Sunday, April 19, 2009

April 19, 2009

WESTERN STATES ARTS ROUNDTABLE DISCUSSION

Hello everybody.

"And the Beat Goes On....................."


ROUNDTABLE DISCUSSION ON THE IMPACT OF THE ECONOMIC CRISIS SO FAR:

I invited the heads of three western state Art Agencies (and I believe these three states are probably fairly representative of what is happening in states across the country)--

Kris Tucker from Washington
Arni Fishbaugh from Montana and
Bob Booker from Arizona
to join Anthony Radich from WESTAF
in a Roundtable discussion of the impact and reactions to the economic crisis in their states and across the west, the role of the NEA in the crisis, and what they think will be some of the outcomes of all this.

Here is that Roundtable discussion:

BARRY: Everywhere there is evidence of the economic crisis impacting the arts sector – seasons being shortened or outright cancelled, layoffs, downsizing, cutbacks and many arts organizations calling it quits and closing their doors. Can each of you give me some assessment about the reality in your states? What is the impact? Can you accurately tell at this point (even in just “ballpark” figures) how many seasons will be lost, how many people will lose their jobs, how many positions will be eliminated, how many organizations will close their doors, how much funding is being lost? How are foundations reacting in your area? What about local government and private donor funding? Are there any attempts to identify and analyze data as to the impact of the crisis to the arts sector in terms of the impact on the wider economy in your states? And what is your best guess about what things will look like at the end of this year in your state?

KRIS: We are working with a group of arts funders in the Puget Sound area to assess trends and needs – and, we hope, to identify opportunities (and resources) for collective action. In other words, to figure out what a group of funders can best do together. Resources were pooled to contract with Helicon Collaborative (Holly Sidford and Marcy Cady) for a report on the impact of the recession on cultural organizations in the Puget Sound region (available at www.arts.wa.gov/resources); the report is based on interviews of 28 nonprofit arts organizations (January 2009), and references a survey by Arts Fund (December 2008).

Helicon found that audiences are smaller, and contributions are down 20-50%. Boards are engaged; there’s little organized response within the arts sector. In general, they see that organizations are responding in three ways:

• Proactive: strategic, energetic, imaginative responses (25%)

• Informed: trimming expenses, monitoring revenue, not thinking long-term (60%)

• In denial: reluctant to believe the situation is critical or that change/action is needed (15%)
Helicon identified some possible collective responses –i.e. actions for a group of funders from the public and private sector. These possibilities include establishing different funding mechanisms, such as a revolving loan fund or a fund for “dynamic adaptation”; supporting technology initiatives; building knowledge, such as through convenings; and exploring and encouraging transformation. We at WSAC are expanding this research to include arts organizations in other parts of the state, so that we can assess the impact of the recession statewide.

We also are tracking how the recession is impacting artists: studies by the NEA and by Artist Trust show that artist unemployment rates are increasing; artists are seeking jobs outside the arts; some have lost their work/live space; most are finding grant funds scarce. Artists also are cutting costs and seeking out networks and opportunities for collaboration (“more potlucks!” said one survey response).

I expect things will get worse before they get better. Public funding will be slow to recover, endowments will be slow to re-build. Some organizations will not survive, and that will cause further unsettling.

BOB: Well as a good friend used to say, these are indeed wiggly times. The Arizona Commission on the arts just completed a survey on the impact of the economy on the nonprofit arts industry in Arizona.

The staff and board of the Arizona Commission on the Arts are greatly concerned by current economic trends and their potential effects on Arizona arts organizations. Arizona is in a deep recession with the second-highest per-capita state budget shortfall in the nation. In an effort to assess the effects of this downturn, the Commission conducted a statewide survey in January 2009. Over 200 arts organizations responded. Key responses follow. A predictable effect of the economic downturn is a decrease in contributions to Arizona’s arts organizations. 84% of Arizona nonprofit arts organizations surveyed confirmed that they are experiencing such a decrease. When organizations were asked what actions they have taken or plan to take in order to manage the economic strain, we found the following:

• 58% are cutting programs and services,

• 65% have enacted hiring freezes,

• 38% are planning staff layoffs.

The survey also revealed that organizations are utilizing positive strategies to perpetuate programs and maintain fiscal health. Respondents plan to:

• increase their volunteer base;

• utilize more local artists in their programming and seek opportunities for partnerships and collaborations to accomplish mutual goals.

The Commission will continue to monitor the economy’s effect on arts organizations, by way of surveys and other evaluation techniques, to reveal trends and opportunities in the field. Survey results will also guide the Commission as it adjusts and develops programs to best serve the evolving needs of the statewide arts industry.

To access a full summary of survey results, visit our website at www.azarts.gov Foundations are feeling the same strain with their investments as well as businesses. One of the simple indicators is the drop in attendance and sponsorship at many of the fundraisers of nonprofit arts and service organizations. The drop ranges from 30 to 40 % both in participation and in purchases at auctions and the like. We are seeing a particular drop in corporate sponsorships of our Governor’s Arts Awards.

The Arts Commission has three sources of funding from the state of Arizona. Our general appropriation, our ArtShare Endowment, and our Arts Trust fund. Both the endowment (15 million) and the Arts Trust (based on a percentage of corporation commission fees paid to the state) are underperforming. In many cases we are seeing the same effect that our foundation friends are seeing with our portfolios underperforming.

