Nonprofits on the Edge: An Introduction to This Series
This is the second of three case studies submitted as part of the graduate course “Nonprofit Governance and Management,” taught by Dr. Chao Guo, associate professor and Penn Fellow in the School of Social Policy and Practice at the University of Pennsylvania. The cases represent three different organizations that have come back from the brink of dissolution. Each did it in a different way, and none of them necessarily has an easy road ahead.
With each of these organizations, one could use multiple lenses to analyze what caused them to decline—and it is almost always a combination of factors that impose frailty over time; but in the stories of the comebacks, the levers were clearer. The generators of organizational frailty, however, can outlast an immediate save—hanging around like unwanted spirits waiting to reassert themselves.
In our editors’ commentary on these cases—in this case, found at the end of the article—we have tried to discuss what some of these persistent issues may be. It is important to remember that the symptoms of organizational problems often lie very distant from the problem generator, which may be the organizational culture and belief systems, or the organization’s birth story. In some cases, additionally, the form does not fit the function in the right way, and the function just spits it out.
Understanding organizational dynamics makes for better leadership, and the more curiosity you have about why an organization seems to be in decline, the better. Too many boards and leaders look for the most immediate relief at hand, and this stops a process of inquiry that in the end could create far more enduring strength over time.
Saving the August Wilson Center
This article is from the Nonprofit Quarterly’s winter 2015 edition, “When the Show Must Go On: Nonprofits & Adversity.”
The August Wilson Center (AWC) for African American Culture is a nonprofit organization that produces and showcases performing and visual arts to celebrate the contributions of African Americans in Pittsburgh and the United States at large. The center’s founders aimed to serve an unmet need for a facility dedicated to black culture; however, despite planning, visionary programming and production, and financial support from major foundations, the August Wilson Center failed to become financially viable. A consortium of private and government funders came to its rescue in 2014, with the hopes of reviving the center from what seemed like an impossible situation.
In many ways, the struggle of the August Wilson Center is not unique. Arts organizations of all types perpetually rely on support from philanthropy and the government to sustain their work. Yet, it has been demonstrated that organizations of color find it particularly difficult to maintain adequate funding. A new paper by the DeVos Institute for Arts Management highlights some of the issues unique to African-American and Latino cultural organizations, and Rick Cohen has written extensively for the Nonprofit Quarterly on the struggles of African-American museums. Despite admitting the uneven playing field, Cohen and the DeVos Institute affirm these institutions as “absolutely essential to the American arts ecology”—valuable not just to the communities whose history and culture they safeguard and celebrate but to society as a whole.1
Since the 1920s, Pittsburgh has been a cornerstone of African-American culture—home to talented and prolific musical, visual, and performing artists. The playwright August Wilson was born into this artistically rich but economically challenged community in 1945, and it would become the center of his best-known and most highly acclaimed works. Wilson chronicled life in the Hill District in his Century Cycle—a set of ten plays, each capturing a decade of African-American life in Pittsburgh during the twentieth century.
For years, Pittsburgh’s African-American citizens explored ways to celebrate and showcase their vibrant community. Many believed the answer lay in the creation of a center—a gathering place—dedicated to African-American culture. Among the first attempts was the Homewood Art Museum, which presented community arts programming in various locations but was never able to raise the funds to build a permanent home.
Concurrent with these efforts, Pittsburgh’s mainstream cultural institutions attempted to capture the voice and spirit of the city’s dynamic African-American community. The Senator John Heinz History Center, for example, regularly mounted exhibitions dedicated to the lives of black Western Pennsylvanians;2 and in 2001, the Carnegie Museum of Art acquired the entire archive of famed African-American photographer Charles “Teenie” Harris, and undertook a decade-long project to catalog and curate it for eventual display.3 But Sala Udin, a city councilman who grew up in the Hill District and was a childhood friend of August Wilson’s, while not deriding the efforts described them as, simply, “not sufficient.”4 August Wilson himself is widely quoted as having said, “Blacks have traditionally had to operate in a situation where whites have set themselves up as the custodians of the black experience.” The African-American community, Udin insisted, needed its own space to showcase its own history and culture: “No other community can do that adequately.”5
Building the Center
Then-mayor Tom Murphy agreed. In 1996, he pledged his support for building a center dedicated to African-American culture, and offered assistance through the city’s Urban Redevelopment Authority (URA), which provided land for a new center Downtown, in Pittsburgh’s Cultural District. Spanning fourteen square blocks, the District attracts more than two million visitors annually and is home to the Pittsburgh Opera, the Pittsburgh Ballet Theatre, and the Pittsburgh Symphony Orchestra. Although some cautioned against building Downtown, the founders stood firm. Dr. Mona Generett, who joined the AWC board in 2007, agrees that the center “completed our very rich cultural district.”6 The center’s vision, she says, is to enrich and enlighten the culture of the entire Pittsburgh community. To achieve that mission, it must be in the heart of the city—accessible to the greatest number of patrons, regardless of race.7
By 2003, the AWC steering committee had hired Neil A. Barclay as president and CEO; set a $33 million construction budget (though Barclay later admitted it was “picked out of thin air”);8 received construction grants of $4 million from The Heinz Endowments and approximately $15 million from the URA; and selected architect Allison Williams’s bold and modern, nautically inspired design for the building.
