[Createquity Reruns] Thoughts on Effective Philanthropy: Part IV – Funding Activity, Not Individuals

(Welcome to Createquity’s summer rerun programming! Over the next few months, we’re reaching into the archives to pull out some of the best articles and most underrated gems we’ve published since 2007. This week, we’re continuing the “Thoughts on Effective Philanthropy” series, which was my first extended think piece for Createquity back in 2007-08. In this installment, I argue against providing direct support to individual artists [what?!] and using artistic merit as a criterion for grants. -IDM)

For years, artists have complained about the National Endowment for the Arts’s 1996 decision, under pressure from Congress, to eliminate individual artist fellowships (except for literature). Nevertheless, it seems that a number of local and private arts agencies and foundations have instituted programs in the past 25 years that support artists in their work directly. Many of the more high-profile of these, including the MacArthur “Genius” grants, the United States Artists fellowships, and prizes such as Columbia’s William Schuman Award, essentially function as general operating support grants for individuals, with no particular deliverables expectation and a closed selection process that operates via nomination.

In the previous segment of this series, I argued that giving more grants to smaller organizations helps to diversify the risk of giving to any one organization while broadening the effect of the money distributed. There’s another factor to consider as well. Because the bulk of foundation and government resources goes to organizations that boast not only the largest artistic budgets but also the greatest market share, there’s a steep stratification within the artist community between elements that are subsidized by outside funding and thus pay “professional” rates for artists’ services, and elements that exist outside of that infrastructure that rely on largely volunteer or far-below-minimum-wage labor in order to get by. Essentially, what this means is that some artists are able to live reasonable or even comfortable lives making art for a living, while other artists of equivalent ability get bupkus. There is little resembling an artistic “middle class” whose members receive remuneration for their services that is respectable, yet not out of proportion with the direct economic value that they generate.

Funding artists directly has the potential to exacerbate this problem. First of all, the growth of artistic stature is spiral in nature: the more citations, awards, and high-profile work you already have, the more you are likely to receive in the future. That momentum makes an artist more visible to funding organizations whose expertise is more usually characterized by a broad understanding of the field rather than an encyclopedic knowledge of thousands of people working in relative obscurity. As a result, awards that fund artists directly, particularly those that do not function via an open call process, tend to go toward individuals who are already doing better, both reputationally and financially, than their peers. In the worst case, it increases the stratification already present in the field on a basis that has more to do with hearsay than intrinsic artistic merit.

I don’t think it’s incumbent upon foundations to judge artistic merit. There are plenty of other people in this world who are perfectly capable of doing that, and arguably more qualified: curators, journalists, other artists, audience members themselves. Where foundations can add value instead is in setting up and supporting systems by which artistic activity is generated in their communities.

How might this be accomplished? The first place I would look is what I would call nexuses for art. Where is art shown, produced, performed, bought, sold, consumed, marketed, supported? It’s not just the museums and the concert halls. It’s the dive bars, the galleries, the coffee shops, the off-off-Broadway theaters, the bookstores, the record stores, the radio stations, and the occasional entities that serve as all of these things and more. Finding a way to get money to these organizations is tricky because many of them are set up as for-profit entities. Yet, from the artists’ perspective, many of these tiny businesses fulfill just as important a function as the city’s performing arts center or marquee theater company, despite being labors of love for their proprietors that often operate completely outside of the support structures that exist to make art available to a wider public.

The artists, in some ways, are only the end product of this multifaceted ecology of organizations. A company that receives no donations, yet values artistic mission over profit, is a company in a precarious position, completely exposed to market pressures. Any time one of these organizations fails, untold numbers of artists (not to mention audiences and communities) are negatively affected. My electric chamber ensemble, Capital M, had the honor of playing one of the last shows ever at the legendary experimental music venue Tonic. The ten-year-old for-profit club, which two years earlier had raised more than $100,000 from fans and angel donors to avert another financial crisis, was only the latest in a string of music venues to close or relocate in the face of enormous pressure from the New York City real estate market. Its demise inspired Take It to the Bridge to organize a protest outside the venue and gather signatures demanding that the city provide musicians with an equivalent replacement. In my opinion, support of these kinds of organizations is an oft-overlooked but critically important way to bolster the livelihood of a varied and active artistic community in a local area, with all the attendant benefits that such activity provides.

(Enjoyed this post? We’re raising funds through July 10 to make the next generation of Createquity possible. We are 36% of the way there, but need your help to cross the finish line. Please consider a tax-deductible donation today!)

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[Createquity Reruns] Thoughts on Effective Philanthropy: Part III – (Dis-)Economies of Scale in the Arts

(Welcome to Createquity’s summer rerun programming! Over the next few months, we’re reaching into the archives to pull out some of the best articles and most underrated gems we’ve published since 2007. This week, we’re starting with the “Thoughts on Effective Philanthropy” series. “Thoughts on Effective Philanthropy” was really the reason why I started Createquity. I wanted to have an excuse to write down some of the ideas that had been bubbling around in my head after five years or so of working in the arts, and I ended up publishing six essays in the series over the fall and spring of my first year in business school, in 2007-08. Reading over these posts, I’m struck by how much of my thinking in those early days still reflects my thinking today, even though my perspective was far less informed back then than it is now. -IDM)

When we left off last time, I was advocating for funding agencies to adopt a spirit of experimentation in their philanthropic strategies for the arts. However, I haven’t yet talked explicitly about an idea that goes hand-in-hand with that strategy: diversifying grants across many different (and often smaller) organizations, instead of concentrating them in a few very large ones.

It’s not that I don’t think large arts organizations do good work, or that they don’t deserve to be supported. What I’m going to argue instead is that there is a tendency among many institutional givers to direct their resources toward organizations that have well-developed support infrastructure, long histories, and vast budgets, and in a lot of ways it’s a tendency that doesn’t make much sense (or at the very least, could use some balance).

For one thing, those well-developed support infrastructures don’t come cheap. Consider the case of Carnegie Hall, which due to union constraints (the subject of a current strike over on Broadway) routinely pays its top stagehands north of $300,000 a year. The astronomical salaries that symphony orchestra conductors make (up to $2.5 million annually; and that’s not counting guest conducting gigs with other ensembles) are being paid for by someone, after all. If those kinds of numbers seem a little insane to you, well, you’re not the only one. This is one of the dirty little secrets of the arts—very few people seem to be aware that their local orchestra conductor might be making bank on par with their favorite NFL players. And yet this information is all publicly available on government forms thanks to the incomparable Guidestar. (pdfs; registration required)

An important thing to note is that the forces driving these compensation figures into the stratosphere cannot be described as “nonprofit” in any meaningful way. The labor unions, for example, are not particularly interested in giving Carnegie Hall some sort of break because of their IRS status. From their perspective, this is the top gig in town and they should be remunerated accordingly. Similarly, the conductors and soloists extracting huge appearance fees from the major orchestras are being represented by for-profit management agencies such as IMG and Columbia Artists. Another large expense for many arts organizations is the rent for their office buildings that ultimately winds up in the hands of property-owning for-profit corporations. Foundations that are truly interested in “effectiveness” should ensure they are aware of the extent to which their charitable dollars may ultimately be making rich people richer.

