by guest essayist, Michael Kaiser

I have a confession: I believe that the “funding model” we live by in the United States is ultimately the most successful in the world. This may sound chauvinistic, and my colleagues at other American not-for-profits may dislike me for saying it, but the mix of small government support, and substantially larger private support, has created the most robust not-for-profit sector in the world. The Catalogue is one manifestation of this healthy ecology; even a cursory look indicates the richness and wealth of American philanthropic endeavors.

It is, perhaps, typically American to promote a system that allows market forces to work, that encourages entrepreneurial behavior, and that rejects central control. But our model really does have distinct advantages over others. I have had the good fortune to run a major European opera house, and to teach and consult in numerous countries throughout the world where central governments provide virtually all support for the arts – and where the largest portion of this support goes to a few organizations in each art form. The European model has long been admired by my colleagues in American arts organizations – but there are drawbacks.

First, governments can exercise a sometimes subtle, sometimes not so subtle, control of the work that they subsidize. While some leaders of arts organizations worry about the control that private donors might exert, it is impossible to evade the dictates of a government minister who provides fifty percent of one’s budget.

Second, the European model does not support the generation of new, vibrant, and creative organizations. Since private support is difficult to find, it is almost impossible to start a thriving independent arts organization abroad. Independent groups are almost always very small and virtually never enjoy stability or continuous growth. That is clearly not true here: one look at the pages of this and prior Catalogues reveals a thriving arts sector at home.

And finally, political change wreaks havoc on not-for-profit organizations when a large portion of their funding comes from the government. How does one adjust when a regime changes and funding levels change as well?

In the US system, smaller groups can thrive – if they learn how to work within the private funding system. Since virtually every corporation or individual is a potential donor, the challenge is to identify, and connect with, those donors who are truly attracted to the mission of the organization. (The Catalogue can help here, because it makes the introduction.) And private funding gives organizations in the United States remarkable control over their own missions. In fact, this freedom to create and support one’s mission is the great joy of running a not-for-profit, just as the freedom to choose what one wants to support is the great joy of being a donor. It does not surprise me, then, that foreign countries are moving toward a hybrid system that encourages increased private fund-raising.

But our system is not perfect and donors must address some of the key challenges. We need to develop the capabilities of not-for-profit executives, particularly those at smaller organizations. We spend so much money training artists and teachers and doctors in this country and virtually nothing training the people who will employ them. And the need is especially acute for the leaders of organizations of color, who face particularly difficult fundraising challenges: they typically depend too much on institutional funders and do not adequately tap into the very large potential of individual donors. This work must become a priority for serious donors. Strengthening the boards of these organizations is a particularly important prerequisite, as is building a robust program of donor involvement and engagement.

In addition to smart managers, we also need smart donors who truly appreciate the missions of the organizations they fund, who understand how important it is to support skill development, and who can evaluate the impact of their grants on those who receive them.And we need donors who encourage grantees to build alternative sources of funding so they can continue to thrive when a grant is completed.

But I am optimistic. American donors, and the heads of American organizations, are getting increasingly sophisticated and more focused on creating a healthy not-for-profit ecology. Our challenge at home is to involve ourselves actively in this remarkable sector and this Catalogue is a perfect roadmap for our participation.

The author is President of the John F Kennedy Center for the Performing Arts and is well known for nurturing small arts organizations both at home and abroad. Visit the Kennedy Center at kennedy-center.org.