ARNI: The financial crisis in Montana is not as devastating as it is in other states, yet there is a cause for concern. Montana's revenue base is largely agriculture, tourism and resources, which provides stability, at this time, not found in other places. With less than a million people living here, we don't have a great number of homes in a housing crisis. Our banks are stable and we don't have a great deal of risky lending going on.

That said, the economic pinch is definitely being felt in many arts sectors, most especially in staffed arts organizations and those that run facilities. In addition, many artists are feeling the impacts through lackluster sales, which are, in some cases, severe.

There are over 350 non-profit, tax-exempt arts organizations in Montana. To get first-hand knowledge of how serious the financial situation is with the most active of these groups, the Montana Arts Council did phone interviews with over three-quarters of the staffed arts organizations in the state, speaking to 53 groups. Here is what we learned:

• During the current year, over half of these organizations laid off staff, cut back hours, wages or contracts.

• In the coming year, over half (not necessarily the balance) anticipate additional lay offs and cuts, or new reductions in hours, salaries or contracts.

• This reduction is conservatively estimated to be close to 100 jobs over the next two years, with a conservative estimate on the loss in wages of over $1 million.

To our knowledge, no organization has closed their doors yet. We do find that because Montana has never been a place of great financial riches, organizations are used to operating on tight budgets and combine duties and delegate projects to more volunteers in order to keep the lights on. Our state does not have huge, nor a great number of foundations or corporations. We always say, "Everyone in our state knows each other." The areas most impacted seem to be major donors and corporate donors, which makes sense looking at what's happening with the economy.

As for artists, virtually all artists we have spoken to are struggling with sales. This is requiring them to become ever more creative in how they address their market, and we are seeing much greater interest in expanding web presences and social networking strategies. We are also seeing artists produce work with a lower price-point, in some cases, in order to help weather this storm.

As to whether this will improve by year's end -- while I'm not sure if the economic situation will improve, I am certain that organization's and artists' ability to address these rough times will improve because of Montanans' willingness to help their neighbor, learn from each other, button down the hatches, scrape by and get creative, just like they always have.

ANTHONY: The recession is having a significant impact on nearly all arts organizations in the region. In the short term, many, if not most of these organizations will be able to trim and otherwise adjust their budgets and programs to squeeze through the current year. However, the next full fiscal year will prove to be a major challenge for them. I predict that the year beginning approximately October, 2009 will be a year when the arts will be put through the financial wringer. Even if the economy were to show signs of revival by then, decisions will have already been made to significantly cut back funding to the arts community and the field will feel the full force of those cuts.

A reality in the arts community that is emerging congruently with the financial challenges posed by the recession is the unfolding society-wide repositioning of the arts. This repositioning has manifest itself in the form of declining audiences, reduced interest in expanding public support for the arts, and, in general, a more competitive and less certain standing for the arts in American society. Some arts organizations have been using plentiful funding to paper over this change in interest occurring in their communities. However, the economic downturn has made it much more difficult to do so. Increasingly, I hear of larger arts groups taking this problem on by talking about “ramping up” marketing.

Unfortunately, marketing is unlikely to make much of a difference in areas where an arts organization's nexus with its community has withered.

Another reality of the current difficult financial situation the arts find themselves in, is the revealing of excesses. Last week, the Denver Post carried a story about an arts administrator and an artistic director at the local performing arts center who had agreed to take pay cuts. One's salary was in the mid $200,000 range, and the other's was in the mid $300,000 range. Though large, the organization is not one of the more distinguished entities in the country. In fact, one could argue it is in a state of decline. Are these salary patterns akin to the salaries of the auto executives who paid themselves handsomely even while overseeing the decline of their companies? I have long felt that excessive compensation has been a creeping problem in the arts field. I think the public will be more than a little concerned—and dismayed--when some of the compensation provided to the leaders of major arts organizations that are now in trouble become more public, and that information is likely to become public during the current economic crisis.

BARRY: Let me summarize if I can. Based on your responses and the studies you cite, there is great similarity in the situations in all of your states (which, I think are arguably likely fairly representative of states across the country – though the very largest states may be experiencing some of the challenges more acutely):


Organizations seem to be experiencing:

1) drastically reduced corporate income – from both sponsorships and contributions;
2) significant reductions in the amount of foundation and public support money available; future public declines are yet to be seen in full, as government budget processes catch up with declining revenues.
3) reduced earned income from all sources -- ticket sales to gift shops to rental space income and beyond; 4) some decrease (though it is too early to accurately pinpoint the level of decrease) in contributed income – but that varies widely among organizations; and
5) significant drops in the value of endowment portfolios (for those fortunate enough to have endowments).


On the intangibles side, reading between the lines, it seems apparent there is:

1) a foreboding of even worse impact to come and the expectation of audience declines, donor fatigue, and perhaps further reductions in the amount of available funding both public and private;
2) a hit to organizational morale as hard times continue; and
3) increased organizational and leadership isolation as collaboration and cooperation seem hard to manage;
4) the postponement (or, in some cases, abandonment) of a range of initiatives (many of which were designed to increase capacity, further sustainability, or address challenges and needs) that are no longer affordable.


The response to all this seems to be to:

1) cut programming / performances (if not immediate, then over the next year);
2) opt for changes in the content of programming to appeal to the most popular (and thus widest) public market;
3) reduce staff costs, by doing everything from freezing new hires, to downsizing, to layoffs; and
4) reduce overhead costs wherever possible (e.g., postponing physical plant repairs and professional development training, cutbacks on supplies, hardware updates);
5) increase core base fundraising drives.


