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Governance in non-profit arts organizations

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Title:
Governance in non-profit arts organizations a grounded-theory perspective
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Radich, Anthony J
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English
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xi, 211 leaves : ; 29 cm

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Art -- Societies, etc -- Management ( lcsh )
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bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )

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Bibliography:
Includes bibliographical references (leaves 193-206).
General Note:
Submitted in partial fulfillment of the requirements for the degree of Doctor of Public Administration, Graduate School of Public Administration.
General Note:
School of Public Affairs
Statement of Responsibility:
by Anthony John Radich.

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University of Colorado Denver
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ocm18004106
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Full Text
GOVERNANCE IN NON-PROFIT ARTS ORGANIZATIONS:
A GROUNDED-THEORY PERSPECTIVE
by
Anthony John Radich
B.S., University of Oregon, 1971
M.A., University of Oregon, 1974
A thesis submitted to the
Faculty of the Graduate School of Public Affairs of the
University of Colorado in partial fulfillment
of the requirements for the degree of
Doctor of Public Administration
Graduate School of Public Affairs
1986
I V, ? t


(c) Copyright by Anthony John Radich 1986
All Rights Reserved


This thesis for the Doctor of Public Administration
degree by
Anthony John Radich
has been approved for the
Graduate School
of Public Affairs
by
Terry Melton
Date



Radich, Anthony John (D.P.A., Public Administration)
Governance in Non-Profit Arts Organizations: A Grounded-Theory
Perspective
Thesis directed by Associate Professor Robert W. Gage
Research concerning governance in arts organizations
generally has been limited to case studies that lack wide
applicability or to technical how-to11 studies that
advise participants of strategies to use for success in arts
governance. This study developed a broad conceptual frame-
work to explain how the arts-governance process functions
that can be used for future research on the topic. In the
study, governance was defined as the process by which a
legally constituted formal body (trustees) and its designated
agent (the director) guide policymaking and the implementa-
tion of policy in a private, non-profit arts institution.
The method used to develop the framework was grounded
theory, which focuses on theory generation rather than veri-
fication and uses qualitative data to produce the theory.
Data were collected through reviewing books and articles
concerned with arts governance and through fifty-four inter-
views with trustees and directors of various types of arts
organizations across the United States. The data then were
coded into major variables of the governance process and
propositions that described the process.


V
Ten variables were identified as important in the
process of governance: resource scarcity, organizational
vision, community connections of trustees, commitment of
time by trustees, trustees' applications of governance models,
director/artistic director structure, measures of success
for directors, perceptions of directors, power relations
between directors and trustees, and actions of founders.
Qualities of these variables or relationships among them
were described in nineteen propositions,.
The propositions were organized into a conceptual
framework centered around the governance act itself, with
its major components: scene, the situation in which the
act occurs; agents, those who participate in and perform
the act; and agencies, the means or instruments used to per-
form the act. Conclusions drawn about these components of
governance suggested that its scene is one of instability,
the agents or participants in governance hold conflicting
views of the organization, and the agencies of governance
are paradoxical and contradictory.
The form and content of this abstract are approved. I
recommend its publication
Signed


ACKNOWLEDGMENTS
I would like to thank my wife, Sonja Foss, for her
i
encouragement throughout mjy graduate program and the disser-
tation process.
i
I also appreciate the assistance and support of my
i
committee members, Eileen pynan, Franklin James, Terry Melton,
and Robert Gage; as the chair of the coimittee, Bob Gage was
' i
particularly generous witfj his time and encouragement.
Finally, Kathleen jArchibald provided invaluable ideas
and critiques at the formative stages of this work.


CONTENTS
CHAPTER I
INTRODUCTION ........................................... 1
Purpose of the Study.................................. 5
Significance of the Study........................... 7
Historic Overview of Arts Governance ................... 8
Chief Features of Private,'Non-Profit Arts
Governance................................... 20
Private, Non-Profit Status .......................... 20
Purposes ............................................ 23
Board-Staff Structure................................ 24
Contexts .......................................... 28
Structure of the Study ............................... 30
Notes-Chapter I ....................................... 32
CHAPTER II
METHODOLOGY ........................................... 33
Procedures ........................................... 35
Definition of Object of Study ........................ 36
Researcher's Perspectives Used as Guides
to Initial Data Collection ............................ 36
Collection of Data .................................. 37
Coding of Data ....................................... 44
Identification of Variables and their
Characteristics ....................................... 45
Presentation of Propositions ......................... 46


Vlll
Development of a Conceptual Framework
from the Propositions ........................ 48
Origins of the Method ............................... 48
Review of the Literature............................... 51
Notes-Chapter II ....................................... 62
CHAPTER III
RESULTS ............................................... 66
1. Resource Scarcity .................................. 67
Proposition 1.0: Arts organizations
experience a high level' of resource
scarcity.............................................. 68
Supporting Data..................................... 68
2. Organizational Vision .............................. 72
Proposition 2.0: Mechanisms are developed
to encourage the maintenance of an
organizational vision ............................... 72
Supporting Data ..................................... 72
Proposition 2.1: Directors work to involve
themselves socially with trustees in
order to reinforce the organizational
vision ............................................. 76
Supporting Data..................................... 76
3. Community Connections of Trustees .................. 79
Proposition 3.0: Trustees are selected
for their connections with the conmunity ............. 80
Supporting Data...................................... 80
4. Commitment of Time by Trustees ..................... 85
Proposition 4.0: Trustees devote too little
time to their organizations .......................... 86
Supporting Data....................................... 86


IX
Proposition 4.1: Trustees allocate insufficient
time to arts organizations because they
often join for reasons irrelevant to the
organizations' needs....................... 91
Supporting Data ..................................... 91
Proposition 4.2: Trustees allocate time to
arts organizations more readily when the
organizations are successful ........................ 93
Supporting Data .................................... 93
Proposition 4.3: Lack of time investment
by trustees in organizations shifts
responsibility for governance to
directors ....................................... 95
Supporting Data................................... 95
5. Trustees' Applications of Governance
Models.......................................... 97
Proposition 5.0: Trustees bring models of
governance behavior from other areas
to the governance process ........................... 98
Supporting Data................................. 98
6. Director/Artistic Director Structure ............. 103
Proposition 6.0: The director/artistic
director structure is innately
ambiguous .................................... 105
Supporting Data ................................. 105
7. Measures of Success for Directors ................ 110
Proposition 7.0: The audience for
directors lies largely outside the
bounds of their organizations...................... Ill
Supporting Data .................................... 11]
Proposition 7.1: The criteria for success
for directors are not explicit at
the local level ...................
114


X
Supporting Data .................................... 114
8. Perceptions of Directors .......................... 119
Proposition 8.0: Trustees regularly
question the management skills of
directors ..................................... 121
Supporting Data .................................... 121
Proposition 8.1: Directors define their
roles in dissimilar ways ......................... 124
Supporting Data .................................... 124
9. Power Relations Between Directors
and Trustees ........................................ 127
Proposition 9.0: Trustees control aesthetic
decision making even when the power
to make aesthetic decisions has
been formally allocated to the
director or artistic director ..................... 130
Supporting Data ................................... 130
Proposition 9.1: Directors devise
strategies to increase their powers ................. 135
Supporting Data...................................... 135
10. Actions of Founders ............................... 139
Proposition 10.0: Founders are imbued
with extraordinary powers ........................... 140
Supporting Data ..................................... 140
Proposition 10.1: Founders have difficulty
adapting to changes in the
organization ...................................... 144
Supporting Data ..................................... 144
Proposition 10.2: Founders who choose to
remain involved in an organization
work to alter the structure of their
organizations to insure their
continued participation .......................... 146


xi.
Supporting Data ...................................... 146
Summary................................................ 148
Notes-Chapter III ..................................... 149
CHAPTER IV
CONCLUSIONS ............................................ 153
Summary of Propositions ............................... 153
Conceptual Framework: Governance as
an Act........................................... 156
Scene ............................................... 159
Agent ................................................ 160
Agency............................'............... 160
Components of the Governance Act:
Discussion ........................................... 161
Scene................................................ 161
Agent ................................................ 169
Agency ............................................... 178
Summary............................................... 184
Limitations of the Study ............................... 184
Suggestions for Further Research........................ 186
Notes-Chapter IV........................................ 190
BIBLIOGRAPHY ............................................... 193
APPENDIX
207


CHAPTER I

INTRODUCTION
Until the last few decades, non-profit arts institu-
tions usually were governed by trustees drawn from the ranks
of wealthy arts patrons and a director who was both an art
connoisseur and an active participant in the social life of
the upper class. The director and the trustees usually
formed a homogeneous group that guided the institution; there
was limited conflict between them as both frequently shared
a collective vision for the institution that was grounded in
the values and norms of the elite. This comfortable gov-
ernance relationship came to an end when a new financial
environment and populist demands forced changes in its
structure.
The events that affected the financial environment
of governance took place in the early part of this century.
Five historical events of particular importance in changing
governance patterns were:
(1) Until the federal income tax was introduced in
1913, wealthy arts patrons paid only minor taxes. As the
century progressed, the income tax increasingly constrained
the ability of the wealthy to support arts organizations


2
individually.
(2) Imposition of federal estate taxes in 1915 fur-
ther limited the ability of wealthy families to support arts
organizations.
(3) The power of wealthy individuals to direct their
funds to the arts was diminished when, in response to taxes
on income, foundations were established to serve as dispen-
sers of funds. Through time, foundations frequently became
semi-independent or totally independent of their founders,
so the patrons essentially became third parties in the support
process. Some foundations even took on activities that were
contrary to the wishes of their founders. Foundations grew
through the period to be significant sources of funding for
the arts, and they generally were not completely controlled
by single individuals.
(4) The Federal Reserve Act of 1935 permitted cor-
porations to deduct up to five percent of their pre-tax pro-
fits upon contribution to charitable organizations. The Act
set the stage for corporations to serve as major actors and
power brokers in the area of arts funding.
(5) The National Endowment for the Arts was founded
in 1965. Its distribution of federal funds and its encourage-
ment of state funds for the arts made the federal and state
governments major sources of revenue and influence.


3
In addition to changes in the financial environment
that influenced the governance of arts organizations, popu-
list demands affected the structure of their governance as
well. In the 1960s and 1970s, arts organizations were sub-
jected to more intrusions and scrutiny by outside elements
than ever before. The arts-governance process once had been
a closed process, but factors developed that opened it to
the public. Among the most important were:
(1) Federal statutes of the 1960s and 1970s regard-
ing the hiring of minorities and accommodation of the handi-
capped forced arts organizations to communicate with and be
influenced by outside agencies and organizations. The in-
creasing dependence of arts organizations on government fund-
ing made ignoring these populations impossible.
(2) Increased public funding made organizations more
publicly accountable. Public funds distributed through the
grant process are commonly allocated by broad-based grant
review panels that require arts organizations to open their
operations to public scrutiny.
(3) As their budgets grew, arts organizations often
sought to increase revenues by hosting activities that would
draw ever larger audiences that would support the organiza-
tion through admission fees and memberships. This increased
emphasis on the widening of the base of participation was


4
reflected in the attempt to govern the organization in a manner
that would encourage that participation.
(4) Where organizations such as unions had not pre-
viously had a place in arts organizations, the past twenty
years have witnessed the increased unionization of arts
organizations. In 1971, the employees' union at the Museum
of Modern Art in New York, for example, called a two-week
strike over staff layoffs. Such activities demonstrate that
staff members of arts organizations increasingly seek a role
in the governance process and have become an important factor
with which to contend in this process.
(5) The late 1960s and the 1970s witnessed demands
made on arts organizations in the name of social change and
that affected the nature of the decision-making process in
the organizations. Such demands included closing the Museum
of Modern Art until the end of the Vietnam War and quotas
for women artists in collections. Such demands never before
had been a major issue for arts organizations, and new sys-
tems o'f governance evolved to deal with them.
These changes in the financial environment and the
power of the public affected not only the board of trustees,
but the director of the arts institution as well. While in
the past, the director needed only to be concerned with know-
ledge about the art form and maintain social links with those


