Role of Public Vs Private Funding in Support of Fields in Communication and the Arts

Download:

   Arts Funding Snapshot: GIA's Almanac Research on Support for Arts and Culture (5Mb)

Public agencies of all kinds are facing severely constrained budgets every bit a result of the ongoing effects of the recession, escalating public debt, and deadening economic growth. States, in particular, are in rough fiscal shape. In FY 2012, forty-ii states and the District of Columbia had upkeep deficits totaling $103 billion. This is on summit of similarly large budget deficits that most states accept faced each year since 2008. ⁱ Equally a result of a slow economic recovery and the expiration of federal recovery assist funds, states are having to substantially trim expenses in club to remainder their budgets, making significant cuts to social services, education, the arts, and other sectors. Public resources are farther strained by increased demand for social rubber net services similar Medicaid and food stamps as a result of sustained high unemployment levels.

State and local funding plays a unique role in the nonprofit arts ecology, and declines in public funding volition have both firsthand and long-term effects on cultural organizations of all kinds. Individual funders, who fill up a much different but complementary function in supporting the nonprofit arts sector, are finding that lower levels of public funding have implications for their piece of work also.

Grantmakers in the Arts commissioned Helicon Collaborative to enquiry how private funders are thinking well-nigh and responding to public-sector cuts. During July and August 2011, Helicon conducted an online survey of GIA's members, interviewed seventeen public- and individual-sector funders and reviewed a range of resources about this issue.

Public Funding Trends

Between 2001, when legislative appropriations to country arts agencies were at their top, and 2011, appropriations declined 39 percent, from $450.half-dozen 1000000 to $276 million. Direct expenditures on the arts by local governments have declined by almost 20 percent in merely the by three years, down $169.v 1000000 — from a high of $858 million in 2008 to $688 million in 2010. Calculating these drops cumulatively, since 2001 the arts sector has lost more than $1.2 billion in land support alone, not adjusting for inflation. ² More detailed data on public funding streams from 1986 through 2011 can be found in this issue on pages 12–13.

Since the recession started in 2008, forty states and Washington, D.C., have decreased their allocations for the arts. The caste of magnitude of the cuts has ranged quite dramatically. Ten states have made extreme cuts of over 50 percent of their arts budgets. Five states were on the other terminate of the spectrum, experiencing cuts of less than 10 percent of their budgets. The remainder of u.s. that experienced cuts were somewhere in betwixt. The median size cut over the iv-year menses was 35.8 percent.

Two states received no legislative appropriations at all in 2012: Kansas and Arizona. Both states have seen the rise of a very conservative political motility, with a strong Tea Party component, that does not believe that government should play any role in funding the arts. The Kansas Arts Commission is non receiving state funding this yr. The Arizona Commission on the Arts has alternative sources of revenue that allow it to proceed to function, albeit with a much reduced capacity. The experiences of these 2 states demonstrate that the electric current challenges facing some state arts agencies are ideological as well as economic. While many states are making cuts to arts budgets reluctantly and in proportion to cuts to other government agencies, some are singling out the arts to brand a point nearly what government should and should non do.

Many of the states that received increases in funding for the arts have natural resources reserves and so were sheltered from some of the impacts of the economical recession. Of the 10 states that saw their budgets increase over this menses, 3 states experienced dramatic increases: Arkansas (88 percent), Wyoming (98 pct), and Minnesota (186 pct). ³ Wyoming and Minnesota now receive the about money per capita of all states.

Funding Ecology

Public funding — both state and local — has immense value to the cultural sector above and beyond the dollar amounts involved. In fact, considering state and local arts agencies distribute their resource across a very broad constituency, their grant amounts can exist small relative to other sources of revenue for many arts organizations. However, most public arts agencies' select their grantees through rigorous peer-panel processes, which involves a high level of due diligence near quality and relevance. This functions as a "seal of blessing" that often unlocks other sources of support. Many private funding sources — foundations, corporations, and individuals — wait for bear witness of public funding as a prerequisite for their own grants. If they have non received public funds, cultural groups may be excluded from other sources of support.

Land arts agencies fulfill a unique and disquisitional function in the arts ecology past virtue of their statewide attain. Few private funders operate arts programs statewide, which means that they exercise not have a statewide perspective on the needs and activities of the cultural sector, and they lack the ability or mandate to human activity on state-level initiatives. As a issue, state arts agencies are frequently the only entity that can coordinate statewide initiatives or connect the arts with other areas of public policy, such every bit education, customs evolution, and economic development. This convening and coordinating capacity is essential in the development of innovative new services (such as the Cultural Information Project) and in a variety of multisector planning conversations that occur at the state level.

