Mission,-Models,-Money-Catalysing-a-more-sustainable-arts-and-

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					Mission, Models, Money
Catalysing a more sustainable arts and cultural sector

Programme overview
May 2007

Programme Overview

Mission Models Money

Purpose of this document
This report contains a general overview of the Mission Models Money (MMM) programme and specifically focuses on the extensive third phase of work which ran from Spring 2006 to May 2007.

Contents
The context for MMM ........................................................................ 3 Definition of MMM ............................................................................. 5 The evolution of the MMM programme................................................. 6 Activity overview .............................................................................. 9
Exemplar Projects .................................................................................... 9 New & Alternative Financial Instruments ................................................... 10 Governance roadshows ........................................................................... 10 Capitalisation roadshows......................................................................... 10 Provocation papers ................................................................................ 11 Case Studies ......................................................................................... 11 Advocacy and other events ..................................................................... 11 Press and website .................................................................................. 12 Why Mission Models Money? ...................................................................... 7 The Seven Principal Issues ........................................................................ 7

Programme delivery framework ........................................................ ISB outcomes ................................................................................ Governance ................................................................................... Funding .........................................................................................

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The context for MMM
“the arts sector in the United Kingdom is over-extended and under-capitalised, with cultural organisations trying to do more things than they can possibly do well, with both human and financial resources too thinly spread. Additional resources secured by the sector are generally more likely to result in further under-funded expansion – whether of programmes or buildings – than in doing core things better. Lacking liquidity or reserves, cash strapped and thinly spread between ever more diverse, fragmented pools of funding, arts organisations find it easier to secure the marginal costs of marginal activities than the core costs of core activities. The result is a hyperactive sector that responds with Pavlovian urgency and enormous ingenuity to the imperatives of funders but that has a decreasing capacity to hear, or at any rate listen to, the voice of mission.” Adrian Ellis in New approaches to sustaining the arts in the UK the initial MMM provocation paper (2004) “We want arts organisations that are both mission-led and financially sustainable. Now that sounds really simple but actually it requires quite a change of mindset for some organisations” MMM conference delegate, February 2005

In common with other parts of the world such as the USA and Australia where not for profit organisations are a primary delivery vehicle for cultural experience, our sector in the UK is facing major structural change brought on by technological advances, global interconnectedness and shifting consumer behaviour. We have reached a watershed where we must adapt to evolving technologies and the different ways the public are engaging and participating with arts and culture or risk finding ourselves marginalised. Inaction or „business as usual‟ is not a viable option1. Hundreds of not for profit organisations critical to the historical and contemporary cultural canon are over-extended and under-capitalised. Often with high fixed costs and inflexible business models they are highly dependent on annual public sector grants to survive as patterns in attendance and earned and fundraised income from the private sector change. The challenges posed by our contemporary operating environment are a threat to the delivery of the mission of our sector as a whole and the individual missions of the thousands of museums, galleries, and performing arts centres, dance, theatre, music and literature organisations who form its ecology. MMM‟s work has been focused on confronting these challenges and advocating that working toward solutions strategically as a sector is the most sensible way forward. Three key challenges Our work during the period 2004 – 2007 has found that the challenges faced by our sector fall into three broad categories: responding to rapidly accelerating changes in the wider environment, building the skills and knowledge base and realigning existing financing, funding and organisational development structures. Responding to changes in the external environment. Many of our arts and cultural organisations are not in a position to respond fast enough to the rapidly changing external environment especially the shifts in the way the wider public are creating, producing and consuming cultural experiences and threats and
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Critical Issues Facing the Arts in California, AEA Consulting, 2006

