A few months ago, my ArtsPool colleague Sarah Maxfield and I were invited to give a presentation about ArtsPool at the All-Ireland Performing Arts Conference, after which we also gave a brief demo of a free online tool we were building to help New York arts organizations cut through the mental clutter created by the various compliance tasks required of nonprofits. We confidently zipped through the demo, but when we clicked the submit button and the computer dutifully produced a to-do list of 40+ compliance tasks, the room erupted in laughter. A month later we gave a nearly identical presentation to the A.R.T./New York Board of Directors, and the same thing happened. In fact, the single biggest laugh line of this very unfunnily-named Compliance Toolkit is the sheer number of tasks it spits out.
After a year working on the ArtsPool project and several months focused on building this tool, Sarah, Guy, David, and I can assure you that there is nothing fun or funny about compliance. There is also nothing easy about getting a laugh, so when a computer makes a room of 200 people laugh, the first thing the former clown in me wants to know — even before “why are you programming a computer?” or “why are you thinking about nonprofit compliance?” — is why is that so funny? British director John Wright’s excellent book Why Is That So Funny? was an obvious place to look for an answer. He describes a debate in the fifties between Dario Fo and Jacques Lecoq about whether clowns could be political:
“Dario Fo reckoned that they could, but Lecoq was adamant that the clown is incapable of being political or subversive because he or she is incapable of seeing that far ahead. He maintained that they’d always be more taken by the uniform than what that uniform might represent.”
The clown’s job is to make us laugh, so their distraction with the uniform makes sense to us. Unfortunately, getting caught up in the uniform is very easy for the rest of to do as well. As artists, we are taught to see ourselves as rule-breakers, as thinkers and vanguards who jostle against boundaries and move our culture forward. However, the uniform that most arts organizations have donned — the growth-driven institutional model and the litany of regulatory compliance that comes with it — appears ill-fitting. A list of 40 compliance tasks is funny to a room full of artists because it seems like the opposite of art. And it is. For many artists running their own 501(c)(3) nonprofits, as well as the legions of artists employed in administrative capacities in other organizations to make ends meet, the lines of magnetic force pull our minds away from the making of art more often than they push us toward it. We find ourselves spending more energy dealing with the operational overhead of the nonprofit model (or writing blogs about it) than pursuing our core purpose, with very little gas left over to consider “what that uniform might represent.”
In recent years, however, the traditional vertically-integrated corporate model that dominated the 20th century has been giving way rapidly to a more malleable, dynamic, and perhaps more efficient model for the 21st century: the network. As we move into an increasingly distributed, shared, transparent, and crowd-oriented world, we have an opportunity to think critically about what our old models represent as structures for creating culture and consciously redesign them to serve that purpose more effectively. But in order to do so, we first need to have a very clear understanding of what the problem is and why it exists in the first place. One way to get at the root cause is to use the famous “5 Whys” technique created by Japanese inventor Sakichi Toyoda.
PROBLEM: There is a large number of compliance requirements for nonprofit organizations.
- Why? Government agencies and funders need to evaluate nonprofit organizations’ financial information and activities.
- Why? To ensure that tax-free money is spent in accordance with the law
- Why? Some nonprofits and donors break the rules.
- Why? They think their activity will not be seen or they do not fully understand what is required.
- Why? The corporate model does not reward transparency.
The churn of compliance work persists because the various bureaucracies concerned about bad behavior are solving for the third or fourth why rather than tackling the root cause: lack of intrinsic transparency. If instead we could solve for the fifth why and create a radically transparent and open system, we could potentially make many compliance tasks disappear. Such a system, if well designed, would make it easier to do the right thing than the wrong thing, educate organizations as red flags appear rather than penalizing them after the fact, and shift the onus of data collection to those who want to see the data so that arts workers can spend more time doing what they care about. For example, imagine a peer-to-peer and publicly auditable accounting system where your books are hyperlinked to the books of everyone you have ever bought from and your bookkeeping is done automatically the moment you spend money. That day may be coming.
We created the Compliance Toolkit as a first step: a way to corral the disparate elements of arts organizations’ compliance work in one place and begin a conversation between artists, organizations, funders, and government agencies about where the biggest pain points lie. As an artist myself, I am well aware that the task lists and compliance scores that this tool generates may seem to many like pain points in their own right, but I hope that the automation, collaboration tools, links to resources, and downloadable templates that we have built into it can help tame some of the complexity of your organization’s compliance work. To that end, we have recruited a team of compliance experts to help us keep the task list generator logic up-to-date and will be aggregating data about particularly difficult or time-consuming items so that we can build tools to make them easier to do. Our primary goal is to help you get things done, but we also believe that by working together we can begin to move the needle toward a new model where compliance work consumes far less of your attention.
To get started with the Compliance Toolkit, sign up for a free account at compliance.artspool.co and create a profile for your organization. For more information on what the toolkit does or how to use it, read the FAQ or contact us at firstname.lastname@example.org with questions or comments after giving it a spin.