Those are only perhaps the most egregious examples of money ending up where it may not be doing the most public good. The administrative overhead costs of maintaining such a budget can get quite high as well. The more money that needs to be raised for the organization to maintain a certain level of operation, the more fundraising staff need to be hired to support that activity. And, of course, since fundraising professionals know damn well that their services are in demand, they know to ask for a substantial salary from an organization that clearly has the resources to give them what they want. Which they then have to figure out how to pay for by raising yet more money. Do you see how this can become an upward spiraling process?

In contrast, small arts organizations are extraordinarily frugal with their resources, precisely because they have no resources to speak of. It’s frankly amazing to me what largely unheralded art galleries, musical ensembles, theater companies, dance troupes, and performance art collectives are able accomplish with essentially nothing but passion on their side. A $5,000 contribution that would barely get you into the sixth-highest donor category at Carnegie might radically transform the livelihood of an organization like this. Suddenly, they might be able to buy some time in the recording studio, or hire an accompanist for rehearsals, or redo that floor in the lobby, or even (gasp) PAY their artists! All of which previously had seemed inconceivable because of the poverty that these organizations grapple with. Foundations concerned with “impact” should remember that it’s far easier to have a measurable effect on an organization’s effectiveness when the amount of money provided is not dwarfed by the organization’s budget.

The best part of giving more money to smaller organizations is that it actually reduces the risk for the funding agency by diversifying its portfolio. Think about it like this: if you were investing stock in each of these companies instead of grant dollars, your broker would call you crazy to divide a million dollars among four of them rather than forty, or better yet four hundred. Sure, some of them will fail, but think about the missed opportunities with the ones that succeed. To only fund the largest organizations would be akin to confining one’s endowment investments to the blue chips on the NYSE while completely ignoring emerging markets.

(Enjoyed this post? We’re raising funds to make the next generation of Createquity possible. We are 35% of the way there, but need your help to cross the finish line. Please consider a tax-deductible donation today!)

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Andrew Taylor Thinks You Should Donate to Createquity

The Createquity team has been humbled by how many amazing arts thinkers and leaders use this site as a resource for their work. Now that we’re in the throes of our first-ever Indiegogo campaign, some of those folks have been generous enough to give us their thoughts on what makes Createquity special. Andrew Taylor, American University Arts Management Program faculty member, fellow arts blogger at The Artful Manager, and pillar of the U.S. arts community, offers a few words of support in the short video below. Please donate to help us reach our $10,000 goal!

Click here to see Andrew’s video if you’re reading this via email.

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[Createquity Reruns] Thoughts on Effective Philanthropy: Part II – Philanthropy and Experimentation

(Welcome to Createquity’s summer rerun programming! Over the next few months, we’re reaching into the archives to pull out some of the best articles and most underrated gems we’ve published since 2007. This week, we’re starting with the “Thoughts on Effective Philanthropy” series. “Thoughts on Effective Philanthropy” was really the reason why I started Createquity. I wanted to have an excuse to write down some of the ideas that had been bubbling around in my head after five years or so of working in the arts, and I ended up publishing six essays in the series over the fall and spring of my first year in business school, in 2007-08. Reading over these posts, I’m struck by how much of my thinking in those early days still reflects my thinking today, even though my perspective was far less informed back then than it is now. -IDM)

When we left off last week, I noted that it’s hard to measure the effectiveness of the arts when we don’t all agree what it is, exactly, about the arts that makes them worth funding. Is it because they contribute to American cultural literacy, the idea being that people are somehow more erudite and interesting if they have a familiarity with what’s going on in various fields of artistic endeavor? Is it because supporting the arts in America means contributing to a body of American artistic work that we can all, as a nation, be proud of? Or is it about something more practical, like improving math and science test scores for kids, or promoting economic development in impoverished urban areas? Or is it about something completely different, like exposing underserved populations to an experience traditionally enjoyed by upper classes?

The RAND Corporation published a nice study a few years ago called Gifts of the Muse: Reframing the Debate about the Value of the Arts. The authors identified a range of benefits, ranging from simple individual emotions such as pleasure and captivation to complex public phenomena such as development of social capital and expression of communal meaning. One of the main points that the authors make is that the public dialogue about the arts tends to bias what they call instrumental benefits, such as improved test scores and learning skills, over intrinsic benefits like extended capacity for empathy and creation of social bonds. Think about that for a second: what can we say about these instrumental benefits as distinct from the intrinsic benefits? That’s right—the intrinsic benefits are really hard to measure! They are what my economics professors might call an “externality”—a force that undeniably exists but that cannot be represented in the model we’re using. So without a reliable objective standard to use as a measuring stick, one might ask, how can grantmakers in the arts properly judge the effectiveness of arts organizations in manifesting these outcomes?

This question really gets at one of the central paradoxes in arts funding. The process of applying for grants is supposed to be objective; otherwise funders might as well pre-select the grantees themselves, right? Applicants depend on a fundamentally meritocratic system that will allow them access to resources in exchange for a quality effort on their part. But making a decision is not as simple as collecting a bunch of numbers and plugging them into a formula. Assessing the “artistic quality” or “integrity” of an applicant’s work certainly doesn’t work like that; nor does evaluating the real impact on audiences of art that has a social or political mission. Even the numbers are not always our friends. Take attendance figures, for example: 800 casual listeners at an open-air concert may not be directly comparable to 50 viewers of an experimental dance show or 100 teenagers seeing a theater piece about AIDS.

I don’t pretend to know all the answers with this, but here’s what I can tell you about my own philosophy. I believe in the intrinsic value of the arts to do all of these things and more. Furthermore, competition between organizations that are engaged in the creation or presentation of artistic work is not an issue the way it can be for service organizations. Rather than divide the market, a high concentration of organizations and artists pursuing their passions will create cumulative network effects that expand the possibilities for all who are involved, from increased cultural tourism to higher land values, to more employment opportunities and a more creative and ambitious workforce. This is the great value in having a critical mass of organizations that contribute to an active “scene” in a particular area: it can go a long way towards redefining that locality as a creative, fun, and attractive place to be.

So if I’m an agency funding the arts, in some sense I’m not so incredibly concerned with the specific effectiveness of each individual organization I’m supporting. Of course you want your money to be used wisely, but it’s a good thing for the size of the art scene to be able to accommodate the full population of artists who want to work in your geographic area of interest; in other words, to grow according to the supply of artists, not audience demand. So it does not make sense, I would argue, only to fund the blue-chip institutions like the art museums, the symphony orchestras, and the major theater companies in hopes (for example) of lending international prominence and legitimacy to the community. Such a top-down approach potentially leaves out a much larger underground network of artists doing their best to scratch out a living with no institutional support, despite creating significant value for their local communities and economies.

