By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
Their "Nonprofit Accountability Checklists," to be precise.
Sent by the influential Dallas Business Committee for the Arts, the mailing asked 20 questions about taxes, debts, budgets, and other dismal money matters--questions to which hand-to-mouth arts organizations don't always have the right answers: "Do you perform a monthly comparison of actual results and budget targets?" "Are payroll and sales taxes current?"
The questions, mailed to 264 nonprofit arts groups across the Dallas area, were accompanied by a letter from Pat Porter, the Dallas Business Committee for the Arts' long-tenured executive director. "With increasing frequency, the DBCA receives calls from corporations wanting to know more about arts groups before they institute funding," she wrote. "The DBCA does not endorse any specific organization, but has long sought a way to make the process of accountability easier."
She went on to explain, in less vague terms, "As our member companies regularly consult with DBCA on the current practices and status of arts organizations as potential grantees, we see the checklist as key to providing vital current and updated information on your organization."
Chuck Moore, executive director of the Greater Dallas Youth Orchestra, was one of the managers who found himself faced with the decision of whether to reply. For organizations that depend on private, foundation, and corporate donations for their survival, the question is a tad more difficult when the DBCA's letterhead includes the names of people like shopping-mall king and art patron Ray Nasher, chairman of the Business Committee's board, and executives from many major Dallas corporations.
"I was a little surprised by the nature of the request," recalls Moore, whose organization includes an orchestra that performs five programs a year at the Morton H. Meyerson Symphony Center, plus smaller ensembles involving more than 300 students in all. "The Business Committee seems to be placing themselves in the role of a clearinghouse organization which would comment on the worthiness of a particular arts organization.
"I decided not to return it...at that time," he recalls.
Not long afterward, the Business Committee sent him a copy of the previous letter stamped "PAST DUE" in red.
"I must confess, I was taken aback," Moore says. "We really had no obligation to reply, although in all fairness the questions were about sound business practices." Moore took the letter to several members of his board of directors, and they decided they'd better just answer the questions and send it in.
Were they concerned about not wanting to cross Porter's organization, which itself donates nothing to arts organizations but is supported by a score of companies that do?
Moore only chuckles before declining to answer.
As gently phrased as Moore's criticisms appear, they're about as blunt as they come on the record. "We're all scared to death of them," says one arts manager. "They have the Dallas Citizens Council and the chamber of commerce and people like that as members." With Exxon, Mobil, GTE, J.C. Penney, and AT&T, plus The Dallas Morning News and the city's biggest law firms--Jenkens & Gilchrist, Gardere & Wynn, and the like--the committee represents many of the city's biggest corporate arts patrons. Only a few active arts donors--including Dr Pepper and Kimberly Clarke--aren't members.
Privately, though, the directors of more than a dozen arts organizations, heads of well-known, well-respected small and medium-size arts groups, are expressing everything from mild pique to outrage about the letter, its source, and the direction the Dallas Business Committee for the Arts has taken in recent years. (One was hacked off enough to send a lengthy letter to each member of the Dallas Observer's editorial staff, complete with a menu of complaints and a source list for more.)
They wonder whether the Business Committee actually does anything--besides siphoning half a million dollars from its members in the name of arts patronage--that truly benefits the arts. "We see them when they want to use our facilities [for seminars]," says one arts-group manager. "That's about it."
Some actually see the Business Committee as a competing charity that harms more than it helps. Certainly, most say, they raise their corporate dollars with no help whatsoever from the DBCA.
The youth orchestra, for example, gets about $50,000 of its $260,000 annual budget from corporate sources. "We deal directly with our corporate sponsors, our corporate donors, and we have good relations with those connections," Moore says. "They [the Business Committee] don't have a role in it."
Last year, the Business Committee, which has an annual budget of more than $500,000, held a well-publicized, lavishly produced awards gala for which they flew in TV comedian Jay Leno as emcee.
It didn't raise a farthing for the arts.
Financial disclosures from 1997, the most recent available, show that the organization kept a $60,000 net profit for itself from that year's Obelisk Awards gala.
"It kind of reminds me of KERA under [former CEO] Richie Meyer. They're spending on everything except what they're supposed to be doing. They're misdirected," says one nonprofit manager at the Sammons Center. The building, a renovated early-20th-century water plant, serves as something of a hub for small and medium-size arts groups--an array of dance, music, and theater companies. Some are so small that their address is a postal box, with office staff and equipment provided by the center.