5
who provided funds, the new environment of the arts institu-
tion required a director with vastly expanded skills, one
who was much more aware of the whole public rather than the
social elite alone. The new type of director needed to work
in the new environment with a new type of board of trustees
that did not form the homogeneous group of the past. Thus,
the new governing group of trustees and the director engaged
in the task of governance in a manner that was both less col-
legial and less predictable than it had been formerly. This
new governance arrangement, under which arts organizations
currently operate, is the subject of this research*
Purpose of the Study
This study is concerned with governance inprivate,
non-profit arts institutions in America. These institutions
commonly include art museums, music associations, arts centers,
and theatres. By limiting this study to private, non-profit
arts organizations, organizations that are government based
are excluded, as are those that are for-profit enterprises.
Narrowing the scope of the governance review to America elim-
inates the need to address European and other foreign arts
systems that are substantially different from those of the
American experience.
Governance, for this study, is defined as the process


6
by which a legally constituted formal body, which will be
called trustees here but is not limited to bodies so labeled,
and its designated agent, the director, guide the policy-
making and implementation of policy of an institution. In-
cluded under the topic of governance are such things as the
composition of the board of trustees, the decision-making
process, the division of power between the trustees and the
director, and the strategies the director and trustees use
in dealing with one another.
This study is designed to identify the major features
of the governance process in private, non-profit arts insti-
tutions and the manner in which these features function.
From these observations, a conceptual framework of governance
will be developed to explain how the governance process func-
tions. The term, conceptual framework, has been chosen to
describe the observations about governance collected rather
than the more common term, theory. A theory implies a co-
herent body of knowledge that attempts to organize, explain,
and predict some aspect of the world. While initial steps
have been made in this direction in this study, a fully
developed theory of governance has not been formulated;
the data gathered in this study were limited, and all pos-
sible patterns in the data have not been identified due to
the need to impose some boundaries on the study. The


7
conceptual framework developed here, then, is an organization
of some exploratory findings into a reasonably adequate
explanation of the governance act. The framework sets forth
hypotheses about the nature of the relationships of the
variables in the governance process. It does not prove the
existence of these relationships; rather, it identifies and
organizes them and presents evidence for their presence.
Significance of the Study
A theory of governance in private, non-profit arts
organizations is significant for a number of reasons. First,
the area of arts administration is one in which relatively
little research has been completed. Studies reported in the
field usually focus on narrow aspects of arts administration
and, with few exceptions, are strictly descriptive and not
concerned with either theory generation or verification. The
arts-administration field is in need of research of all kinds
but is especially lacking in the area of theory development.
Second, the experience of this investigator in the area
of arts administration suggests that governance in private,
non-profit arts organizations is considerably different from
governance in other non-profit, business, and government
organizations. While the purpose of this study is not to
identify these differences, its findings should provide data


8
and a framework that will facilitate the comparison of arts
governance with the governance of other organizations.
Finally, the results of the study will facilitate
the prediction of outcomes in various areas of arts govern-
ance. If participants in the arts-governance process are
able to discuss that process against a background of a con-
ceptual framework such as the one developed here, they may
diagnose and correct problems in that process more easily.
A theory of governance will assist actors in the process,
then, to conduct their activities in a manner that is based
on an understanding of the implications of their conduct for
the governing structure. Such a framework, for example,
could serve as a tool for those who select trustees and hire
executive directors for private, non-profit arts organiza-
tions. It also could assist them in defining the nature of
the governance process in their organization and selecting
participants who will function well in that process.
Historic Overview of Arts Governance
The governance structures and processes of the pri-
vate, non-profit arts organizations of today have their roots
in earlier governance forms and philosophies. Because these
historic residues help explain the nature of governance in
current arts organizations, a brief review of the history


9
of arts governance is appropriate hereJ
Governance in arts organizations did not evolve with
distinct forms through discrete time periods. Although gov-
ernance formats loosely follow chronological time, they are
more appropriately viewed as paradigms that represent a
coalescence of features that result in identifiable types.
Thus, while each of the six governance paradigms reviewed
below are identified with a time period, all are extant today.
The earliest arts organizations in this country were
for-profit enterprises in which arts events were sponsored
for the sole purpose of generating income for their inves-
tors. The early museums of the Peale family, for example,
were art and curio businesses that were supported through
admission fees. The American Museum in New York, established
by John Scudder, was another such enterprise founded not as
a philanthropic enterprise but for investment,. This for-
profit activity was not limited to the visual arts. Soloists
toured the country appearing at subscription concerts organ-
ized by local and regional promoters, and New Orleans was
the home of a for-profit opera house founded there in 1809.
Theatre in America also was commercially oriented in its
early days. According to Moody, this feature of early Ameri-
can theatre continues today: "From the beginning the Ameri-
can theatre has been a commercial enterprise, and this concept


10
p
seems to be an almost eradicable part of our culture."
These early arts activities were based on a paradigm
of business governance rather than on today's paradigm of
non-profit governance. They were frequently owned and oper-
ated by individuals, families, or stockholders, rather than
associations. The owners served as the trustees of the
organization, and one of them often would assume the role of
director as well. Like a business organization, these arts
organizations selected their artistic programming on the
basis of what the market would accept, with little considera-
tion given to broader goals; this market orientation was
their driving force.
After 1800, a number of arts organizations similar
in spirit to those that exist today were established. The
purpose of these endeavors was not to generate a profit but
to benefit either the members of a particular groupsuch
as musicians, artists, and private club members--or the
conmunity as a whole. The underlying goals driving these
organizations were education and self-improvement. These
organizations were founded to educate the public to the
arts, with the belief that such education would contribute
to the leading of fuller lives by the public and, in some
cases, that such contact would reduce crime and address
other social problems. Members of private arts


n
organizations in this category supported the arts out of a
desire to improve themselves, while enjoying the aesthetic
pleasures the arts could bring. Even cooperative organiza-
tions of this type, which yielded direct monetary benefits
to their members, such as cooperative musician associations,
were pursued for the enjoyment of participation in the arts
and the pursuit of growth as artists.
The closed cooperative organization, which typifies
arts organizations formed to benefit from the presentation
of the arts, is exemplified by the early Atheneums. These
early private clubs usually were joined through stock pur-
chase or annual subscription. Most were libraries, but many
had wider interests. Members of the Boston Atheneum, for
example, had an interest in the visual arts and developed
an outstanding collection of fine art. It served as the
founding institution for the Boston Museum of Fine Art.
Another type of closed cooperative organization was the New
York Philharmonic Society, founded in 1842. This association
of musicians was organized in order to schedule concerts in
which they would play and earn their livings as musicians.
I
The group members elected their conductor and admitted new
members through a vote of existing members. At the conclu-
sion of each season, they distributed the season's proceeds
equally among themselves.


12
Appearing simultaneously with these closed-membership
groups were voluntary organizations founded to benefit the
public at large. In Cincinnati, the Women's Art Museum Asso-
ciation was founded for the purpose of establishing an art
museum. Unlike many other closed organizations, the Asso-
ciation was open to any member of the public who wished to
join. The Pennsylvania Music Fund Society, founded in 1820,
was similarly open and demonstrated its concern with society
as a whole in its statement of purpose: "For the relief and
support of decayed musicians and their families and the cul-
3
tivation of skill and the diffusion of taste in music."
These seminal arts organizations shared a number of
governance features with the private, non-profit arts organi-
zations of today. The closed organizations were governed
by voluntary groups that shared similar interests and had
rigorous membership requirements, not unlike the artist
cooperatives and remaining private art clubs of today.
Organizations that sought to benefit the community at large
also were governed by a small, volunteer group, but that
group was only nominally open to the public. In fact, its
make-up was usually reflective of the prominent individuals
and families of a community, suggesting implicit membership
requirements. Similar membership on governing boards is
conmonly found in the arts organizations of today.


13
These early organizations further anticipated today's
governance structures in that they often retained a staff to
assist them in their tasks. Usually, staff members were
called secretaries rather than directors, and their duties
were to maintain financial records, handle correspondence,
and supervise any day-to-day activities of the organization.
These staff members, however, seldom held much real power
and in this way differed substantially from the directors of
today.
Another development in arts governance that still
is reflected in the governance of today's arts organizations
was the rise of "great patrons." Beginning in the middle
1800s and continuing to the imposition of the-federal income
tax in 1913, this period was characterized by the founding
and controlling of arts organizations by persons of immense
wealth. Certainly, other patterns of governance existed
during this period, but the prominent institutions of the
time were controlled by wealthy patrons. Notable among
these institutions were the Boston Symphony Orchestra under
Henry Higgensonj the Corcoran Gallery and Phillips Collec-
tion in Washington, D.C.; and the New York Philharmonic
Society, which was rescued financially in its early years
by Andrew Carnegie.
The governance of arts organizations that were


14
dominated by great patrons was characterized by a number of
features. First, the trustees on the boards of these organi-
zations had little power and influence over them. As long
as one person--who often was the founderheld the purse
strings, the boards essentially were "paper boards," boards
of trustees established to provide the appearance of community
involvement in governance. These bodies, then, were estab-
lished primarily for community-relations and sometimes legal
purposes. In addition, the director of such a patron-domi-
nated organization often was a chief patron, a family member,
or a celebrity who added stature to the organization while
having little to say about the organization's operations.
The programs of such organizations were crafted
around the personal interests of the patrons. These patrons
frequently took the view that the audience served as the
receipient of good deeds performed for it by the patrons,
who undertook such acts out of a sense of noblesse oblige.
Though the era of the great patron reached its peak in the
late nineteenth and early twentieth centuries, numerous
examples of it remain in the art world today. Walter Chrys-
ler of the Chrysler Museum in Norfolk, Virginia, and Donald
Seawell, chair of the Denver Center for the Performing Arts
in Denver, Colorado, are two such examples. The imposition
of the income tax and the limitations placed on monopoly


15
enterprises, however, have greatly reduced the number of arts
organizations that are controlled by a single great patron.
Simultaneously with the great-patron movement in arts
governance in the middle to late nineteenth century arose a
type of governance that might be termed "partnership gov-
ernance." In partnership governance, there was not a great
patron present who could or would assume major responsibility
for an arts organization, so the organization's private-sector
volunteers formed partnerships with government in order to
establish and maintain arts organizations of high quality.
An early example of this type of alliance was a
partnership between the city of New York and a group of indi-
viduals interested in founding a major art museum. In 1870,;
officials of New York City agreed to provide land, construct
a building, and maintain the structure, provided the private
group collected art for the museum and assumed much of the
cost of its operation. The result was the Metropolitan
Museum of Art. This model was followed across the country,
especially after the commencement of the "city beautiful"
movement following Chicago's Columbian Exposition in 1893.
That movement had as its central feature the goal of build-
ing great and beautiful cities that would contribute to the
development of humankind. The construction of buildings
for great arts institutions was a central feature of this


16
effort.
The governance of these partnership organizations is
characterized either by direct government participation on
the boards of trustees or informal but significant govern-
ment influence on the governance process due to its role of
providing substantial funding and facilities to arts institu-
tions. This type of arrangement required a new type of
director. Due to the importance of the government's support,
the director increasingly had'to be a person who could com-
municate with government officials--at times, unsavory and
corrupt local politicians--and keep the flow of funds coming.
The director, then, had to work as a broker who carefully
exchanged programs and performance measures of the organiza-
tion for public support. Although the public was left un-
consulted as to what these.programs would be, they were iden-
tified as the primary beneficiaries of these cooperative
efforts.
Once the era of great patrons subsided and the inter-
est of state and local governments shifted away from build-
ing great cities and states, governing boards entered a phase
that cOuld be termed the "redistributive period," a period
that spanned the years of 1920 through 1965.' During this
time, no single trustee or government interest was preeminent.
In many cases, the prominent founding trustees had died, and


17
their funds were present in the form of earnings from endow-
ments left to institutions. So also did the prominence of
government support fade. Although such support often con-
tinued to be present, the appropriation of these funds became
routine to the point that addressing governmental politics
was no longer necessary. The trustees of this period had
considerable wealth, but no single trustee was necessarily
capable of dominating the organization due to the effects
of tax and other laws that severely restricted the ability
of a few to amass great wealth. These trustees served the
organization as a coalition of guarantors of the institution.
Because the dominant theme of governance was its
coalescent nature, the director in this period had to be a
person adept at holding together such coalitions. This was
often accomplished through social skills that were used both
to keep persons interested in the organization and to main-
tain the governing coalition, assuring its decision-making
capacity. This coalescent nature of the organization also
affected the programs the group sponsored. Unlike the period
of the great patron, the director could not fashion programs
to appeal to a single person. Instead, programming had to
appeal to the range of interests on the board and offer the
hope of appealing to special interests among the public out-
side the board such as art education, minority concerns,