Organizations seem to want funders to (besides provide more money):

1) be flexible in restrictions placed on the use of grant funds;
2) be candid and forthright about what they will and won’t be funding;
3) promote sector wide communication emphasizing best practices in coping with the economic challenge;
4) broker and nurture whatever collaborative efforts might help reduce costs or maximize income short term; and
5) provide leadership and cover costs of things now prohibitively expensive for individual organizations (e.g., professional training, advocacy, sector communication and the nurturing of collaborations.

BARRY: Anthony, your prediction that things are likely to get worse, even much worse, is worrisome – though clearly echoed in the Washington and Arizona studies. Can you elaborate on your thinking a little more about the repositioning of the arts in American society post this economic crisis?

ANTHONY: The American arts community is a wonderful community; however, it is in denial about many things. The community has long needed to spend some time reading the economic and social change tea leaves, and these leaves were available for contemplation prior to the start of the current recession. Some of the well-known pre recession evidence of the dramatic change in the arts environment that preceded the recession include:

• From approximately 1990 through the present day, many major corporations that previously purchased art as an act of corporate positioning sold their art collections. They did so not because they needed the money, but rather because the possession of art by a corporation glided into a very different and lower level of importance as a feature of corporate strategy.

• Public funding for the arts at the state and federal levels has been essentially flat and/or in decline for a very long time. The old vision of state and federal arts agencies as major players in the funding of the arts has not been realized.

• Not too long ago, the cultural offices of the major foundations in the country were places of influence and leadership. While some major foundations continue to retain arts funding as a priority, the importance of this subject area for foundations has diminished. Perhaps more alarmingly, major new technology-fund fueled foundations have very little commitment to the arts.

• One reading of the pre-recession tea leaves and the message they have for the arts community is : “For the first time since the explosion of federal, state, foundation and corporate commitment to the arts beginning about 1965—you are on your own. The old subsidy-based arts funding mechanism is in decline, and arts organizations must find ways to develop outside of a structure that is corporate, foundation and public sector dependent. The arts need to especially consider earned income and other non-grant-based means to fund programs and operations. More importantly, the old top-down supply side support system is almost dead. As an arts organization, your future lies in the development of a coalition of individuals that is passionate about your organization's work. These people are both your earned income and contributed income future. In them lies your ability to develop a constant supply of money to support your work that is not grant dependent.”

• The post recession times will contain this pre-recession reality. I am, however, hearing early signs of an acceleration in the way the arts funding structure is changing. What I hear from an increasing number of sources is that funds from foundations, corporations and governments that have been aligned away from the arts during the recession, may not return to support the arts. If this occurs, it will represent an acceleration of the trend that started long before the current recession hit.

BARRY: Kris – one of the findings in the study you commissioned and which you note is (and I quote) “Those interviewed reported that no organized response is taking place within the arts sector,and communications across institutions are largely informal, occasional, and not very candid” – suggesting that individual organizations are largely addressing the economic challenges on their own.

The survey’s finding that “there does not appear to be a broad-based turn to resource-sharing or joint program ventures” would seem to confirm that conclusion. Does this concern you? In the recommendations section of the report, funders are urged to “encourage program collaborations, joint marketing and resource-sharing” (ostensibly, I would guess, to save money via some economy of scale approach). What can be done to encourage and nurture such collaboration to work together to face these challenges? And when you mention transformation, and question some of our basic assumptions are you talking about the same thing Anthony is talking about?

KRIS: Perhaps most compelling to me is the section of the Helicon report (on the impact of the recession on Puget Sound cultural organizations) focusing on possible collective responses such as a fund for dynamic adaptation and exploring transformation. Discussions are ongoing about what we can and are willing to pursue. We are seeking opportunities to bring people together – including two well-attended briefings on the Helicon report – and hope some self-organizing will results among arts leaders.

Collaboration is tough work. Merging two program models – or two organization models – requires alignment of strategy and culture. And as they say, “culture eats strategy for breakfast.” In other words, while it may be perfectly logical to combine efforts to save resources, in real terms it’s the personalities, the intangibles, the “way we’ve always done it” that will make this so tough. So one thing funders (public and private) might do now is to encourage organizations to work together; this might mean giving arts leaders time and space to meet together; providing expert advice in such things as rental space or for-profit ventures.

I also recognize that getting through the recession isn’t the objective here. The real work is in getting to the 21st century, not returning to 1995. Arts participation patterns have changed, as have the tools we use for sending and receiving information, buying and selling tickets, even scheduling our leisure time. In the meantime, the nonprofit arts sector has grown significantly.

BARRY: Arni, you seem to suggest the opposite reality in Montana. How are you promoting more communication and sharing of data, strategies and ways to work together? And what do you make of Anthony and Kris’ thoughts on fundamental changes at work here?

ARNI: I don’t know if I am suggesting exactly the opposite reality here. But I believe strongly that rural America can serve, in many ways, as a model for many other parts of the country, including our largest urban sectors, in the ways that organizations work together, get along, help solidify and strengthen communities and respond to tough times.

Part of our ongoing work to share information through the state arts council has been through our newspaper, “State of the Arts” and through three listservs we produce on a bi-monthly basis for artists, arts organizations and arts educators. Through these vehicles we publish technical assistance, resources, model practices and great ideas that could apply in other arenas.

