IAJE: Miseducation

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By Brad Haubrich
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IAJE President Chuck Owen speaking at the 2008 IAJE Conference
By Andrew Lepley
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2008 IAJE Conference
By Andrew Lepley
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NEA Jazz Masters Quincy Jones and David Baker
By Andrew Lepley
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The 2008 IAJE Conference
By Andrew Lepley
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Former IAJE Director Bill McFarlin
By Andrew Lepley

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Denial is the first of the now well-known stages of death described in Elisabeth Kubler-Ross’ bestseller On Death and Dying. Her work explores how the prospect of death affected the terminally ill, those who cared for them and their loved ones. The same feelings often play out in the final days of shared experiences like the closure of a business, a campaign or long-running show. So perhaps it’s through this lens that the effects of grief offer an explanation for some of Bill McFarlin’s statements regarding the collapse of the International Association for Jazz Education, an organization he led for more than 20 years: “If I had known, I would have tried to stay and work fervently to try and sustain the organization. It was our life’s work.”

That’s McFarlin in a New York Times article published on April 26. He’s reacting to the firestorm spurred by the news that the IAJE was forced to go out of business and sell off all its assets under Chapter 7 of the U.S. Bankruptcy Code. During an interview with JazzTimes in late May he continued to say he didn’t know the IAJE was on the brink shortly before he stepped down as executive director in January. “That is absolutely what I am communicating,” said McFarlin, who maintains he left the organization for personal reasons, not to avoid the IAJE’s financial collapse. “It is fair to say that I realized the organization would have to make significant adjustments to work its way out of the position that it was in as we have had to do in the past. I certainly did not know the organization was facing its end.”

The demise of the 40-year-old Manhattan, Kan., association was also a surprise to its 10,000 members, who were stunned by then-president Chuck Owen’s letter in mid-April announcing that despite the best efforts of the association’s board of directors, the IAJE’s debt, estimated at about $1.5 million, was too much to overcome and that the association was forced into bankruptcy. But in late May after switching to its second bankruptcy law firm, the IAJE still hadn’t filed a petition with the court. Owen’s letter and initial reports suggested the association was already in bankruptcy or that a filing was imminent.

More than a month after the announcement that the IAJE was shutting down, there’s no official record of the entity’s assets and debts, or a narrative that explains how one of the most prominent organizations on the jazz scene is slated for bankruptcy liquidation. Those who spoke to JazzTimes said no one associated with the IAJE engaged in criminal wrongdoing or intentionally neglected their duties. And any figures mentioned are only estimates. Final tallies will appear in court documents.

But the lack of a bankruptcy filing hasn’t stopped the postmortem over how things fell apart. And some board members say the organization was handcuffed by McFarlin’s optimistic temperament. He’s described as a leader who always saw the glass as more than half full. Others offer a more critical view, that McFarlin presented an incomplete or inaccurate financial picture to IAJE’s board of directors so its members didn’t have a sense of how the organization was floundering, an accusation McFarlin strongly denies. “For a board member to say they didn’t understand where we were along the way is disingenuous,” said McFarlin, explaining board members had full access to IAJE’s financials.

A more complete assessment of the IAJE board, McFarlin included, might be that the organization had grown larger than the capacity of the individuals entrusted to guide it, and that it matured to the point where it needed people with business and fundraising acumen that could take a hands-on approach to ensure its success.

The sound-bite synopsis of IAJE’s implosion offered in Owen’s letter and in some press reports rests the blame on a failed fundraising effort—the Campaign for Jazz—and a poorly attended convention in Toronto that pushed the already cash-strapped association over the edge.

But the beginnings of IAJE’s failure have more to do with how the association was run and its fragile revenue streams. IAJE’s 12-member volunteer board was populated by artists, educators and education administrators that met for less than a week twice a year. Up until 2007, the board was more focused on how the association provided programs and services than on the minutiae of its financial workings.

Over last several years, IAJE’s annual budget averaged about $2.5 million, and the conference was the association’s primary revenue stream. According to IAJE general counsel Alan S. Bergman, the conferences could cost at least $700,000 to put on, and could end up in the red after all the receipts were counted. Bergman volunteered his services as the group’s lawyer for about a decade, and said the IAJE lived conference to conference from its inception. “An organization like this should not have to exist on the success of a conference,” he said. “If you lose several hundred thousand dollars at a conference, that can become critical in a very short period of time.”

During Owen’s tenure as president he said he attempted to make the association less conference-dependent. He is currently the director of jazz composition at the University of South Florida.

January’s Toronto conference marked a return trip to the Canadian city that hosted the event in 2003. Last year’s event was plagued by poor attendance, down as much as 40 percent from well-attended conferences, by some estimates. Bergman said the no-shows were brought on by new passport requirements for travel to Canada, the deteriorating exchange rate for the U.S. dollar and high travel expenses. The organization picked Toronto years in advance after striking a deal with the tourism industry to offset debt from the first conference held in that city.