18
avant-garde art, and art preservation.
The most recent type of arts-governance structure
can be termed the "public-patron" type. Here, the federal
government, through its arts agency, the National Endowment
for the Arts, has become a central force in the governance
process. The fact that it and its related state arts agen-
cies offer the promise of substantial grant funds to arts
organizations means that most arts organizations acquiesce
to federal policy in order to increase their chances of
obtaining grant funds.
Federal influence has affected arts governance in a
number of ways. One is that the type of director needed to
operate in a grant-focused environment is different from one
needed for other arts environments. This environment requires
less of a socially oriented director and more of a techni-
cian. The director must be able to conduct research, com-
plete grant-application forms, and effectively lobby the
grant-making organization. In order to be successful, the
director also must know how to structure the arts organiza-
tion in a way that its management and programs coincide with
the standards the grant-making institutions have established
either explicitly or implicitly.
In this new environment, the character of the board
also has changed. Governmental granting bodies have a


19
variety of requirements for their applicants, including meet-
ing criteria in areas such as minority representation and
handicap access. In order to be competitive in the grant
process, most arts organizations have accepted these stan-
dards and have added minorities and others to their boards.
The result is that, for the first time, substantial numbers
of persons who are outside the bounds of the usual community
leadership are participating in arts governance. In most
cases, they fulfill the duty of a trustee to guarantee the
financial future of the organization by helping the organi-
zation meet its requirements to receive grant funds.
The programs of arts organizations involved in govern
ment-rinfluenced governance are similarly structured. The
various policy initiatives the granting organizations under-
take are reflected in the programs of grant-seeking organi-
zations. They seek to align themselves programmatically
with the grant-making organizations in order to improve
their chances of receiving funds.
The history of governance in private, non-profit
arts organizations, then, is one that contains a number of
different paradigms. Within each governance paradigm is a
different function for both the trustees and the director
as well as different perspectives on programs and audiences.
Although these governance formats can be crudely divided


20
into discrete periods, to confine them to such periods would
be incorrect. These types appear across time, and none of
them has completely disappeared. Perhaps the best way to
conceptualize the history of arts governance is to view all
but the last of the forms as present throughout the history
of arts organizations, although certain types were magnified
and others receded during particular time periods.
Chief Features of Private. Non-Profit Arts Governance
Governance in private, non-profit arts organizations
has a number of core facts and variables that must be under-
stood prior to any discussion of its dynamics. These vari-
ables and "organizational facts" define the universe in
which such governance occurs. They are standard in virtually
all governance situations and together form both the context
for and structure around which governance takes place. They
include private, non-profit status, purposes, board-staff
structure, and contexts.
Private, Non-Profit Status
Probably the most important organizational fact in
the area of arts governance is that the actors operate in
a legal structure that is termed private, non-prOfitv This
term signals two basic facts about arts organizations. The
first is that they are private, not public; they are not


21
parts of government accountable to the public through an
electoral process. Rather, they are organizations, usually
corporately structured, that fulfill the requirements of a
particular state and the federal government for being non-
profit institutions. Such requirements vary from state to
state but include such items as minimum size of governing
board, minimum number of board meetings per year, and fre-
quency of and format for formal reports submitted concern-
ing financial activities.
Because of their legal status, these arts organiza-
tions are totally independent entities. They are not amis
of local government, divisions of larger arts organizations,
or business enterprises. Instead, they are independent
organizations that are responsible for their own destinies
and that have few avenues of appeal if things go wrong
financially or otherwise. This lack of security and linkage
to institutions of last resort raises the practice of gov-
ernance to a level that often gives seemingly inconsequential
decision making a critical quality. Because they are so
financially and organizationally independent, there is often
little room for decision-making error in arts organizations.
The second feature, the organization's non-profit
status, means that the organization cannot exist for the
monetary benefit of any of its members, and its central goal


22
cannot be to generate a profit from its activities. Its
statement of purpose and outlined activities must coincide
with what the U. S. Internal Revenue Service has set out as
appropriate activities for a non-profit corporation. The
organization receives two major benefits from its non-profit
designation. It is exempted from all federal taxes and, in
most states, is exempted from all state and local taxes. In
addition, contributors to the organization can receive a
deduction on their taxes for a contribution to the organiza-
tion; this provision, of course, encourages charitable con-
tributions to the organization.
Their status as private, non-profit organizations,
however, also means that few arts organizations have the
financial resources to sustain their programs without out-
side assistance. This assistance can be in the form of
personnel, funds, or publicity.
In order to generate a flow of resources, the gov-
erning bodies of arts organizations must cultivate links to
sources of assistance. The links may be as simple as the
fact that trustees are drawn from the community and are
expected both to reflect community thinking about the organi-
zation and to communicate the thoughts of the governing body
of the organization to the community at large.
Another strategy is for the staff of the organization


23
to maintain regular publicity and public-relations programs
that work with the organizational environment to condition
it and make it more amenable to the organization. For this
reason, leaders of arts organizations limit activities that
may destroy ties to a community. For example, a theatre com-
pany in a predominantly Catholic town may opt not to produce
the play, Sister Mary Ignatious Explains it All for You/ a
satire on Catholic schooling. Its decision is based on its
wish to maintain links to the community, links that have real
payoffs in terms of audiences, memberships, and contribu-
tions, all of which it needs.
Purposes
In addition to their legal Status as private, non-
profit entities, arts organizations are constrained by their
articulated purposes, which guide then in their activities.
These are usually listed in the organization's articles of
incorporation and have been further developed over a period
of years in board meetings and organizational planning
exercises. These statements of purpose and the development
of policy from them form the backdrop against which all gov-
ernance decisions are made. The statement of purpose is
usually narrow, stating, for example, that an opera company
is devoting its energies to education in the area of opera


24
and perhaps is devoted to "furthering the cause of opera."
Unlike private corporations that are limited in scope
only by their abilities to conceptualize new ways to generate
profits, arts organizations are more circumscribed. While a
private corporation may sell off its television-station hold-
ings one day and enter into agricultural enterprise the next,
arts organizations can do no such thing. One will not find,
for example, an art museum selling off its collection to enter
the supermarket business. Nor will one find the art museum
closing its doors and reopening as a symphony a few weeks
later. The purposes of arts organizations are carefully
defined and difficult to alter, thereby giving those govern-
ing arts institutions relatively little flexibility in deal-
ing with problems.
Board-Staff Structure
The actors involved in the arts-governance process
constitute important variables in that process. The board-
staff structure is universal in all but the smallest organi-
zations, and those that have no staff usually have plans to
develop a staff when funds permit. An exception to this is
the group of volunteers organized to assist an arts organi-
zation whose president acts as the group's executive direc-
tor. In this case, there is no intention to hire other


25
staff members.
While no definitive survey of board size exists for
arts organizations, boards tend to range in size from three
members to more than one hundred. Generally, however, they
5
number between fifteen and forty members. The board mem-
bers, or trustees, are usually selected by a nominating com-
mittee of the board and either are elected by the board mem-
bers or by the general membership. Usually, efforts are made
to stagger the terms of trustees to insure that the board
maintains an institutional memory.
The staff side of the arts-governance process can
assume two distinct structural forms. In the visual arts,
the director is usually the chief staff person and is respon-
sible for all contact with the board and for the day-to-day
operations of the organization. With few exceptions, per-
forming-arts organizations have a different structure. In
them, the staff is headed by co-directors, a director of
administration and an artistic director. The director of
administration attends to the day-to-day management of the
organization and serves as staff and reports to the trustees.
The artistic director is responsible for all artistic deci-
sions and reports to the trustees as well. In most cases,
these two persons are nominally equal, though one usually
emerges as dominant.


26
The qualifications and competence of the director are
major factors in the board-staff relationship. Until recently,
individuals qualified to be directors of art museums by secur-
ing an advanced degree in art history; they often had no
training or experience in administration. In other instances,
administrators were failed actors or directors (in the case
of theatre administrators) or failed musicians (in the case
of symphony orchestras). Some of these administrators did
very well with their limited knowledge of administration;
many, however, did not. A common feature of arts governance,
then, is the possibility that the director of the organiza-
tion may be poorly prepared to assume the administrative
functions of the organization. While there is a growing
cadre of professional arts administrators, the field hardly
can be called completely professional.
In arts organizations, the trustees and the direc-
tor^) meet on a regular basis to engage in decision making
about arts programming, administration, and policy issues.
These meetings are usually in the format of regularly
scheduled board meetings, where the minutes of past meetings
are read and approved, the treasurer's report is given,
and there is a forum for both the director and the president/
chair of the board to address the trustees. Time also is
allowed for committee reports, discussion, and trustees'


27
votes on agenda items.
Topics open to trustees' discussion at board meetings
vary among organizations. Some boards limit discussion and
decision, making to broad policy directives that they then pass
on to the director for implementation. Other boards fail
to make a distinction between policy and administrative items
and regularly delve into the minutia of administration and
order the director to take specific action in particular
areas.
One item that is commonly an issue in board meetings
is the nature of the arts product produced. In most cases,
trustees cede all responsibility for the artistic program
to.the director, basing their trust in him or her on research
that took place during their interviewing and hiring of that
director and/or artistic director. Other arts organizations
have not resolved the question of who is responsible for the
art program, and the issue remains a source of constant fric-
tion. The arts programming selected is very important to an
organization, for a poorly selected program can mean finan-
cial ruin for the organization; this, in turn, places con-
siderable pressure on the trustees, who are responsible for
the financial security of the organization.
Although boards of trustees may experience little
agreement as to their areas of responsibility, there is one


28
area for which they take full responsibility. This is the
right to hire and fire the director. Even in cases where
all of the trustees' power is seemingly transferred to the
director, this duty cannot be transferred. Because the
trustees are legally responsible for the organization, they
bear the responsibility for hiring and firing their agerito
Contexts
Not all of the components of the arts-governance
process are internal to arts organizations. Some deal with
the environment outside of the organizations themselves.
Private, non-profit arts organizations exist in a variety
of contexts, and they assume some of the qualities of their
contexts as well as contributing to them. All exist in a
community context that includes the socio-economic make-up
of that community as well as its general receptivity to the
art form the organization is promoting and its history of
such receptivity. Arts organizations also exist in a
variety of other contexts, such as those of the quality and
volume of arts activity in the city and state in which the
organization is located, the nature of the professional arts
administration cadre in the area, and the history of philan-
thropy in the region.
These kinds of contexts affect the governance of an
organization even as the governance of the organization


29
affects its context. For example, if an arts organization
requires extensive private-contributions to maintain itself
and is located in a community with no tradition of private
philanthropy, the context may affect the organization by
challenging the governing structure of the organization to
find a way to generate funds from that context creatively.
If the organization succeeds, then it may have changed the
context.into one that is somewhat more accepting of pleas
for philanthropic contributions to arts organizations.
The artistic quality of an arts organization's pro-
gram is a feature of the governance process that also links
the organization to its larger environment,. Every arts
organization exists in an aesthetic hierarchy of arts organ-
izations. Those with arts programs that have been critically
acclaimed are placed near the top of this hierarchy, and
those with lesser programs appear farther down. Lowest on
the hierarchical scale are arts organizations with programs
that are directed to amateur visual and performing artists
and their audiences. The existence of this hierarchy is
important to the governance process because the place of a
particular arts organization in the hierarchy can make it
more or less difficult for an organization to attract funds,
hire competent staff, secure influential trustees, and the
like.