Montana also has a strong network of state-wide arts services organizations, including the Museum and Art Gallery Directors’ Association, the Montana Performing Arts Consortium and the Montana Association of Symphony Orchestras. These organizations provide a phenomenal resource for sharing information, ideas that work, success-and-failure stories, and a place where candid truths can be told. While there is some silo thinking within organizations in our state, the predominant culture is that of being a “good neighbor.” That “good neighbor” philosophy is also the underpinning to an organization being successful here. Silos eventually empty.

At the same time, as organizations face crises, there is the reality that it takes more time to work together than going solo. When faced with financial crisis, the first reaction is to get your own house in order and then look outward to find new and creative ways to work with others.

As to Anthony’s comments on the “unfolding society-wide repositioning of the arts…manifest in the form of declining audiences, reduced interest in expanding public support for the arts, and, in general, a more competitive and less certain standing for the arts in American society,” I just can’t go there yet. The success of the National Endowment for the Arts to be included in the economic stimulus bill represents, to me, a beacon of hope that all the hard work of the arts advocates is showing success. This may not be replicated within states or cities, but for it to happen on the federal level is really quite incredible. I believe strongly that as an arts industry, we have to continue to build stronger connections and greater meaning between what we produce and what our audiences find important or meaningful in their lives. Then we have to build the case on an individual level, through a message carried by those who have credibility with individuals who have the power to provide resources.

BARRY: Bob, respondents to your field survey asked you to (among other things): 1) Help (them) find ways to work together, collaborate and share resources, and 2) Provide networking and professional development opportunities. What are you specifically going to do to address those two “asks”? What can we do now in anticipation of those changes that will promote sustainability and the health of the individual arts organization and the sector as a whole?

BOB: Right now our team has adopted an internal “attitude”, we call it Field First. In shorthand, it is getting a commitment from our team at the Arts Commission to focus outward on our Arizona arts industry rather than the commission itself. That is pretty much my job, worrying about the legislature, working with the Governor’s team and loosing hair… We are trying to work with folks as conveners, technical assistance providers, and adjunct staff. When we eliminated our project grant category for the upcoming year we asked people to complete a quick zoomerang survey about what they wanted to do with their proposed project, what the impact of the project would be, and their needs, both from a technical and funding point of view. Since we are a discipline based agency, our team is dividing up the requests and trying to identify other funding sources, partners, or other ways to accomplish their project without a direct grant from the Commission.
I believe I mentioned the change in focus at our annual Southwest Arts Conference.

BARRY: Will collaborations and resource sharing really save meaningful amounts of money?

BOB: I sometimes think that organizations throw Collaborations around like one would throw salt in a busy kitchen. They like the idea, and maybe the taste, but have no real idea how to use it “collaborations” effectively.


BARRY: Let me ask you this Bob: What do you think of the notion that post this crisis, our sector will look, and actually ”be”, something fundamentally different from what it was a year ago? What can we do now in anticipation of those changes that will promote sustainability and the health of the individual arts organization and the sector as a whole?

BOB: I don’t believe we will have universal change across the field. Yes, we will indeed lose some organizations, probably a few big ones, most likely some of our midsize groups. The impact of subscription series is just being felt right now. Remember many folks purchased their subscriptions to last season before things really tanked. We are indeed hearing from organizations that their attendance was stable that they are now seeing a decline.

Those organizations that have diverse funding streams, some solid earned revenue projects and strong returning audience members will be solid through the crisis. I think that the last item, strong returning audience members will be crucial. Now is the time to ensure that you as an arts organization are taking care of your audience members. Customer service will drive this effort. That includes easy ticket exchange programs, the ability to re schedule your performance, and just simple methods of taking care of your attendees. The churn of audience members over a season (without the resources to bring in new audience members) can do more damage to an organization in these challenging times than anything else.

BARRY: Let me ask all of you this: Based on your observations of the impact and effect of the economic crisis, what are your funding and program priorities? What strategies are you considering that you hope will protect and nourish the arts ecosystem you have spent most of your career trying to develop? What organizational behaviors are you trying to encourage or discourage? What collaborations have arisen in response?

KRIS: Anticipating some reduction in state funds, we’re now restructuring our budget for the next two years. We will retain our focus on arts education, and will be improving our grant programs to be more relevant, efficient and accountable – even with reduced funds. And we will be continuing to monitor the impacts of the recession.

I am concerned about some systemic problems of the nonprofit arts field: the expectation that budgets are 50% earned/50% contributed; the assumption that grants are the SAA priority; investment in large, single-purpose arts facilities that are expensive to program and operate; data that shows that arts participation is changing dramatically, but our support systems have not. It often is politically risky to raise these issues. However, the recession makes these all the more important.

A crisis is a terrible thing to waste. We need to think about transformation as well as crisis response.

ARNI: Our funding and program priorities tie to three areas: arts education, economic vitality and public value. This will not change. Of critical importance to us are the stories. What stories does our funding tell? How do we tell that story? Who tells that story and to whom? One of the most rewarding and successful programs we run, in making the case to political leaders about the importance of the arts, has to do with our Public Value Partnerships. They report annually on the way they are building relationships with their audience, the manner is which they are creating greater relevance, meaning and connections in their communities, and they each must answer the question, "If a legislator asked you how you would describe the public value of the public funding you receive, what would you say?" and they must tell it to us in a story that conveys an outcome from the prior year. They also visit their legislators each year to talk to them about the public value of their organization to their community.

When times are tough financially, arts funding always become a much bigger target, so advocacy becomes an even larger requirement. We have learned the hard way that public value has to be at the core of what we do, and we have to tell the story again and again and again, and then again and again. That's just the reality. It's a good thing we're resilient and tenacious, otherwise we'd be outta here.

