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Sounding the Alarm

by Scott Provancher

Sounding the Alarm

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Picture by Chris Cureton

July 12, 2012

I recently gave a keynote speech to a group of community leaders at the Annual Meeting of the Rockford (Ill.) Area Convention and Visitors Bureau. My good friend John Groh, the CEO of the Visitors Bureau, asked if I would be willing to talk about the role that social innovation plays in building vibrant cities.

I have a fond place in my heart for Rockford because they took a risk in hiring me to serve as the Executive Director of the Rockford Symphony when I was just 24 years old—an opportunity that became a defining leadership experience for me and a spring board for both the Rockford Symphony and my career. So when John called, I immediately said ‘yes’.

Preparing for this speech also gave me an opportunity to clarify in my mind what social innovation really means and the role it must play in ensuring Charlotte’s continued growth and prosperity.

Simply defined, innovation is an idea that creates value. There is a plethora of ideas in the world, but few create lasting value. To me, social innovation is the most elusive, yet most important form of innovation—a novel idea that creates value for the public good.

Examples of great social innovations, such as the development of language, irrigation, and the public library system, immediately come to mind. However, one doesn’t need to look back thousands of years or even outside of their own community to witness the importance of social innovation.

In fact, the development of the Arts & Science Council (ASC) was a social innovation. The pressing issue of the time was how a city poised to grow economically in the coming decades could ensure that it had the arts and culture offerings necessary to attract, retain, and inspire the needed workforce and their families.

Despite Charlotte’s prospects for future growth, it had a dilemma. More mature communities had built their arts and cultural amities through the generosity of a select few—famous philanthropists like Mellon, Rockefeller, Carnegie and Guggenheim had both significant resources and saw the importance of a cultural life for a community. Without that kind of wealth, however, Charlotte would need to innovate in order to accomplish this feat.

Through the visionary work of community leaders from both the public and private sectors, a groundbreaking partnership was formed. The ASC as we know it today was developed as a unique non-profit umbrella organization that would receive both public support from the city and county, and leverage that investment to inspire donations from companies and individuals through corporate and workplace campaigns. The dollars raised would not only help lead the creation of new venues and programs, but also provide operating support for a burgeoning group of arts and culture organizations.

What resulted was nothing short of a miracle. Over a 35 year period, more than $1 billion (52% private and 48% public) was leveraged to literally build a city centered on arts and culture. This innovation helped to make Charlotte the envy of other cities that by now are seeing stagnating urban cores and failing arts organizations, but is a significant economic engine for our community, generating over $200 million in annual economic impact and 6,200 full-time jobs.

Our funding model is no longer working

At the risk of being an alarmist, I am concerned that the entire funding model that fueled our cultural explosion over four decades is no longer working. Even before the economic downturn, the underlying system that had fueled the growth of the cultural sector was quietly and dramatically shifting without a true understanding of the consequences. The most significant shift came in two forms 1) how companies partner with ASC to fundraise in the workplace and 2) the City of Charlotte and Mecklenburg County funding structure for the arts and cultural sector.

Workplace giving was the single greatest growth engine for the cultural sector in the past, and it provided much needed operating resources to keep the doors open for organizations like Children’s Theatre, Discovery Place, Charlotte Symphony and a dozen others.

A Foundation For The Carolina’s sponsored task force in 2008 affirmed the crucial role of workplace giving for the future of both the United Way and ASC affiliates. However, the train had already left the station. Since the time of the task force report, the dollars raised in ASC’s workplace campaigns dropped almost 40%.

There is no doubt that the workplace giving model was seeing signs of its age before the economic downturn, and the task force agreed that a significant overhaul was needed to meet the changing needs of employees and employers. But the speed of this changing landscape left two huge non-profit sectors without the runway to develop a meaning alternative for the community. This is something that we still need to resolve.

Another quiet shift remained virtually unnoticed because of the tremendous growth in the private sector. The role that the City of Charlotte and Mecklenburg County play in the partnership to fund the cultural sector.

An important aspect of the ASC model is that the City of Charlotte and Mecklenburg County would in essence outsource the function of a cultural affairs department to ASC, thus enabling a big savings on overhead and ensuring the greatest percentage of dollars going directly to the community.

These dollars also play an important role in the private-sector partnership by encouraging the private sector to match the public dollars committed to the partnership. However, over the last decade the public-private leveraging has become a lopsided arrangement, with the private sector now tackling the lion’s share of the annual support of the arts and culture sector.

Through a series of decisions beginning in the early 2000s, Mecklenburg County gradually reduced ASC funding until it reached an all-time low in 2010. During this period, total City and County funding for arts and culture decreased by 36%, while the overall City and County budgets increased significantly.

The need to forge a new path

All that is to say, the once-innovative model that was developed to support the arts and culture sector will need to be reinvented to meet the growing needs of our community.

The great Peter F. Drucker made a profound observation when he said, “Business has only two functions –marketing and innovation. All the rest are costs." In other words, the function of business is to develop products and sell them to customers.

The ASC and Charlotte-Mecklenburg is no different. We must design solutions that provide community value and ensure their success. Going back to the old model for support of arts and culture is simply not possible. The change that our community has seen is significant and, like our community did decades ago, it will need to forge a new path forward to ensure our cultural assets continue to flourish.

When I stood on stage in Rockford, behind me were two juxtaposed pictures: the Charlotte skyline in 1976 and one in 2012. I looked at the audience and said, “Do you want to see what innovation can do for a city? Look no further than the transformation of Charlotte.”

The arts and culture sector was one of the most significant catalysts in this transformation. With the help of the community, our key civic and corporate partners, I am confident we will find a way to accelerate our arts and culture sector and continue to make Charlotte one of the best places in the world to live. Innovation is how we can do it.

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Editor's Note: This is the first essay in a two-part series. In a Critical Issues essay later this year, Scott will discuss the ASC's work towards a solution to the funding model problem. 
 

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Tags: scott provancher, arts and science council, arts, nonprofits, fundraising, charlotte

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