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.
In the pre-digital era, the arts offered rare access to beauty, prestige, and cultural capital. 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 demands a reimagining of the entire business model—rethinking what we offer, to whom, how, and why.
Expansion without mission drift
When you think of Home Depot, you probably picture power tools, lighting fixtures, and orange carts stacked with plywood.
But today, Home Depot makes more money from gardening than from appliances, paint, or lumber.
How did gardening become central to their business model?
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 kitchens. They wanted to feel good in their homes—and about their homes. So Home Depot redefined their value proposition: not just selling materials, but helping customers create a sense of pride and belonging.
To deliver on that promise, they diversified. Into plants.
They expanded their gardening category into a full-blown lifestyle solution: proprietary products, trial gardens across climate zones, trend forecasting, and support for first-time gardeners.
This is reinvention rooted in purpose. And it has paid off—by the billions.
Just as for-profit companies like Home Depot are constantly adapting and redefining their models, arts organizations must evolve as well.
Building around purpose, not precedent
In today's political climate, some organizations are asking really big questions about legal structure. 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 or legacy formats rather than real community needs.
But, as we saw with Home Depot, purposeful diversification—rooted in what people are trying to achieve—creates freedom, resilience, and growth.
It’s not mission drift. It’s mission delivery, reinvigorated.
When we start with a value proposition that's rooted in customer outcomes—what people are actually trying to achieve—we unlock demand that legacy models could never reach. We create a business model that's more resilient, more sustainable, and more impactful.
And 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.
A business model isn’t a strategic plan. It’s a backend system that shapes what your organization can do, what it prioritizes, and whether innovative ideas take root—or get quietly sidelined.
As Clayton Christensen taught, every business model is made up of four interconnected elements:
Value Proposition – What outcomes are you promising to help 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, create a margin, and sustain your work?
Your Value Proposition is the foundation.
If it’s misaligned—focused on outputs, not outcomes—your entire business model is compromised. Because these elements are deeply intertwined:
Your Value Proposition shapes how Resources are allocated, which define what Processes are possible, which lead to your Profit Formula—locking in which activities will drive revenue.
If your value proposition evolves—but your programming, marketing, or revenue plan still reflect the old model—you'll feel like you're swimming upstream.
You can’t retrofit relevance. You have to build for it.
When you solve real problems in people’s lives, you unlock demand, expand your reach, and deliver the kind of tangible value that funders, communities, and stakeholders care about.
But making that happen requires aligning every part of your model around customer outcomes.
Aligning around new priorities
Once you identify the outcomes that your organization is best positioned to address—and you’ve codified that shift from product to customer in your value proposition—your next step is to ensure that your Resources, Processes, and Profit Formula also shift:
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 people you serve.
This kind of shift affects every part of your organization: How you budget. How you staff—and what behaviors you reward. What you program. How you report success. Where the money comes from.
How to rebuild your model
Here's what business model transformation looks like:
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.
Rethink resource allocation—by staffing differently, funding new capabilities, and building partnerships beyond the arts sector.
Update internal processes—from planning to marketing to evaluation—to prioritize relevance, experimentation, and audience-centered design.
Reframe success metrics—to measure what matters to your audiences (e.g., social connection, digital detox, emotional wellbeing).
Rebuild your value network—by surrounding your work with partners, funders, and validators who care about the outcomes you deliver—not just the prestige of your product.
Organizations that rethink their models around outcomes unlock new opportunities for relevance, resilience, and growth.
Let’s look at a few examples of how it’s already happening.
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. 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.
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.
The risk of inertia
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.
That’s the risk of inertia. Business models are designed to defend the assumptions they were built on—even when external realities shift. Without an intentional reset, organizations get pulled back toward old ways of thinking, even when the future demands something new.
Arts organizations, whose business models were established in the 1950s, are being pulled backward just when they need to leap forward.
This is why strategic reinvention isn't optional. It's necessary for survival.
Organizations that fail to shift their business models away from legacy prestige toward customer outcomes will see progressive declines in relevance, loyalty, and financial resilience.
Why is it crucial to wrap your value proposition around real-life customer needs that the arts can solve? Because customer outcomes are the engine that drives mission, relevance, and sustainability forward.
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 tip of the iceberg.
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.
In a changed world, clinging to old models won't save what we value most. 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.
Rethink the box—and rebuild the future.
