How Many Arts Administrators Does it Take to Change a Lightbulb? by Thomas Wolf
Have you ever gone to a concert and looked at the printed program or perused an annual report of a museum where the names and positions of administrators are listed? Did you wonder, as I often do, why so many are needed? Putting on performing arts events or running a museum may be complex, but the associated tasks are not exactly rocket science. It may take 90 musicians to play an orchestra concert. Does it really take the same number of administrators to run the organization? And that is a conservative number. In some performing arts organizations, the number of administrators far outnumbers the number of performers.
How many (fill in the blank) does it take to change a light bulb? If the question is how many administrators does it take to run an arts organization, some people would answer “too many.”
It reminds me of the light bulb riddles: How many (fill in the blank) does it take to change a light bulb? Suppose we were to insert “arts administrators” in the blank. Or what if we changed the riddle slightly: how many administrators does it take to run an arts organization? Possible answer: too many!
Let’s look at one major music organization at the top end of the budget scale.[1] The fund-raising staff consists of 45 people and this does not count more individuals who work in a call center charged with taking inbound gifts and making outbound solicitations. Let’s assume that the 45 individuals have a total average compensation (including benefits) of $50,000 (that’s conservative, of course—the head of the department and various deputies earn multiples of that). What this means is that for this organization, at least two and a quarter million dollars has to be raised just to pay the salary and benefits of the development staff charged with raising money (not counting the expense of the call center)—this before a single cent would go to the artistic functions of the company.[2] And of course, most of those individuals need office space, a desk and chair, a computer, office supplies, and the like—all costing more money.
Similarly, this organization has a large marketing department charged with, among other things, selling tickets. How many tickets must be sold just to cover that department’s costs? A defender may claim: “But it takes that many people to bring in the tens of millions of dollars on which this organization depends.” Indeed, in this particular organization, the return on investment in development and marketing staff far exceeds that of smaller organizations with smaller staffs (in other words, per capita each of those marketing and development staff members brings in more money than those of smaller staffs in mid-sized organizations). Fair enough, I suppose. But fund raising and marketing are only the tip of the iceberg. What about all those other departments that do not bring in dollars: finance, legal, human resources, house staff…the list is a long one.
It can take upwards of a hundred musicians to perform some orchestral music. Do we really need so many administrators to produce their concerts and run these organizations? And shouldn’t these uniquely talented musicians be paid as much as those in senior management who are responsible for running these organizations?
Another issue that affects administrative costs is what many consider the outsize salaries of the top echelon of personnel. Is an executive director of a top symphony orchestra in the United States really worth close to a million dollars a year when salary, benefits, and perks are considered? Well yes, say some. After all, the chief on the artistic side of the operation—the music director—is pulling in that much and more in some cases and isn’t even full time. But that argument is specious. An internationally-known music director with name recognition functions like a brand that attracts audiences and donors. How many people purchase tickets and make contributions based on the name recognition of an orchestra’s CEO? How many even know his or her name? And the problem is not limited to the individual at the top of the administrative pyramid. Compare the salaries of top administrators to the leaders of the artistic ensemble, like musicians or dancers or actors. As an example: principal players in a major orchestra have skills that are unique—they are among the best in the world at what they do. Yet top administrators earn more—sometimes much more—and in many cases the administrators are much more easily replaced than those extraordinary musicians. One major orchestra today is in its third year of a search for a new concertmaster.
What is true of major arts organizations is true of many midsize and smaller ones. A relatively modest seasonal music presenter has an executive director, two staff in development, a marketing director (with an additional individual who works during the season to handle ticket sales), an education coordinator, a half-time financial manager, a seasonal house staff member, as well as one person supporting these individuals. This does not count the compensation of an artistic director, some of whose responsibilities are administrative. The total cost of administration is greatly in excess of what is paid to musicians.
It was not always thus. Had the particular organization I just described been in business in the mid-20th century, it is likely that no more than three people would have handled all the administrative duties at a fraction of the salary and compensation levels paid out today (even adjusting for inflation). And one or more may well have been a volunteer.
We should ask two questions:
1. Why is this the case?
2. Can anything be done about it?
Question 1—Why?
Prior to 1950, many performing arts organizations were for-profit enterprises. The bulk of their income came from ticket sales, often sold by subscription. The incentive was to keep costs down since tax-exempt philanthropic support was not an option if expenses ran high. Other arts organizations were nonprofit entities but their sources of income required much less creativity and specialization than is now the case. Philanthropy came from individuals almost exclusively and the demand for tickets was often sufficient to keep marketing costs and sophisticated marketing strategies at bay. There was often a corps of unpaid volunteers (indeed, in some cases the administrative positions themselves were filled by volunteers). If paid, compensation for staff was comparatively low by today’s standards, even adjusting for inflation.