Arts funders have traditionally been somewhat reluctant to support such scenes directly because of the difficulty evaluating their performance with precision. Most young, DIY, entrepreneurial arts organizations lack infrastructure and a certain professionalism of presentation, even if the art itself is top-notch. I feel, however, that an intense focus on objective evaluation in such cases is short-sighted, since the risk associated with the failure or ineffectiveness of any given organization is relatively small. Instead, funding agencies would do better to examine the effectiveness of the “scene” as a whole: i.e., to what extent prospective and current grantees are communicating with each other, creating employment opportunities (both artistic and operational), benefiting from synergistic partnerships, and generally contributing to the artistic profile and quality of life of the community as a whole. By adopting a less risk-averse strategy and being open to experimentation in their philanthropy, arts funders can better serve both the artist community and the public while embodying the most inspiring attributes of the field they are funding.

(Enjoyed this post? We’re raising funds to make the next generation of Createquity possible. We are 31% of the way there, but need your help to cross the finish line. Please consider a tax-deductible donation today!)

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[Createquity Reruns] Thoughts on Effective Philanthropy: Part I – The Nature of the Arts and their Impact

(Welcome to Createquity’s summer rerun programming! Over the next few months, we’re reaching into the archives to pull out some of the best articles and most underrated gems we’ve published since 2007. This week, we’re starting with the “Thoughts on Effective Philanthropy” series. “Thoughts on Effective Philanthropy” was really the reason why I started Createquity. I wanted to have an excuse to write down some of the ideas that had been bubbling around in my head after five years or so of working in the arts, and I ended up publishing six essays in the series over the fall and spring of my first year in business school, in 2007-08. Reading over these posts, I’m struck by how much of my thinking in those early days still reflects my thinking today, even though my perspective was far less informed back then than it is now. -IDM)

Measuring impact is a hot topic in the nonprofit world right now, if the title of the 3rd Annual SOM Philanthropy Conference, “Achieving Effectiveness In Philanthropy,” is any indication. Understandably, foundations want to have confidence that their money is being used effectively by the organizations they entrust it to. Furthermore, many staffers and donors in the field come from corporate backgrounds where a premium is placed on deliverables and results, and hope to apply the discipline contained within that culture to the nonprofit sector. In many ways this is a good thing: nonprofits are notorious for inefficiency and amateurish management, and by developing extensive evaluation techniques foundations hope to lead the way toward a more accountable, professional future.

Here’s the rub, though: measuring effectiveness in the arts is a different animal altogether than measuring effectiveness in other program areas, like healthcare or social justice. To illustrate why, let’s take a step back for a moment and think about the differences between the for-profit and non-profit sectors in general. In most cases, the primary goal of a for-profit company is to maximize value for its shareholders by selling a product to consumers. From the outsider’s perspective, then, the focus of the company is on the product. In other words, when we think about Microsoft, we think about Windows. When we think about Starbucks, we think about coffee. Now, what about nonprofit organizations? I would argue that the focus there is not on the product so much as the customer—broadly defined as the recipient of the organization’s services. Take a support group for people with AIDS, for example. Again, from a total outsider’s perspective, the most important thing is not what they’re doing (i.e., the specific programs or services they offer) but who they’re doing it for. When I think about Greenpeace, the first thing that comes to mind is not the specific programs or initiatives they operate—it’s the environment.

In most nonprofit disciplines, funding agencies primarily work with mission-driven service organizations. These are nonprofits that exist in order to improve infrastructure, advocate for interest groups—in short, to correct or alleviate a perceived problem in society. With such organizations, measuring effectiveness can be defined fairly concretely, say in the number of meals served at a soup kitchen or in the passage (or not) of particular legislation that a group was pushing in the local government. Of course there’s more complexity to it than that, but the point is that mission-driven organizations in non-arts fields can generally be evaluated relatively easily and accurately using quantitative and/or results-focused methods.

The arts, on the other hand, are a field primarily comprised of organizations that produce a product for consumption, much like for-profit companies. In fact, they are basically for-profit companies without the profit. Their value to society (and selling pitch to funders) presumably lies in their ability to bring products to market that would not have otherwise seen the light of day; otherwise, why fund them at all? However, this definition of value doesn’t match up so well with our traditional notions of social responsibility and moral imperative. Think about it this way: if a mission-driven nonprofit were to be wildly successful, so successful that it had entirely solved the problem it was created to address, it would have no choice but to shut down. For presenters, museums, galleries, ensembles, and the like, there is no such consideration: wild success is merely an invitation and an opportunity for more activity. And why shouldn’t it be? Arts organizations, much as they might like to believe otherwise, don’t really exist to solve some urgent problem in society. At some level, like for-profit companies, they are self-serving: they promote the art itself (the product) rather than who experiences the art (the customer). As a result, making an argument to donors for support of the arts can be exceedingly difficult, and the arts sometimes take a back seat to other priorities in the philanthropic arena.

That doesn’t mean that there is no argument to be made, however. For me, the role of the arts in a creative society is to define a space in our lives in which the impossible becomes possible. The arts are about celebrating and honoring creativity and innovation for their own sake, not as a means to an end such as financial gain. They need support precisely because a constraint of income inevitably constrains imagination, and the whole point of the arts is to see what happens when imagination runs wild.

Beyond that, however, the arts can be extremely useful to society. This can be seen perhaps most dramatically in the network effects that artists help create when they congregate in undervalued urban neighborhoods (Williamsburg in Brooklyn being a prime example). As an educational tool, the arts have applications in everything from grade-school math to graduate-level management. Not to mention that there are increasing synergies all the time between traditional arts fields and highly creative commercial enterprises such as graphic design, video games, motion pictures, and so on. The arts, in no small way, serve as R&D for society—they provide a leading edge from which other sectors draw inspiration. Their influence “trickles down” into popular culture through numerous intermediaries, providing jobs and creative fulfillment for many in the process. The true impact of the arts is thus difficult to measure properly. For example, my experimental rock band Capital M was made possible in no small part by the money the American Music Center received from the likes of the Hewlett and Mellon Foundations to pay my salary every year. Yet those organizations have no way of accounting for those kinds of residual second- and third-generation ripples created by their investments.

So how can we go about measuring—or even defining—the impact that we want the arts to have? I’ll explore that question in my next installment, Philanthropy and Experimentation.

(Enjoyed this post? We’re raising funds to make the next generation of Createquity possible. We are 30% of the way there, but need your help to cross the finish line. Please consider a tax-deductible donation today!)

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Become Part of Createquity’s Future

Earlier this week, Ian announced some big changes to the Createquity site, including our first-ever fundraising campaign to help us transform our work. As an all-volunteer effort to date, Createquity has never asked for your financial support before, and now we’re hoping readers like you will donate to help us raise $10,000 – a big challenge for us. So, what will your (tax-deductible!) donation pay for?

