I'd like to talk about two challenges that I see most arts organizations face and I think really affect us. The first is that we in the arts have a really hard time improving worker productivity. You're going to read in the newspaper every quarter. Worker productivity went up 1.2% or 0.7%, and the economists read that very carefully. And the reason they do is, when workers get more productive, meaning, when one worker produces a little more each hour, it reduces the impact of inflation, so that when people are getting more and more productive, it means even thought wages are going up it's not as big an impact on the cost of the product, because you got more production per hour. We have a problem with that in the arts. We don't play Beethoven's 9th symphony faster every year. There are the same number of people in the Julliard string quartet every single year. It's four. It doesn't get to four, then three and half, then three and a quarter, then two. We don't have fewer people playing a string quartet. We don't have painters painting faster every year or sculptors sculpting every year. We don't improve worker productivity real well in our field. In fact we do about the worst of most industries and as a result our costs go up faster every year than in other industries. And you know, we feel it. Board members feel it, staff members feel it. You do the annual budget and constantly things are getting more, and more, and more expensive, and how are we going to pay for it? And there's a notion, and I believe the myth, that artists are wasteful. That there are these artistic directors running around spending money they don't have and changing the costume colors at whim, you know Hollywood does that. But it's really not who we are. We're so careful and yet our costs keep going up. Because we don't improve worker productivity very much at all. So we have a real big cost problem. And then we have a second problem that makes it even harder. Which is once we build a theater, or a studio or a gallery or a classroom. We literally set in concrete the real uninflated earned income potential. If you perform in a theater with 500 seats, it stays 500 seats. And so, we can't go from 500 people to 600 people, cause we only have the 500 seats. Coca-Cola every year reaches out to more territory of the Earth. Their real earned income can get bigger and bigger and bigger, ours stays constant. I used to run the Alvin Ailey American Dance Theater dance company out of New York. I'll talk a bunch about that this morning. And I was really lucky. I got to bring the Ailey company to perform in Greece at a theater called the Herod Atticus. The Herod Atticus is this outdoor amphitheater. It's built into the base of the acropolis. It was built by the Romans actually 2,000 years ago. And it's so beautiful. If you are ever in Athens, go to a performance, no matter what it is. Even if you don't think you'll like it, it's worth being there. It's an outdoor amphitheater. It's an ancient stage. These ancient stone bleachers. People, you sit in, and you watch the performance. The Parthenon is lit up behind you. There's a moon above. It's so beautiful. And my dancers were so excited to be on the stage, and I just stood on the stage and said the exact number of stone bleacher seats for 2,000 years. No increase in earned income potential. >> [LAUGH] >> And so we have this problem, because our expenses go up and up and up really fast. And our real earned income, meaning without inflation, just sits there and the difference between the two gets bigger and bigger and bigger and bigger every year. So it feels like it's getting harder. If it feels like the economics are getting harder. If it feels like the economy is affecting us. It is getting harder because there's a difference between where our expenses go and where our real earned income is, gets bigger and bigger and bigger and bigger and bigger. So how do we fill this gap? What are the ways we fill the gap between our expenses and our uninflated ticket income or gallery admissions' income or tuition income? What are the ways we do it? So, I would like to talk about what I think makes a healthy organization. And it starts, fortunately, with really amazing art. And when I use the word art, please read the word programming. Because some of you are educational organizations or some of you do other things than just pure art. And that's fine. I don't mean this is just art. I mean programming. I just don't write very neatly, so art's shorter. But when your work, when your programming, when your art is really exciting, really engaging, really special, and really wonderful Not only do we find that you are happy as artists, we actually find you're healthier financially. And what I feel has happened in the arts world over the last 15 years, but particularly the last 10 years, is we've gotten the creativity beaten out of us a little bit. And we've gotten a little conservative and we've gotten a little scared. And we started to plan art to a budget rather than to plan the budget around the art. By which I mean we say, what can we do for $12,000 versus what would we really love to do that's going to be amazing? Does that difference make sense, what I'm saying? And you're going to hear from us a lot about not planning your art to a budget, but really thinking, dreaming. We believe dreaming has to come back into the art making. And we think as in, I'm not talking every organization, but I have find this across the country, a lot of us have stopped dreaming. We've gotten so scared that we've stopped really thinking about what's going to be amazing. We use the word transformative a lot. We love transformative arts projects. Those are