These emerging groups occupy the opposite end of the spectrum from Dallas' four so-called arts cornerstones--the opera, symphony, art museum, and Dallas Theater Center. With their society-studded boards and well-staffed development departments, the four exist in another financial world. But the cornerstones are the ones the Business Committee appears to be helping most, critics say.
With the financial survey, which was widely seen as a flogging of the poor, the low-grade grumbling broke into quiet revolution: the Accountability Checklist Revolt of 1999. Of the 264 questionnaires sent out, only 86 were returned--less than a third. "That had to send a message, but we don't know whether they got it," says one disgruntled manager.
Pat Porter, who has directed the Business Committee for nearly 12 years, has a simple answer to what she believes is a fundamental misunderstanding behind the complaints: It's not their job to fund arts groups.
"We never, ever set ourselves up as a united arts fund; we do not raise money; we do not grant money; we work specifically with corporate members to create more interest on their part," she says. "They are our primary customer."
At the direction of the Dallas Citizens Council, a private business organization influential in Dallas politics, Ray Nasher and AT&T vice president Bill Hideman set up the DBCA in 1987. In 1988, the IRS granted it tax-exempt status as a nonprofit charity organization with the self-described purpose of "promoting, developing, and increasing support for the arts within the business community."
"After looking at several models nationally, they decided they would model this organization after the Business Committee for the Arts," says Porter, referring to an organization begun by David Rockefeller in 1967. The Dallas group is an affiliate but does not pay dues or take direction from the New York-based national organization. Currently, 89 companies are members, paying dues that range from $500 to $1,500 annually, depending on the company's size.
The structure leaves the decision-making on grants to the corporations, with the Business Committee left to work as a sort of publicity wing, touting the corporations' good works with awards and ostensibly cheerleading for more. At least that's how the Dallas organization spends its money.
The Business Committee's 1997 public tax disclosure forms show that its annual Obelisk Awards gala was by far its largest expense, dwarfing expenditures for its two other programs: a leadership seminar aimed at getting corporate middle managers interested in joining arts-group boards, and an art competition for amateur artists among the corporate members, called On My Own Time. Last year's winners included a clay sculpture of a Yoda, a detailed portrait of a wide-eyed golden retriever, and a photo of a baby in a Santa suit, as well as some more abstract works.
Of a total 1997 budget of $547,117, the group spent $128,510 on the Obelisk Awards, an evening affair held in June at the Meyerson Symphony Center. The Business Committee took in $188,385 from ticket sales.
The big party costs an average of $180,000 to stage, Porter says. In 1997, they brought in jazz trumpeter Roy Hargrove; last year Leno's middle-brow humor provided the entertainment; this year, Broadway stage star Betty Buckley will help give away the award statues--little hammered brass, bois d'arc wood-and-limestone numbers in the shape of the Washington Monument. For the past two years, the awards party has escalated into a "black-tie affair," not unlike the splashy fetes sponsored by the 500 Inc. and The Auction for Cultural Arts. Unlike the DBCA, however, these two nonprofit organizations actually raise money for the arts. (Although the 500 Inc. has come under criticism in recent years for trying to squeeze money back out of the arts groups.)
The Business Committee's awards single out small, medium, and large companies alike for their financial support of Dallas arts, and special mention is made for corporations new to the area. Nobody complains about that.
But only a few years ago, it took far less money to accomplish the same end. In 1995, when the awards were given away at a luncheon, DBCA spent just over $40,000. A few years earlier, it was a $25,000 event.
DBCA's critics in the Dallas arts community point out that the extra $150,000 spent on the Obelisks is more than the annual budgets of about 40 percent of the nonprofit arts groups in Dallas.
"That's money right off the top that could be going to the arts," says one group director. "I wonder if anyone thinks, 'I gave at the Business Committee' and believes they actually did something to support the arts."
(No one interviewed for this story seemed to be under that impression, but Margie Reese, director of the Dallas Office of Cultural Affairs, says she gets calls from time to time from companies and individuals asking whether the Business Committee does get involved in arts funding.)
Porter says the move to a formal evening event was done to improve the awards' visibility. "Why turn it into a big event? We just thought we could get more people in the Meyerson and use these examples of success. More people can come and stay longer. At lunch you have to get in by twelve and out by one."
If there's a hint of organizational and personal social climbing behind the move, it appears to be working. Coverage of the awards in the daily paper shifted over the last several years from the business page to the society columns.