Finally, public agencies are important considering of the kinds of support they offer and the range of organizations they fund — both more wide-based than most individual funders. Many public agencies provide general operating support, which is disquisitional to cultural institutions' ability to fund the basic costs of doing business concern. In improver, they oftentimes provide technical assistance programs, networking opportunities, and information services that private funders are non equipped to offer. Public agencies volition support smaller and newer groups, and customs-based organizations, where private funders might non. Considering they take a statewide reach, they often fund in rural regions or areas of the country that are non served by private foundations. Recent data from the Cultural Database Project, for example, indicates that Bay Area groups with budgets under $250,000, on average, received 24 percentage of their funding from local, state, and federal government sources, while public funding accounted for merely 6 pct of revenue for groups with budgets over $1 million. ⁴

Responses by Private Funders

Both public and private funders recognize that the mandate of private funders is substantially different from that of public agencies. In the survey and interviews for this report, several funders indicated that their charters or missions specifically prohibited them from replacing public funding. In add-on, private foundations accept besides been hit past the recession, and many accept fewer funds to fulfill their existing commitments, allow lonely add new ones. For multi-purpose foundations, the force per unit area to address safety net and social service issues continues to escalate, which makes increasing arts funding more difficult. Despite these challenges, our research indicates that some private funders are adjusting their work to respond to the effects that public funding cuts are having on the arts ecosystem.

The survey of GIA members conducted for this project generated responses from seventy-seven funders located in xx-five states. Slightly more than than half (57 percent) of survey respondents indicated that they accept not changed their grantmaking approach in response to declines in public funding. The thirty-two survey respondents who accept shifted their programs or funding have done so past increasing support for:

• Arts teaching
• Arts service organizations
• Pocket-size organizations
• Artists
• Community-based arts programs and organizations
• Technical assist
• Operating support

In improver, some foundations take increased their commitment to convening cultural leaders and providing forums for discussion of bug and concerns.

It'south worth noting that individual arts funders take increased their commitment to operating support substantially in the past twenty years. The Foundation Center'south study in this consequence confirms that 35 percent of private funders' grants went to operating support in 2009, upwardly from simply 13 percent in 1989. This reflects a growing sensation of the importance of this type of support.

Approximately one-half of the respondents (30-nine foundations) reported that they partner with their country arts bureau, working together on:

• Joint funding of programs
• Articulation data gathering or research
• Regranting programs
• Information sharing
• Public didactics and policy piece of work

3-quarters of the survey respondents (fifty-four foundations) work with their local arts agencies in a variety of means.

In interviews nosotros heard that the degree to which private and public funders are working together now to address declines in public funding is related to their history of collaboration. In many states, private and public arts funders take little background in collaboration, and information technology is hard to beginning new partnerships in times of constraint. "For the virtually role, the land arts councils and the private foundations are two trains running on split tracks. There has been little connection and almost no joint planning or coordination," said ane individual funder. There are exceptions to this general rule. In Indiana, for case, recent cuts take spurred the state arts council to convene private funders to assess the cultural ecology, identify bug of common concern, and select a few areas in which they tin can collaborate or coordinate their actions.

Those states where public and private funders practise take a history of collaboration accept not been less susceptible to cuts, just they are more likely to exist sharing information and communicating almost advisable responses. In Washington, where the Land Arts Commission has been cut 57 percentage since 2008, public and private funders say that tough times have brought them closer together by necessity, and they are sharing information and pooling resources for high-impact initiatives, like convenings. States that have implemented the Cultural Database Project have established a baseline for collaboration (public-private partnership is a prerequisite for participation in this program). Public and private funders in Arizona and Pennsylvania report that the history of working together on a complex projection like the CDP has paved the way for coordinated and responsive activity at present.

No one believes that private funders tin make full the gap left by public funding cuts, and neither public nor private funders we spoke to call up that is desirable. "Public support for the arts is every bit important for psychological reasons as for anything else," said one foundation officer. "Mostly it speaks of urban center or state'south acknowledgement that the arts are important for quality of life, that the arts make a place an heady place to alive."

Implications for Private Funders

While individual funders may not be changing their strategies and activities in response to declines in public funding, interviewees all acknowledged that these cuts will have meaning implications for their piece of work.

Fewer public resources will mean more cultural organizations will be looking to private funders for aid, and those already receiving private funding will be making the case for increased aid. In improver, private funders may lose an important mechanism for vetting the quality of cultural organizations. "For lack of funds, the public agencies may accept to change their grant review system or stop making grants at all," said ane foundation officer. "If this happens, we won't know if the lack of public funding for a given organization means that their programs aren't deserving, or if they don't have funding considering the land doesn't." As a upshot, individual funders may take to invest in new due diligence mechanisms in club to reach across their current funding portfolio.