the projects that no one can believe you pulled off. Isn't it amazing you did this, isn't it astonishing that got done. We never thought you could do it, I never even imagined that could ever be done, and you did it. That's the kind of project that you can't do every time, but we'd love, and we want our organization to be planning for those projects. I wish this were enough, I wish art making were enough, but it's not. It needs to be supported by really strong marketing. And we break marketing into two pieces, one we call programmatic marketing. Programmatic marketing is a marketing we do to sell tickets, to get people to come to our exhibition, to get people to come to our programs, to get people to enroll in our classes. Whatever it is we do that we're trying to get people to. And it's the specific marketing for a particular performance or exhibition. It's the email blasts we send out. It's the brochures we mail out. It's the posters we make. That's what we mean by programmatic marketing. And we're going to talk a lot about programmatic marketing at our next session. And it's really important and I think arts organizations do it reasonably well although there's a lot we need to continue to learn about technology and how we can use technology to make this more effective and less expensive. But I'm particularly interested in another kind of marketing that I call institutional marketing. And by institutional marketing, I'm not talking about marketing we do to get people to come to next Thursday's performance of Hamlet. I'm talking about the marketing we do to get people to say the Children's Chorus of Greater Dallas is the most exciting organization there is. It is so fun to be part of it. If you are not part of it you are missing it. That's a different kind of technique and I am going to give you three examples of what I mean by institutional marketing. Big and small organizations right now to give you a real sense of what I mean because I'm so convinced that organizations that do good institutional marketing end up the healthiest. So let me start with an example from the Ailey organization. As I said, I got to Alvin Ailey in 1991 And the ailing company was in a real mess at 1991. Alvin had passed away just over a year before. Judith Jameson was our new artistic director. There was no money. We owed $1.5 million. It was really one of those situations where you came in every day not knowing if you were going to be able to stay solvent for the week. Let along for the longer term. And I was interviewed for the job, my board and my staff were sort of confused, I'd say. because they said, we're Alvin Ailey. Everyone's heard of Alvin Ailey. How could we be in such difficulty? Why are we, is there no money here? And we're famous. We tour the world, we tour the United States, and then shortly after I arrive, the author Alex Haley died. You know Alex Haley, is the author of the book Groots. And we got thousands of letters of condolence, because people thought Alex Haley was Alvin Ailey. And that told us, that we were not quite as famous as we thought we were. [LAUGH] And you know that's true about all of us in the arts. We think everyone reads every article, sees every newspaper thing, sees every brochure we send out. And the truth is, not so much. And so we have to be very humble about our organizations. And I said okay, well if people think we wrote Roots, I gotta do something about this because we didn't. >> [LAUGH] >> And it's clear that we're not going to get a lot of contributions if people are confused about our organization. So I put in place a one year institutional marketing effort that I'm going to describe in some detail. Not because I think you're going to copy each item. But I want you to get your mind thinking about the kinds of things one can do. And it started in December of 1992 when we got on the Phil Donahue show. Some of you are old enough to remember Phil Donahue, he was the person before Oprah and We got a whole hour on the Donahue show. Now how did we do that? We did that because I am an obsessive reviewer of who likes the work of my organization. I am constantly looking at who came to our performances, who came to our exhibitions, who came to our classes. I find arts organizations don't look at their data enough of who's there. And as a result when we say who we're going to look for to raise money from we always list the 20 richest people in our city or in the country. And you know what, Bill Gates isn't going to give us any of us a penny for the arts. He doesn't fund the arts. So take him off the list. I rather not waste my time trying to get to Bill Gates. Or to any of these super-rich. I'm trying to get to people who like my work. So I'm looking at who comes. And I'm trying to figure out who's coming and who may have some resources to help or may have some inclination to help. And what we noticed was there was this one woman who kept coming. And as we started to study who she was, turns out she was one of the producers of the Donohue Show. So that set ring bells going off in my head this is not someone who's going to give us money, but this is maybe someone who could get us on the show. And we spent a year and a half cultivating her and working up and finally getting on the show. It takes work. But it was worth it, 18 million people watched for an hour as Judith Jamison was interviewed by Phil Donohue. As our dancers danced on this little bitty stage. He danced a little, which was not so good, but it was a great thing. The problem is, when you just do something like that, you do one thing and that's it. It doesn't have much of an impact. We think it does. We say, we were on this TV show, or we had a