Nonprofits: Taking a productive break
By Lynn Sygiel, editor, Charitable Advisors
The advice is often well-intentioned, and it’s something that hard-working, driven individuals may hear a lot: Stop and smell the roses, get away and clear your head, or take a sabbatical to rest and rejuvenate.
When one person in a company takes a break, the work can still go on. When the whole company takes a break, there’s an inherent danger that the vacation will be permanent.
Nonprofits, many of which operate on limited budgets, are no exception. Out of sight, out of mind? A temporary shutdown could be considered a gamble, but it could also be just what a struggling organization needs.
Several years ago, two area nonprofits — the Indianapolis Opera Company and the Martin Luther King Community Center — announced they were taking a break. It raised many questions in the community over the future of the two organizations.
Both nonprofits resumed operations in about a year and from all indications, appear to have used their “downtime” wisely.
Both nonprofits had funding issues that needed to be resolved, but beyond trying to shore up their financial shortcomings, both used the time to figure out their roles and how they stood in the community. One tactic for both boards was to carve out time to listen to their constituents, to understand what services were important to them, or in the case of the Opera, what performances did their patrons prefer.
To help with the process, both organizations had funders who were willing to keep the process moving.
Kimberly Sterling was Martin Luther King’s board president when the decision to temporarily close was made in early 2014. The board’s goal was to temporarily transfer programming to other agencies, and within six months be back up and running. Early on, the board hosted a town-hall meeting, and according to Sterling, there was a great community response. Attendees shared which services were critical and which could go away.
“So as we began to work on a strategic plan for both the short term, and more importantly from a sustainability perspective for the longer term, we were able to heed the voice of the community,” Sterling said.
United Way of Central Indiana offered the center financial support to hire a consultant, Pat Gamble-Moore, to serve as a kind of interim director and keep things moving, things like paying bills and working with the board to design a plan. She worked with the board for nearly a year, and after taking a position at PNC, joined the board herself.
During its pause, the center’s building was never unoccupied. While there was no staff, tenants and agencies were using the building. And while it had to revamp and transform the organization, the board formed strategic partnerships with other groups such as the Edna Martin Christian Center and Kaleidoscope to provide youth programming.
Matt Mindrum, the Opera’s current board chairman, had just signed on to the board when the announcement to shut down was made. He noted that not only was the environment changing here, but opera companies were changing in many places and moving away from large performance spaces to more intimate ones and adding variety to their repertoire.
“So the business model was changing on a macro level at the same time that our circumstances were changing at a micro level. I think that combination really required us to press the reset button. Not only did we need to pause so we could pay our bills, and figure out how to get moved into the Basile Opera Center building and do all the things that we talked about doing for a long time, but we also needed to pause to figure out where we were going.”
After the company canceled the final opera of the 2013-2014 season, a funder provided a grant to assess the future of the Opera, hiring a consultant and market research firm. Together, Steven Stolen and Smari helped the board identify what audiences wanted and determine what various future paths could look like.
“We treated the study, not only as an opera study, although it was opera-funded through the Lilly Endowment, but we included the IRT, the ISO, Butler, the Chamber Orchestra, the Phoenix Theater, the Center for the Performing Arts in Carmel, Jazz Fest and Dance Kaleidoscope. We went out and talked to folks who weren’t just our core audience, but really the arts-inclined audience broadly speaking. And we heard a variety of things from them,” said Mindrum.
Among the findings: Sponsors’ expectations were not being met, the budget needed to be severely cut and reworked, the venues were too large, leadership had to change, and the board of directors needed an overhaul.
“Quality had been inconsistent, and that was probably the biggest takeaway, and quality if you’re a professional performing arts organization, is job one. It’s not that we didn’t have some really high-quality productions, but we had too much variability,” said Mindrum who inherited the chairmanship of the company’s first year back.
