Thinking about money
16/05/14 05:25
“We need to raise more money.” The declaration was made at a meeting I attended last night for a local arts organization. The interesting thing is that the statement didn’t generate much discussion. I have sat on a lot of board of non-profit organizations and I’ve spent my share of time serving on arts organization boards. I guess the statement, on the surface, makes some sense. The organization did spend more last year than it took in. There are adequate reserves, but when spending more than the income becomes a habit reserves are quickly depleted and a crisis ensues.
I’ll grant the organization this much, at least the idea of addressing the problem by talking about income was raised. I’ve sat on other boards where the only technique employed to balance a budget is to decrease expenses. The real solution lies not in which side of the ledger you are dealing, but rather in the balance.
What frustrates me about these boards at times is the general inability to see the difference between investment and expense. And that brings up my question about the declaration that “we need to raise more money.” “What for?” is my initial question.
Do we need more money so we can have more concerts? Do we need more money so we can hire different artists? Do we need more money so we can throw lavish receptions? What is the purpose of having more money?
The question is important because it helps to determine how we go about raising more money, if in fact that is what we need to do. For an organization like the one whose board meeting I attended last night there are two streams of income: donations and ticket sales. There are small amounts that come from grants and sponsorships as well. So one way to get more money is to increase audience size and ticket revenue. In that case advertising is a simple cost/benefit decision. Does advertising produce enough new ticket sales to justify the expense? If so, spend on advertising and the gain in revenue will result. The problem with this particular organization, like many others, is that advertising doesn’t yield measurable results. Advertise a lot and concert audiences seem to be largely unaffected by the ads. Don’t advertise at all and audiences remain constant. Increases in audience seem to come from word-of-mouth and in response to particular artists.
Choosing which artists to book may be the best way to increase audiences and boost revenue. There is a problem with this approach for this particular agency, however. It is a group that promotes chamber music. Chamber music is an acquired taste and appeals to a limited audience. A few years ago, the group left classical music behind for a season and booked popular acts. Ticket sales soared. The group produced substantial reserves for future years. But the traditional audience was displeased. They hungered for classical music. When we returned to the usual format, audiences declined and revenue went down with the audiences.
For this particular organization it appears that attracting and nurturing donors might be a more sensible solution to the budget. There are people in the community who value living in a place with such cultural offerings. They are willing to donate funds to sponsor concerts motivated by their love of the music and their commitment to community. These genuine gifts are the lifeblood of the organization. But like many other gifts, you often need to ask in order to receive. And there are plenty of organizations that have refined their skills at asking.
Another possibility, however, exists. What if our organization doesn’t really need to raise more money? What if the best way to enjoy chamber music is in a small venue with a small audience? What if the organization doesn’t need to grow in order to contribute to the quality of life in the community? Larger isn’t always better.
I have witnessed other organizations that became obsessed with growing and all that happened for the board was that the numbers got bigger. Not only was income and expense increased, but so too did the gap between them. Bigger for an organization that runs an occasional deficit might mean bigger deficits.
I said very little at the meeting. My input wasn’t really needed as the board discussed find raising events and raffles and direct donations and grants. There was a part of me that was sad because the same board has never invested as much time or discussion in choosing artists for the next year’s season. The board will approve a season’s program in a few minutes with little discussion. And I’ve been around long enough to know that long discussion doesn’t always result in action. If those in the room would have each reached in their wallets and donated $10 more money would have been generated than will be generated in a couple of months of selling raffle tickets. If we had each found a way to donate $50 the organization wouldn’t have an operating deficit for the year. The idea occurred to me that if we allowed board members to pay $100 for the privilege of skipping a meeting, there would be times when I’d rather pay the money than sit through the endless discussion. Fortunately, I bit my tongue and kept the idea to myself. I have plenty of ideas that are not worthy of wasting the time of others.
The experience did, however, remind me that we need to be careful about how we talk about money in the church. Of course if we had more money we could engage in more mission and outreach. If we had more money we could make some investments in our building and infrastructure that would allow us to contribute to the next generation just as we have received much from the generosity of previous generations. But the truth is we don’t need more money. God has worked through the generosity of our people to provide us with what we need. All we need to do is to learn to live joyously and abundantly with what has been provided.