The cultural system is an ecology equanimous of a web of interconnected, various organizations of unlike sizes that are focused on a broad range of fine art forms and that serve a broad spectrum of communities. Without public funding, certain parts of this ecosystem will suffer more than others. It may non be possible for private funders to fill in these gaps, just the cuts will take implications for the shape and vibrancy of the cultural ecology every bit a whole, and for different communities' admission to arts and cultural programs.

Looking to the Hereafter

Are current cuts to public funding a temporary blip or a permanent shift? A majority of survey respondents (56 per centum) believe that current funding cuts marker a permanent reject in public funding for the arts that will not rebound when the economic system does. Almost seven in ten survey respondents believe that even if funding is restored, what is funded and how information technology is funded will alter in the time to come.

Interviewees hold that the future for public funding volition be different than it was in the past. "Public funding for the arts is going to have to exist squarely focused on serving people, not institutions," said one state arts bureau director. "That idea is and so foreign to our sector that it's a revolution in thinking, simply it will be the only grounds on which we tin can restore funding." "Public arts agencies demand to evolve," suggested the director of some other state arts council. "In ten years, the state arts agencies are non going to look substantially identical, as they do now, but may look very different from one another as they evolve in response to their local conditions." A private funder suggested, "Unfortunately, many public arts agencies are not considered to be progressive, relevant, or accountable. In numerous places, arts agencies are non seen as effective as public agencies in other sectors — housing, instruction, community development, and wellness, for instance. They're going to demand to be more than in touch with what'south happening in communities, and more than responsive to the public if they are to get more public support."

Recommendations

Private funders accept many concerns, as well as escalating demands on their time and attention. Just the severe cuts to the budgets of most public arts agencies will have both brusque-term and long-term consequences for private funders. This may be a time for private funders to rethink their relationship to the public funding system, and act in new ways to address the long-term prospects for public-sector support. Hither we offer a few suggestions:

• Engage in chat. Talk with public arts agencies nearly what's going on and the possibilities for joint activity. Are at that place opportunities for new public-private partnerships related to research, programming, or advocacy that will assistance maximize resources and impact?
• Consider the implications of public funding cuts on the cultural ecology. Which kinds of organizations and communities are most dependent on public funding sources, and therefore least capable of finding replacement funds from private or individual sources? What might that mean for your foundation'due south work?
• Look across sectors and acquire from others. Private funders in all sectors are dealing with the impacts of public funding cuts and increased community needs. Grantmakers for Effective Organizations has sponsored cantankerous-sector conversations virtually this issue. Are in that location ways that arts funders can work with foundation colleagues in other fields to address mutual issues and have a stronger bear on?
• Participate in making the case for the public value of the arts. In what ways can private funders contribute to making the argument that the arts are a necessity rather than an assiduities? ⁵
• Help cultural groups explore concern models that are less reliant on foundation or government income. What are great examples of developing individual donor and earned income strategies, for instance, and how can they exist replicated?
• Champion alternative public funding mechanisms that have been successful elsewhere. Public agencies in Minnesota, Arizona, Cuyahoga County, Ohio, King County, Washington, and Denver are among those that have revenue streams independent of legislative appropriations. How can these examples be used to stimulate more diversified revenue bases for public support of the arts in other locales?

Alexis Frasz and Holly Sidford are colleagues at Helicon Collaborative, a consulting business firm for the cultural sector.

Notes

1. Elizabeth McNichol, Phil Oliff, and Nicholas Johnson, States Go along to Feel Recession's Affect (Washington, DC: Center on Budget and Policy Priorities, updated June 17, 2011).
2. Kelly Barsdate, Public Funding for the Arts: 2011 Update (Washington, DC: National Assembly of Country Arts Agencies, August 2011).
3. Minnesota voters passed a constitutional amendment in 2008 creating a new 3/8-cent sales taxation to support outdoor heritage, clean waters, sustainable drinking water, parks and trails, arts, history and cultural heritage projects and activities. Of the total proceeds from the sales taxation, 19.75 percent is dedicated to the Arts and Cultural Heritage Fund.
4. San Francisco Grants for the Arts, Cultural Database Projection, 2011.
5. A contempo New York Times article quotes Bill Ivey, director of the Curb Middle for Art, Enterprise and Public Policy at Vanderbilt University: "The positioning of arts within the public policy loonshit has e'er been tenuous . . . . The arts are considered an amenity — nice to fund when you have a bit extra but hard to defend when the going gets tough." Robin Pogrebin, "Arts Outposts Stung by Cuts in State Aid," New York Times, Baronial 1, 2011.

stokesdomess.blogspot.com

Source: https://www.giarts.org/article/how-are-private-funders-responding-cuts-public-funding

Share this post