Participation from the African-American community was vital. Both The Heinz Endowments and Milton and Nancy Washington, cochairs of the capital campaign, established challenge grants to match giving from the African-American community up to $2 million, thereby leveraging every dollar donated. The heads of Pittsburgh’s black churches, often considered the heart of the community, preached generosity for the center and held fundraisers for the building campaign. Despite the fact that Pittsburgh’s African-American community comprises only about a quarter of the city and has significant rates of poverty, the challenges were met.9
However, a combination of faulty budgeting and unforeseen environmental factors drove up costs before construction even began, and caused significant delays. By the time the August Wilson Center opened, in 2009 (in the midst of the financial crisis), the final cost of the structure and its contents was $42 million. Construction was completed with an $11 million loan, secured by the organization’s only asset—its building.
The center’s multimillion-dollar debt would have made breaking even a struggle even under the best of circumstances; combined with poor marketing and inconsistent programming, it spelled financial disaster. By mid-2010, the center was on its third executive director, and the board and funders began to worry about its viability. Few Pittsburghers were venturing Downtown to support the center, and there were scant resources available for programming and management. “It is based on the mentality of the movie ‘Field of Dreams,’ that if you build it, they will come. It’s a great movie theme, but it’s a terrible strategy for operating a place like the Wilson Center,” said Dan Martin, dean of the College of Fine Arts at Carnegie Mellon University, describing the tendency for arts venues to lose their way.10
Financial records show that the organization had run an operating deficit every year from the time it opened its doors.11 If the August Wilson Center could not fund operations, no level of debt service would be feasible. By September 2013, the building was forced into foreclosure. Concluding that the AWC was not viable in its current state, Judith Fitzgerald, the center’s conservator, became responsible for the disposition of its assets.12
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The community rallied. Independent citizens held “Community Conversations” with more than seventy key stakeholders throughout Pittsburgh, encouraging public support to save the center.13 African-American Pittsburghers, speaking out in the center’s defense, included August Wilson’s niece Kimberly Ellis, Reverend Harold Lewis of Calvary Episcopal Church, and Tony Award–winner Billy Porter. A town hall meeting in the Hill District was standing-room-only.14
Three of Pittsburgh’s largest foundations—The Heinz Endowments, the Richard King Mellon Foundation, and the Pittsburgh Foundation—came together, along with support from the city and the county, to pool sufficient funds to purchase the center. Grant Oliphant, director of The Heinz Endowments, considers this kind of effort central to his organization: “[L]et’s be clear—every cultural center and arts facility in the country depends on charitable fundraising and donations to survive.”15 In an interview for this article, he added, “Part of the value that foundations bring is that they can be a little more courageous.”16
Significantly, the transaction, which took place in November 2014, cleared all liens on the property. The building emerged free of debt obligations but severed from its original owner, the nonprofit entity called The August Wilson Center for African American Culture. The deed was then transferred to a newly created nonprofit, headed by the leaders of the three foundations. This new ownership structure safeguards the building and land from ever being mortgaged in the future.17
Vision for the Future
Maxwell King, President and CEO of the Pittsburgh Foundation, is taking the lead during the transition. “During this transitional period, we will work with a range of groups and individuals, locally and nationally, to develop the best possible management practices and highest-quality programming.”18 The Pittsburgh Cultural Trust, which performs similar functions for a number of arts organizations, is currently under contract to provide management and operations services to the center. According to the Pittsburgh Foundation, the “overarching requirement will be that the programming focus be primarily, though not exclusively, on African American art and culture.”19
In the future, the center will be run by three entities, with a distinct division of labor.20 In a briefing, Oliphant explained that the plan is to create “two African American–led nonprofits: one to maintain and operate the facility, the other to fill it with dynamic, deeply relevant African-American programming.”21
The African-American Cultural Center Board of Directors is in place as the governing board, and currently consists of the three foundation executives, and Michael Polite and Richard W. Taylor—two highly respected African-American members of Pittsburgh’s business community. Recruitment of board members with experience in nonprofit business, facilities management, and finance has progressed slowly and methodically. The plan is to add an additional two to four African-American members in 2016, with King, Oliphant, and Scott Izzo, director of the Mellon Foundation, then rotating off.