Realizing that uneven gains from the annual conferences put the association at risk, the IAJE started the Campaign for Jazz, an ambitious fundraising effort that began in the fall of 2004 and was expected to raise $13 million. McFarlin was unsure of the final dollar amount raised by the campaign but estimates up to $200,000 in collected cash. The campaign was carried out with the help of Hartsook Companies, a private fundraising firm based in Wichita, Kan., that Bergman said was paid about $300,000 in fees. “And that was another thing that sunk the organization,” he said. “We paid a huge amount of money to them and they did nothing for us.”

Hartsook president Matt Beem said the firm doesn’t comment on its engagements with clients.

IAJE’s problems were exacerbated by an environment that tolerated unclear financials either from its accounting practices, its auditors or its leaders or some unfortunate mixture that left board members unaware of the association’s fiscal health. Owen’s letter to members said the board was “blindsided last fall with the discovery of the extent of the accumulated association debt.” In the months leading up to the association’s end, IAJE officials complained of having to dig for information that would shed light on where things stood so they could make key decisions.

By all accounts it appears the board lacked full understanding of the association’s financial status, an unimaginable position given the easy access to financial information enjoyed by most enterprises in which data can be displayed in graphs, charts and summaries that illuminate the basics of a balance sheet.

Marty Ashby is executive producer of the Manchester Craftsmen’s Guild in Pittsburgh. He’s been with the program for 22 years, and during that time the Guild’s earned a national reputation for the promotion of jazz through performances, live recordings and educational programs for students. His organization was one of the patron sponsors of IAJE. Upon hearing news that both the board and the executive director were caught off guard by IAJE’s mounting debt, Ashby found that scenario hard to fathom. “From my perspective there is no way in hell that our board would not have known on a monthly basis where the balance sheet stands,” he said. “And if there are issues with the cash flow and balance sheet, trust me, it is brought to my attention to fix it.”

Owen said the expertise and skill sets Ashby has access to on his board can’t be compared to IAJE’s board, which was made up of artists and educators. “He has high-powered business people, he has financial people, he has some major suits on that board,” Owen said. “And that board has major access to support structures and dollars, and it became clear that when we encountered these problems we did not have access to those kinds of people.” He said if he were charged with starting an organization like IAJE again, he’d recruit talent from outside the jazz world to help run it and troubleshoot potential problems in advance.

IAJE officials interviewed by JazzTimes agree that the organization’s financial plight was clearly understood by November 2007. The events that fostered this clarity began in the summer of 2006 when the board began to push in earnest for the hire of a senior staff member to focus on day-to-day operations. At the beginning of 2007, then-treasurer Laura Johnson, along with the finance committee, began to probe the association’s financials to get a clearer picture of the IAJE’s cash position.

In July 2007, Vivian Orndorff was hired as associate executive director and the effort took on more steam. During this time the finance team made a series of discoveries that were previously unknown to the board, such as vendors that were 12-18 months past due, and that funds raised from the campaign were used as a stopgap measure to shore up cash flow problems. “It wasn’t fraudulent,” said Johnson, executive producer at Jazz at Lincoln Center in New York, “but it was more serious than we had ever been led to believe.”

It was also during this time that the board, led by the finance committee, moved to further assess what the association’s expenses were, such as American Express charges, the status of the campaign versus cash positions, and the annual budget. Johnson said the association needed greater oversight for the accounting of American Express charges that at times were in the five-figure range during a billing cycle. The charges covered a broad range of expenses, from conference-related items to programs sponsored by the association.

Inside the IAJE, Orndorff described a culture in which staffers were discouraged from interacting with the board so bad news was kept at bay. She is especially critical of McFarlin, who she said misrepresented important information on the association’s finances. “The only information the board was given was information [that came] directly from Bill, and his interpretation of it.” Orndorff said efforts to get the board and McFarlin on the same page were stymied by his unwillingness to believe the IAJE was in a precarious financial state.

“He was aware of certain individual problems, but not the big picture,” Orndorff said. “It wasn’t until I started pressing and having the business manager doing cash flow projections for the end of the fiscal year that he realized it, but even then, he didn’t accept it. He fought me for a while, saying it wasn’t accurate. And I kept trying to show him that it was accurate.” She continued, “He just couldn’t believe it was that bad and I honestly believe that. I think if he had any idea of the true depth of the financial hole, they would have realized they couldn’t afford to hire me. So I think that alone showed me he didn’t have a clue.”

McFarlin is currently executive vice president of the Blue Lake Fine Arts Camp, an internationally recognized arts center located in Michigan’s Manistee National Forest. In reacting to remarks from his former colleagues, McFarlin is agitated at the suggestion that he held back information from the board or that he created an atmosphere that prevented staffers from talking freely.

“I don’t quite understand why Vivian or Laura would say that because we never purposefully withheld information. There was never misrepresentation of information to my knowledge. That is not the way I thought things went down,” McFarlin said, adding that at all times the board had access to audits, annual reports and financial compilations. “I am also disappointed that there is an inference that the failure of the organization falls at the feet of Bill McFarlin … and if that is the inference, that’s incredibly unfair because I am one of 12 people on a board of directors that sets policy and approves the budget.”