David Starkey, the Opera’s general manager and artistic director since March, says the Opera’s board did something more difficult than they realize — they didn’t let the quiet or dark period go on too long. According to Starkey, these resets have a national average of about 3 ½ years.
In its search for a new director, Sterling said the Martin Luther King board was looking for someone with leadership capabilities who had community center experience but not necessarily as the leader. It was also important to understand the uniqueness of how community centers work.
In June of 2015, the MLK board hired Allison Luthe. She had both a community organizing background, and a short stint at a community center. She came on board as managing director, an interim position.
With a short-term playbook in hand, Luthe worked with the board to change both programming and mission. The mission had focused primarily on providing programming, but now it was also trying to be more inclusive to the needs in the neighborhood.
“It was pretty clear to me that we weren’t connected to the neighborhood,” Luthe said.
She cites an example. On Labor Day, a couple of months after she arrived, there was a group of parents across the street from the MLK center on West 40th Street who were protesting chain-link fence going up around the adjacent Butler-Tarkington Park because of park improvement. Luthe met some of the protesters — youth football coaches — who feared they would lose practice fields because of the park’s development.
Luthe found out the coaches didn’t know Martin Luther King was a community center to help serve some of the very kids they were coaching. No one had ever introduced themselves before, the protesters said.
“There was a disconnect,” Luthe said. I just spent a lot of time getting to know them, we had the town hall meeting at the school and they came to that. We ended up seeing each other in a couple of other places. One of them, their brother was murdered, so we helped them plan the peace rally that they had. So really, we just spent time getting to know them and now they all bring their kids here, the football team works out of here.”
Luthe would become the center’s executive director and worked with the board to develop a long-term strategy.
Before the pause, United Way provided more than 60 percent of the funding for the MLK center. Today it’s at 23 percent and the center has a mix of funding from a variety of sources. Luthe secured a small grant from Meridian Street United Methodist Church to restart some youth activities, and the church has continued as a partner.
When Luthe began as managing director, there were 1.5 employees. Today, there are nine full-time, five part-time permanent employees and 10 temporary employees in the summer. The budget went from $300,000 to $1.2 million, with federal and state contracts.
One main question that the center had to answer: When does it make sense for the center to have its own programming and when should it collaborate?
And while programs and staff have returned, the center now offers its after-school K-5 programming at the neighborhood’s public school, School 43. The program is funded by a 21st Century Community Learning Center grant, which is highly competitive. Grades 6 and 7 meet at the center, but the center is submitting a proposal to expand the grant to add those grades to the school as well.
There is still a long list of partnerships, which won’t go away even with funding, said Luthe, since the partners excel at offering these programs.
The board realized that a signature fundraising event was needed to maintain community relationships. MLK’s grew out of conversations with community members during Luthe’s first summer. With four murders in the neighborhood in the summer of 2015, she had calls from former neighbors who were concerned and wanted to help.
Her response to each of them was simple.
“We’re in a renewal phase and doing better. What if we had a breakfast event and you come and talk a little bit about the history, so that we could stay in touch with our history?“
The Founders’ breakfast fundraiser was born and now happens the Friday before Martin Luther King’s birthday and is hosted by Meridian Street United Methodist Church.
Financially, there is a short leash. There are check limits and the finance committee meets monthly. Everything that is proposed has to have a funding source. The board is proactive, and asks tough questions.
Recently the center hired a wellness coach. The center already had employment coaching and a WorkOne mobile unit. For people who want a better way of life, no matter how much is in their bank account, the center wants to help them grow personally or professionally.
MLK spent the last year doing focus groups with the Public Policy Institute, which is getting ready to produce a report about gentrification, racism, neighborhood safety, and perception of where you live.
Visitors to the center tell Luthe the building has a sense of life, and she’s hoping to add an MLK Guild to help make it more of a welcoming community-owned place.
Sterling said one of the board’s goals was to see people using the facility.