  • The design and implementation of our new, mobile-friendly website. Our current site was last updated in 2009 and needs a facelift to take advantage of contemporary technologies, including easy access via phones and tablets where more and more of our readership is migrating. We’ll also need to rework the way content is organized on Createquity to support our new editorial direction.
  • Our upcoming in-person planning retreat in July. Our team has already been working hard over digital communications (so many video conference calls!) to prepare for the launch, but there is no substitute for spending a full day together. We’ll use the time to make some of our most important and far-reaching decisions about where we’re going to prioritize our research efforts over the next 12 months and beyond.
  • A cash reserve. In contemplating these changes, we’ve often found ourselves saying that it was time for Createquity to “go big or go home.” For us, going big means not just streamlining the editorial process to make more effective change, but professionalizing Createquity on the operational side. In addition to paying our people for the first time, this transition will involve various startup expenses like filing fees, software purchases, etc., and as any arts manager knows, it’s important to ensure smooth operations in the face of unpredictable (i.e., totally new!) revenue streams. Any funds we raise over and above our budget for the above two priorities will go towards ensuring Createquity’s sustainability.

In addition to my time, I’ve personally donated some of my own hard-earned, nonprofit-salary cash to the Createquity campaign because I deeply believe in the value of this project. I’ve been consistently impressed by the integrity of Ian and the Createquity team in publishing only the the highest-quality prose and most trustworthy analysis, something I imagine most of you value, too. More than most, Createquity is essentially prestige-blind: it has given young thinkers like me a chance at a public audience through the Createquity Fellowship, and served as a forum for insightful dialogue on both established and emerging ideas.

The next iteration of Createquity is going to be even more exciting, as we bring all of the site’s intellectual and cultural resources to bear on the thorniest problems facing the arts. This is an incredibly ambitious project, with the goal of transforming the field from the inside out through persistent truth-seeking. And instead of relegating that process to an anonymous conference room, we’re going to share as much of our thinking on Createquity as possible so that we can learn, debate, and experiment together as we move forward. It’s an investment that benefits us all. Won’t you donate to help make it happen?

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Three Additions to the Createquity Editorial Team: John Carnwath, Jackie Hasa, and Devon Smith

As announced yesterday, Createquity is blazing a new path and taking the summer off to make it happen. We’ve launched a fundraiser to help make the transition possible – please consider a donation!

Now we get to the second major announcement of the week: the Createquity editorial team just doubled in size! I am thrilled to share that John Carnwath, Jackie Hasa, and Devon Smith have joined Talia Gibas, Daniel Reid, and me in making our little virtual think tank here a little less little and a lot more awesome.

These are some of the smartest and most capable people I’ve ever met, and I couldn’t be more excited about the collective brainpower of this group. Jackie has been involved with Createquity the longest, having served a term as a Writing Fellow back in Spring 2012. In the two years since then, Jackie has helped out Createquity in an ad hoc capacity as a Contributing Editor, and had a hand in bringing to life such articles as Ann Markusen’s Fuzzy Concepts, Proxy Data, Talia Gibas and Amanda Keil’s The Cultural Data Project and Its Impact on Arts Organizations, and Calcagno Cullen’s A Tale of Two Strategies: Participation and Organization at Adobe Books and SFMOMA. In addition to her crackerjack analytical skills, Jackie is an exceptionally gifted communicator and community organizer, and I’m overjoyed to have her on board as a full member of the team!

I met John in late 2012, where he wowed me with some perceptive questions about a speech I’d just given at the University of Chicago Cultural Policy Center about the future of arts research. After noticing some equally perceptive comments from him on Createquity and other sites, I reached out to him to see if he’d be willing to write a guest post on the charitable tax deduction (which was at the time under some threat due to the negotiations surrounding the so-called “fiscal cliff”). That article has since become a traffic monster, racking up dozens of Google search inquiries a day on its way to becoming the most-viewed post on Createquity ever. John subsequently used his research talents to unlock the mystery of film tax credits in another blockbuster post for us earlier this year, and more recently worked with Rebecca Chan to develop her article on state-designated cultural districts that was published last week. John is quite literally a gentleman and a scholar, and we’re privileged to have him with us. (Also, when I said these additions make our team “a lot more awesome,” I wasn’t kidding – John was Dean of the Chicago chapter of The Awesome Foundation!)

I’ve known Devon since we were classmates at the Yale School of Management many moons ago. To say Devon is a superstar is soft-pedaling it mightily. A bona fide thought leader in the realm of social media for nonprofits, she spends most of her time these days devising digital strategies for the likes of the Rockefeller Foundation and Planned Parenthood. But she’s never lost her affection for the arts, and has a knack for blowing our collective minds with thought explosions like last year’s Google Doc read ’round the world and her 7,500-word interview with Barry Hessenius. In the year or two before she landed her current job, she was amassing an amazing portfolio of blog posts and presentations at her website, 24 Usable Hours, the archive of which is still well worth reading today. I’m so glad Devon has decided to return to arts writing on this platform!

 

Full bios and headshots below:

jc_iiJohn Carnwath is a consultant at WolfBrown, a research and consulting firm serving arts organizations, cultural agencies, and foundations. John’s work primary focuses on arts funding, cultural policy, and related issues of measurement and evaluation. Previously, John developed content for the theater section of the Chicago Artists Resource and served as the Dean of the Chicago chapter of the Awesome Foundation. John holds a PhD from Northwestern University, where he taught undergraduate seminars including “The Economics of the Performing Arts” and “Organizational Structures and Production Processes in contemporary US Theater,” while writing his dissertation on the institutional development of municipal theaters in Germany.

Jackie HasaJackie Hasa is a generalist through and through. Jackie has deep roots in the Bay Area arts nonprofit community, having worked in marketing and development for the Yerba Buena Center for the Arts, San Francisco Shakespeare Festival, and American Institute of Architects, and as a public programs fellow with the Emerging Arts Professionals Bay Area. Currently, she serves as Community Partnerships Manager at the David Brower Center in Berkeley, an organization focused on the power of the arts to illuminate critical environmental and social issues.  In her spare time, she helps organize psychogeographical forays into the hidden corners of the Bay Area, helping produce Journey to the End of the Night since 2007 and Wanderers Union since 2010.

Devon Smith SXSWDevon Smith is the Director of Social Media and Analytics at Threespot, a DC-based digital agency serving nonprofits and government agencies. In this capacity, her recent clients include the Brookings Institution, James Irvine Foundation, National Park Service, Pew Charitable Trusts, Planned Parenthood, and Smithsonian Institution. In the past two years, she has been a featured speaker at more than a dozen conferences in the U.S. and Australia.  Earlier in her career, Devon worked for the Actors Theatre of Louisville, Corporation for Public Broadcasting, Roundabout Theatre Company, Seattle’s Washington Ensemble Theatre, and the World Science Festival. Devon holds an MBA from Yale School of Management and an MFA in theatre management from Yale School of Drama, as well as two Bachelors degrees from the University of Washington. She is a novice homebrewer, a published playwright, and an avid vagabond.

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From Inquiry to Action: It’s Time to Take Createquity to the Next Level

TOO LONG; DIDN’T READ?