great article. The problem is, there's so much news these days, you can't rely on one thing. You gotta do it, and you gotta do it again, and you gotta do it again, and you gotta do it again. So the next month, in January of '93, was President Clinton's first inauguration. And I found out one of my board members was involved with the campaign, was a donor to the campaign. Called him up. Said Ken is there going to be some kind of event around the inauguration that we could participate in? I knew there would be something because there always is. I think it'd be great to Ailey to be part of that. And so he said, well, there's this guy who's going to run the whole inauguration, but no one's ever heard of him. His name is Rahm Emanuel, who now is the mayor of Chicago. But at that point no one had ever heard of Rahm Emanuel. And so I called up Mr Emanuel, and I said, we would love to be in the gala, good news, Ailey's available, so You just tell us where we should show up. And he didn't want to deal with me, so he pushed me off on the man who was actually producing the performance that was going to happen the night before, a man named Gary Smith. So, I called up Gary Smith, and I said, Gary, good news, Rahm Emanuel said we should be on the gala, so. >> [LAUGH] >> Here we are >> [LAUGH] And Gary Smith did not want us on the worst way on his gala, because he already had Michael Jackson and Barbara Streisand and Fleetwood Mac and Aretha Franklin and on and on and on and on. And he didn't want to have this little dance company. And so he said, he didn't say no because he was embarrassed to say no, which was his big mistake. So what he said was, you could only have three minutes and I know there's no dance one can do in three minutes. So I went running to do the jammas and I said, we can have three minutes in the gala, and revelations are most famous piece. And there's a section at the end where the dancers are dressed in yellow. And they sing to Rock My Song in the Bossom of Abraham. And there's a way to shorten that section to three minutes. As long in three minutes, you can make a three minutes I called up Gary. Gary good news. We got to three minutes. He was really upset. he said well I would need a video in costume tomorrow. And you can't do that, so no. So we ran in to the studio. Threw the dancer's costumes on. Did the three minutes, sent him the video. Back and forth, back and forth, back and forth. We got on the gala. >> Two great things about it. Well first of all, it's a lot of fun. Secondly, I got to touch Michael Jackson, that was sort of exciting. >> [LAUGH] >> Second thing was we had 88 million people saw that television show on CBS in primetime. But what was really important was. I knew there was going to be a lot of press coverage of this event because of all these celebrities. And because President Clinton was just being inaugurated the next day. So, and I knew there'd be a finale where there'd be a line up, you know, on the stage with President Clinton in the middle and Michael Jackson here and Barbra Streisand here and all the artist lined up. I knew they were going to stick my dancers in the back. So tell my dancers they will all get a present if they got to the front of the line. [LAUGH] And so, actually if you go online and look at the pictures what you see is President Clinton, all my dancers in their yellow costumes, and poor Michael Jackson in the back fighting for his life as my dancers are pushing him to the back. And they all got a gift. Why do I tell you this story in detail? I tell you because these things sound fun when you tell about them. They're a lot of work. And with limited staffs, they're a lot of work, so I know they're not easy, but you know what, they change people's minds. They really do. They get people excited. And coming the month after the Donnave Show, that's pretty potent, right? In March of '93 we weren't done yet though. In March of '93, we did a big exhibition at the Smithsonian institution of Washington. It's actually an exhibition I created for New York That was moved to the Smithsonian that talked about the very humble beginnings of the Ailey company in 1958. And how it had grown and become a major cultural ambassador for the country. And how the State Department made us change the name from the Alvin Ailey Dance Theater to the the Alvin Ailey American Dance Theater because they wanted the word American as, when we toured the world. And it was a really interesting exhibition about the history of the organization. I love exhibitions. Any arts organization can do an exhibition. You all have a big anniversary every five years. This was our 35th. Not a major number, but we made it a major number. And I love exhibitions particularly for performing arts organizations. Because you know in the performing arts, we have to recreate the performance every day, where as we do an exhibition and you can leave it up for two, three months. It's something to bring donors to, something to bring the press to. You don't have to keep remaking it. And so, I really love the notion of showing what you do, showing your work, showing your photographs, your posters, your costumes. What you created for the community, how you engage people. That can be a really wonderful tool for explaining who you are. In July of 93, we did a big free concert in Central Park. The concert, as I said it was our 35th anniversary. It turns out, one of our corporate sponsors, Phillip Morris was celebrating it's 35th anniversary of giving money to the arts. So I went to them, I said wouldn't this be a great way for you to celebrate your 35th anniversary by funding a concert for New York, let's make it free. Everyone can come to, in