Nope, this is not my title. It is blatant theft from Scott Walters’ multi-part blog on the topic. For those of you who have not seen the posts, here are links to the first two: Occupy Lincoln Center-Part I and Occupy Lincoln Center-Part II.
The thing about kindred spirits is that even if you don’t agree 100% with everything they say or the way they say it, you are still captivated by the expression and want to share it. That’s the way I feel about Scott and these two posts.
Scott (and Diane Ragsdale who beat me to a shoutout for Scott in her Jumper post Instead of more data perhaps we should discuss why we keep ignoring the data we have?) make the somewhat obvious connection between Occupy Wall Street’s 99%/1% view of US society and the National Committee for Responsible Philanthropy’s study of arts funding, Fusing Arts, Culture and Social Change.
The point of both Scott’s posts and Diane’s post is that “Something is not right.” We have an organizational mechanism for arts structures in this country, the 501(c)(3) model, that was intended to institutionalize eleemosynary (I don’t get near enough chance to use that word, it means “charitable”) work. As most of us know, “arts” is not in the tax code’s authorizing language for tax exempt entities. We sneak in under “education.” The facts of the NCRP report along with our anecdotal awareness of the relationship between money and the arts establishment easily raise questions about the whole system.
But I would be remiss if I failed to point out that there are similar issues, though played out differently, in the 501(c)(3) world beyond the arts. Volunteer Boards of Directors are tasked with making the ultimate decisions in all 501(c)(3)’s. They are supposed to be guardians of the public good in those organizations. Who are those people? The tradition, because of the need for fundraising, is that they are individuals of means, lots of means. And so, in every segment of the Third Sector (third after government and the for-profit arenas), the backgrounds and world views of people with money set the tone. Wealth calls the shots in each sector of our society. This is particularly discomfiting when we realize that it’s true of the sectors (government and not-for-profit) that are supposed to be looking after the public good. For the insomniacs among you, I have expanded on this in an article titled The Social Justice Paradox.
I don’t pretend to have a solution. I think pointing things out is going to be my primary role in this category. As I said in an earlier post, Equity, I have a concern that before too much longer, the arts establishment could begin suffering noticeable backlash from growing awareness of and anger about income disparity. It’s one of my reasons for pressing so hard to get arts organizations to engage with non-usual suspects in their communities. That is, after all, the point of 501(c)(3) status–serving the public good.
I am particularly taken with an idea Diane raised in her post. There are a large number of 501(c) categories, all tax exempt entities. What makes 501(c)(3)’s special is the deductibility of contributions and eligibility to receive grants from private foundations. This is “earned” by serving the public good. Diane makes an argument that arts organizations that do not embrace a public service mission could be moved to another 501(c) category, perhaps 501(c)(4) or 501(c)(7) (civic leagues or social/recreation clubs). Income would be tax exempt but donations would not be tax deductible. Now, no arts organization would voluntarily make such a move, but raising the issue might encourage a public service mindset.
My hat is off to Scott for his thought and research on this topic. I love his riffs comparing income/wealth disparity among individuals (a la Occupy Wall Street) with that among arts organizations. The sooner the status quo in both categories is widely visible and recognized, the sooner some real change might be possible.
Engage!
Doug
Lincoln Center Photo: 
Some rights reserved by robzand
An arts funding system financed by the wealthy inevitably allows the wealthy undue influence. This is inherent to the system and cannot be reformed. We might as well complain that horses can’t fly. We might tone down or obfuscate some of the obvious manifestations, but it won’t change the nature of the system.
The only solution to the problems you, Scott, and Diane describe is for the USA to join the rest of the industrial world and develop a comprehensive system of public arts funding. This will require decades, and in the meantime our funding system will remain a backward, undemocratic, 18th century embarrassment.
American arts administrators will also continue to be specialists for a system that is inherently broken, like veterinarians for one-winged birds.
On the positive side, it is good that the recent OWS protests have given the timid world of arts administrators the courage to finally address some of these issues, even if in veiled and cautious tones. Of course, we can’t expect too much, since these people build their careers around serving the interests of wealthy board members.