  • Createquity is relaunching in the fall with a whole new editorial agenda, an expanded team, and a new website! We’re building upon everything we’ve learned over the past seven years to tackle the hard questions that matter and make principled, evidence-backed recommendations for the field that we can confidently stand behind.
  • In order to give us time to prepare for these big changes and do them right, we’re going dormant for the summer starting this week. But don’t worry: we’ve scheduled some re-runs of “Createquity’s greatest hits” to keep things interesting.
  • If you’d like to get involved, please donate to our Indiegogo campaign that will run through early July. Help us bring this dream to life!

"the future soon," photo by k rupp

Photo by k rupp

A Case for Change

Back in March, I co-hosted a Createquity Office Hours gathering for our editors, writers, and readers located in the San Francisco Bay Area. Among the attendees was a woman who wanted us to review a research report her organization had recently published. Createquity’s only real channel for such reviews at the moment is the Arts Policy Library, a format involving an exhaustive deconstruction of seemingly every strength and weakness of a research text. Because they are so labor-intensive to generate, we made a decision years ago to focus Arts Policy Library articles only on high-profile publications – which means that up until now, the way to get Createquity to review a research report has been to get lots of other people talking about it first. As I rattled off a few names of other outlets to whom this woman could pitch her study, I found myself admitting rather apologetically: “the thing is, Createquity is not a tastemaker when it comes to arts research. We don’t drive the conversation, we react to it.”

As I heard those words coming out of my mouth, all I could think to myself was, “Jesus, how lame is that?” If Createquity was not going to be a tastemaker for arts research, of all things, then who was? But as I thought about it more, I realized this observation wasn’t just true for research reports. Our recurring features like Around the Horn and public arts funding updates are necessarily reactive to events in the news. When we do a feature in response to a topic proposal from a guest author or Fellow, we’re reacting to that individual’s interest and expertise. Sure, we have a strong editorial filter, but as I reflected, I came to realize that we hardly exercise any editorial direction at all.

But maybe we should be. Createquity and I have come a long way since the days when I was a fresh-faced grad student with a crazy idea to start a blog about the arts in a creative society, eager to soak up as much information as I could about the field. Back then, blogs were still something of a novelty, and few writers and outlets were trying to draw connections across disciplines and comment on the “behind the scenes” elements of arts management, funding, research, and policy in a broader way. But as this personal blog chronicling my journey through business school has evolved into a multi-author, fieldwide resource read by thousands, a lot has changed alongside it. Social media has become the premier way to engage in discussion online and is changing our reading habits in substantive ways. Arts institutions have created dozens of venues for discussion and debate in the interest of advancing open-ended conversations about the future of our field. More and more, I hear from our readers that that they are simply too busy to keep up with it all. Whereas the problem in 2007 was not enough information, the problem today is that there is too much.

All of this has resulted in a resource that, after seven years, is no longer optimally serving its readership. Don’t get me wrong: I’m incredibly proud of what Createquity has accomplished, and continue to believe that we offer a quality of commentary and depth of insight that is unparalleled in our field. But whereas the crucial opportunity of 2007 was to expand access to conversations about the future of the arts to people who hadn’t traditionally been able to partake in them, the crucial opportunity of 2014 is to start bringing those conversations in for a landing. We’ve collectively learned enough about the way that the arts sector works, what kinds of challenges it faces, and what kinds of interventions are possible that we can begin to make the kinds of principled, evidence-backed recommendations that we can confidently stand behind. So why aren’t we putting actionable next steps in front of people who could conceivably make a difference?

A Theory of Change

Last winter, Createquity’s editorial team gathered in Philadelphia to discuss our strategic goals and the evolution of the site. To frame the discussion, we generated what’s called a theory of change, which is a way of depicting a strategy visually. I’ve now been a part of many theory of change development processes, and the capacity of this tool to open up new ways of seeing one’s role in the world never ceases to impress me. Our own exploration was no exception.

At Createquity, we’ve always placed great importance on quality: of prose, presentation, and analysis. We take pride in our ability to come up with insights that are not obvious and convey them with style. We also try to take an open-minded, objective approach – which is not to say that we never have an opinion, but rather that we adjust our opinions in light of the facts instead of looking for facts to justify our opinions.

These values have built our reputation thus far, and we’ve had the privilege of publishing some truly fantastic articles over the years. But as we fleshed out our theory of change, we realized that publishing articles is not really the point for us. Looking back on what we’ve done to date, the articles I’m proudest of are the ones that actually made a difference in the way that people in power approach their work – most notably the series on creative placemaking and research that began with 2012’s “Creative Placemaking Has an Outcomes Problem.” We want Createquity to be not just interesting but useful – in other words, we want to have an impact.

Createquity theory of change

(Click to enlarge.)

Ensuring a consistent and direct connection between our work and potential decisions on behalf of the sector requires us to engage in advocacy in a much more proactive fashion than we ever have before. And so, beginning this fall, that’s exactly what we’re going to do.

Being the Change

Take another look at the diagram above and you’ll see a key activity for Createquity that is brand new: “Identify and articulate strong cases for change.” What will these cases for change be, exactly? Well, the truth is that we’re going to need to invest a little time towards figuring that out – after all, we’d prefer not to come out with guns a-blazing on behalf of some cause that we later decide wasn’t such a great idea in retrospect. But we have a pretty clear sense of how we’re going to go about it, at least. Createquity’s ultimate goal is to help the arts ecosystem “work better for artists and audiences.” So, what does that look like in practice? What are the characteristics of a healthy arts ecosystem versus an unhealthy one? Put another way, if everything were perfect, how would that be different from how things are today? Our next step is to map out answers to these questions in enough detail that we can start to see the picture as a whole instead of in little bits and pieces. In identifying the gaps between our perfect world and present-day reality, we’ll start to get a sense of where the biggest priorities are, and which of them are not getting enough attention. Once we know which areas we want to focus on, we’ll devote ourselves to researching the state of the evidence in those areas, with particular attention to “what works”: what kinds of interventions and next steps might conceivably move the needle on the things that we think matter most?

This new approach will require a near-total restructuring of our editorial process. Right now, we spend a lot of time (somewhere between 15 and 20 hours a week) assembling links from widely-read sources for regular columns like Around the Horn and the Public Arts Funding Update. Our other major editorial focus, the Createquity Fellowship, has produced some great content (and people) over the past three and a half years, but invariably our team spends so much time editing and mentoring that we hardly have any left over for writing. Imagine if we spent all of that time instead reading all those research articles and publications that hardly anyone else is paying attention to, but arguably have more to teach us? And then synthesizing what we’ve learned so we can point out the areas that badly need more of our collective attention?

For all those reasons and more, we’ve decided to reinvent Createquity from the ground up to support our new vision. When you return to this address in the fall, things are going to look very different around here! As exciting as this is, as you can probably tell, it’s going to take a ton of work. So we’ve decided not to post any new content to Createquity this summer to enable us to focus our undivided attention on preparations for the relaunch. If you just can’t imagine not getting your Createquity fix, we’re taking this opportunity to stroll through our back catalogue and repost some of our favorites. For those of you who have been with us from the beginning, you might be surprised at how fresh some of those old chestnuts still are.

Finally, if you’re as psyched about this new direction as we are and would like to get involved, there are lots of ways to do so!