BOB: Our field tells us that direct operating support is what they value most along with the services and technical assistance our team provides. We have eliminated project grants for the upcoming 2010 year as well as eliminated our Working Capital program. In addition, we are making cuts to our Tourism initiatives as well as some of our quick turn around grants. Our goal is to continue to push funds forward to our operating grant recipients large and small. Indeed we actually are beginning a new program to engage the very small organizations in a set operating support grant accompanied by strategic training and technical assistance. We are holding on to our support for individual artists and arts education, though we are surely finding that grant requests from schools are down due to their schedules, high stakes testing, and the ability to find modest matching dollars.

We continue to work with the field to develop programs that relate to our current economic times.

• Most recently we have convened a number of arts organizations and artists in Tucson for an intensive workshop/training experience on buying real estate.

• Our annual Southwest Arts Conference was scheduled in August to present cost savings to both participants and the Commission during these challenging economic times. For many years SWAC was scheduled in winter, which meant “high season” rates at local hotels. It is the Commission’s hope that a reduction in out-of-pocket expenses and a change in schedule might allow more arts leaders from outside the Phoenix metropolitan area to participate in the day’s learning. In addition, because the conference is scheduled during the middle of the Arizona summer – otherwise known as “off season” – the Commission has been able to work in close collaboration with hotel staff to keep the agency’s costs low, lower than in recent years. SWAC 2009 will focus on the theme, “Safety/Sustainability/The Future is No Accident,” and will address the economic crisis and its effect on the arts and education sectors, and the fact that within the tumult there are terrific opportunities. Using the old civic slogan as a departure point – “safety is no accident” – the conference will address preparedness and sustainability but move beyond, into discovering opportunity within the current economic realities and constructing a prosperous future.

• The conference will also address some of the following: safety for individual artists; crisis/disaster preparedness for individuals and organizations; thoughtful, practical and visionary planning; formal and informal sharing of resources; new models for organizational structure; and new realities for public and private funding for the arts.

ANTHONY: At WESTAF, we are approaching the downturn by carefully monitoring revenues and expenditures. We are treating the unfolding of events as a series of financial uncertainties that require us to be vigilant and recognize changes as they unfold. At WESTAF, the recession hit at a time this organization was underway with a high number of technology and research contracts. WESTAF was thus committed to deliver the goods and services that were contracted. As a result, WESTAF management could not adjust expenditures in any major way. The coming year's budget preparation exercise will be the tool we use to create a more flexible budget and one that will allow the organization adapt to the financial surprises that may wait!

WESTAF's external services to the states and the arts community are being supported at their planned levels. They are, however, being refocused a bit to address the impact of the recession on the field. For example, WESTAF has always provided the field with cost-effective software and cost-saving systems with which to administer programs. Since the early months of the recession, however, WESTAF has increased its efforts to help clients and potential clients better understand the cost savings efficiencies they can realize through the use of online technologies. A second external service activity WESTAF has ramped up in response to the recession is a consideration of how WESTAF can help state arts agencies staff –particularly the executive directors—attend conferences when their home states have imposed a freeze on travel funds. Having the states in the WESTAF region represented in national forums is important, and to the degree possible, WESTAF will adjust its budget to support travel to these meetings.

BARRY: The problem with a crisis of this magnitude is that survival becomes the overriding priority – usually at the expense of building sector wide infrastructure or some kind of foundation on which to build a sustainable future. It’s the old: “if your house is on fire, first put out the fire” mentality. But is putting all our dollars into putting out the fire the smart thing to do in the current situation? Should some of our money and effort be directed towards things that will benefit us (the whole sector) more long term?

It is, of course, a little late to be doing worst case scenario planning (which we all should have been doing more of I suppose), but aren’t there things that don’t have to do with the demands of the instant crisis that we ought to be doing for the long haul. Shouldn’t we be investing in some infrastructure now so as to position ourselves for the recovery and the future after that? Shouldn’t we be asking the kinds of questions you are asking Kris – about our basic underlying assumptions and about the ways this crisis will (or could) be the basis for transformative changes (with or without our acquiescence)? Is this an opportune time to question the alternatives to the basic 501 (c) (3) business model, the role of local and state arts agencies, and even the basic funding formula for arts organizations (i.e., 50% earned, 50% a combination of public and private funding)? As you say Anthony – we will likely be dealing with “uncertainty” for some time. Is there an opportunity here amid the disaster? Is the primary responsibility to try to save what we have, or to try to construct a viable, sustainable future? And if a combination of the two – how should we proceed? Bob cites Arizona’s current approach as quite the opposite, at least for the moment, in moving away from special projects to meet the unprecedented need for operational support, and Arni’s situation with a much smaller number of organizations and smaller budget is much different. Is there room for both approaches now? What are your thoughts?

ANTHONY: This crisis is a tremendous opportunity for the arts. You are correct, the big question on the table is whether to preserve what we have or rebuild. I believe the wrong approach is to assume that every arts organization—no matter how excellent, and no matter how much work went into building it--should be saved. The organizations that will survive and thrive in the future are those that: a) connect with their communities, b) have a diverse and perhaps non-philanthropic base of support and c) are able to change with what may be very fast-changing times. Of course there will be a number of “legacy” and Flying Dutchman organizations. These are entities that have major permanent funding resources in the form of endowments or major patron funders. These entities will continue to operate through the inertia provided by these funds. They will survive with a very small audience base—in fact a surprising number of major institutions are already operating in this space.

