Contracts and covenants
Nonprofit arts managers are bound not only by practical/tactical agreements, but also by durable, often unspoken commitments.
“To every people the land is given on condition. Perceived or not, there is a Covenant, beyond the constitution, beyond sovereign guarantee, beyond the nation’s sweetest dreams of itself.”
— Leonard Cohen, from Book of Mercy
It’s a basic bit of business to know that a contract is an agreement between two or more parties that defines rights or obligations for each. Organizations, arts organizations included, are constructed and controlled with contracts. Some scholars even define an organization as the intersection of agreements that tether people, stuff, and money together. According to Fama and Jensen (1983), for example:
An organization is the nexus of contracts, written and unwritten, among owners of factors of production and customers.
But while contracts are essential to any enterprise, their skillful crafting, connection, and compliance are only part of the arts manager’s work. The larger and more purposeful work is framed by covenants.
In the legal world, contracts and covenants are similar in function but different in scope. They both commit parties to rights, actions, or inactions but with different reach, duration, and consequence.
Contracts generally constrain only the contracting parties. Covenants often “run with the land” they are tied to, including parties who weren’t involved in the initial agreement.
Contracts have specific terms and durations and may expire once those terms are met. Covenants tend to be perpetual.
Contracts can be broken or breached if one party does not fulfill their promise. Covenants remain in place regardless of action or inaction – they can’t be broken, only betrayed.
Contracts are signed. Covenants are sealed.
In short, contracts are transactional – built on specific obligations and consequences – while covenants are relational – built on long-term commitment and trust.
Beyond the legal world, covenants carry moral, ethical, and spiritual meaning that contracts do not. They are pledges, vows, statements of solemn resolve to uphold your part of the promise. When another party strays from their obligation, a covenant calls you to step up rather than step out, working even harder to bring all parties back into trust.
As an arts manager, you’re responsible not only for the legal agreements you made or inherited. You’re also responsible to the moral, ethical, and spiritual obligations that come with the space you hold. Your organization’s public statements of mission and purpose capture some of these obligations, but not all of them. They’re also contained in the history of your enterprise and the hundreds of hidden agreements that brought you the resources, relationships, and trust required to thrive.
In the long game, your nonprofit status is certainly a contract with your state’s attorney general and with the Internal Revenue Service. But it’s also a covenant with your many communities to hold and honor their trust.
From the ArtsManaged Field Guide
Function of the Week: Hosting & Guesting
Hosting involves inviting, greeting, and supporting those who enter your circle; Guesting includes acknowledging, honoring, and listening in the circles where you are a guest.
Framework of the Week: Art Worlds
Sociologist Howard Becker used the phrase Art Worlds to describe the complex webs of people, stuff, and money that bring artistic expression and experience into existence. He wrote: “Art worlds consist of all the people whose activities are necessary to the production of the characteristic works which that world, and perhaps others as well, define as art.”
Photo by marcos mayer on Unsplash
Sources
Fama, Eugene F., and Michael C. Jensen. “Separation of Ownership and Control.” Journal of Law and Economics 26, no. 2 (June 1983): 301.