  • Spread the word: In its new incarnation, Createquity’s success is highly dependent on reaching the right people. If all goes according to plan, we’re going to be putting out some pretty important, compelling stuff in the fall and beyond – better than anything you’ve seen here before. By sharing what you read, you’ll be doing your colleagues a solid.
  • Get into the weeds with us: If you’re not sure you trust us to make the right decisions about which of the arts ecosystem’s problems are most important, or what the research tells us about what we could do to fix them, I don’t blame you. We’re just a few people, after all. That’s why, when Createquity relaunches, the considerations and logic behind all of our major editorial decisions will be accessible via the website – often before any actual cases for change are generated. And if you want to get in there and debate us on the details, I guarantee we’ll listen to you. This is your chance to help steer us in the right direction.
  • Help us pay for this thing: Createquity has been from day one an all-volunteer effort – we don’t even have a bank account. But this new website isn’t going to drop out of the sky for free, and we need to get our geographically dispersed editorial team together in one place for some in-person planning sessions, among other priorities. We’ve set up a crowdfunding campaign on Indiegogo and would love to have your support – and we have some cool/valuable perks to offer in return. Please consider donating today – it will go a long way towards making our new vision a reality!
  • Join the team: We love working with smart, awesome people! As part of the new plan, the Createquity Fellowship will be evolving into an explicit apprenticeship for joining the editorial team. We also expect to have ad hoc volunteer opportunities available. Stay tuned for further details as the coming months unfold.

Until soon!

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Interview with GiveWell

Earlier this spring, I had the pleasure of interviewing Elie Hassenfeld and Tim Telleen-Lawton from GiveWell. GiveWell is a charity rating agency that makes recommendations to donors based on the expected impact of their dollars, rather than more traditional metrics such as how much money is spent on administrative overhead or some squishy notion of reputation. I’ve taken a particular interest in GiveWell’s development since the beginning. Its story is truly remarkable: having started out right around the same time as Createquity, Elie and his GiveWell co-founder Holden Karnofsky adopted a policy of radical transparency, including the practice of recording and posting all of its board meetings for anyone to listen to. Most notably to me, despite a scandal early on that nearly caused the death of the organization, the people behind GiveWell managed not only to recover but become one of the most highly-respected “smart giving” resources anywhere, motivating more than $17 million in donations last year. (A very tiny portion of that $17 million came from my wife and me, FYI.)

Recently, Createquity waded back in to the smart-giving waters after an op-ed by bioethicist Peter Singer comparing donating to a museum to donating to a blindness charity understandably didn’t sit well with the museum community. Singer’s argument had its roots in an emerging area of applied philosophy called “effective altruism,” which argues that we have a moral imperative to do the most good we possibly can and use objective criteria to figure out what that good is. GiveWell has indicated its support for the effective altruist movement, so I thought it was high time to catch up with them to figure out where the arts fit in to all of this.

What was interesting was that the GiveWell folks seemingly came into this experience with a genuine desire to learn from my perspective as much as I was eager to learn from theirs. So at various points I found myself as suddenly the one answering questions, and in particular being challenged to articulate what funding opportunities might exist within the arts that self-aware philanthropists should be paying attention to.

This is a long but rewarding read. Tim and Elie were gracious enough to talk with me for over an hour, and the conversation will be of interest to anyone thinking seriously about philanthropy, advocacy, or research in the arts. That said, simply reproducing the whole thing verbatim here would make for by some margin the wordiest-ever post on Createquity (and that is really saying something), so rather than subject you to that, I’m sharing some of the highlights, condensing and moving things around a bit for the sake of readability.

On Where the Arts Fit in to GiveWell’s World

IDM: GiveWell hasn’t historically given a whole lot of attention to the arts, although I know the arts have been among a broader list of causes considered by the organization. I’m wondering if you can talk briefly about GiveWell’s current orientation to the arts, if any.

EH: There’s two main things I’d tell you about the arts and how they relate to the work that GiveWell is doing. For a long a time GiveWell was almost entirely focused on what we’ve termed evidence-backed, cost-effective, internationally-focused interventions. The arts really didn’t fit into the frame of GiveWell’s research process as it was originally constituted. More recently, as we’ve been working on this broader-scoped research that we call GiveWell Labs, I think it’s not as clear where the arts fit.

One of the things that we’ve always done at GiveWell is research the causes that we collectively, meaning our staff, are most interested in supporting. Early on when GiveWell just started, [it] was just Holden and Elie thinking about where we would give charity. I think now that’s broadened out to the staff we have. My impression is, and I’m certainly speaking for myself, but I think for other staff, that we tend to be more engaged in questions of giving to the causes that we’re currently researching, causes focused on international aid or US policy or scientific research, rather than the arts. And so to some extent those personal interests drive the research we’re doing.

One of the main reasons that we’ve done this is we’ve found that when we are trying to answer the question [of] where would we give our own funds, we tend to do better research then where we’re trying to answer something that I’d say is perhaps more of an intellectual question, which is where would I give if I were interested in something else? So that’s one part of the answer. The other thing I think is just important to ask, and it’s one of the questions that we’re asking for all the causes that we’re currently considering, is to what extent does this field have sufficient funding, versus not? I can’t say that I’m familiar enough with all of arts funding to know exactly how it stacks up, but [I have] sort of a superficial impression that there’s lots of ways in which people can get funding for the arts, whether through, let’s say, privately funded entertainment or government grants or otherwise, and there’s a lot of interest among philanthropists in providing that funding. And so one of the questions that we would have if we were to be involved in this area is what part of this field seems to be under-invested in. I think that question of where additional funding or current funding is not quite meeting the needs is one of the main ways that we’d think about this…[but] in many ways, because of the first point I made I don’t think we’re particularly well positioned to answer [it].

On Prioritizing Basic Versus Higher-Order Needs

IDM: Is it fair to say that GiveWell prioritizes serving the bottom of Maslow’s pyramid or hierarchy of needs? I’m wondering if those concepts of Maslow figure into any of your conversations or thinking about values, or if it’s more coming from an intuitive sense that poverty is central.

TTL: Yeah, I’d say we aren’t just focusing, and don’t want to just focus, on the bottom third or some tier of Maslow’s hierarchy. Traditionally, all the recommendations that we’ve made to date, as you point out, have been in global health and direct aid to people that have dire needs or needs that are different than the needs of people in developed countries.

When we were first deciding what causes we wanted to work on, we wanted to limit it to just causes that had really good evidence of effectiveness, and we found pretty quickly that the types of causes that had really good evidence were interventions in global health and developing countries and direct aid such as using bednets to prevent malaria deaths. There’s been over 20 randomized controlled trials that have connected the properties of bednets to reduce malaria and reduce malaria rates [and] deaths of, especially, people under 5 years old. There are very few interventions available to philanthropists out there that can claim that level of evidence. That was one of the big reasons for our historical focus on global health and direct aid interventions.