The group's next-largest expense in 1997 was for salaries--$123,000 for three staff members listed on the organization's tax filing. Porter, of course, is one of those staffers, but she won't reveal her salary.
The staff puts out a newsletter acknowledging the membership's largesse and runs stories about various gifts and activities. These often resemble advertisements.
In the December-January issue, for instance, Nasher's NorthPark Center shopping mall was highlighted in a piece describing how generous the center is to arts groups. It lets them use "exhibit space," i.e., the shopping mall's interior, to demonstrate their talents to NorthPark customers. This, the story says, "provides a win-win situation for all parties involved. Community and arts groups benefit from the natural steady traffic and exposure received at such a busy shopping center."
Pat Porter is surprisingly friendly--considering the fact that a reporter has just arrived in her office on short notice, asking to pick through her organization's nonprofit financial statements to the IRS.
The Business Committee is located in the rose stone and gold glass Oryx Energy Center, adjacent to the Galleria. Although the address is corporate chic, the DBCA's space is down a first-floor service corridor, just beyond the mailroom. Inside, Porter's small space looks across a narrow strip of grass into the mall's parking garage.
Almost immediately, trying to establish some rapport, she rattles off the names of various Observer writers who are past colleagues of her husband, Bob Porter, a former feature writer and film critic for the Dallas Times Herald.
She is hardly giving the lie to her reputation as a "good schmoozer" and a "good businesswoman" who hasn't spent 30 years in PR for nothing.
Before signing on in 1987 with the Business Committee, Porter was associate vice president for university relations at Southern Methodist University and a public relations person for the Meadows School of the Arts.
During this initial interview, as the conversation turns to the ill-received questionnaire, Porter says that there are poorly managed arts groups and that corporate donors have a right to know what they're getting into when they decide to make a financial gift. "Answering these questions correctly is the minimum you'd think is required," she says.
Likewise, Porter says, corporate executives in Dallas seem to prefer some groups over others when deciding whether to serve on a nonprofit board. She hints that some of the fault lies with the nonprofits but declines to provide details.
On a second meeting, though, once the depth of the arts-community criticism is explained, Porter puts a completely different spin on the questionnaire--and just about everything else about her group's relationship with the arts.
The questions, she explains, were part of a theoretical exercise: "This was an independent program that was developed...it was a culmination of an issues-and-trends series where we look nationally at things that are happening, that are going to impact us eventually--us being the arts and cultural community. As we looked at national things, the thing that kept surfacing everywhere we were looking, corporations said we are going to be looking for accountability, because our feet are being held to the fire by shareholders, by our executives who are giving. Accountability is going to be a major issue in the future. We took it to the board and said, 'This is something we think is going to be very important in how corporations give away their money in the future, and we want to ensure as much as possible that our community is ready.'"
Two accountants and a lawyer then put together the list, and off it went.
What about the cover letter explaining how local corporations were relying more and more on the Business Committee's judgment before making grants to arts groups?
Porter says that she passes on only good things to the corporations about local groups. "I know a lot of ways to say 'I don't know,'" she says. "People have to understand the purity with which we try to approach this, really. My husband was a critic, and he says, 'Everybody has favorites.' But I say I just don't."
From the corporate side, some companies solicit the Business Committee's input on giving and others do not, says Kenneth Russo, who retired last year as a vice president at J.C. Penney and served as the DBCA's president from 1994 to 1997. "The big companies pretty much know where they're gonna direct their giving, but even here Pat might get involved, saying this group or that group needs support. She'll do some marriage brokering."
The Business Committee's position as a middle man between the arts groups and corporate donors has tensions built in. The arts-fundraising world, where grants mean life, is so competitive that The Texas International Theatrical Arts Society (TITAS) urges its board members to join the 500 Inc. so they get more votes when the money is doled out.
From the corporate side, it's not unknown for gifts to be tied to special recognition. GTE gave a six-figure grant to one group and made it clear they expected to be nominated by the group for one of DBCA's awards, a knowledgeable source says. Bill Kula, a GTE spokesman, denied that account, saying the company never ties sponsorship to nomination for an award.
"A lot of these organizations quiver anytime they have to report on their boards or their finances. They live payday to payday. They wonder if their boards will be deemed worthy. They can't compete with the bigger organizations on these terms, even if they put out an excellent product," says Margie Reese.
Reese's Office of Cultural Affairs, which supports 85 different arts organization in Dallas, doesn't ask many of the questions contained in the Business Committee's survey before it writes a check, she says. "We ask them to give us an accounting of how they spent the money once their project is completed," she says. "The key thing is, we have a relationship with their organization. We know their staff." The Business Committee's survey is mostly a reflection of attitudes in corporate Dallas toward midsize and smaller arts groups, Reese says.
