When things are going well at a nonprofit arts organization — revenue up, audiences engaged, creativity flourishing — the glory often goes to the group’s top executive (or executives).
When things start to go south, though, that’s when you generally start to hear more (whether fairly or not) about the behind-the-scenes people who hire those leaders: the organization’s board.
Witness a couple of recent examples here: In 2014, bitter infighting surrounding a surprise proposal to close San Diego Opera led to the departures of more than half its board, and made national news.
And this fall, the San Diego Junior Theatre board’s unpopular decision to dismiss two top leaders (for reasons not publicly divulged) led some angry supporters to rally against the trustees and demand they resign en masse.
While crisis can cast boards into the public eye, they remain a key guiding force at a nonprofit in good times and bad.
And yet for all the power they can wield, boards — which are a required fixture of nonprofits — are all but invisible to the typical arts-goer.
So who are these people, what do they do and how did they get in a position to do it?
One trait that board members have in common at arts nonprofits large and small: they’re all volunteers.
Beyond that, their backgrounds and reasons for joining — and what they’re expected to do once aboard — are all over the map, and have a lot to do with the profile of the organization.
“The small boards have the expectation that the board members will pitch in on anything,” says Ralph Bryan, a financial adviser who has served a total of 15 years on the board of La Jolla Playhouse, three of them as chairman.
“At a small theater they might be ushers some nights, or they might be coming up with little fundraisers.
“With big boards, it moves toward larger decisions, and more expectations for giving money, just because there’s so much more they have to raise each year.”
As for why people join: Often, Bryan, says, “they’re driven by the mission, or they know somebody else who’s already involved in the board.” (Bryan and his wife, Gail, fostered a love for the arts while students at UC San Diego, and began their relationship with the Playhouse with small donations that grew over the years.)
“For some people, it’s the opportunity to help shape their community. And for some people it’s a status symbol.”
Money matters
Fundraising is usually among the top responsibilities for board members: The typical nonprofit theater gets only about half its revenue from ticket sales, and must rely on donations, grants and other sources for the rest.
Big institutions such as the Playhouse and Old Globe generally have a minimum requirement of funds for board members to raise, donate themselves or some combination of the two (what’s called a “give-get”).
At the Globe, which has an annual budget of $21 million, the minimum yearly contribution for each of the 49 people on the board is $20,000, although “many board members exceed that amount, some significantly,” the theater says. (A few give less than the minimum but “contribute expertise and other important input” in lieu of the funds.)
Barry Edelstein, the Globe’s Erna Finci Viterbi artistic director, says nonprofit boards share numerous parallels to their counterparts in the commercial world in terms of what they’re expected to do for the organization.
First and foremost, the board is responsible for hiring (and firing) the chief executive: “That’s one of their most profound obligations,” as Edelstein puts it.
The board also is charged with holding that executive responsible for results. (At some institutions, the Globe included, the top position is split into two: an artistic director and a managing or executive director.)
But measuring results at a nonprofit arts group gets a bit more complicated than in the for-profit world, where revenue is king.
Maintaining financial solvency is obviously important; growth is also nice.
But “in a commercial situation, the board is answerable to the shareholders,” Edelstein notes. “In a 501(c)3 (the legal code for a nonprofit), the shareholders are this amorphous body, namely the people of San Diego.
“In the commercial world, if the stock price plunges, then there’s enormous pressure put on the board, and the board meets and fires the CEO. What's the measure of the Globe’s performance? It’s a lot of things,” encompassing benchmarks both financial and artistic.
But if the board holds the leadership accountable, who holds the board accountable?
One answer is the organization’s bylaws, which specify how members are chosen and how long they serve. (Board trustees or directors — the terms are used more or less interchangeably — typically serve terms of two to four years, although there are no hard-and-fast rules.) Their appointments are approved by those already on the board, which means boards tend to be self-perpetuating.
