The Problem with "Problemization" in Arts Funding

I discovered an excellent article on the weekend that really gets to the heart of matter when it comes to the whole notion of  "project driven" and "problem driven" methods of arts funding.  This one is well worth a read if you are at all involved in raising funds in the non-profit world.

I wasn’t sure whether or not problemization was a word until I looked it up and found that it is one. Problemization is to consider or treat as a problem (Merriam Webster).

I’ve been thinking about this a lot. The reason is that increasingly when you look at a foundation’s grant guidelines you are asked: “What problem are you trying to solve?” I put the following into Google: “Foundation funding what problem are you trying to solve.” The search result: 182 million hits that included dozens of foundations’ guidelines and many articles about how to write successful grant proposals. The additional question is “What is the need or problem that will be eliminated if your request is granted?” (And subsequent questions about how you identified and documented the problem, what logic model you followed to design your solution and how will you measure your results.)

I wonder what effect this culture of pathology, of diagnosis and treatment, is having on the nonprofit sector in general and the cultural sector in particular. Do foundations increasingly see themselves in the role of a sort of benevolent physician, identifying social “disease” and using their grants as the medication needed for wellness to be achieved? Not that long ago, a primary framework for organized philanthropy was one of ideas and experimentation; the mindset was one of risk capital and the ability to fuel new ideas that are interesting and should be tried.

The problem/solution framework is especially insidious for the arts. Yes, we do solve problems in the arts, particularly we work on aesthetic and philosophical problems, though these are not problems a foundation could help solve (at least not directly). In fact, the problems we solve are not easily documented, it is difficult to apply a social scientist’s approach to them, and our documentation of results is more likely qualitative than quantitative.

Read the article here

Is Sustainability Sustainable?

By the principal consultants of WolfBrown with Joanna Woronkowicz

Historically, sustaining an arts organization meant generating enough earned and contributed revenue to fund current operations. With so much continued change and turmoil in the arts industry, WolfBrown set out to reconsider what sustainability means in 2011.

Why are some arts groups able to persevere – and even thrive – when they are chronically “under-capitalized” and perpetually on the brink of extinction? On the other hand, why are well-established, large institutions with sizable endowments filing for bankruptcy? What, besides strong finances, does sustainability require? Is it possible that financial security actually deters sustainability?

Reflecting back on several decades of work with funders and arts organizations, we propose a more nuanced and multi-dimensional view of sustainability – one that encompasses and transcends the current dialogue on capitalization, adaptive capacity and other elements of good management. In our view, sustainability requires a balancing act with three interdependent but sometimes competing priorities:

• Community Relevance
• Artistic Vibrancy
• Capitalization

Together, these elements give organizations the ability to excel in a permanent state of flux, uncertainty and creative tension.

Is Sustainability an Illusion?

On December 16th, 2002, the San Jose Symphony – having played to audiences for over 120 years – declared bankruptcy. Its assets were sold and an institution that had once been the pride of a growing city suddenly ceased to exist. Many were shocked; how could an arts organization with such a long history and sizeable endowment fail? Throughout the late 1990s, the orchestra’s ticket sales had increased by fifty percent and government support remained stable. In the first fiscal year of the new millennium, however, ticket sales declined twelve percent. More significantly, private support for the orchestra decreased by half over a span of four years. While revenues decreased, expenses increased. At the opening of its 2002 season, the orchestra found itself in dire straits. Reluctantly, a weary board of directors, unable to reorganize and remain solvent, declared Chapter 7 bankruptcy.

Contrast this story to that of another nonprofit arts organization, the Center for Puppetry Arts in Atlanta, which opened 30 years ago when Kermit the Frog and his creator, the late Jim Henson, cut the ceremonial ribbon. Now a $3.5 million organization, the Center’s live performances, exhibits and distance learning programs generate roughly half a million visits annually. Demand for the Center’s programs has remained stable and expenses have been carefully controlled, producing consistent operating results. In response to a major donation to the Center from Jim Henson’s family of puppets and other objects from their personal collection, a capital campaign is underway to renovate and expand the Center’s facilities, including a commitment to raise additional endowment to cover increased operating expenses. While other organizations in Atlanta have struggled to raise sufficient capital for new facilities, the Center for Puppetry Arts sees great community demand for its expansion, which will enable it to double the number of unique visitors and increase operating revenues by seventy-five percent.