I suspect these discussions will soon be swept away, just like the OWS protesters. The usual denial will soon return. Real change requires real commitment. Do arts administrators, communities, and advocates have the engagement it takes to create the public arts funding system we need? How can that engagement be created?
I am at last clearer on how our similar world views differ fundamentally on the strategic level. You say that the only solution is broad public arts funding. My disagreement is two-fold. First, from a practical point of view, that ain’t gonna happen in the U.S. Period. Or at least not until the arts industry sees the broad public as its basic constituency, transforms its programming, and is then *seen* as valuable by that broad public. I think the public policy change you desire can only follow transformation in the arts. (And the time frame for that policy change would be glacial.) I cannot see it happening the other way around. We’ve had this disagreement before. My understanding is that you think elected officials can lead the public. I just can’t see that given my reading of history, opinion polls, and elect results. There is no political will for massive arts support and won’t be until the transformation I describe above has already taken place (or gotten a long way down the road).
Second, I don’t think public funding is the only option. If I did, I’d have to throw in the towel today. I believe that broad-based support (small amounts from many) can serve a similar end. Yes, this would also require transformation of approaches to programming but it can happen incrementally and it can start happening (and is happening) now on a case-by-case basis. As arts organizations evolve, they will garner grassroots support. Those that transform themselves can (and will) have access to crowdsourced funding. The others . . . .
Our posts crossed, hence my comment below not fully corresponding to your response. What is obvious is that our neo-feudalistic system of funding will always be dysfunctional and inadequate even if it remains forever. It’s not going to be fixed because it can’t be fixed. That much we know.
The situation is interesting because we both declare each other’s approaches as dead ends. What tips the scales for me is that all other developed countries have long had comprehensive public funding systems. The USA will not be able to stand alone forever with a system that makes it ludicrous in the eyes of the world.
Rather than say a public funding system will *never* evolve in the States, it might be more prudent to say it will take decades to become a reality. People once said public health insurance would never happen. Eventually the absurdity of the situation becomes so apparent society finally changes. We should not let the radicalization of the American mainstream right create a sense of hopelessness, even if our struggles for justice will be long and arduous.
I think that if a democratic system of small donations from many were an alternative, it would have happened long ago. No major orchestra or opera house will survive relying on such a system. Here too, one can say it ain’t going to happen.
And as I mention below, the problems with undemocratic hierarchy are inherent in the nature of classical music itself. The problems are so profoundly embedded in the aesthetics of the genre that suggestions like more populist programming, changes in concert attire, seating areas reserved for twittering, changes in applause decorum, alternative venues, and so on are ridiculously inadequate.
The overriding characteristic of such discussions is the superficiality of the proposals in comparison to the extent of the problems faced. I think history illustrates that this sense of futility, hopelessness, and delusion characterizes the deaths of cultures. One can view this with regret, or see it as an opportunity for rebirth. If there is any advantage to the American funding system, it is that it will hasten the death of orchestras and opera houses, something like a system of euthanasia.
OK. We can go around and around about this. And it looks like we’ll need to agree to disagree. That’s OK since our basic motivations are nearly identical.
Two points. The more important, with respect to your observation about funding, “I think that if a democratic system of small donations from many were an alternative, it would have happened long ago.” The difference is the possibility of small donation funding that did not exist until recently. The Obama campaign of 2008 transformed at least an element of political donations. Crowdsourced funding is doing the same in the arts and will accelerate as we move forward. That’s what I began to explore in my earlier post: http://www.artsjournal.com/engage/2011/11/arts-2-0-40k-x-251m/. The world *is* different in this regard from even the very recent past.
Second, regarding what has led you to your view, “What tips the scales for me is that all other developed countries have long had comprehensive public funding systems,” I don’t see the state funding model (which is after all the European legacy of the patronage system just as our 501(c)(3) structure is in the U.S.) as being the future. Many of the state-supported arts systems are in trouble and those countries (pray for them) are starting to look at the U.S. to figure out how private support can be an answer! Eeeeek.
And the unnumbered question is whether arts genres that developed in very different social, economic, and political climates–opera and symphony orchestras being prime examples–are sustainable in a vastly different environment. I hope so. But *my* hope rests in individual organizations transforming themselves.
Now I need to go on about Holiday preparations. Seasons Greetings!
