In choose your adventure books, children take on the role of the protagonist and make decisions at critical points in the narrative that lead to different endings. Like these classic children’s books, the National Center for Arts Research at Southern Methodist University (SMU) recently released a report that allows arts organizations and entrepreneurs to choose their own adventures – starting new ventures or improving existing ones.
By following the report as though it were a choose your adventure book, we are able to glean rich information about the context in which arts organizations operate. The report builds on layers of data to reveal how key metrics like revenue development, attendance and engagement are associated with an organization’s success. It is at this point, when researchers have piqued our interest, that entrepreneurs are faced with a choice of adventure:
Option #1 – Start Your Own Venture
The SMU report and others like it can be extremely helpful in feasibility assessments for new ventures, which is step 4 of lean start-up for the social sector. Feasibility assessments determine whether a new venture is likely to succeed or fail by investigating the venture’s market, competition and fit. Arts organizations that are thinking of starting new programs can use SMU’s report to determine characteristics that are linked to success. The report shows how organizational, socioeconomic and competitive characteristics impact success in revenue, attendance, engagement and program offerings, among other factors. For instance, SMU found that attendance and engagement with arts organizations was lower in cities with more sports teams, zoos, cinemas and public radio/television stations. This tells us that entrepreneurs should consider their competition broadly and not look myopically at arts organizations in the local area when they are thinking of launching a new arts venture.
Option #2 – Improve an Existing Program
Most organizations are also accountable to boards, investors or donors, and SMU’s report and others like Nonprofit Finance Fund’s State of the Nonprofit Sector are useful for benchmarking your organization to comparable ones. Benchmarking gives social sector organizations a chance to communicate reasonable expectations and performance targets to stakeholders who sometimes do not understand the day-to-day demands and investments required for results. For example, SMU reported that the average arts organization spent $4.11 to attract each attendee. Other arts organizations can use this metric to evaluate their own spending on marketing and make program or administrative changes to drive results.
The resolution to this story is up to you. Like choose your adventure books, entrepreneurs are free to enact the storyline more than once. Invoking both options is a complete possibility! We hope you will read SMU’s report and share your insights with us. Please check in with us again next week as we report what we learned from the Social Enterprise Alliance Summit ’14.