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opportunities brought about by new technology. Most organisations are not financially or organisationally structured to enable rapid response to the broader trends that are shaping the engagement with and participation in arts and culture such as new technology. With the majority being small scale in nature, any level of undercapitalisation means they have insufficient financial and human resources to develop and implement effective technology platforms or rapidly step change their public engagement strategies. Skills and capacity gaps. There are significant knowledge and skills gaps in key competency areas that will help achieve greater sustainability, not only in basic financial management for example but in methods of financing which extend beyond the mainstays of grants, fundraising, ticket sales and other earned income, the potential of alternative legal structures and business models which may offer a better environment for the delivery of mission and the role that new technology could play both in improving back office functions and expanding public engagement opportunities front of house. As in the wider Voluntary and Community sector, some core competencies such as governance of a traditional charity model need to be seriously improved. And it is not just existing competencies that need improving. As Graham Leicester has pointed out in his Provocation for MMM „Rising to the Occasion: Cultural Leadership in Powerful Times‟, we need to develop new competencies to manage the increasing complexity and rapidly accelerating change of our world2. Realignment of existing financing, funding and organisational development structures. It is by no means only arts and cultural organisations that face challenges of responding to change faster and driving up performance. Serious levels of misalignment are evident in funding mindsets and mechanisms and there are knowledge and skills gaps in the existing capacity building infrastructure too. There are concerns that the original mission and existing roles and structures of the dominant public funding agencies and some intermediary organisations are not best suited to the cultural and political realities of our time and the plethora of publicly funded organisational and business development support on offer largely focuses on sole trader, start up or commercial creative industries not so much on the business development needs of mature non-profit arts and cultural organisations. Issues about the quality of organisational development support on offer and confusion of different agencies responsible is being raised. Public and private funders are helping to drive the undercapitalisation of the sector through working practices that drive mission creep or and perpetuate the organisational fragility of those they fund. There is insufficient recognition that structure influences behaviour As Churchill has said: “We shape our buildings, and afterwards our buildings shape us”. Our financial structures influence our behaviour, so do our organisational structures and our mindsets. Cultural policy itself defines structures that discourage or encourage certain behaviours and the ecology of funding has a profound effect on the ecology of the arts.

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Rising to the Occasion, Graham Leicester, MMM, 2007

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Definition of MMM
Mission, Models, Money (MMM) is a national action research programme and a campaign for change which aims to ensure that artistic and cultural endeavour thrives in the UK at a time of accelerating social, demographic, cultural and economic change Vision To help ensure that artistic and cultural endeavour thrives in the UK at a time of accelerating social, demographic, technological and economic change. Mission Engaging leaders of the not for profit arts and cultural sector and their funders to address the challenges of developing mission-led, financially and organisationally sustainable businesses, by exploring and promoting a deeper understanding of the principal issues identified by MMM as enabling sustainability. The need for an independent sector-led approach. MMM recognised that traditional external interventions, often policy-led, with a top-down approach were no longer the best way to empower and equip arts and cultural organisations with the capacities and capabilities required to respond to the challenges being faced by the sector. “the key to unlocking a better future is not a better funding regime [but] a shift in the psychological mindset of the arts…. we require the leaders of the sector to become less defensive and more proactive, to move from a culture of dependency to self-sufficiency, and to become activists for change rather than defenders of the status quo. We also need them to recognise that they have a first order responsibility namely to reanimate the public conversation about how best to create a vibrant cultural community in the UK in ways that place excellence, access, customer experience, relevance and efficiency above organisational and institutional vested interest.” John Knell, in The Art of Dying, an MMM provocation paper (2005) Three approaches were adopted at the outset: First, the project was set up as independent and sector-led, second a working ethos was developed which aimed to be highly collaborative and open-source, recognising that knowledge can be created and shared in ways that emphasise its character as a common good, rather than as something to be owned. Thirdly there was an acknowledgement that peer to peer support and mutual problem solving was key to addressing common challenges.

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The evolution of the MMM programme

Figure 1: High-level MMM timeline

Mission Models Money began as a conversation in late 2003 between Roanne Dods, Director of the Jerwood Charitable Foundation and Clare Cooper, then Director of Policy and Communications at Arts & Business, with the initial aim to encourage a more honest conversation about the challenges facing the arts & cultural sector. Their intention was to catalyse a debate which both recognised weaknesses and accepted the need to adopt new approaches and models of operation and develop new infrastructure support. Using an initial paper written by Adrian Ellis as its foundation, MMM brought together over 250 sector leaders in a ground breaking conference held in June 2004 to launch the investigation. The participants included both trustees and senior management of organisations and public and private sector funders. Unlike similar events which often concluded that the solutions can principally be found in increased public funding for the arts, delegates agreed that, to provide the most powerful and long-lasting transformation within the sector, arts and cultural organisations needed to collaborate and work on solutions themselves. The output of the first conference was a set of Principal Issues, the examination of which was to form the architecture of the overall MMM programme. The MMM Action Group, a group of senior sector leaders, together with the support of fellows from the Clore Leadership Programme, were then commissioned to produce short research papers into each of the principal issues. A second conference was held in February 2005 where the research findings were presented and the principal issues refined. Whilst MMM was originally resourced by the Jerwood Charitable Foundation and Arts & Business, participants at both conferences confirmed that the future success of the agenda was dependent on wider sector involvement at a very practical level and a clear mandate emerged for MMM to develop a third phase with a more extensive programme of action research and advocacy activities. This third and most extensive phase of activity was therefore designed as an action research programme and campaign for change and ran from June 2005 to May 2007 with the latter part of 2005 devoted to programme design and fundraising and most of the programme activity delivered between February 2006 and May 2007.