Seemingly sustainable in a financial sense, the San Jose Symphony was not able to rebound after a few difficult years. With its structural deficit exposed, the orchestra’s value proposition to San Jose’s diverse community was not sufficient to generate the level of support required to reorganize, nor was it able to rescale its operations to align with demand. In contrast, the Center for Puppetry Arts – consistently operating on shoestring budgets – continues to grow in relevance to its community and to be recognized for its managerial and artistic excellence by national as well as local funders.

Read more »

Charities and non-profits still feel the pinch

Two years ago, an economic tsunami hit the world's financial markets, sending everything -- including B.C.'s non-profit sector -- into a tailspin.The stock market crash of 2008 and the bailout of banks and multinational corporations shook the economic foundations of governments, and with so much money evaporating overnight, it was no surprise that charities and non-profits were among the first to feel the pinch.

The repercussions that followed were felt by the large and small alike, from the VGH and UBC Hospital Foundation to the Sidney-based Raincoast Conservation Foundation, whose mandate is to protect the land, water and wildlife of coastal B.C."We had been getting along on a budget of about $1.1 to $1.3 million but with the crash we went down to $700,000," said executive director Chris Genovali.
"It's been a real challenge for everyone but it is slowing coming back and we expect our budget next year to be north of $700,000," he said.Ron Dumouchelle, president and CEO of VGH and UBC Hospital Foundation, said revenues from investments and donor contributions fell by 10 per cent in 2009, the first major decline in seven or eight years."We found donors were deferring their donations or making donations of lesser amounts. We had to be patient because the donors had to recover from the downturn, as did we," said Dumouchelle."The good news is this year we'll be up by 15 per cent and will raise about $36 million as both the smaller and major donors are coming back, which is fortunate because we have many important things that need to be funded in health care."

A new study of the non-profit sector by the Vancouver Foundation, Canada's largest community foundation, shows that while the storm is over, hundreds of charities are still struggling -- especially those serving the arts and culture, environmental groups or small charities with budgets under $250,000.

A survey of non-profits and charities in B.C. taken this fall "painted a picture of a sector that is facing a high level of uncertainty and financial stress," said the report.Vancouver Foundation communications vice-president Catherine Clement said the survey was a companion to one taken last year when the effects of the economic crisis were first felt."We fund non-profits and last year we'd heard many of them saying they were not prepared for 2010 because of what had happened. We wanted to go back this year and see what had transpired and if they were in any better condition to meet their mandate [in 2011]," said Clement.

The survey found half of the respondents reported their revenues decreased this year -- a slight improvement over 2009, when 53 per cent had decreased revenues.

Sixty-three per cent of arts and culture and environmental groups reported decreased revenue.
The average decrease was 18 per cent.

Charities and non-profits still feel the pinch  Dec.10 Vancouver Sun

British Columbians spend nearly $4 billion on cultural goods and services, over 4 times higher than government spending on culture in the province

Consumer Spending on Culture in Canada, the Provinces and 12 Metropolitan Areas in 2008, the 32nd report in the Statistical Insights on the Arts series from Hill Strategies Research, shows that BC residents spent $3.8 billion on cultural goods and services in 2008, or 2.9% of total consumer spending in the province. The $3.8 billion in consumer spending on culture is more than four times larger than the $920 million spent on culture in British Columbia by all levels of government in 2007/08.

At $869 per resident, British Columbia consumers’ cultural spending is the fourth highest of all provinces. Cultural spending per capita is highest in Alberta ($963) and Saskatchewan ($905). Per capita consumer spending on culture is highest in the five western-most provinces, led by Alberta ($963), Saskatchewan ($905) and Ontario ($880).

Across the country, Canadian consumers spent $27.4 billion on cultural goods and services in 2008, or $841 per capita. Consumer spending on culture is three times larger than the $9.2 billion spent on culture by all levels of government in 2007/08.