30
These are just a few of the organizational variables
that are involved in and have an impact on the governance
process. The above list is not exhaustive, but it does pre-
sent the most significant facts and variables affecting gov-
ernance. They are provided here to give the reader an under-
standing of some of the basic features that condition the
governance processes of private, non-profit arts organiza-
tions.
Structure of the Study
Chapter I provided a statement of the purpose of the
study, suggested its significance, reviewed the history
of arts governance, and summarized the chief features of
private, non-profit arts governance.
Chapter II describes the procedures used in the
study and the origins of the grounded-theory method on which
they are based. Available literature concerning arts gov-
ernance is also reviewed.
Chapter III presents the results of the data collec-
tion and analysis--a series of nineteen propositions con-
cerning ten variables in the arts-governance process.
Chapter IV provides an interpretation of the results
of the study. It presents a conceptual framework through
which the propositions on arts governance can be viewed and


31
draws conclusions about them and the governance process in
general. Suggestions for further research and the limita-
tions of the study also are described.


32
NOTES-CHAPTER I
^ Two comprehensive sources dealing with the history
of museums are: Alma S. Wittlin, Museums: In Search of a
Usable Future (Cambridge, Massachusetts: MIT Press, 1970);
and Nathaniel Burt, Palaces for the People: A Social History
of the American Art Museum (Boston: Little, Brown, 1977).
2
Richard Moody, "American Actors and Acting Before
1900: The Making of a Tradition," in American Theatre: A
Sum of Its Parts, ed. Henry B. Williams (London: Samuel
French, 1971), p. 46.
3
John H. Mueller, The American Symphony Orchestra:
ASocial History .of Musical Taste (Bloomington. Indiana:
Indiana University Press, 1951), p. 123.
^ Christopher Durang, Sister Mary Ignatius Explains
It All for You.
Tracy Daniel Connors, "The Board of Directors," in
The Nonprofit Organization Handbook, ed. Tracy Daniel Connors
(New York: McGraw-Hill, 1980), p. '2-44.


CHAPTER II
METHODOLOGY .
The method used to develop a conceptual framework
of governance in private, non-profit arts organizations is
grounded theory as presented by Barney Glaser and Anselm
Strauss in The Discovery of Grounded TheoryJ This method
was selected for two reasons. First, extant research relat-
ing to arts governance is limited to highly focused descrip-
tive or experimental studies that do not share a common con-
ceptual framework. In an area where very little research
has been completed, the studies that have been done generally
are concerned only with parts of a largely unknown whole.
The use of a framework for research on a phenomenon such as
governance provides an important referent to the phenomenon
in its entirety and imposes a level of order on the research.
Second, the scope of the phenomenon of arts govern-
ance is unknown. Since no one has provided a comprehensive
theoretical description of the activity to date, such a des-
cription seems appropriate prior to additional, more narrow
inquiry. The. grounded-theory method, then, was selected
because it addresses these two features of research in the
area. It has the capacity to develop a framework that can


34
be used to guide other research, and it allows for the broad-
est possible investigation of the field, thus offering the
prospect of locating most of its significant features.
The grounded-theory method as outlined by Glaser and
Strauss has several basic elements. One is that the focus
of the process is on theory generation rather than on theory
verification. In other words, the researcher does not under-
take the research task with hypotheses in mind that are to be
either verified or rejected. Rather, the undertaking is
focused on the systematic review of data that will result in
the development of propositions or hypotheses about them.
The researcher provides evidence for the existence of these
propositions but does not endeavor to test them empirically
at this.stage.
The method also emphasizes the use of qualitative
rather than quantitative data. Interviews, participant obser-
vation, historical accounts, and other such information con-
stitute the data base on which the framework or theory is
developed. Quantitative data such as an organization's
budget size or number of board members may serve as one of
several arguments to support the presence of a particular
proposition in the framework, but it is seldom the prime
indicator of that proposition.
An inductive rather than a deductive process i$ used


35
to generate the framework. Starting from the broadest pos-
sible body of information, the researcher draws out a struc-
ture from specific observations about the phenomenon. This
approach does not use pre-established propositions or hy-
potheses to test and interpret situations. Rather, use of
an inductive approach means that there is very little idea
what the structure of a phenomenon is prior to the inception
of the research.
Another feature of this method is that the framework
that is generated is data basedboth in terms of its genera-
tion and presentation. No theorizing occurs apart from the
data. The framework is developed from the data, and when
it is laid out, those data are used to support and illustrate
it.
Finally, a framework or theory is seen as emergent
and as a process rather than a product. As the researcher
combs through the data, patterns emerge from them rather
than being imposed on them. The resulting patterns are con-
sidered to constitute steps on the road to total understand-
ing of the phenomenon rather than the final statement about
its nature.
Procedures
The.grounded-theory method as used in this study con-
tains seven major steps. Following are a description of


36
each step and an explanation of how it functioned in this
study.
Definition of Object of Study
The first step in the process is the definition of
the question or phenomenon to be studied in order to delimit
the study. In this study, governance in private, non-profit
arts organizations was the topic of interest. Governance
was defined here as the process by which a legally consti-
tuted formal body (trustees) and its designated agent (the
director) guide policymaking and the implementation of policy
in an institution.
Researcher's Perspectives Used as Guides
to Initial Data Collection
The second step in the grounded-theory method is
identification of the researcher's existing perspectives on
the phenomenon being studied and their use as a guide to
initial data collection. The perspectives are used, in other
words, to suggest places in which to begin collecting data.
The perspective on governance of this researcher has developed
from participation in arts organizations for twelve years as a
trustee, staff member, and director of various arts organiza-
tions; the position of director was held for six of those
twelve years. These experiences led to a number of assump-
tions about governance; the following are two examples


37
of these assumptions and the directions in which they led
this study as data collection began:
(1) As a participant in the governance process, this
investigator had had insufficient time and inadequate access to
materials concerned with the history of arts governance. Know-
ledge of historical governance situations could have improved
job performance by describing ways other directors had solved
similar governance problems. This assumption led to the
reviewing and coding of historical works concerned with arts
governance.
(2) The belief that the context of arts governance had
changed a great deal in the past twenty years and that this
change affected arts governance led to the collection of
information about recent changes in this context and the
response of governance participants to them. When it was dis-
covered that the published information on this topic was lim-
ited, the decision to gather information on it in the inter-
views was made.
Collection of Data
The data for this study were gathered primarily from
two sources: books about arts organizations and interviews
with individuals involved in non-profit arts governance.
These were supplemented by journal articles, newspaper sto-
ries, miscellaneous papers and documents, and personal


38
experiences of the researcher in arts organizations.
Thirty-three books were reviewed and coded either entirely
or in part. The data sought were any fragments about the govern-
ance process, especially the quotes of participants involved in
that process and descriptions of governance structure. Typical
of the books coded are Nathaniel Burt's A Social History of the
2 3
American Aft Museum and Ronald L. Davis' Opera in Chicago. In
addition to these types of books, analytical works that contained
commentaries on governance as well as examples that could be used
as data also were coded. Robert" W. Crawford's In Art We Trust:
The Board of Trustees in the Performing Arts^ and Joan Jeffri's
5
The Emerging Arts: Management, Survival and Growth are two
examples of this type of work. These data sources were supple-
mented by fourteen articles concerning arts governance in periodi-
cals as well as five manuscripts such as speech texts and six news
stories. The coding of written materials allowed the researcher
to expand the quantity and variety of arts-governance situations
examined.
Fifty-four interviews were conducted with trustees and
directors between June of 1982 and November of 1983. Because
this study dealt with arts governance in America in general,
interviews were completed across the country and were not
confined to a single locale. The interviews also were under-
taken in different parts of the country to determine whether
there were any broad, geographical differences in the form and


39
in the manner in which arts organizations are governed.
Although this effort identified some minor differences, such
as the apparent practice of Southern trustees to be more
patient with directors who fail than are their comrades in
the North, there did not appear to be major regional dispari-
ties that Would invalidate the conceptual framework presented
here.
Interviews were conducted in the following cities:
Chicago, Illinois (four interviews); Reno, Nevada (two inter-
views); Seattle, Washington (four interviews); Eugene, Ore-
gon (seventeen interviews); Portland, Oregon (four interviews);
and Norfolk, Virginia (two interviews). The remaining twenty-
one interviews were conducted in the metropolitan Denver,
Colorado, area.
Those interviewed held various positions in non-profit
arts organizations. Nineteen of those interviewed were direc-
tors, and eight of them had extensive experience both as
directors and trustees. Twenty-seven of those interviewed
were trustees, and eight were miscellaneous arts persons such
as volunteers, artists, and state arts administrators. The
state arts administrators were interviewed, despite the fact
that they were not involved in private, non-profit organiza-
tions, because they formerly had directed non-profit arts
organizations and presently had perspectives on non-profit


40
governance through their work with non-profit organizations
as grant applicants.
Those interviewed participated in a range of arts
organizations. Twenty-five represented the visual arts,
fourteen the performing arts, and four worked for arts organi
zations that engaged in a variety of arts activities, with
an emphasis on the performing arts. Four worked for arts
organizations that could be termed government-funded organi-
zations serving the arts, and seven were from a variety of
miscellaneous arts organizations. Fourteen of those inter-
viewed in Eugene, Oregon, represented all the trustees and
staff of a visual-arts center. The opportunity to acquire
interviews from all parties in this organization was valuable
The interviewees were selected, in part, to fill gaps
that appeared in the coded written material. There was a
need to interview more visual-arts participants than those
involved in the performing arts, for example, because the
performing-arts experience is more frequently discussed in
written material.
The organizations represented by the interviewees can
be classified crudely into large, medium, and small organi-
zations according to budget size. Large organizations are
those with budgets over $1 million, medium organizations are
those with budgets between $200,000 and $1 million, and small


41
organizations are those with budgets under $200,000. The organ-
izations represented by those interviewed break down into thir-
teen large, seventeen medium, and twenty-four small organizations.
Fourteen of those in the category of the small group represent the
entire board and staff of the arts center in Eugene, Oregon.
The sample from which data were drawn for this study, then,
is a judgmental sample. In such a sample, units to be examined are
selected on the basis of the researcher's own judgment about which
ones will be the most useful or representative. This type of sam-
ple was deemed most useful for the exploratory nature of the study.
The interviews that were conducted were not tightly struc-
tured, thus allowing the interviewees to develop topics and raise
issues concerning governance that they felt were important. Inter-
viewees, then, were encouraged to "ramble" on about their govern-
ance experiences and were guided only in the following ways:
(1) After a brief greeting and introduction of the re-
searcher to the interviewees, they were given a brief overview
of the purpose of the research project, which was stated as the
development of a conceptual framework of governance in private,
non-profit arts organizations.
(2) Interviewees were asked to provide a brief overview
of their organizations and to provide any materials that would
assist in the understanding of the structure and programs of
the organizations.
(3) The interviewees were asked to detail the history
of their involvement in their organizations.
(4) The interviewees were asked to talk about the


42
governance process in their organizations.
(5) Later in the interviews, as issues and topic areas
emerged, the interviewees were asked to address specific areas
if they had not covered them in their unstructured conversa-
tion. These questions were asked to round out what appeared
to be a developing cluster of data around particular issues.
The questions served as a means of verifying or dismissing
the presence of phenomena that had emerged in earlier inter-
views. The questions were asked in broad, nOn-directed terms
such as, "Tell me about how you and the. president work
together" and "Is the founder of your organization still
involved in it and if so, how does he or she function within
it?"
The interviews conducted for this study were under-
taken on a confidential basis, and the names of those inter-
viewed are not revealed in the dissertation. The primary
reason for this confidentiality was that the study would pro-
duce more useful data if those interviewed were totally can-
did in their statements about governance. In many cases,
public revelation of their statements could cause embarrass-
ment to the interviewees and, in some cases, might have led
to.the dismissal of directors. For example, when a director
called the president of his organization "an ignorant ego-
maniac," there had to be absolute assurance.that this would


43
not get back to the president. Similarly, the doubts some
trustees expressed about the ability of their director to
relate to them and their dislike of him had to remain confi-
dential.
This level of confidentiality was important beyond
the need to avoid hurt feelings and maintain working rela-
tionships. Directors of arts organizations are usually pro-
tected only by their personal contract with the organization.
There is no union, no tenure, and no powerful professional
society that would have supported the right of the director
to criticize or appear to criticize the trustees. Such
criticism, if made known, easily could be made cause for dis-
missal, even if the comments were made to aid research in the
field.
The decision to keep the names of the interviewees
confidential was reached after initial interviews with four
directors and two trustees. They unanimously agreed that
the interviews would not produce data as rich if confiden-
tiality were not assured. They felt that recorded interviews
that were to be destroyed at the end of the research project
were not sufficiently confidential. They believed that for
the most candid material to appear, interviewees had to be
able to deny all that they reportedly said. Thus, because
of the desire to acquire the best data for the study, the


44
interviews were interviewed in complete confidentiality and
without a tape recorder. During each interview, notes were
taken. Following the interviews, the notes were reviewed, cor-
rected, and supploriented, in order to make them as clear, com-
prehensive, accurate, and useful as possible. Where names of
people and organizations are mentioned in this study, they
appear in published materials and never refer to interviews.
Coding of Data
Once the data were collected, they were reviewed and
coded. The coding was accomplished by taking governance-
related facts and comments from the written information and
interviews and placing them on computer cards, resulting in 614
"data cards." These cards were reviewed, and notes were made
in the corner of each as to what aspect of governance the data
segrrent might relate. For example, one category that emerged
was "professional allegiance of the director." This category
was developed based on data that indicated that although the
director sought to keep members of the organization happy, more
energy was expended pursuing activities that would be recog-
nized by the field of the arts professional as significant in
spite of their limited appeal to the organization's members.
This coding process was not, of course, a mechanical one. Other
researchers reviewing the same data well could develop dif-
ferent, although not contradictory, categories.


