Arts Organizations Aren’t Failing. Their Models Are.
Arts organizations today are under pressure from every side: political, financial, digital, and cultural.
Public funding is shrinking.
New mandates are threatening core values.
And the old playbook—fill the house, cultivate donors, repeat—isn’t working like it used to.
Historically, the arts have been one of the few avenues for accessing beauty, intellect, and high-status cultural capital. The product itself was scarce, revered, and gatekept.
But since the early 2000s, the digital revolution has shifted power to the consumer—creating a world where people expect personalized, on-demand experiences that deliver clear value and meaningful outcomes. Shaped by pre-digital norms, the arts sector has struggled to respond.
This complex moment demands more than programmatic tweaks. It requires a reimagining of the entire business model.
It means rethinking what we offer, to whom, how, and why.
Expanding the Model Without Losing the Mission
When you think of Home Depot, you probably think of power tools, lighting fixtures, and orange carts stacked with plywood.
It turns out Home Depot now makes more money from gardening than from appliances, paint, or lumber. $20 billion a year. That’s not a side hustle. It’s central to their business model.
So what happened?
Home Depot looked beyond their traditional product line and asked a crucial question: What are our customers really trying to achieve?
They realized people didn’t just want to build decks or renovate their kitchens. They wanted to feel good both in their homes—and about their homes. So Home Depot diversified. Into plants.
They expanded their gardening category into a full-blown lifestyle solution. Not just selling plants, but creating an entire support system to help even first-time gardeners succeed—including proprietary products, trial gardens across climate zones, and trend forecasting.
This is reinvention rooted in purpose. And it has paid off—in billions.
Just as for-profit companies like Home Depot are constantly adapting and redefining their models, arts organizations need to evolve with shifting consumer trends and a changing cultural landscape.
Building around purpose, not precedent
In today's political climate, some organizations are asking really big questions: What if we became an LLC? A cooperative? A hybrid model? What if we gave up tax-deductibility in order to fund work that matters, freely and boldly?
The core insight is the same:
Our value lies in the outcomes we deliver, not the structures we inherited.
Too often, arts organizations’ models are shaped by funder priorities rather than community needs. Diversification is how we create more freedom—but it requires rethinking how value is defined, delivered, and sustained.
It means integrating around the value we provide—rather than the legacy formats we’ve inherited.
When we organize around customer outcomes—what people are actually trying to achieve—we unlock demand that was never reachable through traditional formats, making the model more resilient, sustainable, and impactful.
The best part? Relevance, diversity, equity, inclusion, and access stop being side projects—they become embedded in the model itself.
What are you built for?
If you want to drive meaningful transformation, you can’t just bolt new programs onto an old frame. You have to rethink the organizational model itself.
Because a business model isn’t a strategic plan—it’s a backend system. One that shapes what your organization can do, what it prioritizes, and whether bold new ideas take root or get quietly sidelined.
As Clayton Christensen taught, every business model is made up of four interconnected elements:
Value Proposition – What are you promising? What outcomes are you helping people achieve? This isn’t about the product, but about the impact the product can have.
Resources – What people, tools, assets, and funding do you rely on to deliver those outcomes?
Processes – How do you operate? What habits, workflows, and decision-making systems define how your team gets things done?
Profit (or Sustainability) Formula – How do you cover your costs and create a margin to sustain your work? This includes how your revenue is generated, which activities are funded, and what makes the model financially viable over time.
These components are deeply intertwined. Resources are optimized for existing processes. Processes are designed to sustain legacy priorities. And over time, even well-intentioned change gets pulled back toward whatever the model was originally built to protect.
That’s why you can’t deliver radically new outcomes using a business model built for something else.
If your value proposition evolves—but your programming calendar, marketing systems, or revenue targets still reflect the old model—you'll still feel like you're swimming upstream. New ideas will stall not because they’re flawed, but because the system wasn’t designed to support them.
To move from a product-first model to a customer-first model, you have to rebuild the business model around different priorities: From selling tickets to solving problems. From filling seats to delivering outcomes. From cultivating insiders to reaching the underserved. From preserving tradition to creating relevance. From pleasing funders to empowering the public.
This shift affects everything: how you budget, how you staff, what you program, how you report success, and where the money comes from. It’s not a marketing tweak—it’s a structural redesign.
And even that won’t be enough if you’re trapped in a misaligned value network.
Does your ecosystem support change?
Your value network is the ecosystem you operate in—funders, partners, norms, expectations. If that ecosystem only rewards prestige, subscriptions, and legacy programming, it will fight your transformation at every turn.
Sometimes, transformation doesn’t stall because of what’s happening inside your organization. It stalls because of what’s happening around it.
Let’s look at a real-life example in a different sector.
Blue Shield of California noticed that many patients were missing appointments—not because they didn’t care, but because they didn’t have a reliable way to get there.
Instead of launching a new awareness campaign or blaming patient behavior, they expanded their value network.
They partnered with Lyft, the Blue Cross Blue Shield Institute, and local providers to launch a program called rideQSM—free Lyft rides for eligible members to and from doctor’s appointments, lab visits, and soon, even pharmacies.
This pivot in how healthcare is delivered—one that required new partners, new funders, and a new definition of value—is a perfect example of an ecosystem shift enabling a business model shift.