With the creation of the National Endowment for the Arts in the mid-1960s and the network of state arts agencies soon after, the landscape changed. Government money had entered the equation and though private philanthropy continued to predominate, there emerged a new psychology. Only nonprofit organizations were eligible for grants (many for-profit entities converted to become eligible) and “financial need” was the name of the game. There was greater incentive to build out the administrative side of the budget: the more you needed, the more you could ask for.
But increasing administrative positions and salaries was more than a grantsmanship game. Administrative requirements increased. Applying for grant money was more complicated than sending out a fund-raising letter once a year and asking an individual for a donation. It involved specialized abilities around financial management and reporting, legal knowledge, and an understanding of human resource management among other things. Meanwhile, as foundations increased their focus on the arts, they too were placing new requirements and expectations on arts institutions. For many, the trend was to move away from general operating support toward project-based grants and new programs required specialized staff to run them. There was more emphasis on outreach and education, expanded touring, program “innovation,” and less interest in the tried and true. There was also greater attention to the balance sheet, on building reserves and endowments. Crafting appropriate proposals became a specialized skill.
With the expansion of government funding agencies, a vast new bureaucracy was created. The new agencies offered employment for administrator/bureaucrats that often provided higher levels of compensation (including, especially, more generous government benefits) than that historically offered by arts organizations that now had to compete for staff. Inevitably, the cost of providing for administration rose everywhere. A new profession was born – that of the arts administrator. When my brother and I established our little summer chamber music organization in 1960 in Maine, the term “arts administrator” did not exist (or if it did, we were unaware of it). By 1970, people were referring to me as an arts administrator. By the end of the decade, I was teaching university courses and writing articles about the subject and Garrison Keillor, of “Prairie Home Companion” fame, was writing his humorous piece for The New Yorker magazine, entitled “Jack Schmidt, Arts Administrator,” taking pot shots at this new “profession.”[3] At the same time, as jobs became more specialized and required greater training, there was a new emphasis on “professionalization” and an assumption that jobs formerly done by volunteers now needed paid staff with particular skills. Some applicants came with advanced degrees in arts administration.
With the incentive of additional resources in the form of grants, organizations were encouraged to grow, often beyond what the market would bear. Growth was a badge of honor that funders encouraged. It made sense in a way. Philanthropic support for the arts was expanding exponentially (in one year alone, the National Endowment for the Arts’ budget tripled—and that was during a Republican administration) with more sources coming on line every year. In the 1960s and 1970s, there seemed no limit to what federal, state, corporate, foundation, and individual sources could provide. The number of programs that performing arts organizations produced increased dramatically. But demand for all those extra seats to sell could not keep up. And it was not only growth in the number of programs during this period. Philanthropic support (including municipal and state as well as federal and private dollars) was made available for new and expanded facilities. Not only were there more performances but there were more seats to sell for every performance.
Unionized work forces of musicians in orchestras demanded higher wages (after all they too wanted to enjoy the fruits of the new resources) and pressed for longer seasons (including year-round employment) and better benefits (medical, retirement, vacation). This contributed to the trend of more events and greatly increased costs but despite the claims of management, the percentage increases in artistic costs for the industry did not exceed those for overall organizational growth.[4]
With the addition of so many events to sell, greater pressure was placed on ever-expanding marketing departments to squeeze blood from stones [i.e., come up with more creative (and often expensive) ways to convince new audience members to purchase tickets].
The growth metaphor may have been appropriate in the for-profit corporate sector where expansion could often mean producing (and selling) more widgets with greater efficiency, lower unit cost, and increased profits. But in most cases, it did not work for the arts. It was famously observed that it takes the same number of musicians to play a Beethoven Symphony five times as it does once and the musicians have to be paid each time. If there are only enough ticket buyers to fill the hall twice, the organization is actually losing money on concerts three, four and five. So greater pressure was placed on ever-expanding marketing departments to squeeze blood from stones [i.e., come up with more creative (and often expensive) ways to convince new audience members to purchase tickets.] By 1991, it cost orchestras an average of $26.17 for each audience member served (up from $5.00 in 1971). Marketing costs alone were up 57%. during that period.[5]
Growth in marketing departments had much to do with the volume of tickets to be sold but also the manner in which consumers purchased them. One factor was the declining percentage of sales by subscriptions. A subscription to five concerts represented a single sale while selling singles to the same events individually required five sales. Over time cost increases also had to do with the complexity of the selling process itself. A one-person marketing team could write and mail a press release and write brochure copy that a freelance designer could design, which is how arts marketing happened in the mid-twentieth century. But by the 21st century, people were needed in marketing with knowledge of social media, website design and management, email marketing, database management, sales analysis, content development, dynamic pricing, and much more.