45
Identification of Variables and their
Characteristics
The data then were compared in order to sort them
into major variables in the process of governance and the
characteristics evident of those variables. The data
were compared and sorted in an inductive process until no fur-
ther conceptual variables were generated and sufficient support
had emerged for the existence of particular propositions that
described the qualities and functions of those variables and,
in some cases, the relationships among the variables.
In this study, the following variables were identi-
fied as important in the process of governance: resource
scarcity, organizational vision, community connections of
trustees, commitment of time by trustees, trustees' appli-
cations of governance models, director/artistic director
structure, measures of success for directors, perceptions
of directors, power relations between directors and trus-
tees, and actions of founders. Nineteen propositions that
described qualities of these variables or relationships
among them were developed from 173 cards of possible propo-
sitions about governance that either were folded into the final
propositions or were discarded as lacking sufficient support.


46
Presentation of Propositions
In this step of the process, the propositions derived
from the categorization of the data are presented, along with
support for them from the data, to justify their identifica-
tion as propositions. In this study, the propositions are
organized around the variables of governance discovered in
the sorting and comparison process, and they either describe
those variables or discuss relationships among variables.
The presentation of the propositions (which appears
in.Chapter 3) is limited in a number of. ways. First, there
cannot be an exhaustive presentation of all of the evidence
collected to support the existence of .the propositions listed.
Thus, while each proposition is followed by a list of data
that led to its formulation, this list constitutes only a
fraction of the amount of evidence available to support the
proposition. The data selected for presentation are designed
to provide the best examples of the data that support the
proposition:.
Second, because this\is an exploratory study, the
propositions serve as hypotheses. The data that support each
of ..the propositions are not proof that the propositions are
necessarily true or correct. Rather, they are statements that
.
indicate that the proposition is, in fact, supported by data
and well may be true. All propositions are put.forward with


47
the understanding that considerable additional research will
be necessary to state more confidently that they are accurate
statements about governance in non-profit arts organizations.
Third, the propositions do not deal with all processes
of governance in equal detail. All areas of governance that
undoubtedly are important are not covered by the propositions
that were formulated; only topic areas that emerged from these
particular data could be discussed. In addition, a particular
area of governance may be covered by numerous propositions
that probe the phenomenon in depth, while in other areas,
propositions are more limited in number.and address the.
phenomenon less extensively. Again, the reason for this lack
of coordination among the propositions is that they were
allowed to emerge from the data. To have imposed requirements
on the propositions formulated in terms of areas to be covered,
number, or detail would not have reflected the data accurately.
Consequently, the presentation of the propositions must be
viewed as an initial description of governance in non-profit
arts organizations. A complete presentation will emerge only
after more data are collected that allow some of .the gaps
evident in this framework to be filled in.
Finally, some of .the propositions presented may appear
to be obvious and self-evident. Against a backdrop of the
arts-administration field, however, in which very little


48
theory has been developed, these propositions may be
significant. In addition, to confirm the presence of quali-
ties or relationships that participants in the governance
process believed existed is important as well. In the area
of non-profit arts governance, the need to confirm is neces-
sary because very few studies have even identified the "com-
mon-sense factors" in the: process in a systematic way.
Development of.a Conceptual Framework
from the Propositions
Finally, the propositions discovered are organized
into a conceptual framework that explains, in part, the phe-
nomenon under study. At this stage, the propositions are
interpreted and given meaning according to a framework that
views the propositions in a holistic fashion. In this study,
the propositions were organized according to the basic
elements of the governance actparticipants, setting, and
means of accomplishing the act. This framework (described
in chapter 4) then was used to discover where more research
is needed into arts governance and to devise diagnostic
tools for participants in it.
Origins of the Method
The theoretical underpinnings of the grounded method
of theory generation come from several sources. The. primary


49
epistemological assumptions are those of the phenomenologist
rather than the positivist. Although the two approaches may
utilize similar methods of data collection, phenomenologists
attempt to suspend presuppositions about the phenomenon under
review and seek to describe the essences of experiences as
they are intuitively apprehended by the subjects. Positivists,
on the other hand, search for facts or causes of social phe-
nomena outside the individual and are less concerned with sub-
ject ive states of ,i nd iv idual s.
The grounded-theory process of comparing data is
rooted in the comparative analytic method, which has both
anthropological and sociological sources. In sociology, the
works of both Weber and Durkheim are cited as early examples
of the. use of the comparative method; Durkheim's work on
suicide and Weber's study of bureaucracy both used the com-
fi
parative method to generate theory. In the field of anthro-
pology as well, the comparative method long has been used to
arrive at an understanding of societies. The nineteenth-
century study of the Iroquois by Lewis Morgan is cited as an
early and influential use of the method.7 Later, in the mid-
twentieth century, the comparative method in anthropology was
utilized in such studies as African PolitiCal Systems by
O
Fortes and Evans-Pritchard (1940) and African Systems of
Kinship and Marriage by Radcliffe-Brown and Forde (1.950).9


50
The third source for this method is field work, which
has found its greatest development in the field, of anthro-
pology. Lewis Morgan's study of the Iroquois^0 and Franz Boas'
study in British Columbia^ were two of the first significant
12
uses of the method. Sociologists such as Beatrice Potter Webb
13
and Charles Booth also employed the method in their work,
and perhaps its most widely known use :was in the study that
resulted in the book, Middletown, by Robert Lynd and Helen
14
Lynd. A major quality of field work is that it is emergent
rather than preplanned in nature. As the: researcher proceeds
with the study, the unfolding of the information points the
direction in which further research should be conducted.
A fourth source of this methodology is the concept
of grounding in data. While much of this concept may be
ascribed to.the methodology of field work, it has other his-
torical roots as well. Discussion surrounding the book, The
Polish Peasant in Poland and America, by W. I. Thomas and
Florian Znaniecki, which was spearheaded by Herbert Blumer,
centered on the adequacy of data to support theory in the
work, the amount of .data needed for theory verification, and
the degree to which researchers should approach datarbased
research with pre-conceived theoretical conceptions./'5. The
work of Robert Merton in Social Theory and Social Structure
also relates to the concept of generating theory grounded .in


51
data. Merton's comments in this area focused on the modifi-
cation of theory through research feedback, which he called
16
"grounded modification of theory."
' A final basis for the method is its focus on data.
The theory that emerges is formulated only after detailed
review of the data. This contrasts with so-called "arm-chair
theorizing," where the person developing a theory utilizes
knowledge and experience to put forth a theory based solely
on his or her mental synthesis of experience and information.
It also contrasts with logico-deductive theory, where the
theoretician deduces theory from statements and assumptions
about classes of data. Glaser and Strauss believe grounding
a theory in the data has two major benefits: (1) The theory
will fit the situation that was researched. It will not
contain artificial and forced aspects; and (2) It will be
understandable and usable to those in the area under study
because its basis is data with which those in the area are
familiar.
Review of the Literature
A review of the literature concerned with governance
in non-profit arts organizations reveals several works that
provide information related to the topic. None, however,
offers a comprehensive theory of governance in private,


52
non-profit arts organizations.
The most prevalent type of publication in the arts-
administration area is the "how-to" publication* Such pub-
lications offer advice on legal, tax, organizational, and
public-relations issues affecting arts organizations. They
frequently suggest ways, for example, to run meetings, write
by-laws, and raise funds from the perspective of a.success-
ful person telling a novice how to act. What they do not do
as a group, however, is offer suggestions that are based on
theory. Most of the publications either are limited or
totally lacking in references to research and theory that
might support the advice. Some of the publications in this
category include Arts Administration by Tern Horwitz,^
Nonprofit Corporations, Organizations, and Associations by
18
Howard Oleck, and The Nonprofit Organization Handbook by
19
Tracy Daniel Connors.
The second type of publication concerned with this
topic is the "how-to" book that deals not only with arts
administration but with the organization of community human
resources to accomplish a task. Eva Schindler-Rainman and
Ronald Lippitt have developed a model of community action
in Building the Collaborative Community: Mobilizing Citizens
for Action. The model details the manner in which activities
are accomplished in a community, but it does not offer an


53
explanation of why the descriptive model works'or explain the
nature of the relationships that expedite organization.20
The same two authors also wrote The Volunteer Community; Cre-
ative Use of Human Resources. This work details the recruit-
ment, motivation, and training techniques necessary for the
development of a good volunteer corps and discusses the chang-
21
ing environment from which volunteers come. Like their
other work* however, it does not offer information on how the
volunteer functions in the governance setting and why. A
third pub!ication, The;Effective Management Of Volunteer Pro-
grams by Marlene Wilson, uses organizational theory as a base
22
on which to propose methods for utilization of volunteers.
She does not develop, however, her own model for voluntary
activity in an organization and focuses only briefly on volun-
teers at the governance level.
The third type of literature pertaining to the area is
that concerned with the functions of boards of directors,, In
Citizen Boards at WOrk: New Challenges to Effective Action,
Harleigh Trecker discusses the roles, structure, problem-
solving methods, and relationships of a non-profit board.23
This publication comes closer than many to developing a model
of governance. It falls short, however, in that none of-the
features of governance with which Trecker deals are tied
together into an actual theory or framework of governance.


