In The Global Leaders Institute’s ‘Key Concepts in Financial Management’ Module, lead instructor Eva Heinstein of the Mandel Institute for Nonprofit Leadership reveals how financial health is essential to the mission of arts organizations.
In this module, GLI Fellows learn to look at the big picture of financial management for arts organizations, exploring how financial analysis not only invites reflection on the viability of an arts organization but also helps reveal necessary priorities. Financials are more than a numerical portrait of an enterprise’s performance; they are a dynamic tool used to review and sharpen organizational strategy.
The connection between an organization’s mission and activities is often most clearly understood through its business model. Whether they know it or not, every arts organization has a business model — a set of core activities executed towards intended goals and related sources of income that enable these activities to take place.
A revenue model — one of the frameworks dissected by the 2023 Cohort this week — aligns these parts, connecting income sources with activity costs in a balance that allows an organization to exist today and in the future. The most sustainable arts organizations utilize multi-pronged revenue models — generating income through a range of mission-aligned services, products, and solutions relevant to the needs and interests of their target audiences and communities. ▣