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Why Mission Models Money?
MMM‟s name derives from Adrian Ellis‟s original provocation paper Mission, Money, Models: New approaches to sustaining the arts in the UK (2004) which advocated that not for profit A&CO‟s needed to get significantly better at managing interdependent relationship between mission and programmes, organisational capacity and financial capacity in order to become more organisationally and financially sustainable.

Figure 2: Iron triangle

The Seven Principal Issues
The seven principal issues formed the output of the initial MMM conference in 2004 and have formed the architecture of the overall enquiry. It was the MMM proposition that it was through the deeper interrogation of the following questions that arts and cultural organisations would be able to develop their financial and organisational sustainability while remaining mission-led.
1. How can we, as a sector, better engage with the changing

demographic, technological and social environment?
2. What can be done to improve the capabilities of A&COs to develop both

new and more collaborative approaches to sustaining their audiences, develop new markets and build engagement and participation?
3. What strategic alliances could be developed between organisations

which are both “back office” and “front of house” thereby enabling new kinds of artistic collaboration, better connections to culturally diverse communities and organisations or new income streams.
4. What are the priority issues with regard to governance and what changes

need to occur to reflect the changing landscape arts organisations are operating in?

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5. What are the key competencies organisations need in order to manage

mission-led strategies which are successful both in terms of organisational and financial sustainability?
6. How can we expand the financial capacity of arts and cultural

organisations, for example by creating reserves and/or developing new financial instruments and once created and/or developed how do we manage and control them?
7. What new methods of operation, business models, infrastructure

and funding support will deliver sustainable, vibrant cultural endeavour?

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Activity overview

Figure 3: Programme elements N.B. Since this document intends only to provide an overview of the extensive MMM activities from February 2006 to May 2007, readers are encouraged to read the further material in the areas which are of particular interest to them. Full details can be found in How to use the MMM documentation. . The MMM programme comprised of eight strands:

Exemplar Projects
The exemplars were seven diverse medium sized arts and cultural organisations each of whom were looking to tackle the issues pertaining to their sustainability in a variety of ways. The exemplars provided an opportunity for the MMM programme to learn from front-line organisations about the challenges related to each individual project and the common issues shared by the whole exemplar community. The organisations involved and their highlighted projects were:   Aegis Trust: drive to grow payroll-giving and membership schemes to ensure a reliable source of unrestricted income to support core costs Audiences Yorkshire: Development of business model through re-evaluation of thirst, AY‟s initiative to grow support of the independent publishing sector nationally Lift: revitalising its mission and model of engagement through development of the Lift New Parliament Manchester Camerata: developing a new strategic alliance by becoming a professional partner and resident of the Royal College of Music MLA Yorkshire: developing the income spectrum of independent and voluntary museums through the instigation of a federated fundraising initiative

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South East Dance: research project to develop SED‟s business model to take advantage of new distributions channels for screen dance Watershed: creation of iShed, a new network services company, brokering relationships between sectors using the Community Interest Company structure

Using a programme of both individual interventions and checkpoint meetings for all organisation, the exemplars developed into a thriving community of practice, learning and innovation.

New & Alternative Financial Instruments
This strand of work considered methods of financing arts and cultural organisations which extend beyond the mainstays of contributed income including grants, ticket sales and other earned income. The purpose of this work was to prompt A&COs to think more broadly about the range of financing available to them and to give examples of how they could be used in order to encourage their use. In preparing the report, Margaret Bolton and David Carrington leveraged their knowledge of not only the arts and cultural sector but also the wider voluntary and community sector where these alternative forms of financing are more prevalent.

Governance roadshows
Six half-day workshops entitled Mission Accomplished held in Leicester, Nottingham, Liverpool, Bristol, Brighton and Edinburgh. The sessions were designed with a working group made of representatives from the MMM Action Group, A&CO‟s, Arts Council England and NCVO, tested on a group of leading practitioners from the sector and delivered and facilitated by David Carrington and Sara Robinson using detailed case studies as prompts for discussions on governance practice with regards to:    Trustee responsibilities for supporting artistic risk Understanding and applying appropriate business models Building effective partnerships between board and executive

The participants for these days were chief executives and trustees from a variety of organisations largely gathered by the appropriate Arts Council England and MLA regional offices, and their overall rating of the sessions was high with a score of 4.2 out of 5 from a data set of 110 evaluation forms.