What we’ve been working to do recently is also open that up to a broader range of possible causes to look at, and that’s the project we’ve been calling GiveWell Labs, which still hasn’t made any recommendations yet. The causes we’re considering within GiveWell Labs include things that are not just focused in the same areas and includes things like trying to understand if there are ways that a philanthropist can improve scientific research or can change aspects of the political process in the US or elsewhere and a bunch of other causes as well.

We’re definitely very open to the idea that it’s possible to have more impact per dollar with things that are outside of developing health, or things that don’t just affect the bottom tier of Maslow’s hierarchy as you’re saying. But when there’s not as much academic literature on a specific intervention, it’s certainly a lot harder to understand that impact and it’s taking us a long time to try to understand.

IDM: Do you have a formal definition that you use, or even an informal definition, of what the good is that you guys are seeking to create in the world? Because I’m wondering when there are tradeoffs between those kinds of needs, how do you compare higher-level needs to lower-level needs in thinking about that hierarchy?

TTL: Yeah, I think this is a great question. It’s a hard one, and we have not formalized what values we are trying to maximize, if you will, or how to trade off the value of saving the life of someone that’s less than five years old versus maybe reducing the chance of mental development problems in another person, or improving the life of someone in a developed country, or maybe improving an institution like a government that will affect a whole lot of people.

EH: I think the main thing we’ve written that I would just point you to is this blog post [GiveWell co-founder] Holden [Karnofsky] wrote about a year ago called “Deep value judgments and worldview characteristics.” I care about self-actualization, so in some ways, I can easily imagine us being excited about things at the higher end of the hierarchy of needs, but I think it would really depend on the specifics of the circumstance.

One of the things that that blog post talks about is that we are not putting strong weights on achieving specific things in and of themselves – so some artistic endeavor as, like, some sort of achievement, as much as the broader impact that those types of activities could have on individual self-actualization. And so again, I think that one of the challenges for us in engaging with a type of philanthropy that we’re not particularly involved in now is understanding how the activities fund and would contribute to the types of goals that we would value.

On Effective Altruism and Strategic Cause Selection (aka Can You Work in the Arts and Still Be an Effective Altruist?)

IDM: I loved that you guys published a roundup of the GiveWell staff’s personal donation decisions this past December. It was super interesting. One thing I noticed was that there were a couple of staff who chose not to allocate all their charitable dollars to GiveWell-recommended charities. [But] some of the logic that we hear from a theoretical standpoint from effective altruists has to do with the idea of concentrating resources on high-impact opportunities rather than spreading the wealth around.

I’m wondering if you could talk a little bit about the balance between personal passions and feeding those through charitable activities on the one hand, and on the other hand, the moral imperative that a lot of people involved with this movement do lay out around the idea that you really should maximize the expected amount of good that you can do in your life.

TTL: The way I think about this broadly is that it’s important to me to have as big of an impact as possible and to approach that question sort of systematically. For me, not surprisingly, GiveWell is my primary resource for figuring out how to do that with the bulk of my funds – and I guess on top of that, it’s also how I’ve chosen to try to do that through my career – but then there [are] a bunch of reasons why maybe I should give in ways that aren’t just GiveWell top charities. I think you saw a bunch of these in the staff giving profile but, you know, it includes things like, well, if you have particular or special knowledge of a particular area then that might be a really good reason to expect that you might have a really good giving opportunity even if the broader community or GiveWell in particular hasn’t discovered it and developed the same sort of public degree of confidence that you have privately.

Additionally, for me, I think that certain types of heuristics in terms of one’s giving habits or patterns can be really useful even if they can’t quite be justified in this typical sort of straight-line effective altruist or consequentialist type perspective. Even if you can’t prove or you have no expectation that this marginal dollar if given by anyone would be best spent in this particular way, maybe if it’s related to something that you care a lot about or you use as a service yourself. Then that is an additional reason to value it, or to value the principle in general that people using that service might contribute to it to some extent.

IDM: In my professional life, I work with a lot of people who are very cause-centric, right? [Laughs] People care a lot about the arts. And so I’m wondering if you feel that there are principles from effective altruism, or from your general approach to giving, that could be applied even within a cause? As background, I’ll just tell you that when we were working on our effective altruism article for Createquity, we had a lot of debate internally about whether the idea of effective altruism in the arts is an oxymoron because of that cause-agnostic nature of effective altruism.

TTL: I don’t think it’s an oxymoron. I think that it’s totally possible to – if you can restrict the set of possibilities to some subset before, and then even within that subset, there [are] going to be causes that have more of the impact you’re looking for or less of the impact you’re looking for per dollar.

And so I absolutely don’t think it’s an oxymoron. I think that if I had some pot of money that was going to be dedicated towards the arts, then I would definitely be interested to know what are the opportunities to make changes out there, which of the opportunities seem to be most effective could actually be scaled up with more money, versus they might be really effective but giving them more money won’t allow them to do more of the same work, and other related questions.

EH: Yeah. I mean, I think there [are] a lot of the sort of questions and tools that we ask that I can easily imagine applying well to the arts. I think one of the main questions I’d have is, how does the arts funding ecosystem work, and what types of activities or outputs are for whatever reason not valued by the current funding infrastructure, but they appear to achieve the same types of goals, or the goals that one has as an arts funder or an artist?

Those are the types of things that I think come out of what I would characterize as the broad goals of an effective altruist, trying to use the part of your time or charitable funds that is being directed towards altruistic rather than perhaps personal goals as effectively as possible.

While I think people will reach different conclusions about which causes they are excited to work on, there is nothing that seems particularly problematic to me about someone saying, “the way in which I think that I can best contribute to the world is via the arts and, therefore, I’m going to try and maximize in some broad sense the impact that I have in that domain.”

On How to Think About Giving to the Arts

EH: Sorry, just to follow up actually I have a question for you if that’s okay. I mean, I think one of the questions that I would have when thinking about the arts is, what is the problem that additional funding could solve? I think that would help me because I think I have a relatively superficial understanding of what the problem might be, but I would characterize it in such a naïve way that I’m not sure it’s particularly helpful. So my naïve characterization might be something like, we could fund more art than we are currently funding, and the thing that would start to help me think this through more carefully would be, you know, what are we not funding that we should be, and how bad is that, and how much funding would it require? And I guess, then, ultimately, what could that mean to the development of a more complete, richer world arts community? Those are some of the things that I think I would want to ask when starting to think about this question.

IDM: Yeah, so two things, I guess, on that. The first is that I think the arts in some ways have struggled with this tendency of the broader philanthropic and nonprofit or social sector community to frame things in terms of problems, because what I think a lot of people in the arts might say is that we’re not here to solve a problem, we’re here to create possibility. We’re here to sort of extend the universe of what it is possible for humans to do in a way.

And in some ways, what we do has more in common with something like higher education or even science then it does with international development or aid or things like that. With that being said, I think that your question is still valid and important, because you focused it specifically around the idea of, well, what are the opportunities that we’re missing specifically with respect to funding?