54
Further, the governance of which Trecker speaks is that of
non-profit organizations in general and not that of non-profit
arts institutions. In Community Councils and Community Con-
trol: The Workings Of Democratic Mythology, Harold Weissman
provides an analytic model for the operation of neighborhood
24 '
organizations. This model offers insights into the govern-
ance process of neighborhood organizations, but it is too
specifically grounded in'that area to be applied to the arts.
Other works deal with the pragmatics of being a board member
and are similar to.the technical, how-to publications cited
25
earlier. The. Effective Board by Cyril Houle is one of these.
It provides board members with a guide to behavior in a wide
variety of circumstances.
One of the most valuable publications concerned with
governing boards is the report of an extensive survey of
boards of directors in health organizations, Boards of Direc-
tors: A Study of Current Practices in Board Management and
Board Operations in Voluntary Hospital, Health and Welfare
Organizations. The extensive survey offers numerous insights
into what the board members, according to self-report, see
26
as their duties and relationships to the organization. The
results are voluminous, but again, they are not tied into a
framework or theory of any kind.
Another perspective through which non-profit governance


55
has been approached is that of the administrator, but again,
a framework is lacking. In The Role of the Arts Administra-
tor, Norman Kaderlan looks at the role of the administrator
27
in terms of role theory. This investigation adds insight,
into the governance process but is not sufficiently broad
to encompass either all aspects of administrative behavior
or the board perspective. A second work in this area, Effec-
tive Leadership in Voluntary Organizations: How to Make the
28
Greatest Use of Citizen Service and Influence, does not
focus on describing relationships but, rather presents a
detailed description of what one needs to do as an adminis-
trator in order to use community resources. Additional admin
istrator-centered works that were reviewed were Management
29
Policy and Strategy by George Steiner and John Miner and
30
The Nature of Managerial Work by Henry Mintzberg. Because
non-profit arts organizations may be different from other
organizations, however, these works may not provide informa-
tion that accurately describes the arts context since they
are developed out of a corporate paradigm.
Still other works deal with the governance of arts
organizations as historical fact. Barnard Hewitt's Theatre
U.S.A.: T665 to 1957, for example, treats the development
of theatre in America historically, touching regularly on
the processes of governance in private, non-profit arts


56
31
organizations. Yet, recounting the history of theatre is
the purpose of this work. Although significant aspects of
governance are discussed, they are done so only in a cursory
fashion. The same can be said'of John Mueller1s The American
Op
Symphony Orchestra; A Social History of Musical Taste.
While this work provides more of an insight into the govern-
ance process than Hewitt's work and provides generous amounts
of material about the history of symphonies, governance as a
topic is again a sideline. The Art Museum; Power, Money
Ethics by Karl E. Meyer is the art-museum.equivalent of Muel-
ler's work and again offers no comprehensive framework for
33
governance. While these types of works provide insights
into the history of the governance process in'arts organiza-
tions, then, the information they provide about it is not
drawn into an explanatory,pattern by the authors.
The field of cultural economics, which has developed
since the middle T960s, examines the arts in economic terms
and occasionally produces material related to governance
behavior in.the arts. The seminal work in this field is
Performing ArtsThe'Economic Dilemma by William Baumol and
34
William Bowen. it examines the problems of productivity in
the performing arts and the effect these problems have on
performing-arts organizations. In an attempt to obtain .an
accurate.picture of the financial condition of.the arts and


57
the decisions that have been and are made inresponse to that
condition, the work is profusely documented. It contains,
for example, a great deal of longitudinal statistical data
dealing with such items as charitable bequests, expenditures
on the performing arts, and Broadway activity, at times cover-
i ng more.than fi fty years.
A second pioneer in the field of cultural economics
is William Hendon, who has authored and edited a variety of
works in the field. His edited work, Economic Policy for the
Arts, is perhaps the best example of the scope of these works.
It is a collection of papers from a cultural-economics con-
ference that describes the economic environment for the arts
and occasionally makes modest predictions about an organiza-
OC
tion's behavior in light of this context. Dick Netzer's
The Subsidized Muse: Pub!ic Support for the Arts in the
United States is a third example of works that assume an
economic perspective on the:arts. Netzer examines government
support for the arts and discusses its effects on arts organi-
36
zations, including some governance effects.
Although works in;the:area of cultural economics pro-
vide .valuable information that can assist in the understand-
ing of the: nature of governance in arts organizations, they
are, for the:most part, narrow in their economic perspective.
Like.the historical works, they provide data and insights


58
into the nature of governance in private, non-profit arts
organizations, but they are not focused enough on the phenom-
enon to propose an adequate explanation of it.
Other literature of relevance to arts governance is
broad in scope and deals with non-profit or organizational
processes in general. Some works deal with policy analysis
and implementation in the non-profit sector in general and
provide information about some of the ground rules under which
such organizations, including those that deal with the arts,
operate. .Dimensions of.the Independent;Sector: A Statistical
Profile is a compendium of descriptive statistics concerning
the non-pfofi.t sector. Like the economic works mentioned
earlier, this type of work is valuable in that it discusses
the context for non-profit organizations concerned with the
arts by piacing them in;the universe of non-profit organiza-
tions in general. At the same time, it provides facts about
non-profit arts organizations as a groupthat contribute to
understanding of such topics as the percentage of the non-
profit sector they occupy, the number of people they employ,
and current expenditures by such organizations. As useful
as these data are, they do not constitute a theory of govern-
ance in arts organizations.
Another work that places the arts with their partners
in the non-profit or third sector is;Why Charity? The Case


59
38 ........
for a Third Sector by James Douglas. This book defines and
defends the third sector from the perspective of policy analy-
sis. It details the reasons most arts organizations are non-
profit but reveals little of the behavior of governance actors
in the non-profit situation. This perspective also is used
39 '
in The Endangered Sector by Waldemar Nielsen. He defines the
non-profit sector, selects what he terms "key subsectors!' in
the non-profit world that include higher education, science,
health, andi.culture, and comments on the state of each. Al-
though the arts constitute one of these subsectors, Nielsen's
review is broad and focuses on how the organizations respond
to challenges rather than on the internal dynamics of that
response. The descriptive literature from the general non-
profit sector concerned with policy analysis, then, is useful,
but it does not contain a focused discussion of governance in
that sector.
The broadest perspective taken on the governance issue
is that of general organizational theory. In Not-For-Profit,
for example, Barry Keating and Maryann Keating offer a modest
description of an organizational framework for non-profit
organizations and mention.the governance process/0 James
Thompson, in Organizations in Action, provides a comprehen-
41
sive theory of organizations. Like other theories of this
type,.these add insight, into the nature of the governance


60
process but are not specific1and detailed in the area of arts
governance, which may differ from governance in other kinds
of organizations.
A few works come close to developing a theory of
governance in:non-profit arts organizations as this study
attempts to do. These are works that draw conclusions about
governance from case studies. Joan Jeffri's The Emerging
Arts: Management, Survival, and Growth is an example of this
42
approach. Jeffri's work tells much about arts administra-
tion through case studies of such organizations as small
dance companies and off-Broadway theatres. Although her
effort approaches the goal of this study, she makes no effort
to draw her perspectives together into a coherent scheme of
arts governance; the data gleaned from the case studies are
not compared or grouped into patterns.,
Similar to Jeffri's effort is Conflict in the Arts:
The Relocation of Authority: The Arts Council by Douglas
43
Schwalbe and Janet Baker-Carr. This study, a series of
fourteen interviews with trustees, arts staff, and government
officials about the local arts council, does much to reveal
the.structure of a community's relationship to an arts
organization. Although the work, in its question-answer
format, suggests relationships and theoretical structures
about.arts governance, these are not explicitly stated in


61
the text.
Although material is available, then, that discusses
the arts, their administration, their context, and general
organizational theory, ho work is presently known to exist
that uses the information in these areas to construct a frame-
work of governance in non-profit arts organizations. This
study was undertaken to fill this void and to attempt to
develop a more comprehensive and cogent framework for this
central feature of arts operations.


62
NOTES-CHAPTER II
Barney G. Glaser and Anselm L. Strauss, The Dis-
covery of Grounded Theory: Strategies for Qualitative
Research (Chicago: ATdine, 1967).
2
Nathaniel Burt, Palaces for the People: A Social
History of the American Art Museum (Boston: Little, Brown,
1977). :
Ronald L. Davis, Opera in Chicago (New York: Apple-
ton-Century, 1966).
A
Robert W. Crawford, In Art We Trust: The Board of
Trustees in the Performing Arts (New York: Foundation for
the Extension and Development of the American Professional
Theatre, 1981).
5
Joan Jeffri, The Emerging Arts: Management, Sur-
vival, and Growth (New York: Praeger, 1980).
Emile Durkheim, Suicide, trans. John A. Spaulding
and George Simpson, ed. George Simpson (1897; rpt. Glencoe,
Illinois: Free Press, 1951); and Max Weber, Economy and
Society: An Outline of Interpretive Sociology, trans. Ephraim
Fischoff, ed. Guenther Roth and Claus Wittich (1922; rpt.
New York: Bedminster, 1968).
7 Lewis H. Morgan, League of the Ho-de-no-sau-nee
or Iroquois (1851; rpt. New York: Dodd, Mead, 1901).
q
Meyer Fortes and E. E. Evans-Pritchard, eds., Afri-
can Political Systems (London: Oxford University Press, 1940).
A. R. Radcliff-Brown and Daryll Forde, eds., Afri-
can Systems of Kinship and Marriage (London: Oxford Univer-
sity Press, 1950).
^ Morgan.
^ Franz Boas, Race, Language, and Culture (New York:
Macmillan, 1948).
12
See, for example, Beatrice Potter Webb, My Appren-
ticeship (New York: Longmans, Green, 1926); Beatrice Potter
Webb, Our Partnership, ed. Barbara Drake and Margaret I. Cole
(New York: Longmans, Green, 1948); and Sidney Webb and Bea-
trice Potter Webb, Methods of Social Study (1932; rpt. New
York: A. M. Kelley, 1968).


63
13
Charles Booth, Life and Labour of the People of
London (1889; rpt. New York: Macmillan, 1902).
^ Robert S. Lynd and Helen Merrell Lynd, Middletown:
A Study in Contemporary American Culture (New York: Harcourt,
Brace, 1929).
15
William I. Thomas and Florian Znanieeki, The
Polish Peasant in Poland and America (Boston: R. G. Badger,
cl918-1920); and Herbert Blumer, Critiques of Research in the
Social Sciences: I. An Appraisal of Thomas and Znanieeki's~
The Polish Peasant (New York: Social Science Research Coun-
cil, 1939).
Robert K. Merton, Social Theory and Social Struc-
ture: Toward a Codification of Theory and Research (Glencoe,
Illinois: Free Press, 1949), pp. 97-111. -
^ Tern Horwitz, Arts Administration: How to Set Up
and Run Successful Non-Profit Arts Organizations (Chicago:
Chicago Review Press, 1976).
*| O
Howard L. Oleck, Non-Profit Corporations, Orqani-
zations and Associations (Enqlewood Cliffs, New Jersey: Pren-
tice-Hall, 1965) .
19
Tracy Daniel Connors, ed., The Nonprofit Organiza-
tion Handbook (New York: McGraw-Hill, 1980).
20
Eva Schindler-Rainman and Ronald Lippitt, Build-
ing the Collaborative Community: Mobilizing Citizens for
Action (San Diego: University Associates, 1980).
21
Eva Schindler-Rainman and Ronald Lippitt, The
Volunteer Community: Creative Use of Human Resources (San
Diego: University Associates, 1975).
22
Marlene Wilson, The Effective Management of Volun-
teer Programs (Boulder, Colorado: Volunteer Management Asso-
ciates, 1976).
23
Harleigh Trecker, Citizen Boards at Work: New
Challenges to Effective Action (New York: Association Press,
1970).
24
Harold Weissman, Community'Councils,and'Community
Control: Workings of a Democratic Mythology (Pittsburgh:
Pittsburgh University Press, 1970).


64
Cyril 0. Houle, The Effective Board (New York:
Association Press, 1960).
pc
Greater New York Fund, Boards of Directors: A
Study of Current Practices in Board Management and Board
Operations in Voluntary Hospital, Health and Welfare Organi-
zations (Dubbs.Ferry, New York: Oceana, 1974), pp. 48-68.
27
Norman S. Kaderlan, The Role of the Arts Adminis-
trator (Madison, Wisconsin: Center for Arts Administration,
1973)".
Brian O'Connell, Effective Leadership in Volun-
tary Organizations: How to Make the Greatest Use of Citizen
Service and Influence (Chicago: Follett, 1976).
29
. George A. Steiner and John B. Miner, Management
Policy and Strategy (New York: Macmillan, 1977).
30
Henry Mintzberg, The Nature of Managerial Work
(New York: Harper and Row, 1973).
3^ Barnard Hewitt, Theatre U.S.A.: 1665 to 1957
(New York: McGraw-Hill, 19597! !
32
John H. Mueller, The American Symphony Orchestra:
A Social History of Musical Taste (Bloomington, Indiana:
Indiana University Press, 1951).
33
Karl E. Meyer, The Art Museum: Power, Money,
Ethics (New York: William Morrow, 1979).
34 William J. Baumol and William G. Bowen, Perform-
ing ArtsThe Economic Dilemma (New York: Twentieth Century
Fund, 1966).
35
William S. Hendon, James L. Shanahan, and Alice
J. MacDonald, eds., Economic Policy for the Arts (Cambridge,
Massachusetts: Abt, 1980).
36 Dick Netzer, The Subsidized Muse: Public Support
for the Arts in the United States (Cambridge: Cambridge Uni-
versity Press, 1978).
37 - -
Virginia Ann Hodgkinson and Murray S. Weitzman,
Dimensions of the Independent Sector: A Statistical Profile
(Washington, D.C.: Independent Sector, 1984).