BOB: We are protecting our operating support grants and that comes from what our field tells us. Indeed, we may be taking a different approach from some of our colleagues in the west.
At the same time, as a staff we are developing a new series of internal driven projects that would actually place arts activities in communities underserved by the agency and the arts. In essence we imagine taking small touring groups and residency artists into communities for performances and teaching residencies. We are running the numbers and may indeed look to fund these projects in full.
Imagine two visual artists placed in a city park or a community center for a week offering classes for young people and giving one or two slide lectures in the library for the adults.

Or a month long residency for a weaver, painter, or sculptor where they actually move into an abandoned store front on main street, welcoming in visitors to talk about their work, share a cup of coffee, or just watch the artist work, again providing some kind of formal presentation about their work or art history at the local library, rotary, church, etc.

Another idea is to tour small ensembles, theatre, music, etc. to very rural communities where they would perform in a mixed concert/performance at no cost to the presenter.

This accomplishes three simple goals. One getting product into communities where there is little or no organized arts programming and two, giving visibility to the Commission in communities again where there is little acknowledgment or awareness of our work. Finally it creates an opportunity for local artists and community minded folks to come together to help “produce” the event or residency thus beginning a skill building initiative and grass roots arts development initiative that could then continue into the future.

KRIS: I think it’s very timely to have discussions about new models for investing in and supporting arts participation, including activities that happen outside the nonprofit sector – such as Gallery Walks/First Thursday activities, online arts participation, meet-up technology, and collaborations between the commercial and nonprofit sector. We also need to expect grant applications to reflect realistic revenue projections, and perhaps demonstrate “scenario planning” to examine how numerous variables might shape the organizations future. There’s value to convening artists, arts managers, and arts supporters to encourage collaborations, build networks, and provide opportunities for self-organizing.

ARNI: We’re not up to challenging the non-profit model at present. I think everyone is looking at more earned income opportunities, and for us, operating support will continue to be the number one priority, as it has been.

BARRY: Correct me if I’m wrong, but I think the States will share in the $50 million NEA Stimulus Bill funds to the same proportion as they do in general NEA funding. What is your plan to allocate those funds within your state? Are there restrictions imposed on you by the NEA in how you spend that money? What are your major goals for those funds? And what is the timeline on when that money might reach its ultimate arts organization recipients? Also, while the NEA sees the money it will retain as funding previous grantees (with the stated goal of trying to protect jobs), as the general NEA budget is actually up just slightly, will that mean the NEA will have more funds to support new programs or at least more applicants?

BOB: Arizona will follow the model set up by the NEA regarding stimulus funding. Our grants will go to arts organizations to preserve jobs that have been cut or are in jeopardy of being cut. We have encouraged all the former applicants (in the last four years) of the NEA to apply there first. We will also engage with WESTAF in a partnership to deliver additional grants with them and will use their online grants program to assist in the administration. These grants will be in amounts up to $20,000 per organization and will play an important role in the stabilization of a nonprofit arts industry in a true economic crisis.

KRIS: SAAs will be receiving a share of the NEA jobs recovery funds. With these funds, WSAC will be establishing a targeted one-time initiative to support jobs that are in jeopardy; these include salaried positions and contractor jobs. Grants will be expended Sep 1, 2009 through August 31, 2010. Our guidelines parallel the priorities of our strategic plan. The NEA guidelines are fairly specific. We are glad to be working with WESTAF to get distribute the funds as efficiently as possible, and in a good collaboration with our regional and local arts orgs.

ARNI: The state arts councils are receiving federal economic stimulus money from the NEA. Montana's share is $291,000. We are spending $241,000 on grants, $22,000 on our database and e-grants platform that was cut from MAC's budget for the upcoming biennium, and $28,00 over a two-year period to run the ARRA grants reporting, which we understand will be very onerous. Our grant program will fund successful applications fully up to $25,000, and will be limited to funding non-profit arts organizations or units of government whose program has the arts at the core of its mission and that have received funding from the Montana Arts Council or our Cultural Trust since July 1, 2005. Grant funds are required to be used for:

• Salary support, full or partial, for one or more positions that are critical to an organization's artistic mission and that are in jeopardy or have been eliminated as a result of the current economic climate.

• Fees for previously engaged artists and/or contractual personnel to maintain the period during which such persons would be engaged.

These funds may be used for the retention or restoration of:

• Employee positions (full-time or part-time).

• Hours and/or hourly wages of employees (full-time or part-time).

• Contractual personnel.

Our goals for the program are to make an impact on local communities through the arts, to prove that the arts have economic merit, and to successfully make the case, over the grant period, that arts jobs are just as important as any other job and that they have importance to the state.

Are there restrictions on how we spend the money? You betcha. We are waiting to see the reporting requirements, which we understand will really make us blanch. But we're ready and able to do whatever is necessary to ensure this federal economic stimulus funding is a huge success for us and the NEA.

As the NEA's budget goes up, such as with the $10 million in the Omnibus spending bill for the next fiscal year, I would think that this would net out more direct funding opportunities for arts groups around the country. Forty percent of the NEA's program budget normally goes to state arts councils, so our budgets will go up a bit, as well, which is always welcome news. As to new programs at the NEA, I would envision that the new Chairman, when announced, will set the bar on that front.