"The rich are getting richer," she says, referring to the four big arts groups. "Unlike the foundations, the corporations haven't learned that the value of the arts in a community cannot be measured by management structure. A small all-volunteer arts organization might be playing a critical role in the community, but its management style won't stand up compared with, say, a multimillion-dollar organization in its own building paying union scale."
Hedy Helsell, director of the Center for Nonprofit Management, agrees. "Business tries to nail down everything. Groups do have to be encouraged to do that, but it's probably more important to be looking at measures like output of art and quality of the performance...Arts folks are pretty individualistic. The focus is on art, not 990s [tax forms]."
Lynn Flint Shaw, a businesswoman and symphony board member, says nobody dares criticize the Business Committee or its concerns because "[Porter] has the Citizens Council and chamber behind her, and they rely on Pat. You rankle her, and you rankle her people. If you don't skip to their beat, you might be out of the loop."
In Shaw's opinion, Dallas arts wouldn't change much if the Business Committee folded tomorrow.
"This is an organization that's supposed to be a liaison from the business community to smaller groups that really need help, who need some largesse, and it doesn't do any of those things," she says.
Says Pete Pena, an appointee to the city's Cultural Affairs Commission, "They spend a lot of money on nothing. They're a glorified PR firm. Everybody wants to give to the symphony or the opera. But who wants to give to some theater company in West Dallas where the exposure is so much less? You'd think the Business Committee would be out there helping companies understand that, but...I see the funding, I talk to people, I know who's supporting people. They're not doing that."
The Business Committee's supporters--who are plentiful in business circles--pin their defense of the group on the overall increase in business patronage of Dallas arts.
Russo, the former Penney's executive, says arts groups large and small are receiving more financial support and more employee volunteers as a result of the DBCA's work.
"It's an interesting question--Would the world be any different without the Business Committee?" he says. "It's an intangible thing, creating a partnership between business and the arts...I don't think we've been the end-all answer, but we've played a key role in raising an awareness of the arts in the business community. No other organization is doing that."
Using 1989, the bottom of the last recession, as a baseline, the Business Committee reports that corporate arts funding in Dallas has grown from $4.2 million to $20.2 million in 1997.
A far better economic climate--and new arts venues such as the Meyerson--account for much of that. But like a president in office during good times, the Business Committee is in a position to take some credit.
"They've brought some leaders to the forefront; that's where their strength lies," says Dolores Barzune, chairwoman of the city's Cultural Affairs Commission and a longtime arts patron who has served as president of the symphony board.
Her reference is to the Business Committee's Arts Leadership Institute, which every year exposes about 40 corporate managers to the Dallas arts world through a series of nine seminars and a class project--the compilation of an arts directory one year, a Web site the next.
The program usually leads to placement on an arts board at one of the small or midsize groups, and many of its 300 graduates have served on boards over the past 12 years, Porter says. The largest institutions, which are more likely to favor CEOs than these mid-level execs, have their own nominating procedures.
The graduates have in some cases added nothing to their chosen arts groups; in others, they have been invaluable, local arts managers say.
Zenetta Drew, executive director of Dallas Black Dance Theater, says that the arrival of one particular Business Committee graduate, accounting executive Lisa Pals, to her board in 1996 was critical.
"When you have a senior partner for Ernst and Young as your finance chair, it immediately validates your finances," says Drew, who says she has only respect for the Business Committee.
Pals moved to New York last year, but remains on the dance theater's board. She says that the Business Committee helped direct her to the organization, but that Drew did a convincing job of pursuing her to join.
Drew, whose organization has grown to a point where its annual budget exceeds $1.1 million, says arts-group managers who complain about what DBCA or others are saying about them aren't doing their jobs.
"You have to manage your own reputation," she says. "If I heard such and such company had been speaking to the Business Committee about us, I'd call them [the company] and find out what was said." Drew--who comes off as hard-charging as anyone on the corporate side of the table--appears uniquely equipped to make Porter's organization work in her favor.
As for many of the rest of the city's groups, they seem happy to get by in spite of the Business Committee's grading of their financial health.
Porter, always a diplomat, claims ignorance about any specific groups that aren't up to snuff financially. "There aren't any badly managed arts groups to my knowledge," she says. "At least not any of the ones that returned our questionnaire.