“I think that’s always important when people who are coming for services feeling like it’s a place that they would want to be in. But I think most important are the services that are being provided are based on the needs that are assessed,” said the former board chair.
One of the changes that the Opera made was to its programming venue. It moved from Clowes Hall that had a capacity of 2,100 to the Schrott Center for the Arts, which seats 450. The Opera has also offered programming at Booth Tarkington Civic Theatre in Carmel, which is similar in size to Schrott.
In addition, the office’s move to the Basile Center at 40th and Pennsylvania streets, Starkey said, was a game changer and is helping it to become a center for community arts and culture with its additional tenants.
“It changed the Opera from being a producer to a community leader. And when you look at IMA, and IRT and the Symphony, those three nonprofits, they all have place.
“And now we’re in a place where we are daily giving to our community, and that changed the mindset,” said Starkey. “An arts organization that takes that more collaborative approach is a core of the 21st century model. I have found tremendous dedication to this neighborhood, this building, to this revitalization, how they shift and move has been really encouraging.”
But that’s not all that has changed.
“So, venue, programming, collaboration, and then maybe the final thing would be the type of artists that we seek to cast and to develop here. We’ve embraced the idea that we want to be a training ground for the next generation of world-class singers. We’ve got the best opera school in the country an hour down the road (Jordan School of Music at Indiana University), and we’ve got lots of other great programs nearby. We’re a rich community when it comes to vocal arts,” said Mindrum.
“We believe we need to be the champion of the vocal arts, the champion of opera. And opera is automatically the top of the food chain. Our responsibility is to be the best professional company that does opera and theatrical representations of that,” said Starkey.
That now includes building a strong middle and offering shows that have ensembles.
“When you do a South Pacific, it’s an ensemble show, when you do Man of LaManchia, it’s an ensemble show,” said Starkey.
The Opera’s board has taken steps to try to ensure a pause doesn’t happen again, including shrinking the board. Mindrum said the board was somewhat unwieldy. The board, he said, now provides more detailed and regular oversight in a variety of places, especially financial. The budget changed, too. It was at $1.9 million and is now a little over $900,000.
“So we shrunk the board, but we’re now in a position where we’re ready to expand it again a bit. We went from a maximum of 45 in our bylaws to a maximum of 35 in our new bylaws. We’re at 23 or 24 right now. We definitely had to sort of narrow before we could broaden again,” he said.
Starkey said it’s a change of philosophy.
“It’s not about how big and bulky can you be. It’s about the nimbleness that you have in your leadership. So size shall represent philosophy and philosophy should represent size. The board has to have a more intimate relationship and understanding of its involvement, and it cannot be just oversight and check the boxes,” said Starkey who moved back to Indiana from Asheville, N.C. in March.
While Mindrum and Starkey believe the temporary suspension was necessary, Mindrum reminds that a pause is never going to be perfect on the other side.
“You feel like you’ve stopped, you’ve done the right things. You’ve taken stock of where you are, you’ve asked the marketplace where you should be going and you put the strategy together. You hired a new director, and you’ve gotten the board reconstituted. Everything is in where you think is the right spot, and then you press “go” and not as much audience comes back as you thought was going to come back. You run into funders who said, ‘I want to see a couple of years of history before I’m going to come back and provide funding.’”
The Opera didn’t have a surplus the first year back and Kevin Patterson, the general director serving both executive and artistic roles, was the “right guy” to get them back on stage. Now with Starkey, Mindrum believes the Opera has the guy who was going to get us to operate within our means.
“He did a great job with Man of La Mancha. We took what had been tracking toward another deficit year and turned it around and broke even in this last fiscal year, and now we’re on track for a solid surplus this year.
My two primary goals as chair were to continue to put on quality productions and operate within our means. That’s really it. And I think that will get us to a place where we’ll continue to build confidence and use this new programming model to develop new audiences, continue to build the education program that is been so strong and really fits nicely with our approach to develop talent, use this building in a better way.”