Eventually, a separate programming board will be established and staffed with and by leaders in the African-American arts community. Until then, the center is looking to a variety of sources for suggestions. The Pittsburgh Foundation has invited more than sixty local arts and culture groups to develop programs, offering a $300,000 pool of funds to support their efforts, and The Heinz Endowments has distributed an equal amount to the Cultural Trust for current AWC programming. Judge Joseph K. Williams III chairs August Wilson Center Renewal Inc., a community-driven group that is also offering programming suggestions. “I want to bring it alive,” he said. “I think it will be such a healing vehicle for relationships in [the Pittsburgh] community.”22
While the process of board-building continues, the August Wilson Center is beginning to come to life once again. Fall programming included the new “Soul Sessions” music series, dance performances by Philadanco and Ailey II, and The Piano Lesson, August Wilson’s fourth play and 1990 Pulitzer Prize–winner. On the building’s exterior, the “I Am August” installation showcases 150 portraits of Pittsburgh residents of all races—part of Brazilian photographer Angélica Dass’s ongoing Humanae project. According to the Pittsburgh Cultural Trust’s website, “This project, which includes a collection of community stories, performances and events, takes a first step toward a vision for an August Wilson Center that boldly celebrates community in the spirit of the center’s namesake, August Wilson.”
The DeVos Institute’s research is clear: “Arts organizations of color are, in general, much less secure and far smaller than their mainstream counterparts.”23 Yet the same factors that underlie their frailties, such as the underrepresentation and marginalization of the populations they represent, are precisely those that make support for them so critical. Cohen cites Randall A. Williams and Michael Worth of George Washington University saying that to address this problem African-American cultural institutions require “an internal reorientation of missions and staff, as well as an external infusion of funds and experience.”24
The August Wilson Center is attempting just such a course correction. Its public and private partners have provided the funding to safeguard its assets and allow a fresh start, and a new board and ownership structure promises to make the best use of directors’ diverse management and cultural expertise. But, as Cohen has written, African-American cultural organizations’ survival depends on “what they do for and how they connect with their local communities.”25 Pittsburgh citizens from every sector have joined forces to give the August Wilson Center a second life. Time will tell if it lives up to its potential.
As president of the Association of African American Museums and director of African American Programs at the Senator John Heinz History Center, Samuel Black holds a unique perspective on the importance of African-American cultural institutions, as well as their potential shortcomings. Black emphasizes that one of the benefits of a place like the August Wilson Center is that it not only serves the public through programming but can also be a training ground for African-American young people who aspire to careers in the field of arts and culture.26 Both Cohen and the DeVos Institute point to the overall lack of people of color in the arts management field as one of the main uphill battles these organizations face. Black confirms this scarcity, noting that while African Americans make up a quarter of Pittsburgh’s population, they only comprise about 5 percent of employees at the Heinz History Center, and even less at other cultural organizations in the city.
A place like the August Wilson Center shows young people that a career in arts and culture is a possibility, and provides an opportunity to work toward that future. In 2010, the Association of African American Museums (AAAM) held its annual conference in Pittsburgh, at the newly opened August Wilson Center. At the time, it was the group’s best-attended conference in a decade, and Black feels the venue was largely responsible for that success: “People wanted to see the August Wilson Center and be engaged with it.” It comes as no surprise that the grand 65,000-square-foot state-of-the-art facility, designed—according to architect Allison Williams—to represent “power and pride,” would serve as an inspiration to AAAM’s membership.27 And, while its reincarnation story is not yet complete, the August Wilson Center has a chance to inspire a new generation of leaders in the field of African-American arts and culture.
Commentary: There are two things not referenced in the following case study that appear to be in play vis-à-vis the August Wilson Center. The first has to do with the fractured nature of “ownership” of this organization from its very inception, and the second has to do with a simple problem of timing.
Regarding ownership, we have seen any number of times the specter-like organizations left behind by philanthropic initiatives—often projects of national foundations. In essence, these are organizations that wouldn’t have been started without some significant element of their founding being claimed by a funder. These organizations tend to have a relatively short shelf life, defined largely by the continued support of their patrons. This dynamic may be looked at as an organizational “failure to launch,” and the champions of such organizations are usually external stakeholders trying to think through the problem rationally. This results in a lack of the core energy needed to maintain a central identity.