Similarly, development departments were forced to take on people with new skills (running capital campaigns, designing planned giving programs, producing fancy fund-raising events, planning corporate cause-related marketing campaigns) at higher pay and they hired specialists in different types of proposal writing for a varied array of funders. All this required more administrators and more people to supervise them. In the orchestra field, fund-raising costs alone increased more than 50% in the two decades from 1971 to 1991[6].
Over time arts organizations not only had to compete with ever more ticket-selling entertainment options but with the expanding fine dining sector.
Another factor was playing out from the 1960s on: the lure of funding became an incentive to create new arts organizations. At the same time, entertainment options were expanding for the consumer. Arts organizations were competing for the entertainment dollar with fine dining, film, sports, theme parks, all with sophisticated marketing and communication.[7] This required ever more ingenious ways for organizations to attract dollars through expanded staffs carrying on more functions, launching more fundable programs (e.g., community, education, touring) to attract the philanthropic dollar, and pursuing new sources of funding in any form. Organizations needed more sophisticated administrative horsepower as challenges on all sides continued to increase. But the available fuel to supply the necessary horsepower (namely money) no longer was growing at an exponential rate. Success required more people to sustain the growth and beat out the competition.
Question 2 – What to do About It?
Which brings us to where we are today. Will we continue to see the expansion of administration and management in arts organizations? Even if some may claim the expansion is justified, can the industry afford it? Or can we try to reverse the trend? Most organizations can benefit from some of the recommendations that follow.
1. Don’t assume bigger is better. The growth paradigm for arts organizations must be replaced with the idea of “right-sizing”[8]—finding the best possible balance between artistic and programmatic aspirations on the one hand and economic reality on the other. If that means shedding programs and staff, so be it. As an example, one modest-sized music presenter is now doing fewer concerts in large, expensive halls, has established a more realistic (and lower) target for ticket sales, and has been able to shed two staff members for a net gain to the artistic side of the budget. A dance company has eliminated its international touring activities and reduced the scope of its national tours as well, focusing on its home season and a single national tour every other year. Three positions have been eliminated.
2. Focus on your core business. Mission creep—pursuing new opportunities not directly related to the organization’s purpose—is an ever-present temptation, especially when funders hold out incentives for organizations to move in new directions. Remember, though, that those very funders will not be around with support for that same activity forever. Where will the money come from then to support expanded staff? Is a new initiative really something a particular organization can afford in the long run? Will core activities suffer as a result of moving in these new directions? A theatre company abandoned its affiliation with a local university to teach theatre classes there. Originally incentivized and funded with a three-year grant from a local foundation and with all administration originally assumed by the university (which later reduced its administrative support), the program was soon draining resources from the theatre’s core business of staging new plays. A full-time and part-time staff member were eliminated when the program was dropped.
3. Become nimble and adaptable as the world around you changes. While being true to the core business of an arts organization is critical, it is also important to understand that the world, the organization’s field, its audiences, funders, and the needs of its employees will evolve over time. Being sensitive to these changes, ensuring that strategic planning makes note of the ones that seem more than passing fads, is crucial. Organizations must be ready to adapt and change to meet the requirements of a changing world and this means rejiggering their administrative priorities and staffing. One organization has automated much of its ticket selling saving an entire staff position. Another has changed its staff structure to focus more on audiences and the community. Today, attention to diversity, inclusion, equity, and belonging has many rethinking priorities and staff.
4. Re-evaluate staff structures. Many administrative structures grow through an additive process, simply adding positions when new tasks are required without enough thought as to whether existing positions are really necessary. This is a natural tendency since adding staff is so much easier than reorganizing and letting people go. Reorganization around attrition (when people leave voluntarily) can mitigate some of the pain of firing staff but sometimes there is no alternative to eliminating jobs and people. Besides reorganization, careful attention should be paid to opportunities for getting tasks done more efficiently and cheaply by contracting them out. One organization, after carefully assessing its needs in the area of marketing and ticketing, contracted out the entire operation to a much larger entity that had better trained staff and equipment to handle it. The result was a smaller staff, substantial savings, and much more efficient service delivery.