Capitalisation roadshows
Seven day-long workshops entitled Mission Accomplished held in Liverpool, Leeds, Edinburgh, Nottingham (x2) and Brighton. The sessions were designed by Adrian Ellis and a working group made up of MMM Action Group members and delivered and facilitated initially by Adrian Ellis and then by Anthony Blackstock. The purpose of this Road Show was to support arts leaders in their efforts to understand the relationship between their organisation‟s artistic and financial priorities. It explored the impact of the structure of an organisation‟s balance sheet (that is, fixed and liquid assets and liabilities) on organisational effectiveness; suggested ways for arts organisations to manage financial capacity more aggressively and deliberately; and explored the impact of these strategies on the ability to fulfill long term artistic goals. The workshop was designed for Trustees and senior managers whose job was to ensure that preoccupations with mission and money are kept in balance and to manage the inescapable tension between pursuit of mission – and the programmes that support an organisation's mission – and the requirements of financial sustainability.

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The MMM approach to this issue has was developed in the context of the challenges that under-funded growth, whether of programmes or facilities, has presented non- profit arts and cultural organisations. Over the last ten years this under-funded growth and expansion of the sector has been stimulated by funding from the National Lottery and by the increasingly prominent role that the arts play in fulfilling civic and educational agendas. It has left many organisations struggling to meet the expectations placed upon them. This Road Show sought to address head-on the realities of this situation and help participants to share their experiences find new solutions to current challenges.

Provocation papers
Seven highly stimulating essays by thought-leaders from the arts and beyond discussing key challenges facing the sector today. This collection of highly influential papers comprised of:     Mission Models Money: New approaches to sustaining the arts in the UK by Adrian Ellis, 2004 The Art of Dying by John Knell, 2005 19th Century Artforms at the Dawn of the 21st by Graham Devlin, 2005 Mission Unaccomplished: the place of education and learning in our national and regional performing arts and cultural organisations by Sara Robinson and Teo Greenstreet, 2006 Many Voices: the importance of cultural diversity in democratic society by Francois Matarasso, 2006 Rising to the Occasion: cultural leadership in powerful times by Graham Leicester, 2007 The Art of Living by John Knell, 2007

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Case Studies
In addition to those prepared for the exemplar projects, the New & Alternative Financial Instruments work strand and the Governance roadshows, a number of other case studies have been collated to highlight how A&COs and their stakeholders have been able to address key issues of sustainability.

Advocacy and other events
Throughout the programme, MMM hosted a number of workshops and events which served not only to supplements its research activities but also provided a valuable opportunity to share learnings with a wider audience. These have included: MMM-led events:  Individual New & Alternative Financial Instruments/Intelligent Funding workshops with: o o o executive leaders of mature A&COs the social investment community theatre producers

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o o o     

high-net worth individuals business representatives the trusts & foundations community

Workshop on funding from business with leading Development Directors from the arts & cultural sector Intelligent Funding/NAFI symposium at the RSA Whitehall seminar on Intelligent Funding/NAFI IT4Arts day on the arts and media (hosted by WCIT/IT4Arts) Kick-off workshop exploring the Ecology of the Arts (hosted by the International Futures Forum)

Major MMM contributions delivered at the following events:   Annual conference of the Association of British Orchestras Annual conference of the Federation of Scottish Theatres

In addition, MMM made a large number of presentations to several senior stakeholders within the sector, both at national, regional and local level.

Press and website
As part of its open-source approach, MMM‟s website, www.missionmodelsmoney.org.uk, has hosted all reports and papers developed by the programme. It has proved a popular resource with over one thousand downloads of the provocation papers alone. MMM has also been active in the press with a major partnership with Arts Professional. This has comprised four feature articles and a series of shorter “sounding board” pieces. In addition, MMM has enjoyed wider coverage including International Arts Manager and the leading blog artfulmanager.com.

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Programme delivery framework

Figure 4: Schematic programme approach

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A small well respected core executive team who managed the relationship network and have overall responsibility for programme conceptualization and delivery. An Action Group of senior sector leaders who met regularly to provide advocacy and strategy advice with individual expertise tapped when needed. A team of paid specialists with responsibility for specific work-packets such as provocation papers, roadshow delivery, evaluation, exemplar project strand development Regular contact between the executive team and the exemplar organisations allowing for ongoing mutual learning and core teams deeper understanding of current issues in A&COs. Specific stakeholder groups within the A&CO and public and private funding communities directly targeted for advocacy and dissemination events and publications on specific issues. The wider sector reached through the communications channels of the website, press campaigns and word of mouth. All issues raised from any source are collected as part of the MMM evidence base. Core team and associates are empowered to act as provocateurs, helping to generate conversations, bring new perspectives and encourage new solutions.

