The 10/26/2012 edition of the Nonprofit Quarterly published an article by Woods Bowman titled Nonprofit Accountability and Ethics: Rotting from the Head Down which examines the current state of nonprofit accountability, governance, and responsibility. Although applied to the broader nonprofit field (with particular attention toward charitable nonprofits), key elements from Bowman’s article can be applied to the orchestra field.
In the wake of recent and ongoing stakeholder disputes in orchestras such as Detroit, Atlanta, Philadelphia, Louisville, Denver, Minneapolis, St. Paul, and Jacksonville over strategic planning, mission designation, and governance it would be worthwhile for the field as a whole to examine whether these public relations driven and institutionally catastrophic quarrels are simply a natural byproduct of financial pressures or if ethics play a greater role.
Bowman asserts that accountability involves being answerable and responsible, with the latter characteristic described as a “felt sense of obligation.”
For charitable nonprofits, this is comparatively easy to define but for performing arts organizations, there’s far greyer than black or white. What should an orchestral organization feel obliged to accomplish, carry out, or complete? Similarly, are those priorities flexible or fixed; if the former, what conditions necessitate change?
Questions such as these have dominated national discussions over the past several years with criticism directed toward traditional missions focused exclusively toward artistic excellence. It has been argued that, at best, artistic goals are subjective with tendencies that move organizations toward the type of autonomy Bowman describes in his article as “[leading] to a disregard for actively seeking input from stakeholders.”
In response to the economic downturn, strategic commitments (and even some formal mission statements) have moved more toward including language highlighting fiscal responsibility. However, in some cases, these commitments have served as the impetus for shifting Bowman’s disregard for actively seeking input from stakeholders to the inverse side of an extreme.
The ongoing Jacksonville Symphony, Minnesota Orchestra, and St. Paul Chamber Orchestra labor disputes are what some might consider archetypical examples of this phenomenon in that the respective boards are responding to what they have generally defined as irresponsible financial practices designed more to support artistic accomplishment with new mission directives that focus on economic prudence regardless the immediate impact on artistic standards.
The Hard Part
In Bowman’s article, he cites a lack of accountability among nonprofits in the form of not feeling as though they are “answerable to the people they serve and to the public as well” (emphasis added).
Nonprofit status, tax exemption, and deductibility of charitable contributions are legal artifacts—privileges granted by the public’s elected representatives to organizations run by law-abiding, personally disinterested, socially minded individuals performing socially desirable activities. Most nonprofit organizations may not discern the general public as a major actor, let alone the dominant one, yet it is the ultimate source of every privilege they enjoy.
The personally disinterested characteristic is particularly relevant to the orchestra field in that labor disputes tend to draw out the exact opposite qualities among board stakeholders.
Bowman points out the clear challenge in this sort of situation.
…nonprofits aspiring to be ethical organizations must shoulder greater responsibility.
Bowman also points out the Catch-22 involved with letting constituents (i.e. patrons and ticket buyers) have any effective means of influence beyond paying for concert events.
Nonprofit constituents often cannot vote a nonprofit leader out of office, nor can they necessarily stop using the service. Thus, nonprofits have a greater power advantage relative to the people they serve than for-profit businesses have relative to their customers—or than politicians, arguably, have vis-à-vis constituents.
In this illustration, orchestra patrons arrive at the Catch-22 during labor disputes when faced with whether or not they should cause additional financial damage, and as a result institutional stress, by withholding donations and/or returning tickets for a refund.
Ultimately, and in a very real sense, the current system only provides patron stakeholders the ability to impart influence by means of negative reinforcement whereas an ideal ethical environment within the institution should preclude that sort of scenario. Consequently, no alternatives currently exist.
Nevertheless, one potential solution capable of providing a positive means for self correction among board and artist stakeholders would include applying existing regulations governing involuntary bankruptcy currently applied to commercial enterprises.
But that’s a topic for another post.