Regarding timing, we have written often about the disasters that ensued when arts nonprofits made big capital expenditures immediately before the recession or just as it started. In many cases, not only did fundraising falter even when due diligence had been done, but ticket sales fell short of their projections, too. The August Wilson Center’s being a new organization located outside of the community it primarily represented creates yet another hurdle to overcome in this regard.
The description of the collection of entities now being patched together to manage this organization simply carries forward this unfortunate history. Our guess is that it will be difficult to extricate the organization from its own fractured beginnings and create an independent entity, unless some person or group other than a funder assertively claims it.
- DeVos Institute of Arts Management, Diversity in the Arts: The Past, Present, and Future of African American and Latino Museums, Dance Companies, and Theater Companies (Washington, DC: The DeVos Institute of Arts Management at the University of Maryland, September 2015).
- Jan Ackerman, “Some question cost of new cultural center,” Pittsburgh Post-Gazette, August 10, 2003.
- Ellen S. Wilson, “New at Carnegie Museum of Art: Fast chairs, tiny portraits, 80,000 Pittsburgh photos,” Carnegie Magazine, March/April 2002; and editorial staff, “Teenie Harris exhibit, gala,” New Pittsburgh Courier, October 14, 2011.
- Grant Oliphant, in an interview with the authors, October 2015.
- Elizabeth Bloom, “The Rise and Fall of the August Wilson Center,” Pittsburgh Post-Gazette, February 8, 2014.
- United States Census (Washington, DC: U.S. Census Bureau, 2010).
- Debra Erdley, “Foundering August Wilson Center a hub of missed opportunities, observers say,” TribLive, September 28, 2013.
- August Wilson Center for African American Culture, Forms 990, 2006–2011.
- Bloom, “The Rise and Fall of the August Wilson Center,” Pittsburgh Post-Gazette.
- August Wilson Center Recovery Committee, An Interim Progress Report of the August Wilson Center Recovery Committee: “Community Conversations” (Pittsburgh, PA: August Wilson Center Recovery Committee, September 2014).
- Natasha Lindstrom, “August Wilson Center face-off to start,” TribLive, September 28, 2014; Harold T. Lewis, “Save The August Wilson Center: History would not look kindly upon a city that shows indifference toward a people who labored to make that city great,” Pittsburgh Post-Gazette, May 18, 2014; Billy Porter, “The August Wilson Center’s future matters for us all,” Pittsburgh Post-Gazette, May 18, 2014; and Ann Belser, “Community meets to discuss future of August Wilson Center; Judge will decide on restrictions,” Pittsburgh Post-Gazette, September 7, 2014.
- The Heinz Endowments, “Foundations announce detailed plans for saving the August Wilson Center,” August 11, 2014.
- Oliphant, interview.
- Ibid. The nonprofit entity “The August Wilson Center for African American Culture” still exists legally, but it does not operate anything or have any assets since the building was sold via the Sheriff’s Sale (and subsequently sold to the new entity). That organization is currently languishing in bankruptcy court. The August Wilson name cannot be used by the new entity as long as it is attached to the old one. The African American Cultural Center is the new entity that purchased the building from the bank (funded by the three foundations, city, and county). The foundations were adamant that the building never again be in danger of being sold off to pay debts, so they required that the legal entity owning it must be different from the legal entity running it.
- The Pittsburgh Foundation, “Foundation outlines August Wilson Center revival plan,” December 4, 2014.
- The Pittsburgh Foundation, “Update on the August Wilson Center,” November 2014.
- In e-mail correspondence with the authors, Maxwell King, President and CEO of the Pittsburgh Foundation, explained: “There are three entities—the ownership group, which is just a legal construct under Pennsylvania law; the board of the building (called the African-American Cultural Center Board of Directors); and a programming arm. At the moment, there are multiple sources of programming for the center, but we eventually envision an anchor tenant programming organization emerging from the process. The legal ownership entity effectively has no name—and, ultimately, not much of a role.”
- The Heinz Endowments, Briefing on August Wilson Center (Pittsburgh, PA: The Heinz Endowments, 2014).
- Natasha Lindstrom, “Rebirth of Wilson Center afoot as board members named, revenue builds,” TribLive, July 23, 2015.
- DeVos Institute of Arts Management, Diversity in the Arts.
- Rick Cohen, “The State of Black Museums—Part I,” Nonprofit Quarterly, June 6, 2014.
- This and following quotes related to Samuel Black are from an interview with the authors, October 28, 2015.
- Patricia Lowry, “Cultural center’s design unveiled: African-American heritage inspires,” Pittsburgh Post-Gazette, July 30, 2003, accessed via news.google.com.