65
James Douglas, Why Charity? The Case for a Third
Sector (Beverly Hills, California: Sage, 1983).
39
Waldemar Nielsen, The Endangered Sector (New York:.
Columbia University Press, 1979).
40
Barry P. Keating and Maryann 0. Keating, Not-for-
Profit (Glen Ridge, New Jersey: Thomas Horton, 198071
^ James D. Thompson, Organizations in Action (New
York: McGraw-Hill, 1967).
42 Jeffri.
43
Douglas Schwalbe and Janet Baker-Carr, Conflict
in the Arts: The Relocation of Authority: The Arts Council
(Cambridge, Massachusetts: Arts Administration Research
Institute, 1977).


CHAPTER III
RESULTS
The purpose of this study was to identify major fea-
tures of the governance process in private, non-profit arts
organizations and the manner in which these features function.
To accomplish this research objective, a grounded-theory
method was used. Data were collected from written sources
and interviews and coded into categories of variables and
patterns that described aspects of and relationships among
those variables. In this chapter, the results of the coding
process are reported through the presentation of the nine-
teen propositions about non-profit arts governance that
emerged. The propositions are unaccompanied by interpreta-
tion here; interpretation of them is presented in Chapter IV.
In the study, ten variables emerged as elements that
are important in the process of governance: resource scar-
city, organizational vision, community connections of trus-
tees, commitment of time by trustees, trustees applications of
governance models, director/artistic director structure, mea-
sures of success for directors, perceptions of directors, power
relations between directors and trustees, and actions of foun-
ders. The propositions presented in this chapter are organized


67
around these variables, beginning with the two broadest variables
dealing with contextual factors that permeate the governance pro-
cess-resource scarcity and organizational vision-followed by
the variables dealing with the prime actors in the processtrus-
tees, directors, and founders.
Each section dealing with one of the variables consists
of three major components. First, the variable is briefly ex-
plained, with tenns defined and necessary background explanation
of the phenomenon provided. Second, the proposition or proposi-
tions that emerged from the data dealing with the variable are
presented. As detailed in Chapter II, the propositions should be
viewed as hypotheses about governance, not proven statements
about it. In addition, the propositions do not deal with all ele-
ments of the governance process in equal detail. This is the case
because the propositions emerged from the data as they were re-
viewed, and the time, financial, and physical limitations of the
study limited the amount of data available. Third, each proposi-
tion is supported with samples of the data that led to the formu-
lation of the proposition. Again, as explained in Chapter II,
these data do not constitute all of the data that were found to
support the propositions; they serve as samples of such data.
1. Resource Scarcity
Like all organizations, non-profit arts organizations
rely on a steady flow of funds to keep them in operation.
What makes non-profit arts organizations somewhat


68
unique* however, is that they are heavily dependent on grants
and private contributions to balance their budgets. The
degree to which these contributed funds are incorporated
depends on the nature of the arts organization, its location,
and its history. Although the amount of contributed income may
vary significantly from one organization to another, the
earnings gap is a recognized factJ Funds not acquired
through earned-income activities must be obtained through
private or corporate support and/or government grants or
allocations.
Resource scarcity is an economic fact. Virtually
every person and all endeavors experience such scarcity in
that there are never adequate financial resources to under-
take and accomplish all goals. There are* however, greater
and lesser degrees of this scarcity. In his article on
fiscal.stress, Allen Schick identifies several types of
2
resource scarcity, ranging from "relaxed" to "total." In
his scheme, the degree of scarcity conditions behaviors in
organizations, which is also the case in non-profit arts
organizations.
Proposition.1.0; Arts organizations experience
a high level Of resource scarcity.
Supporting Data:
1. Baumol and Bowen report that because the arts are labor


69
intensive, they offer few ways to increase productivity in
order to reduce rising costs that result from rising wages,
material costs, and the like. They note, for example, that
a play cannot be produced with fewer than the number of actors
called for in the script and that most musical numbers call
for a certain number of instruments, without which the work
is not what it is supposed to be. According to Baumol and
Bowen, this productivity problem is on-going and never com-
3
pletely solvable.
2. The arts depend upon private contributions to continue
to exist; yet, as a class, cultural endeavors receive the.
lowest percentage of Americans' contributions dollars. In
1980, culture received an estimated much less than 7.5 per-
cent of the individual American's contribution dollar, in
contrast to 9 percent for education, 68 percent for reli-
gion, and 11 percent for medical and health concerns.^
Despite its need for contributions, then, culture is not a
priority among Americans for their contributions.
3. Scitovsky has identified low demand as one reason for
the high level of resource scarcity in the.arts. He asserted
that the:Puritan ethic continues to exist in'America, a pro-
work, anti.pl easure bias that regards the arts as trivial or
pernicious. He further argues that Americans tend to prefer
physical and psychological ease during periods of relaxation


70
rather than the stimulus of the arts, which demand intellec-
5
tual and emotional effort. Low demand, then, contributes
to lower earned income for arts organizations.
4. A community-theatre company in the Rocky Mountain West
planned its season to include the most popular plays that
would attract the greatest number of people. Staff and
trustees did this because the organization was in serious
financial difficulty. Virtually all organizations investi-
gated through the.interviews practiced some form of planning
with community response in mind, and those interviewed
related that response to budget needs.
5. The director of an art museum in a metropolitan area of
the Midwest seldom proposes additional annual programming
because the organization can barely balance its budget as
it completes its basic program.
6. The trustees of an arts service organization in the
Rocky Mountain West consider themselves to be in fine finan-
cial condition, although they have financial resources on hand
to cover only two months of operating costs. This develop-
ment is a great advancement* however, over its previous
experience of having cash to cover only two to three weeks
of operations.
7. Trustees of a community theatre in the. Pacific Northwest
insist upon reviewing all marketing and press-release copy


71
sent out by the staff. They have assumed this task because
they are deeply concerned about the day-to-day financial
condition of the organization and want to control all elements
of the operation to insure that a financial crisis will not
arise.
8. The board of trustees of a crafts gallery in the Midwest
"concentrates extensively oh financial matters and probes
the budget carefully." They do so because '.the organization
.always runs close to the edge financially*"
9. With few exceptions, a universal criterion used in the.
selection of trustees for arts organizations is'the ability
of the recruit to contribute money personally or serve as a
contact person for funds. Such trustee funding, .1nterviewees
commented, is universally sought to balance the operating
budget and less often to fund new programs.
10. Throughout the interviews, directors and trustees com-
mented on the critical need for the director to have the
ability to raise funds. The director's prior track record
in this area, as well as his or her present performance
level, were underlying themes in all interviews. With few
exceptions, the assumption was that the organization could
not afford to hire someone who was not going to be an effec-
tive fundraiser.


72
2. Organizational Vision
A major theme found in descriptions of governance of
arts organizations is the need to develop and maintain a uni-
fied vision for the organization. The vision is an explicitly
or implicitly agreed-upon conception of what the organization
is and should be. In the governance process, those involved
seek to establish and protect the organizational vision
through both formal and informal means. The dangers of not
maintaining a central vision can be great, including the pos-
sibility of dissolution of the organization.
Proposition 2.0: Mechanisms are developed to
encourage the maintenance of an organizational
vision.
Supporting Data:
1. The executive director of a community theatre in the
Pacific Northwest sits on the nominating committee of the
organization and has a vote. The reason he serves on the
committee, he stated, is to make certain that those nominated
for the board of trustees share in the goals of the organi-
zation and are willing to work toward those goals.
2. The director of a symphony orchestra in a metropolitan
area of the West believes that the nominating committee of
the organization, which presently meets for about one month
.out.of each year, should meet throughout the year. He


73
believes this would accomplish two functions: (1) The organ-
ization could better locate trustees who would offer the
most to the group in terms of resources; and (2) More time
would be available to search for people truly interested in
the organization and who share the vision of the organiza-
tion.
3. Although the by-laws of a contemporary arts gallery in
the Pacific Northwest exclude the executive director from
having input into the board-selection process, she has been
consulted by board presidents in the past about possible
nominees. The current president of the board, however,
interprets the by-laws literally and does not consult her.
The director was concerned that under this arrangement, those
most involved in the organization would not be rewarded with
trusteeships. Instead, she believed, trustees Would be
selected without a sufficient level of commitment to the
organization, a commitment the director believed Would exist
in the candidates she would nominate.
4. The president of a symphony orchestra in a metropolitan
area of the Pacific Northwest serves a total of five years
on the board to insure continuity of the organizational
vision. One year is served as president-elect, two years
are served as president, and two years are served as immedi-
ate past president.


74
5. An arts center in the mid-Atlantic region uses staggered
trustee terms to insure continuity in organizational vision.
This staggered-rotation method, which is generally found in
arts organizations, elects trustees for a particular term-
in this case, three yearsand rotates them off at different
times. The result is that only one third of the trustees are
replaced at any one time, creating a board on which part of
the trustees are always knowledgeable about the organizational
vision.
6. An arts center in a metropolitan area of the Midwest has
provided for the retention of all past presidents on its
board. The purpose of their participation in this manner was
stated to be so that "no new board of trustees drifts too far
from the intent of the organization's founders and leaders."
7. A trustee of an arts council stated that she was asked
to rejoin the organization's board because the "board members
began to see that they needed some continuity." She was an
early board member who had many years of service with the
organization; she left the board after serving "as long as
the bylaws allowed."
8. A trustee of an arts center in the Pacific Northwest that
was in severe financial and organizational difficulty analyzed
part of the problem as being a lack of continuity in the organ-
ization's vision: "No one is left on the board who. is an


75
old-timer."
9. Board orientation is a traditional method of developing
and conserving a shared organizational vision. Ann S. Smith,
the director of development for the National Opera Institute,
noted that board orientations have two functions: "1. the
selection and education of new board members and 2. the
7
evaluation, motivation, and redirection of existing trustees."
10. The director of a community-theatre organization in the
West noted that board development, which includes agreement
on the purpose and mission of the organization, is a chief
concern of the board. This area is one a board should move
away from only after trustees feel very secure about their
agreement on purpose and mission.
11. The executive director of a community symphony orchestra
in the West works with new board members to orient them to
the goals, policies, and procedures of the organization.
12. The executive director of a community-theatre company
in the Northwest stated he has no social relationships with
board members but encourages trustees to socialize because
"it helps them get through organizational highs and lows
helps them work better in committees and makes better use of
peer pressure." This bonding among trustees, he believed,
facilitates the creation of ah understood vision for the
organization.


76
13. The board and staff of a large theatre company in the
Pacific Northwest meet annually in a retreat format to talk
about philosophical issues because "there was not adequate
time in which to discuss these issues in monthly board meet-
i ngs."
14. Ann S. Smith of the National Opera Institute noted,
"Careful planning should go into preparing the board for
[its] role. The entire process should be tailored to the
organization. The age of the organization, its artistic
purposes) its role in the community, and the current strength
g
of its operations should all be taken into account."
Proposition 2.1: Directors work to involve
themselves socially with trustees in order
to reinforce the organizational vision.
Supporting Data:
1. The managing director of a medium-sized theatre company
in the Pacific Northwest noted that he needs to find a way
to spend more staff time with board members. He feels a
need to "nurture" them--to communicate and clarify the organ-
ization's goals to them and to encourage them to pursue these
goals.
2. A staff member of a state arts agency who had experience
operating arts organizations noted that where a director
comes from affects the Way he or she gets along with the


77
board. She stated that "if the director has a social back-
ground similar to that of the board, there may be less con-
flict."
3. The trustees of a community theatre in the Rocky Mountain
West hired a particular executive director in part because
he.was a local person who shared their values. They felt
"comfortable" with him.
4. The fact that the staff and board of an alternative gal-
lery in the metropolitan Midwest do not socialize outside of
parties held at the gallery is cause for concern for the gal-
lery 's director. She felt that by isolating the staff from
the socializing, the trustees consider them to be something
less than an integral part of the organization, increasing
the opportunity for disparate perspectives on the organiza-
tion to develop.
g
5. The director of a presenting organization in the Rocky
Mountain West noted that he socializes with a board member
he knew prior to being hired and also meets periodically with
a trustee who heads another non-profit arts organization in
the area. Yet, he does not meet socially with other board
members; as a result, he feels helpless in his efforts to
shape their vision of the organization.
6. The director of a visual-arts center in the Rocky Moun-
tain West socializes extensively with trustees. She noted


78
that the former president, who did not socialize with the
group, had a very different view of the role and mission of
the organization and was very unpopular among the trustees
and staff. The president is no longer involved in the organ-
ization.
7. The director of a museum in a metropolitan area of the
West stated that he feels socially isolated from the trus-
tees and unable to communicate his view of what the organi-
zation should be effectively. His position is complicated
by the fact that many staff members have social relations
with trustees. Through those relationships, the staff mem-
bers are able to convince trustees that the director's view
of the institution is incorrect and that his administration
is ineffective.
8. The director of an arts center in the mid-Atlantic region
maintains social contacts with the organization's trustees.
He had found that in his previous job, where he did not
socialize much with the trustees, the trustees strayed far
from his vision for the organization. Lack of congruence
in vision eventually led to his resignation.
9. The director of an arts center in a metropolitan area
of the Midwest maintains extensive social contact with the
trustees. He believes that because of this contact, he is
able to implement his policies and survive policy failures.