When your environment starts validating outcomes—like access, equity, and impact—it becomes possible to sustain a new model.
But if your value network only rewards prestige, legacy formats, and conventional metrics… it will quietly pull your organization back to the status quo.
To make change stick, you need to ask: Who else believes in the outcomes we deliver? And what would it look like to build our ecosystem around them?
You'll need to attract funders who are aligned with your value proposition—not just your art form. Partner across sectors. Seek funding from non-arts sources. And instead of chasing coverage from the usual critics, seek visibility from platforms that care about social innovation, community wellbeing, and outcomes.
Because if the environment doesn’t change, the model can’t either.
How to rebuild your model
Ready to rebuild? Your foundation is your value proposition. But the most effective value proposition doesn't center the product. It centers real-life customer needs that your product can solve.
When you solve real problems in people’s lives, you unlock demand, expand your reach, and deliver value that funders, communities, and stakeholders care about. (And you do it while maintaining the excellence that you've always been known for.)
Here’s how to build your organization around what your audiences truly need:
Shift the value proposition from showcasing artistic product to delivering audience outcomes (e.g., wellness, belonging, inspiration, emotional restoration).
Redefine your revenue strategy by creating new income streams that align with those outcomes—beyond tickets and traditional donations.
Expand resource allocation to include different talent, tools, and partnerships—especially those outside the arts sector (e.g., wellness practitioners, educators, social service orgs).
Update internal processes (like planning, marketing, and evaluation) to prioritize relevance, experimentation, and audience-centered design—rather than tradition and preservation.
Reframe success metrics to measure what matters to your audiences, not just what matters to insiders or funders (e.g., social connection, personal growth, first-time participation).
Rebuild your value network by cultivating funders, partners, and press outlets that validate outcomes instead of just prestige, tradition, or aesthetics.
Let’s examine how some organizations are reimagining what they offer, how they engage, and how they generate value—each pointing the way toward a more resilient, customer-first model.
Ballet Austin
Ballet Austin doubled its revenue by expanding beyond performances and offering wellness classes, recovery programs, and movement-based community groups. Rather than diluting their impact, Ballet Austin demonstrated transformative business model evolution, grounded in what their community needed most.
ROCO
ROCO, a chamber orchestra in Houston, diversified by creating a children’s book—The Nightingale—based on a piece they commissioned. The book includes QR codes to narrated music, listening prompts, and orchestral recordings. It’s now in libraries, literacy programs, and homes across the city. ROCO didn’t just create a product—they created access. They connected classical music with multigenerational, family-centered outcomes.
UNICEF
Like ROCO, the nonprofit UNICEF USA tapped into the power of tactile, story-driven experiences to go beyond transactional donations. They created Paddington’s Postcards, a monthly donation program from UNICEF USA. When you give, a child in your life receives educational postcards, activities, and stories from around the world—building empathy, curiosity, and cultural awareness. It’s not just fundraising. It’s a values-aligned product that deepens connection with the mission.
The RESET
The RESET, an immersive sound healing experience created by Davin Youngs, has been hosted by symphonies, opera houses, and cultural venues across the country. From the Chicago Symphony Orchestra to the Kennedy Center, arts organizations are rethinking how their spaces can serve wellbeing and community connection.
It’s not a concert. It’s a sound-based wellness journey—with guided meditation, mindfulness, and restorative soundscapes. For some attendees, it’s their first time entering a concert hall.
This kind of partnership expands who arts organizations serve—and how they’re perceived. Rather than compromising artistic values, it creates a compelling story of relevance that resonates throughout the community while reimagining mission delivery.
Calgary Public Library
Calgary Public Library (CPL) reimagined its role in the community by shifting from traditional book-lending to offering inclusive, interactive spaces for learning and connection. They transformed their services to better engage families—installing a decommissioned fire truck as a hands-on playscape, expanding digital offerings, and adding dozens of meeting rooms.
The impact is clear: by 2023, CPL was serving 6.7 million visitors, a 26% increase from 2013.
CPL’s success shows how a legacy institution can remain relevant by designing around real-world outcomes: community belonging, family engagement, and equitable access. That’s strategic reinvention—rooted in purpose and impact.
And we’ve all seen what happens when legacy institutions resist change. Just look at Kodak. They dominated their industry—but failed to adapt when the world went digital.
Start With Outcomes. Build From There.
Overwhelmed by the enormity of this pivot? Simply start by asking: What tangible outcomes do we deliver that matter most to our community? How are we organizing ourselves to deliver that value—consistently, sustainably, and at scale?
That’s how you begin building your new engine of relevance and revenue.
When you let go of outdated assumptions and shift focus from the product to the customer, you’re free to:
Create new revenue-generating products
Expand your venue’s function
Partner beyond the arts sector
Pair the traditional audience development model with a “just passing through” model
Experiment with real-time, outcome-based giving
And that’s just the beginning.
A Critical Moment
These aren’t side projects—they’re strategic extensions of purpose that also diversify revenue. They’re bold moves toward sustained relevance.
And boldness is exactly what this moment demands.
When the structures we rely on are at risk—from legislative backlash, shifting demographics, digital revolution, declining loyalty—we have to be willing to adapt.
Because in a dramatically changed world, clinging to outdated models endangers what we’re ultimately trying to protect.