Additionally, he is still amazed by the board’s decision to seek bankruptcy liquidation and believes it was the wrong choice. He said from his understanding of the IAJE’s financial position, it wasn’t in danger of failure, and insists he didn’t quit when all options vanished. “It’s just really hard for me to believe that was their only recourse. I absolutely did not believe the organization was in that kind of a situation,” he said. “Now, if people choose not to believe that, that is their right. But I know in my heart of hearts what led me to the decision I made, and I deeply regret the final culmination of this. I was executive director of the organization for over two decades. … I have to accept responsibility for what happened during my watch, just as the board does.”

Mary Jo Papich was slated to become the association’s next president, and has been a board member for eight years. She is currently the fine arts chair at Highland Park High School on the north shore of Chicago. Papich said IAJE’s troubles had been simmering for about the past six years. Her first reaction to the organization’s end is to say McFarlin’s choices brought the IAJE down: “As executive director of the organization, his job was to be fiscally responsible for everything that was happening.” She later reflected that she and other board members also shouldered some responsibility for how the IAJE was run. “I am not going to say it is all Bill’s fault; I will absolutely take my share of the blame. I have been on the board a long time. I am hanging my head that I wasn’t more vocal. I feel badly that I wasn’t more aggressive in not wanting to know more about the high American Express charges, why we didn’t ask earlier to see them, and why I didn’t question accounting procedures. I will go on record to say we didn’t do as good of a job as we should have.”

On a recent Wednesday afternoon, Davey Yarborough was meditating at an electric keyboard over Chick Corea’s “Windows” inside the band room at the Duke Ellington School of the Arts, nestled deep inside Washington, D.C.’s tony Georgetown neighborhood. He paused to talk about how the loss of IAJE programs, especially artist visits during the conferences, will affect instructors like him. “My first reaction when I got the email that they were going bankrupt was horror,” said Yarborough, who is chair of instrumental music and jazz studies director. Over the years he has showcased students during conferences, obtained scholarships for his budding musicians, and relied on the IAJE’s other services.

The walls of the band room are covered with autographed publicity shots of artists who’ve dropped in, among them Wynton Marsalis, Dizzy Gillespie and Jon Faddis, who did more than stop by and play. Yarborough recalled that the trumpeter hung out for three days with students, got to know them and left him with six horns. That’s the kind nurturing and inspirational push Yarborough fears will be lost with the IAJE’s absence. He said a number of students made connections with artists like Marsalis and Stanley Turrentine, and were able to cultivate allies and mentors to further their careers. “When artists come here there is a tangible representation of what you aspire to be,” he said. “And some of the inhibitions that students develop are broken down … because you think, Oh, I can’t be like a star. But when that star sits right next to you, that soon fades.”

Yarborough hopes a new and stronger organization will emerge and pick up where the IAJE left off. There are already discussions taking place among music educators across the country to figure out the next move. Bergman said the IAJE’s state chapters could be considered part of the larger organization and have to dissolve. There isn’t a clear answer on their fate in the absence of a bankruptcy filing. But IAJE’s state chapters aren’t waiting around for a court-appointed trustee to decide their destiny. This is especially true in Seattle, which was scheduled to be the host city for next year’s conference before the association collapsed.

Chris Bruya, president-elect of the Washington State IAJE, has been in talks with his colleagues to figure out if a state or regional gathering can be planned over the next eight months. “One of our guys has been getting inquires from around the nation: ‘Can we bring our group to your thing?’ I don’t think we want to do that right now,” said Bruya. “Our whole mindset is to start small. We are not going to try to imitate what was going to be the Seattle convention. It’s just impossible.”

(The National Endowment for the Arts, whose Jazz Masters ceremony was arguably the flagship event of the annual IAJE conferences, recently announced a “nationwide search” for a host of its 2010 Jazz Masters induction event. Solicitation forms and more information can be obtained at grants.gov.)

Bruya, who is also director of Jazz Studies at Central Washington University in Ellensburg, Wash., has been searching for venues like community colleges that can accommodate the group’s needs. He said part of the passion that’s driving interest among educators is the desire to put the focus of the conference on education and students. A number of instructors, said Bruya, had begun to feel that the IAJE in recent years became industry-focused at the expense of its classroom-centered roots. “It seemed at times that it had become more of a showcase jazz event than a conference for education,” he said. “There were even a couple of years when there were no student ensembles playing on the evening concert. That was changed back, but only because certain folks in the membership protested. I think the IAJE did move a little bit away from the school teacher in the trenches trying to run a jazz program and needed some help.”

Originally published in August 2008

1 Comment

  • May 23, 2010 at 03:04PM Jon Vanhala

    Good article - feels fair and balanced. Is there an update now in 2010 that we've got even greater perspective to look back from? Still strikes me as odd that the decision was made to shutter the organization but i didn't have any insider look at the state of IAJE's finances.

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