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ISB outcomes
In the original submission to HM Treasury‟s Invest to Save Budget, MMM‟s major funder, it was required to outline a series of outcomes. These are repeated here:

ISB outcome target
Participation by 1,000 A&COs Production of an Action Plan to further develop MMM objectives Development of a sustainability toolkit for A&COs to measure the health of their organisations and develop strategies for improvement Significant change in content / nature of discussion of cultural funding

MMM evidence for achievement
Over 1000 A&COs reached through the two roadshow series, all advocacy events, active participation on on-line survey and download of website materials. Covered by MMM Recommendations Document and Designing for Transition (Deft), the next generation initiative Tools created include the Income Spectrum, governance checklists and stakeholder management pack. Strategies for improvement to be found throughout the MMM closedown material. New & Alternative Financial Instruments report and the provocation paper „The Art of Living‟ which focused on the role of the private and public funding communities. Both these pieces of work were accompanied by a series of workshops with a range of relevant stakeholder groups. Seven high profile provocation papers looking at different themes (funding, education, diversity, people development etc) all reference all stakeholder relations. Road shows on A&CO governance and financial capacity issues covered modus operandi of public and private funders. Advocacy and dissemination events and provocation papers and seminars role funders could play in developing sustainability Deferred outcome due to inability to measure within MMM timeframe

Fresh insight into relationship between public, Government and cultural professions re: arts & culture sector Improved understanding by A&COs of expectations of funders / investors Improved understanding by investors & funders of the challenges and needs of A&COs and the long term needs of the sector Improved success rate of A&COs (financial longevity)

Governance
MMM was set up as an independent initiative hosted for legal and auditing reasons by the Jerwood Charitable Foundation. The MMM core team consisted of the two co-Directors, Clare Cooper and Roanne Dods, Vernon Ellis, who chaired the MMM Action Group, and a full-time consultant seconded from Accenture. The MMM Action Group was formed from a coalition of leaders within the UK not-for-profit arts & culture sector. They provided direct input in the first two MMM phases taking a more strategic role in the third. In addition to the MMM core team, the Action Group included:                    Dawn Austwick, Director, Esmée Fairburn Foundation Moss Cooper, Associate Dean School of Arts, Columbia University Adrian Ellis, Founder of AEA Consulting David Hall, Chief Executive, Foyle Foundation Sue Hoyle, Deputy Director, Clore Leadership Programme Keith Khan, Head of Culture, London 2012 Michael Lynch, Chief Executive, South Bank Centre Ruth Mackenzie, General Director, Manchester International Festival Clara Miller, President and CEO Non Profit Finance Fund Francis Runacres, Arts Council England Sir John Tusa, Chairman, University of the Arts London Jacqueline Riding, Clore Fellow 2004/5 Kathleen Soriano, Clore Fellow 2004/5 Julia Twomlow, Clore Fellow 2004/5 Nadine Andrews, Clore Fellow 2005/6 Anne Gallagher, Clore Fellow 2005/6 Sally Lai, Clore Fellow 2005/6 Fiona Kearney, Clore Fellow 2006/7 Jigisha Patel, Clore Fellow 2006/7

Funding
Key funding partners and in-kind supporters for the third phase of MMM were:           Accenture Arts Council England The Clore Leadership Programme Cultural Leadership Programme Deustche Bank Governance Hub HMT‟s Invest to Save Budget Jerwood Charitable Foundation The Paul Hamyln Foundation The Rayne Foundation

Other MMM in-kind partners have included:  Bates Wells & Braithwaite

Programme Overview

Mission Models Money

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Arts Professional Four Communications

The range of major partners which includes private sector, public sector and the foundation community demonstrates the breadth of support for MMM. In addition to these programme supporters, there have been numerous partners who have provided in-kind support for specific roadshows and events.

Notes: Significant in-kind support has also been invested by Accenture through the secondment of staff to the project. This is not shown on the above chart. In kind support to the value of £25k has also been invested by the Jerwood Charitable Foundation through the provision of office and other overhead costs. This is not shown on the above chart. ACE and MLA offices around the country have covered the venue and catering costs of Road Show events. This is not shown in the above chart. 100% = c.£532k Proportions are indicative only and subject to alteration over the remaining lifecycle of this third phase

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