fact, 35,000 people came to it. And CNN came and did a little story about it and ran it 48 times. It was two-minute story they ran 48 times over the next 24 hours. Every half hour we were on CNN nationwide and worldwide. That was Central Park. In August of 93 the city of New York named our street Alvin Ailey Place. West 61st Street is still Alvin Ailey Place, even though Alvin Ailey has moved, built its own building. But the company had its street named, it was press, there was a ceremony, they took the sign off, all that good stuff. In November of '93 two books were published about the organization. One was Judith Jamison's autobiography. One was a book of photographs by a man named Jack Mitchell who'd been photographing aliens since 1960. So almost since it's beginning, and it was a whole history of alien photographs. And in December of 93, exactly one year after Donahue, was our 35th anniversary season, and we opened with a big gala, with Dionne Warwick, Al Jarreau, and Jesse Norman singing Revelations. And Denzel Washington, Felicia Rashad as our hosts, and Maya Anjou writing and reading a poem, and a new work that Judith created with Anna Didier Smith. So it was a, extravaganza. Everywhere you turned in that year, Ailey was out there. In 1992, before we did all this, we raised $1.7 million for the year. By the way, we had raised $1.7 million every year in a row for five years. And when I started there, I was told by my board, you will never raise more than $1.7 million. That's all there is in the world for Alvin Ailey, so just get used to it. I didn't believe them. We did all this work, and that year we raised $3.4 million. We doubled our fundraising, it was a $1.7 million increase. That 1.7 paid off the entire historic deficit of $1.5 million and left a little left over. And by the way, there were no big gifts, this was all $50, $100, a few bigger ones, but no like $1,000,000 unrepeatable gift, these were all repeatable gifts. Why? Because people wanted to join what I called the family. And by family I'm not talking about staff or artists, that is a family too but I'm not talking that family. I'm talking to people around us who do stuff for us. I"m talking about our audience or our visitors or our students, depending on who we are, or our members, if we're a membership organization. I'm talking about our volunteers. I'm talking about our donors, and yes, I'm even talking about the board. Our board members have no obligation to be on our board. We don't pay them. If the art is amazing and the marketing is strong, people want to join the family. People wanted to join the Ailey family because all this exciting stuff was happening. By the way, our fundraising also doubled because my board got really engaged and excited by all of this. When I started Ailey in 1991, I went to each of my 36 board members. Individually, I went to everyone's home or office and I said, we're about to go bankrupt. Who do you know who can help us? I'll do all the work. Just give me some names, open a door, let me talk something. And the astonishing thing was not one of my board members had ever met another human being. They knew nobody. >> [LAUGH] >> Now you're laughing because you recognize. >> [LAUGH] >> The truth of that. I don't know anybody who could give us money, or I've tried everyone and no one wants to. That's my favorite line. As if like one no is it for the history of the world. And all of a sudden in these two years when getting all this stuff done, all of a sudden my board met lots of people they wanted to bring into the family. What they realize was, instead of it being asking their friend for a favor to get involved, they were doing their friends a favor to get them involved because it was fun, it was exciting, it was engaging. Does that makes sense, what I'm saying? And so, all of a sudden I realized that one of my jobs as executive directive of an arts organization is to get my board unembarrassed. They were embarrassed about our financial health. And there are lots of reasons why board members can be embarrassed. They can love your mission and still feel that there's always typos in the thank you letters or they forget to send thank you letters, or the performances always start late, or no one's ever really ready in the theater, or whatever reason. And I realize that my job is to undo all of that and make my board so happy and so engaged, that they wanted to really bring their friends into the family. I promise you two other examples which I will give you in a moment, but let me just finish this cycle for a second. When the family is really happy and growing, and engaged, and loves you, and when you know how to do fundraising decently well, you get money. And very importantly, when that money goes back into great art, and we'll talk about that in a few moments, but back into great art, which you market even more aggressively. The family gets bigger and happier and more engaged. And you get more money and you can do better art. It's what sports teams do so much and I always get booed when I talk about sports, although I love sports, but they do it really well. They create an exciting product, they market it really well. People want to join the fan base, they provide tons of money. And they put it back into buying better players and they do more marketing and the family gets more larger and more engaged and they get more money. They do that well. We don't do it as well and we need to do it well. Does this make sense? Does this cycle make sense? Yeah? And to me it's intuitive and whenever I teach people they say yeah, I sort of knew all that. The problem is we don't necessarily act on it. We may know it but we don't focus on it.