The report examines spending on cultural goods and services, including art supplies and musical instruments, art works and events, home entertainment, movie theatre admissions, photographic equipment and services, and reading material. The data is drawn from Statistics Canada’s Survey of Household Spending, a yearly questionnaire on Canadians’ spending habits.

British Columbians spend twice as much on live performing arts as on live sports 

British Columbians spent twice as much on live performing arts ($200 million) than on live sports events ($100 million) in 2008. In addition, more than twice as many BC households spent at least some money on live performing arts (41% of households) as on live sports events (19%).

British Columbia is also highly ranked in other per capita rankings

The report also provides comparisons of consumer spending on four key arts-related items in 2008: live performing arts; admissions to museums and heritage-related activities; works of art, carvings and other decorative ware; and books. British Columbia is highly ranked on all four of these arts-related items. For per capita spending on admissions to museums and heritage-related activities, Alberta ranks first ($21), followed by Ontario ($17) and British Columbia ($16). Per capita spending on works of art, carvings and other decorative ware is highest in Alberta ($43), followed by British Columbia ($38) and Ontario ($33). Regarding per capita spending on books, Alberta ranks first ($52), followed by British Columbia ($47) and Manitoba ($42). Per capita spending on live performing arts is second in B.C. ($47), behind Saskatchewan ($51) and tied with Manitoba and Ontario (also $47).

21% growth in cultural spending between 1997 and 2008

After adjusting for inflation, BC residents’ spending on cultural goods and services grew by 21% between 1997 and 2008, which is lower than the 35% rise in spending on all goods and services during the same period. The highest increase among the cultural categories was art works and events, which rose by 54% between 1997 and 2008. In the country as a whole, cultural spending increased by 28% between 1997 and 2008 after adjusting for inflation.

Vancouver 11th among 12 metropolitan areas
On a per capita basis, Vancouverites’ cultural spending ($795 per person) ranks 11th among 12 metropolitan areas in Canada. Total cultural spending was $1.8 billion in Vancouver in 2008, representing 49% of the provincial total.

From Hill Strategies Research

Few Canadians give to the arts

Individuals gave about $101 million to arts and culture organizations in 2007, but these donors represent a very small percentage of Canadians who make charitable donations, according to a new report.

A study by Hill Strategies Research found that of the Canadians who give, only 3.3 per cent give to the arts. The report is based on figures from 2007, when the recession had not yet hurt donation practices.

"Some cultural attendees and participants may not realize that a large portion of the revenues of arts and culture organizations is not covered by admission fees, other earned revenues or government funding," the report said.

Read more »

Camada's cultural revenue down 3.9 B in 2009

"The global recession is expected to reduce revenues for cultural enterprises by approximately $3.1 billion in 2009".
This is one of the findings of "The Effect of the Global Economic Recession on Canada's Creative Economy in 2009", a report prepared by The Conference Board of Canada for the Cultural Human Resources Council (CHRC) that measures the impact of the current recession on the cultural sector.
Traditional culture sector revenue streams such as business advertising, endowments, and municipal funding have been eroded due to the weak economy and the steep decline in stock markets. Cultural industries have felt the pinch. For example, the report highlights the fact that written media and broadcasting which depend heavily on business advertising are expected to see real revenues fall by 6.1 per cent and 4.8 per cent respectively.

Link to article  link to report

Charities and Digital Giving

Tod Cohen in a recent artlicle points out that from recent studies in the US, it seems that many charities are behind the times when using digital means for fundraising and giving. For instance a new study conducted by Forrester’s Technographics for online provider Convio estimates online giving in the U.S. to nonprofits will total over $4 billion this holiday season, with over 111 million givers saying they plan to give over the Internet this year.  At the same time, a study earlier this year from Target Analytics, a Blackbaud company, found online giving generates only about one in 10 dollars given to charity.(from Stanford Social Innovation Review - Charities Missing out on Digital Giving )

Scot Hartley's follow up article provides some practical ideas for dealing with web 2.0 issues, and getting your organization engaged in the Brave New World of online fund-raising. There are a number of ways organizations of all sizes can leverage web tools to understand their users, target and acquire new followers, and solicit online donations:
Read more »