And strictly speaking, there’s no simple way to “fire” a board from the outside. Instead, constituents and members of the community must rely on protests, economic votes of no-confidence (in the form of boycotts on ticket purchase or contributions), or, in extreme cases, legal action.
“Ultimately, the board legally is required to abide by the bylaws that they or their predecessors have set for the organization,” says Howard Sherman, director of the Arts Integrity Initiative at the New School for Drama in New York.
“If the community they serve is dissatisfied with the decisions a board is making, their recourse is to choose not to engage with the organization, as ticket buyers or members or donors, or to speak with the trustees at the organizations to ask for different outcomes.
“But boards ideally should want to be responsive to the communities they’re in — otherwise they can find themselves in a difficult situation.”
Common conflicts
The Theatre Communications Group, a national advocacy organization for nonprofit theaters, devotes regular research to the issue of board governance, and executive director Teresa Eyring follows the issues closely.
“Some of the things that come up pretty regularly are, what’s the line between what staff is responsible for deciding and what boards are responsible for deciding? There’s been a pretty strong firewall between the artistic and programmatic decision-making, and board decision-making.
“And that can be contentious at times, because people who sit on boards are passionate about the work being done, and want to be able to be express opinions. But it’s often very, very difficult for artistic leaders to do their jobs if they have 50 people opining about which plays should be done.”
She adds that “because of the fiscal responsibility of the boards, there can be a thought process around season selection that is more about trying to predict what kinds of shows are more likely to do well financially, vs. ‘What shows and what programming should we be doing to fulfill our mission?’”
The issues that San Diego Opera faced in 2014 were much broader, the stakes much higher. And “contentious” doesn’t begin to describe the emotional tenor of that time.
The crisis began in March of that year when Ian Campbell, then the opera’s general director, CEO and artistic director, made a surprise announcement to the board that the organization was in dire financial straits and needed to shut down.
The board at first voted almost unanimously to go along with his recommendation. But in the ensuing days a rebellion took shape both within and outside the organization.
Eventually more than half the board departed, and Campbell was pushed out by the reconstituted, smaller board, which came up with a plan to save the opera.
David Bennett, who joined the opera as general director in 2015, says the upheaval led to positive changes.
“Our board is a very responsive and very proactive one now,” Bennett says. “And they’re very keenly aware and transparent. Those are two very important words.”
One major change the opera made was to discontinue the practice of having an executive committee that met regularly, says Bennett, who came to San Diego from New York’s Gotham Chamber Opera.
That committee previously “wielded a lot of power, and there was a sense from some of the board members that a lot of decision-making wasn’t being done by the entire board.
“What we have now is a board that is much more involved in, really, governance. And clearly when you have a board the size of the board was before, it is difficult to make all your decisions board-wide.” (The opera has 21 trustees now — down from 57 before the 2014 crisis — with a goal of getting to 30.)
Some arts nonprofits, the opera and the Globe included, also have provisions for anyone who contributes a certain amount ($100, say) to become a member, which allows attendance at an annual board meeting plus certain voting rights.
Still, influence by those outside the board has its limits — even at a place like San Diego Junior Theatre, which has an unusually devoted constituency because of families’ involvement in their kids’ activities there.
Protests and a concerted online campaign after the September firings of the artistic director and longtime production manager have so far proved unsuccessful in reshaping Junior Theatre’s board significantly, nor in getting answers about the dismissals. (The organization has cited privacy issues.)
“Community members who happen to really love an artistic or managing director or development director or anybody on staff who’s let go don’t really have any leverage in the situation,” says Eyring.
“They can threaten to pull their funding. (Or) if they think something illegal happened, that can be brought to the attention of government.”
In sum, it’s not a perfect system, and nonprofit arts boards around the country still have major work to do in several areas — diversity being a major one.
“Sometimes the model gets questioned,” Eyring acknowledges, “and people say, do boards need to be so big, are there structures in place that prevent the making of the best possible art? How does this model work, and is it the best model in all cases?
“But I find all these board members who have served over the years have really contributed to making our field strong.”
Twitter: @jimhebert
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