Of the 40 or so developed countries with public funding systems, most aren’t in trouble. That’s simply misinformation created by neo-con propaganda. In fact, the few that face difficulties, like Ireland, Greece, and Spain, are not due to changes in arts funding ideology, but rather general economic problems. Holland and Britain are the only two facing changes due to influence by America’s neo-liberal economics. And in those two countries, the resistance has been very strong.
Public funding is not solely something European, or alien to Americans. We have many types of public funding systems, just not for the arts.
The Obama model might work for arts funding, but his campaign was a one-time deal, whereas arts organizations have to continue for decades. Political campaigns and arts organizations are also very different types of social phenomena. These differences might prove to be a significant when applying the small donation model to arts funding.
We not only share a similar worldview, but also similarly quixotic hopes.
Happy Holidays.
The fact is that, according to the report and my own analyses, public funding follows exactly the same pattern as private funding. The change that has to happen is in our priorities and our criteria for granting money.
Just read your article you linked above, “The Social Justice Paradox” and really appreciate it. As you note, non-profit funding organizations might have very good ideals, but structural problems that lend them plutocratic biases that weaken community engagement.
I really like this sentence: “Well-meaning assistance provided in a way that undermines the self-respect of the recipient is no contribution to the cause of social justice.” I can only speak for myself, but there is something about funding as gifts from the wealthy that is always inherently demeaning. There’s a reason the words patron and patronize are related.
And to make matters even more complex, the feudalistic history of arts patronage allowed the characteristics of feudalism to permeate even the basic nature of classical music. This is readily observable in the patrician rituals and steep hierarchies that surround most any orchestral or operatic performance. One begins to see that the changes needed are profoundly deep, and include not only funding systems, but the very nature of classical music itself.
A few thoughts:
First, the arts don’t just slip in under “educational” — they also fit squarely under “charitable,” specifically as the IRS defines it: “advancement of education… lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration…”. Often the presence of an arts institution employing artists and producing relevant work, in a relatively accessible way, touches on many of these categories.
Second, a well-managed Board is not “tasked with making the ultimate decisions.”. Arts organizations are generally founded by artists, who then select their founding board members. If things go well, the Board’s only organizational tasks will be to set executive compensation, raise money, and generally be kept in the loop. Their degree of involvement is set by the founding artists, and the composition of the Board (wealthy or otherwise) is determined by artists as well. In short, the degree to which a board reflects the community that it springs from is up to the artists, at least initially. (And even if the Board members chosen do turn out to be of means, the possession of means has also fortunately never described a homogenous, lockstep group.)
Non-profit status makes sense for the arts because a risk-taking institution that inefficiently distributes a product that’s more expensive to produce than it is to consume is inherently unprofitable. Until a vast source of money — public or otherwise — appears to tilt the scales, that equation will not change. The burden is on the practitioners — the artists and arts leaders — to act as a public trust. The funders (board or otherwise) and the model (nonprofit) are not to blame when we fail in that purpose.
I guess I disagree that many arts organizations see themselves as “lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration…” If they did, they certainly would be charitable organizations. And community engagement would be the core of every arts organization’s mission.
And we have a profound disagreement about the nature of not-for-profit boards. The role of the board in not-for-profit governance is to ensure that 501(c)(3) organizations serve the public good. This is the trade-off for the benefits of tax exempt status. You are right that often new arts organizations have boards hand-picked by the artist founders; but the board role, as envisioned in the tax code, is to make certain that the public good is advanced while the mission is being carried out. The responsibility is both inward and outward focused.
Well, there are so many issues being touched off by this article, judging from the comments.
I didn’t think the arts had to justify their value as a common good. Sure seems self-evident to me.
What I thought this article was about was the way the arts as non-profits are run. I think there will be people who have a problem with the LA Philharmonic being called a non-profit when their President is making $1.2 million a year. Or the fact that music directors can make $800K for only 14 weeks of work vs the musicians who often make paltry salaries in the same institutions. I can see a day in the near future when that is deemed unjust.
Public money, while deserved for what the arts do for the public good, often comes with so many strings attatched that it is best to keep it to a minimum. All it takes is for a George or a Newt to get elected and that money all evaporates with a pen stroke. Best keep our destinies out of their grasp.