ANTHONY: WESTAF has taken a position that the NEA stimulus dollars it received for redistribution should be deployed in a way that reflects WESTAF’s core priorities. By focusing the $543,000 in funds, the awards will likely have a greater impact and also support work WESTAF has been engaged in for some time. WESTAF's priorities for the use of the funds are: 1) support for employees of organizations of color; 2) support for employees of entities engaged in creative technology and the arts; and 3) support for persons of great promise who were recently hired but are being laid off.

In addition to focusing the distribution of the funds on core WESTAF priorities, WESTAF is seeking to administer the awards in an efficient manner by piggy backing on the grant applicants of the states in the region. Applicants for WESTAF stimulus funds will apply through their home state's stimulus funds application and decide whether or not to apply for WESTAF funds by answering four questions appended to the state application. This approach will greatly reduce the costs of administering the WESTAF program. To further expedite the distribution of funds, WESTAF has offered each of the states in the region free use of WESTAF’s CultureGrants Online™ (CGO™) grants management system to administer their grants.

BARRY
: The $50 million in NEA money, while helpful and much needed, is, nonetheless not likely to be enough to be much more than a band-aid on a life threatening wound for some in the sector. What do each of you realistically think it will accomplish? Doubtless it won’t be enough to prevent the loss of some jobs; which jobs then will likely be most at risk – senior level boomer jobs, or lower level jobs of the Generation X and Millennials? What will be the impact for the future if most of the lost jobs come from one group vs. another? Are boomer managers likely to retire on schedule or will the economic collapse force them to stay where they are and what impact might that have?

BOB
: This is a tough one to imagine. I have heard from many folks that joke about working forever. That may be true as so many people working in the arts industry truly have very little in savings or even retirement accounts. As we all know, you don’t get rich in this business… At the Commission we continue to work to develop the careers of our youngest staff members all of whom are very engaged in their work right now. Indeed when NASAA recently held their board meeting in the Valley, we engaged them in a career training session for young 18 to 35 year old arts administrators. It was quite a great presentation led by Jonathan and was truly well received by the attendees.

However, in the larger community, I continue to find Gen X and Millennials find it easy to move to other options, get antsy, or change entire careers in a moment. Sadly in a conversation with a high school student recently, her approach was that she and her classmates simply want to find a job that makes a lot of money.

I am looking forward to hearing the response from my colleagues about these generations of workers.

KRIS: Retirement? I think this is a good time to delay retirement for a year or more, and, in truth, I know several people who are doing just that. As for the NEA job recovery funding, the focus is on protecting jobs, so some arts organizations may be able to reposition as the economy recovers. I also hope this provides jobs for artists – as contractors or in salaried positions. As this play out, I think it’s likely that some new opportunities will open up; that some creative individuals and innovative efforts will open up job possibilities that we can’t now envision.

ANTHONY: Although there is considerable talk about Boomers delaying retirement because of the downturn in retirement accounts, I don't believe this will be a major factor in the arts. Many Boomers have been in positions of leadership since they were in their mid-to-late 20's, and they are ready to move on to other work or retirement. A new and younger group is preparing to flood into the field and this will be a terrific asset.


ARNI: The federal funding is extremely important for the statement it carries. This is the first time the arts and the economy are connected on the federal level. Although the amount of funding is not going to cure all the problems, each job it saves it is important. As to the rest of the analysis, I leave this for my colleagues to assess since we have not had an opportunity to dig this deeply in our research.

BARRY: Do you think any of the NEA funds (from the Stimulus bill or their general budget) should be spent on new efforts -- programs, research, convenings, pilot projects or otherwise -- that might have a national impact on our sector short or long term or should all the money be spent on protecting existing and creating new jobs as soon as possible? What kinds of national impact projects would you like to see the NEA support?

BOB: I would love to see a national arts education initiative using working artists from states rosters to provide direct programming in community centers, parks, churches, and social service organizations throughout the states. This old school method of actually placing working professional teaching artists in communities for a month at a time in truly underserved (meaning underserved by the state arts council) would have an impact both on the young people and the authorizing environment (think legislators) in those communities. Let’s use these teaching artists in new ways, put them to work, engage them in creating new connections in new environments that would accomplish arts education goals and advocacy goals together.

KRIS: I hope the NEA is repositioned to be more responsive and more proactive. I think of three levels of new action needed in this economic downturn:

• Crisis management. The job support initiative is an example of how the NEA can provide near-term resources that help nonprofit arts orgs get through tough times without changing the paradigm or expecting systemic or long-term change. The NEA grant panels should expect applicants to address a more dynamic/volatile future; assumptions of status quo are likely na├»ve.

• Strategic response: I assume the future won’t be like the past - which is good news and bad news. The arts should be better connected with public priorities – including trade, commerce, privacy, workforce development. The NEA should expect (and challenge) state and local arts agencies to be effective and strategic in the crisis and in the recovery.

• Transformation: how about a “transformation initiative” that would fund arts participation ventures outside the nonprofit sector? I think this is the most compelling.

ARNI: As to future NEA funding, that's a great question. On behalf of state arts councils, I think that any effort to build on the successful partnerships the NEA has helped build with the National Governor's Association and the Education Partnership, are worth their weight in gold. This doesn't require a lot of money, but it does require a strategic intent and a staffing commitment. The fact that the NEA is included in the economic stimulus package is huge. In our state, I've been told that there were certain important people in Montana who were not happy that the Montana Arts Council was included in the state's economic stimulus bill because arts jobs aren't as important as the other jobs. They aren't "real" jobs. So, we still have a long way to go to make the case here, but we make no progress at all if there aren't successes along the way to which we can aspire and relive. The NEA's inclusion in the ARRA legislation is that for me.

