The economy today forces people to be inventive – and potentially to collaborate. Non-profits are the original “do more with less” folks, and that sector’s creativity at leveraging is going to be stretched to its max over the next two to three years.
As a society, we’ve gotten used to non-profits providing all sorts of services that perhaps government should provide and that local communities used to provide without a formal infrastructure. Services include feeding people, providing clothing and shelter, educating kids after school and on weekends, providing exposure to art and music, helping the elderly live at home and enriching their lives. Americans will continue to support some of those things – especially food, clothes and shelter – because they perceive them as necessities. And they are necessities. The other things are less essential to basic survival and its likely that people will cut their budgets for art, music, after-school education, and the like.
How will non-profits adapt to this culture? Are there opportunities that exist to leverage existing resources and develop new relationships that will result in at least a maintenance of current services, and perhaps even increase them? I believe there are.
I was just talking to a young woman who works at a NYC music school that has two main divisions: tuition-paid music lessons, and community services. The two divisions rarely if ever work together. The school owns its building, but it is not used full-time.
My colleague is responsible for community programming, and recently approached a major NYC cultural institution about a collaboration that would serve both groups’ interests. Specifically, she thought it would be great to have alums of this institution serve as faculty for her school, as well as giving community concerts. This would expand the number of students to be served, it would allow these young musicians to teach and to perform, and it would enhance the school’s presence in their target communities.
The original plan was to establish a new separate program and raise money for it. Now most places are looking at funding cutbacks and ways to increase revenue. Raising money for a new program probably is not going to be a priority.
Does this mean the program is dead? Not necessarily.
We talked about applying a business models to the music school. Its under-utilized is sort of like empty airline seats. At an airline, its fixed costs (equipment, infrastructure, terminals) are covered by selling a certain configuration of seats at certain prices. Once fixed costs are met, the airline has to cover its marginal costs – fuel, crew, food, etc.)- – selling other seats is gravy. That’s why airlines cancel flights – haven’t sold enough seats to cover fixed and marginal costs.
How would this apply to a music school? Most costs already covered by current tuition – only have marginal costs to cover for additional students; could excess cover other work? Could the school bring in PT faculty to teach retirees during day, at lower tuition cost? Cover costs, raise profile, give needed service. Adding new revenue stream is way to cover fixed/marginal costs INSTEAD of raising tuition for current students (as is current plan). Can even start out small with two or three instruments – have small group classes for short period of time – use young musicians to teach.
Adding new PT faculty has other benefits. Young musicians can do concerts for community as well – expose kids, parents to classical music, different instruments, culture. The school can publicize these through local neighborhood papers via a press release that’s published as an article, as well as by partnering with senior centers and city agencies.
This strategy avoids giving people a chance to leave the school. If they raise current tuition, this gives people a chance to decide NOT to renew – a very bad move in this economy. Why not keep tuition the same to avoid that decision? In this kind of economy, organizations need to look for multiple revenue streams that are creatively using existing resources, leverage external resources, and collaborating.