I resolve not to use the words, “we need more money,” in my conversations about the church and its budget. I prefer to say, “God has blessed us.” Maybe if we are careful and wisely invest the resources we have been given we will be blessed with similar generosity in years to come. It might be considered heresy by some, but it seems possible that we don’t really need more money.
I’ll grant the organization this much, at least the idea of addressing the problem by talking about income was raised. I’ve sat on other boards where the only technique employed to balance a budget is to decrease expenses. The real solution lies not in which side of the ledger you are dealing, but rather in the balance.
What frustrates me about these boards at times is the general inability to see the difference between investment and expense. And that brings up my question about the declaration that “we need to raise more money.” “What for?” is my initial question.
Do we need more money so we can have more concerts? Do we need more money so we can hire different artists? Do we need more money so we can throw lavish receptions? What is the purpose of having more money?
The question is important because it helps to determine how we go about raising more money, if in fact that is what we need to do. For an organization like the one whose board meeting I attended last night there are two streams of income: donations and ticket sales. There are small amounts that come from grants and sponsorships as well. So one way to get more money is to increase audience size and ticket revenue. In that case advertising is a simple cost/benefit decision. Does advertising produce enough new ticket sales to justify the expense? If so, spend on advertising and the gain in revenue will result. The problem with this particular organization, like many others, is that advertising doesn’t yield measurable results. Advertise a lot and concert audiences seem to be largely unaffected by the ads. Don’t advertise at all and audiences remain constant. Increases in audience seem to come from word-of-mouth and in response to particular artists.
Choosing which artists to book may be the best way to increase audiences and boost revenue. There is a problem with this approach for this particular agency, however. It is a group that promotes chamber music. Chamber music is an acquired taste and appeals to a limited audience. A few years ago, the group left classical music behind for a season and booked popular acts. Ticket sales soared. The group produced substantial reserves for future years. But the traditional audience was displeased. They hungered for classical music. When we returned to the usual format, audiences declined and revenue went down with the audiences.
For this particular organization it appears that attracting and nurturing donors might be a more sensible solution to the budget. There are people in the community who value living in a place with such cultural offerings. They are willing to donate funds to sponsor concerts motivated by their love of the music and their commitment to community. These genuine gifts are the lifeblood of the organization. But like many other gifts, you often need to ask in order to receive. And there are plenty of organizations that have refined their skills at asking.
Another possibility, however, exists. What if our organization doesn’t really need to raise more money? What if the best way to enjoy chamber music is in a small venue with a small audience? What if the organization doesn’t need to grow in order to contribute to the quality of life in the community? Larger isn’t always better.
I have witnessed other organizations that became obsessed with growing and all that happened for the board was that the numbers got bigger. Not only was income and expense increased, but so too did the gap between them. Bigger for an organization that runs an occasional deficit might mean bigger deficits.
I said very little at the meeting. My input wasn’t really needed as the board discussed find raising events and raffles and direct donations and grants. There was a part of me that was sad because the same board has never invested as much time or discussion in choosing artists for the next year’s season. The board will approve a season’s program in a few minutes with little discussion. And I’ve been around long enough to know that long discussion doesn’t always result in action. If those in the room would have each reached in their wallets and donated $10 more money would have been generated than will be generated in a couple of months of selling raffle tickets. If we had each found a way to donate $50 the organization wouldn’t have an operating deficit for the year. The idea occurred to me that if we allowed board members to pay $100 for the privilege of skipping a meeting, there would be times when I’d rather pay the money than sit through the endless discussion. Fortunately, I bit my tongue and kept the idea to myself. I have plenty of ideas that are not worthy of wasting the time of others.
The experience did, however, remind me that we need to be careful about how we talk about money in the church. Of course if we had more money we could engage in more mission and outreach. If we had more money we could make some investments in our building and infrastructure that would allow us to contribute to the next generation just as we have received much from the generosity of previous generations. But the truth is we don’t need more money. God has worked through the generosity of our people to provide us with what we need. All we need to do is to learn to live joyously and abundantly with what has been provided.
I resolve not to use the words, “we need more money,” in my conversations about the church and its budget. I prefer to say, “God has blessed us.” Maybe if we are careful and wisely invest the resources we have been given we will be blessed with similar generosity in years to come. It might be considered heresy by some, but it seems possible that we don’t really need more money.