In a post above, Scott says private and public arts funding follow similar patterns. In the USA that is true to some extent, but public funding is such a small amount of the total that the comparison is not very meaningful.
We have seen, for example, that the NEA’s budget has risen or remained stable since the financial crisis of 2008, but that private funding has dropped strongly. On the other hand, some state budgets have dropped. The reasons, however, have usually not been due to the economic crisis, but due to ideological beliefs of rightwing governments that almost entirely eliminated state arts budgets while the private sector saw much less radical cuts.
In short, Scott’s statement is far too broad.
And based on international comparisons, Scott’s statement is untrue. The sums for the private funding system in the USA have dropped considerably, while Europe’s public funding systems have, on the whole, remained fairly stable or even increased. In fact, the EU has budgeted a 35% increase in arts funding starting in 2014. And the German Federal government announced a 5.1% increases in next year’s cultural budget. For documentation see:
http://www.artsjournal.com/slippeddisc/2011/11/rub-your-eyes-brussels-follows-german-lead-with-massive-arts-funding-boost.html
It is difficult to obtain up-to-date international information because there is usually a 2 to 3 year delay in its collection and publication. The Council of Europe has published data about European arts funding by country. It shows that up to 2008 funding not only remained stable, but even rose in many countries. The table is here:
http://www.culturalpolicies.net/web/statistics-funding.php?aid=117&cid=80&lid=en
Funding in the USA was already dropping by 2008, so we see a lack of correspondence. And as mentioned, after the crisis, the differences became even more extreme. Many European countries applied stimulus funds to their public arts funding system and arts funding actually rose while private funding in America dropped precipitously.
It is a well-known general principle that public arts funding budgets are more stable than private ones. European governments invest heavily in cultural infrastructure like concert halls, opera houses, and museums. It is simply not possible for them to cut off the funding to these institutions in the same way private foundations and donors can. The employees usually have permanent contracts as civil servants. And it is rare to the extreme for Europeans to sell off or abandon public cultural institutions. Among many other things, the political consequences would be too strong.
We should remember that the European funding system is often misrepresented in America. It has become a method for Americans to rationalize their own isolated and dysfunction private funding system. Commentators will focus on the few European countries that have made cuts due to economic reasons, and ignore the other 25 countries that have remained stable or even increased their budgets.
Mr. Osbourne — My focus is solely on the US — I have no knowledge or interest in the European situation. In addition, my point is that, public or private, the funding in this country is disproportionately centralized in large, urban, white institutions, and that this needs to be changed. The fact is that, private or public, the same criteria for evaluating grants leads to this undemocratic situation. We need to revise the way we evaluate grants and make a concerted effort to make arts funder much broader.
Thanks for the clarification. I misunderstood. I agree with your stance. The Detroit Symphony is a good example. The orchestra is 98% white in a city 82% black. Naturally, that spells trouble for traditional arts funding models.
It is important to realize that Europe’s public funding solves exactly the problem you describe about arts funding being concentrated in large, urban institutions. Most of the funding in Europe comes from the state and municipal levels. There is a strong belief that cultural should be locally funded, and that smaller communities have their own autonomous cultural institutions. The American system, by contrast, focuses money in the few financial centers where weathly donors are, while the rest of the country remains relatively neglected.
Europe is not as racially diverse as the USA, so fewer lessons can be derived in that area. On the other hand, Europe demonstrates that public funding systems are almost always more democratic than funding by wealthy. If communities are neglected politicians lose votes while wealthy funders are accountable to virtually no one.
BTW, I think it is important to look at international comparisons in arts funding systems. It provides a frame of reference that provides important insights. And ironically, it also helps prevent excessively ethnocentric perspectives.
Andrew: “I didn’t think the arts had to justify their value as a common good. Sure seems self-evident to me.”
Perhaps this sanguine attitude is why we haven’t been able to make a viable argument for increased arts funding. It is time for artists to stop thinking that the value of art is self-evident. There are many things that are of value, but not all of them get tax deductions and public money. It is time for us to get our house in order. Right now, as the report notes, the tax deductible money and tax funding is going to subsidize the rich, which is really not the purpose of non-profit status.