I also am a big fan of the work done by Dana Gioia, in terms of his success in making the case to Congress about the value of the NEA. Whatever it takes to continue this support should be continued, in my mind. We've come too far to go way back.

ANTHONY: The administration is appropriately concerned about using stimulus funds to increase employment. If it were to be improved, our leadership's perspective is that the program could allow a focus on job creation as well as on job retention. Under the current rules that favor job retention, there is a strong possibility that NEA stimulus funds will be used to support positions in dying arts organizations. Unfortunately, following the completion of the first cycle of stimulus funding, some of these jobs will likely disappear forever as will the arts organizations they are affiliated with.

BARRY: Should somebody be collecting data on the impacts of this economic crisis (jobs lost, downsizing, seasons cut short, donors down etc.) so that we can analyze where we are, what might come next? Is acting as a clearinghouse for data collection and analysis the kind of thing that the NEA should be involved in? Do you think the NEA should fund projects that might have national impact or implications, in addition to providing programming or operational support to individual organizations? And what specific kinds of things would be most valuable at this time?

KRIS: I don’t know that a national database is the answer. In fact, we might be best off with some training and encouragement to better use online technology to share info and build connections within and across the field.

ARNI: In our state, people care primarily about what happens here. Montanans believe we’re unique. National statistics or studies don’t play. I do think that the larger impacts that the loss of jobs and other financial strains have on the community itself, individually, are relevant and persuasive. We would be happy to be included in any type of national research effort, to ensure that rural perspectives and realities are included.


ANTHONY: Barry, there are really two questions you are raising in your commentary. The first is related to the measurement of job loss in the arts. Underlying it is an assumption that shrinking or “right sizing” the arts delivery system in this country is a bad idea. While I believe having more art opportunities around is better than having less, many highly credible arguments have been made that the supply of some kinds of art far exceed the demand for them. In addition, there is growing evidence that many arts organizations have not built a sustainable public demand for their work. I find that measuring job loss in the arts ignores the larger question of the need to transform the arts delivery system into something that is more efficient and responsive to the desires of the public. I really don't know what the story is related to job losses in the arts—is it a surprise? What do we think is going on in virtually every other sector of the economy?

You raise the issue of the need for organized national-level action to better position the arts in the national dialogue and also to provide a flow of policy options that can help move the arts forward. I support such a vision and believe that Americans for the Arts (AFTA) is one national organization that has worked hard to realize it. Though AFTA's efforts are sometimes imperfect, and their operational vision has yet to be fully realized, I give them a lot of credit for working diligently on the problem. Many other national-level organizations seem to have retreated to their bunkers and are awaiting the return of the year 1972.

Moving the arts field forward is a challenge. A key part of this challenge is the fact that the field is primarily composed of artists and administrator practitioners. These individuals have accomplished extraordinary things. What they have not done, however, is develop and support a cadre of cultural policy experts with the formal education and experience. This cadre would be charged with the development of a stream of cultural policy options, operational critiques, and the maintenance of a productive dialogue about the role and future of the arts in this country. In order for the arts community to mature in the area of cultural policy, it needs to recognize the value of investing in such efforts and the people supporting them. Such an investment must be meaningful and sustained over a long period of time.

With the Poetry Out Loud project, Dana Gioia has demonstrated how a nationwide program that is imagined by the NEA can be an influential success. Reallocating more NEA funds away from discipline-based program grants to support such larger programmatic visions such as Poetry Out Loud and also field-building activities in the areas of, cultural policy research, arts technology development and convening would, I think, be highly beneficial. I understand the need for programmatic support to the disciplines, and think the NEA's endorsement of such activity--particularly in the form grants to initiatives that emerge from them-- can be beneficial. If the NEA had grown as initially envisioned, it would, perhaps be allocating a billion dollars to the arts. In that scenario, continued broad-based support to the disciplines makes a lot of sense. I don't need to underscore the fact that we are a long way from that dollar amount. We should never give up on the goal of significant federal funding for the arts, however, until we get closer to it, there is just not enough money to support such widespread federal arts funds distribution and move the NEA forward too. This topic is timely and worthy of a blog discussion in itself.

BOB: I would love to see some venture capital go into the Do It Yourself gallery scene that we are seeing in Phoenix. Even start up support and working capital for young theatre and dance ventures or web publishing projects. I think the energy of these young entrepreneurs is quite exciting, but they live in a quasi profit world that doesn’t fit the historic structure of grantmakers.

I am not sure a federal initiative focused on collecting data or reporting would be a great use of funding.

I would love to see a national campaign about the value of the arts or art education in the lives of our children. One that would speak to the values of our country and communities. I think that many of the ones in the past, though clever and indeed have had some impact, lacked a focus that tapped into the values that Americans, yes even Arizonans, hold dearly. We are working on beginning that conversation around arts education. Arizonans believe in the handmade (cowboy boots, belts, native silver), hard work (ranchers, farmers, indeed even landscape folks), and our independence from governance. To me it seems that we could easily align the arts with the values of the handmade, hard work, and freedom here in Arizona.

BARRY
: I think an online discussion of the role the NEA should play in the arts & cultural sector, and how it ought to allocate its money is a very good idea and I will work on that in the near future.
Thank you all for participating in this Roundtable and sharing your thoughts with us.

Have a great week everybody.

Don't Quit!
Barry

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