5. Develop a 21st century approach to volunteers. For many younger staff leaders, the image of a volunteer is of an elderly, wealthy, white woman with few skills and nothing to do with her free time who is unable to perform the tasks that professionals can. Some refuse to consider volunteers for new tasks; others get rid of the volunteers they have. When a major museum fired its 150 volunteer docents in an effort to diversify and professionalize its program, the move made national news and the museum leadership realized that while its intentions were good (to add more diversity to the program) its methods were wrongheaded and it was losing talented people and adding to staff loads. The existing docents had deep knowledge of the collection, were superbly trained, and were beloved by the public. The number of individuals with expertise and a willingness to work for no pay is growing as the population ages and organizations need to build more effective efforts to capture this free workforce. Similarly, corporations increasingly encourage younger employees to volunteer and many bring skills that would simply be unavailable to an arts organization without a large investment.
6. Re-assess compensation assumptions. A widely held assumption among arts organization is that there is a scarcity of administrative talent—especially top senior talent—and the only way to attract competent CEOs, Development Directors, Marketing Directors, and the like is to pay top dollar. This often leads to an unbalanced barbell effect—outsize salaries at the upper level and squeezed salaries at lower ones. There are two problems with this approach. Senior level compensation continues to escalate while lower level compensation is nearly static, leading to staff churn—people coming for a short period and then leaving for better jobs requiring the expense of constant training of new hires. An alternative approach is to look at younger, lower level staff as future candidates for upper level positions. Training and investing in them and giving them opportunities to advance within the organization, can lead to less turnover, more continuity, less expense related to finding, recruiting, and training new staff, and often a more reasonable compensation for those at the top of the pyramid. It is also true that trends among new hires today suggest many may be willing to trade off higher salaries for a more amenable life style, with more time off, reasonable working hours, and acknowledgement of family needs.
7. Consider strategic partnerships and mergers. Several mergers in recent years among arts organizations have brought great efficiencies and reduced the administrative burden on the participants. An orchestra merged with its main venue leading to reducing staff in several merged departments. A presenting organization and a community music school found common areas that allowed reduction of the management burdens on each. An urban-based music education organization serving primarily African-American children merged with an organization in the same city providing a prize honoring important African-Americans in the arts. These mergers were not easy to pull off but in every case, they have had positive impact on administrative costs, not to mention programs, visibility, and praise from funders. Not all cost-sharing and cooperation requires a formal merger, however. Several examples suggest ways in which strategic partnerships can be equally effective such as a centralized financial management system among several museums in a southern city, shared ticketing and marketing systems, and cooperative booking systems that reduce costs and allow greater efficiencies in reviewing talent.
8. Finally, ensure that the ARTS and artists are the HEART of arts organizations. Administration and management is not an end in itself. It is a means to advance the mission of the organization, a mission that is about the arts themselves. That is where priorities and resources must be directed. In the end, it is the art that matters. This should be more than a slogan to which people pay lip service. It should be a core mindset that staff, board, and volunteers remember when they wake up in the morning and as they go about their tasks each day.
[1] I have chosen not to name the organizations described in this blog as I have colleagues who work in them for whom I have a lot of respect. For simplicity sake, I have also focused most of my examples on the performing arts, especially music organizations. A more extensive article could show parallels among organizations serving other arts disciplines.
[2] I recognize that it is an oversimplification to say that all administrators get paid first before a single dollar goes to artists. However, as one recent writer observed, “Arts funding is very different from what the public or private donors know. The outcome results in paying managers first; performers, artists and other creatives second.” (cf., Robert McDowell, Is Managerialism Taking Over The Arts?” The Stage, May 31, 2022 Director Robert McDowell: Is managerialism taking over the arts? (thestage.co.uk) (last accessed 9/1/22)
[3] Garrison Keillor, “Jack Schmidt, Arts Administrator,” The New Yorker, April 30, 1979
[4] This claim is supported by research conducted by The Wolf Organization, Inc in 1991-1992 for the American Symphony Orchestra League looking at 25 years of financial data.
[5] Cf., “The Financial Condition of Symphony Orchestras (Part I – The Orchestra Industry),” Cambridge, MA: The Wolf Organization Inc. for the American Symphony Orchestra League, 1992, p. iv.
[6] Ibid.
[7] To get a sense of scale of the competition, the Disney Company reported annual advertising expenses of 5.5 billion U.S. dollars in 2021, dwarfing the total combined organizational budgets of a high proportion of all the arts organizations in the United States. https://www.statista.com/statistics/685554/walt-disney-ad-expense/#:~:text=Published%20by%20Statista%20Research%20Department%2C%20May%205%2C%202022,when%20expenditures%20grew%20by%20over%2053%20percent%20annually (last accessed 9/20/22)
[8] For more on right-sizing, cf., Thomas Wolf, Managing a Nonprofit Organization (40th anniversary edition), New York: Free Press (Simon & Schuster), pp. 398-404