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The Dire Consequences of Poor Nonprofit Strategy

By Nell Edgington



There was a really interesting article in the Wall Street Journal recently about the New York City Opera that dramatically illustrates how critical a nonprofit’s strategic alignment of mission, money and competence is. I’ve written before that for a nonprofit to be truly effective and sustainable, three things must be aligned:

  1. Their mission, or reason for existing
  2. Their core competencies–what they do better than anyone else in the world, and
  3. Their revenue engine–all the ways in which they sustain themselves financially

So that an organization, in alignment, fully integrates and gives equal weight to those three elements. Those nonprofits not in alignment eventually suffer the consequences, which can sometimes be quite dire, as is the case with the New York City Opera (NYCO).

Once a shining star in New York City’s performing arts world, NYCO has fallen on financial hard times, requiring them to move out of their Lincoln Center home and dramatically scale back their performance calendar this year. The NYCO chorus and orchestra are so upset about the situation that they have held a protest. What a nightmare.

In the 68 years of its existence, NYCO’s mission statement has been clear, succinct and captivating: “The People’s Opera.” However, in recent years, the organization has struggled to align its core competencies and revenue engine around that compelling mission. In 2008 Gérard Mortier, the NYCO general manager and artistic director, canceled NYCO’s 2008-09 season while Lincoln Center was under construction. And the following season, after Mortier quit, NYCO scrapped their planned season and staged a selection of unpopular productions that flopped. The result is that NYCO has lost its audience, lost its revenue, and lost its way.

At the same time, NYCO’s competitor, the Metropolitan Opera, has transformed from a very conservative opera house into a media-savvy, artistically adventurous opera company that trains its own new singers instead of relying on NYCO to develop upcoming stars. All of this leaves the Wall Street Journal to ask, “New York already has one major opera company. Why does it need two? If [NYCO] can’t come up with an answer to that question, then New York City Opera is doomed—and deserves to be.”

Harsh, but true. NYCO is faced with a critical inflection point. They can either figure out how their mission should adapt to their core competencies (what they do better than the Metropolitan Opera) and develop an integrated revenue strategy around that mission and those core competencies, or they need to close up shop.

The reality is that NYCO isn’t alone in this dilemma. It is becoming increasingly difficult to survive these days. Growing competition from nonprofit and for-profit solutions, decreasing funding available, and the advent of new technological channels to reach customers, clients, and funders means that now more than ever nonprofits need to find alignment. They must constantly be analyzing whether their mission, money, and competencies are working in tandem to create an effective, sustainable organization that brings value to its community. Because to ignore alignment is to eventually wake up to the heart-wrenching decision NYCO now faces.

Photo Credit: NYCO website

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.


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2 Comments to The Dire Consequences of Poor Nonprofit Strategy

Alexandra Peters
July 14, 2011

While I completely agree with you about the 3 things that must be in alignment, I don’t agree that the New York City Opera, because it was given the nickname of “The People’s Opera” 60 years ago by a mayor, is not living up to its mission. In fact, it differentiates itself very well from the Metropolitan Opera with its daring and innovative repertoire. The Met is doing a fantastic job of marketing, but their repertoire is hardly innovative. I saw plenty of both this season. Both great opera houses, and very very different.

I don’t think the issue is why New York needs two opera companies. (Why shouldn’t the greatest city in the world have two? Must opera houses be scarce?) The issue is how an innovative house can survive in an era with so little funding. That’s that revenue engine issue, very real. But I completely disagree with the Wall St Journal writer, who clearly has no interest in more modern music. “A selection of unpopular productions that flopped” was news to me. (I couldn’t get tickets to several of them.) Their mission and their core competencies seem pretty clear to me. How they’ll find the money to survive is a whole other, really scary issue.

Nell Edgington
July 15, 2011

Alexandra, thanks for your comments. I won’t quibble with you over the value of NYCO’s productions because I am neither a New Yorker nor an opera buff. But I very much agree with you that NYC can and should have two opera houses. However, it remains to be seen whether NYCO has the ability to be the second one.

No matter what the external funding situation is, and we are in the midst of a very dire one to be sure, a nonprofit still must be able to connect their mission, to their ability to deliver on it, to their ability to generate funding for it. The issue is not simply that this era has so little funding. The issue is that NYCO has not found a viable way to create a mission that they can execute well on and find people who will want to support it, thus their financial situation is so bleak. If they can’t find a viable strategy for integrating those three elements they will not survive, and we won’t be able to blame the economy for their demise.

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