79
The resultj he felt, was due in part to his ability to com-
municate informally and thus continuously build a vision for
the organization.
3. Community Connection of Trustees
Arts organizations depend upon outside resources for
their financial well-being. Baumol and Bowen demonstrate
this need in their seminal work, The Performing Arts; The
Economic Dilemma, where they document the fact that perform-
ing-arts institutions cannot charge the true cost of per-
formances to patrons and expect to pay for them through
earned income.^ Other possible rationales for arts subsidy
have been detailed in Netzer's The Subsidized Muse. These
include market failure, the existence of external benefits
derived from the arts, and the fact that the arts are merit
goods. ^ Public and private subsidies exist for nearly all
arts organizations; while the degree of subsidy varies, it
may average over half of operating costs.
Because such a high level of subsidy is necessary,
arts organizations seek to develop links to sources of sub-
sidy in the public and private sectors that will guarantee
their existence. Where historically, arts organizations have
been subsidized by a single patron, the needs of most arts
organizations have expanded to the point where one person


80
cannot underwrite the large amounts necessary. A combination
of private, corporate, foundation, and governmental support,
however, can address these deficit needs.
Arts organizations have responded to subsidy needs
by developing connections with sources in their environment
that are potential fonts of financial support. This process
is complex because there is seldom a single available source
that alone can subsidize an operation entirely. In addition,
there are players involved in the subsidy such as foundations
and governmental agencies, which often have sub-agendas such
as minority employment and handicapped access that arts organ
izations must address. The result is that arts organizations
need multiple strategies to appeal to multiple sources. One
major way in which appeal to funding sources is developed
is through the selection of trustees.
Proposition 3.0; Trustees are selected for their
connections with the community.
Supporting Data:
1. A trustee of a visual-arts center in the Pacific North-
west noted that the organization lacked people on the board
who could give them money or provide entree to corporations
and individuals who could fund the organization. The trus-
tee noted that until the organization develops such contacts,
it is doomed to be poor.


81
2. The director of an arts-service organization in the Rocky
Mountain West stated that she wanted "the board to represent
different sections of the community." She believed this
approach makes the organization more appealing to funders
and provides communication and feedback to the organization's
governing structure on the needs and problems in the community.
3. The director of an arts-service organization in the Rocky
Mountain West noted that there are a number of people who
would make good presidents for the organization, but "who you
know" is, unfortunately, the primary criterion for selecting
a president due to funding needs. A number of those who would
make good presidents do not have the necessary community con-
nections to secure funding for the organization.
4. A trustee of a failing visual-arts center in the Pacific
Northwest found that the board "keeps reproducing itself" and
because of this, it never draws from outside a circle of
friends for trustees. It thus severely limits its success
with outside funding sources.
5. The director of a community symphony in the Pacific North-
west believed that when organizations develop large boards,
they do so to acquire broad community support.
6. The managing director of a dance company in the Midwest
attempted to entice the mayor of her city to attend a per-
formance. The purpose of the proposed visit was to acquaint


82
the mayor with the organization, but more importantly, to ele-
vate the group in the minds of potential funders and board
members.
7. A member of the nominating membership committee of an
arts council believed that the effort to broaden board con-
tacts can go too far. Speaking of the process, he commented,
"I do-think* however, that the committee may overdo it a bit
and get people who represent parts of the community that
12
couldn't care less about the Arts Council."
8. A trustee of a visual-arts center in the Pacific North-
west stated that the organization "needs ties to old money."
He felt that without such ties, the institution always would
operate at a fairly low level due to a lack of contributed
income.
9. Barbara Hauptman, executive director of the Twyla Tharp
Dance Foundation, stated, "we had a prerequisite for board
membership: an annual commitment of $10,000 to be given per-
13
sonally or raised from other sources."
10. In his work on the history of art museums in America,
Nathaniel Burt noted that at the Boston Museum of Fine Arts,
a "quiet word passed among old friends on the board of trus-
tees was no longer sufficient for meeting deficits and com-
14
peting for acquisitions." As a result, the Museum was
forced to broaden its base of trustees.


83
11. In his book on boards, Robert Crawford discussed the
need for arts institutions to make contact with outside sour-
ces: "Many institutions have established advisory boards,
advisory committees, honorary boards, emeritus boards or ex
officio board memberships for a wide variety of reasons.
Most have been done for direct or indirect fund raising,
15
public relations, or political purposes."
12. The director of a city arts agency who has close con-
tact with the city's arts organizations in the Rocky Moun-
tain West believed that there is presently "less carrying"
of board members who don't do things. He found that trus-
tees are increasingly being looked to as active resource
persons who have a duty to remain active. If they are not,
they threaten the stability of the organization, which de-
pends on the aggregate of contacts arid work of the trustees,
each of whom is selected to represent and provide contact
with a particular element of the community.
13. The president of an arts council commented on the value
of trustee-community contacts: "I think that the trustees,
all of the trustees, feel a responsibility, first of all, as
conmunity representatives to take action that is best suited
for the community as a whole. The makeup of the board does
reflect, we hope, a real cross section of the community. We
have tried very diligently to have representation on the


board from business, government, member groups--both funded
and nonfunded, and the community at Targe. All neighborhoods
and economic levels, in general, are fairly well represented.
14. The director of a West Coast opera company asserted,
"All nonprofits represent the 'warp and woof' of life and
need to have ombudsmen to represent the people on boards of
arts institutions." He stated that, at times, trustees of
an organization may not take action that is best suited to
the public's interest, and the public may lose the organiza-
tion due to the trustees' incompetence.
15. Barbara Hauptman, the executive director of the Twyla
Tharpe Dance Foundation, noted, "Once the function of the
board is outlined, diversity in the skills and contacts of
the individuals represented can be crucial to its success.
A board, like a good salad, should contain an assortment."^
16. The director of a community symphony orchestra in the
Pacific Northwest stated, "The ability of people to raise
or contribute funds is not an overriding concernthere are
other ways they can contribute." These "other ways," how-
ever, are all concerned with the acquisition of resources
such as volunteers, in-kind services, and community contacts.
17. In his work, Olympus on Main Street: A Process for
Planning a Community Arts Facility, Joseph Golden stated that
there are three universal functions of a professional board:


85
"(1) open doorsget and hold the attention of businesses,
corporations, labor, the political structure. . (2) Give,
get, or get outensure that fiscal needs are satisfied,
either by regular fund-raising or endowment-building. (3)
Act as a buffer between the public and private sectors
protect the broad public interest against the threat of the
18
militant, the very righteous, or the hyper-political."
18. In order to arrive at a useful mix of trustees, twelve
of the thirty-three organizations examined in interviews
used a matrix of board qualifications to select new trus-
tees. This method assures diversity among the trustees and
insures that the board contains persons who have access to
the community resources needed by the organizations.
4. Commitment of Time by Trustees
The time trustees devote to arts organizations often
is a concern to administrators and trustees of non-profit
arts organizations. Although trustees make an implicit time
commitment to an organization when they assume a trustee-
ship, they do not always spend adequate time with their organ-
izations. In many instances, this lack of attention has
dysfunctional effects on the organization.
Trustees can contribute time to an organization in
several ways. They may spend time attending board meetings


86
or reviewing information mailed to them from the organiza-
tion. Time also may be spent participating in the social
and ceremonial activities of the arts organization, includ-
ing attendance at opening events and galas as well as at
private gatherings for those interested in either the arts
institution or the art form promoted by the institution.
Finally, time may be spent volunteering for some of the
organization's miscellaneous tasks such as painting a room
in:the.organization's building, assisting with a large mail-
ing, or joining a non-trustee-centered committee to help
organize a special event. There is, then, a concept of time
needs on the part of arts organizations and a number of ways
trustees can attempt to fill these needs. One proposition
that emerged from the data concerned this issue of time.
Proposition 4.0: Trustees devote too little time
to their organizations.
Supporting Data;
1. The director of a theatre in the Rocky Mountain region
detailed some of his problems with trustees and time. The
theatre's trustees had attempted to improve the board by
inviting several high-level executives from area corporations
to serve on it. These new trustees turned out not to be
assets to the organization because they seldom attended board
meetings. When they were contacted and asked to give time


87
to the organization's activities, they announced that they
were very busy and could not spend much time on the business
of the theatre. Instead of being the hoped-for important
link to corporate treasuries, the new trustees were limited
participants in the organization and a great disappointment
to those who had believed their presence would solve the
theatre's corporate-relations problems. The organization's
director commented on the problem, "Vice presidents of cor-
porations sometimes have no time to work for the organiza-
tion and certainly can't be part of a 'working board."1
2. A member of a nominating committee for an arts council
in New England found that when he recruited representatives
from the local power structure in the community to serve on
a re-organized board, ,'lsome of the people brought in were too
busy--their primary responsibilities were elsewhere."
3. A small arts center in the Pacific Northwest that was
experiencing severe financial and governance problems was
labeled, by one board member, as having these problems in
part because "board attendance is not good." He felt that
the lack of participation on the part of the trustees in
formal board meetings contributes to a feeling of helpless-
ness among the trustees in dealing with their problems.
4. Trustees' attendance at activities outside the formal
board meetings also was cited as cause for concern. The


88
manager of an arts center in the Midwest stated that the
trustees do not attend organizational events such as parties,
receptions, and lectures, even though they attend board meet-
ings. He believed the reason for this is a lack of time.
5. The director of a city arts agency in the Rocky Mountain
West stated that in his experience, in both public and pri-
vate arts endeavors, only half of the trustees take the time
to read what is mailed to them in advance of meetings. They
further demonstrate this lack of concern for the organization
by failing to take the time to bring such materials to board
meetings.
6. The; director of a multi-arts center in the Rocky Mountain
West Stated, "A board can be as informed as it wants to be."
He noted that "some are very prepared-rthey read everything
and come to all events." Yet, he noted, many trustees do
not take the time either to read about the organization or
to participate in. it. He believed that their lack of time
involvement makes them, as a group, unequipped to evaluate
programs and set policy.
7. In considering the time the trustees of his organization
spend on it, the director of a community orchestra in the
Northwest concluded that the board is "not well enough
informed" because of the trustees' lack of time commitment
to the orchestra.


89
8. A West Coast opera company that regularly attracts an
audience from around the world for its performances cannot
get its trustees to attend those performances. The managing
director of the opera noted that in the nine years that the
organization has attracted wide attention for its special
performances, "only about twenty percent of the board members
have seen them."
9. In speaking of arts boards in general, the director of
an arts agency in Colorado noted that "very few board members
have the capacity or time to get involved in the budget.
Even this central feature of governance generally is given
insufficient time by board members, according to this source.
10. The time theme also appeared in descriptions of the
nominating process. The director of a small professional
theatre group in the Northwest stated that he forwards the
names of people who "really help"put time into the organi-
zationto the nominating committee to insure the election
of trustees who will devote time to the theatre.
11. The notion of a "working board"--one that spends time
essentially as staff to the hired staff--was a common one
in the interviews. The working board was contrasted by
many with the "professional board"the board with respected
names and high-level connections. The working board was felt
to require a great amount of time from trustees--time trustees