I think that there are a lot of potential ways to answer that, but the reason why I asked about Maslow’s hierarchy of needs is because if you think about where the arts kind of fit into that, you know, it seems pretty clear to me that where they slot in is in that top need of self-actualization. The arts, creativity, and sort of related concepts – I don’t think anyone would argue that it’s the only form of self-actualization, but Maslow himself talks about that being one of the ways in which self-actualization manifests.

[Later on…]

EH: I do think there is this question about the arts, which I would be interested in hearing from people who are themselves very interested in providing charitable support there, answering the question of how those funds will make a difference. Because I guess I don’t want to, sort of let the arts off too easy relative to any other cause, and I’d be interested in this question of trying to determine what is not being funded that should be, and why. Because it strikes me that there are a lot of institutions and individuals who are interested in being part of the arts and funding the arts, and so there’s something of an obstacle to overcome in terms of convincing, me, let’s say, or other donors that additional funding is really what is most needed there.

IDM: So let me ask, do you think that the greater obstacle for you is more about the value of the arts in the abstract, compared to some of the other things that GiveWell focuses on? Or is it more about, as you kind of expressed just now, a lack of familiarity or confidence that, in GiveWell’s term, there is room for more funding in the arts?

EH: I think the issue is more a room for our funding issue, but I’ll try to explain what I mean by that and then let me know if this makes sense. Basically, I think a world – like, imagine you could just take all of the funding and time that goes into arts and totally take it away, and now it all goes to just, I don’t know, like poverty prevention programs.

I mean, that doesn’t strike me as the ideal balance for the world. You know, like absolutely no entertainment or literature or painting or music. I mean, that does not seem like a good world to live in and so, now, again, I’m just kind of giving you my own values and my impression, [but] I wouldn’t want to see a world where there was none of that. And so, therefore, to me the big question is, does this area have sufficient funding or insufficient funding to engage humanity as much as it potentially can or should, relative to the other needs that people have? That’s a very hard question to answer, but that’s the way that at least I personally look at it.

IDM: So, I think my readers might kill me if I didn’t at least attempt to hazard an answer to that question. I’ll preface this by saying there is no sort of canonical consensus around the answer to that question of, you know, what is it that philanthropic intervention in the arts is supposed to do? But a while back I articulated two ways of thinking about justifications for subsidy of the arts which are mine alone, but also do have antecedents and connections to other work that people have done.

I don’t think it’s realistic to imagine a world where there is literally no art or entertainment, or anything like that. Because it’s part of human expression and people find a way to make it happen, sometimes in very adverse conditions.

[But] if it were only up to the commercial marketplace to decide what art gets created and who gets to be an artist, there would be two things that would happen. In the long run, over time, on average, you would have art and cultural products that cater to a wide, broad-based audience, and so you’d lose some of the diversity of product. You would lose a lot of the most interesting kind of expressions of human creativity that you get, and there are plenty of examples of artists who are considered very famous or important today that basically survived to the present day entirely because of luck. If they survived because of luck, then how many other geniuses or brilliant contributions to the literature or to the set of human achievement were lost, because they were never created in the first place or because they were literally lost? That’s one kind of justification.

The other justification is – so, if we go back to this idea of self-actualization and sort of take it as a given that for at least some people, the path to that is through being an artist or through engaging with the arts in some really deep sustained way in order to have peak experiences, understand and really experience what it means to be alive in this very present and visceral way [such] that you could make a moral argument that everybody deserves to have that opportunity – people’s access to the arts is determined in many ways by the market. And there are many disparities in the level of access that is available to people in various ways, for example due to cuts in arts education funding, it’s much less common now for people from poor or minority communities to have access to arts education than was the case in the past. That’s not necessarily to say that they won’t come into contact with the arts outside of school, but it’s less likely that they will have these pathways into discovering themselves through this medium that is one way to kind of achieve one’s potential. That’s sort of the way that I’m currently thinking about it.

EH: Got it. Yeah, I mean so those two points, and I think maybe this is just something about definitions, but I think that this problem that people who are perhaps socioeconomically disadvantaged have less access to the arts, it’s something that I would almost categorize as part of the general cause of inequality in the rich world. That’s to just say that is broadly speaking how I mentally file this cause, and it would almost be outside of art specifically.

On the first point, you know, I think the place I start is I think the most recent Giving USA survey data says there was roughly $14 billion given to the arts in 2012 and $19 billion given to international aid. And so the question is, you know, we can all agree that here should be, or at least I’m willing to agree that there should be some level of non-market-based arts funding, and then the question is should it be equivalent, roughly speaking, to the amount going internationally or should it be more or should it be less. That seems like the major question to try to answer and it becomes difficult to answer what the appropriate level should be in some abstract sense.

And so that’s why the approach that we’ve taken, at least in the research we’re doing under the name GiveWell Labs, is trying to look for specific areas that where we’re seeing ideas or problems that don’t seem to be funded in the way that they should be, where you can almost see the full concept and idea behind a lack of funding in a particular area. And you can say, you know, this thing, it would cost X dollars and it appears to have insufficient funding, therefore, this is something that is worthy of serious consideration.

On Evaluating and Allocating Resources to Research

IDM: You guys have devoted quite a lot of resources over the last few years to reviewing research literature, often either in connection with GiveWell Labs or to develop a knowledgebase of evidence-backed [interventions] in international aid.

I’m curious if you could talk a little bit about how your process has evolved and changed since you first started. I’m especially interested in whether you feel like you’ve kind of hit upon the answer at this point to what an effective research process is in terms of just going into a completely new area and finding out as much information as you can about what the evidence base is for guiding philanthropic decisions, or if you feel like there is still inefficiencies and problems that you’re still trying to figure out.

EH: Yeah, so the short answer is we don’t have it all figured out yet and there’s a lot we’re still trying to figure out about the best research process. The longer answer is that I think that we have come to a reasonably good process for our traditional research on international aid organizations but even that, you know, is not particularly formulaic because it varies a lot based on the specifics of the intervention or the organization.

There’s two different ways that we’ll look at an intervention. One is the more traditional GiveWell focus, which is very specific interventions that have a great degree of rigorous evidence evaluating their effectiveness. Another type, I wouldn’t even call it an intervention as much as a charitable program area, you know, where one might say hey, we could have a big impact on the world if we were to increase labor mobility or have some sort of software patent reform. These are areas that I don’t think one could call the activity we undertake evidence review as much as trying to get a better sense of the area.

I think the first kind is one where we have a pretty standard process we go through of looking for research that evaluates the question we have. You know, do bednets work, how well do they work. Then we are trying to think of all the questions that we have of the ways that the program could fail and then looking for literature on those questions. So, in the case of bednets, just to play out this example, it would involve how often do people actually use the bednets and was it the case that they only used the nets in smaller, randomized trials but in a larger-scale government program they might not. Or what impact does insecticide resistance have. So then we just go about listing out the questions and trying to answer them.

IDM: So, there’s a piece of that that you’re glossing over a little bit that I’m really interested in. I have to imagine that in the area in which you’re looking, there are hundreds, maybe thousands of studies that are potentially relevant to the questions that you’re looking at. So what are the filters that you use to decide which studies you’re even going to take a look at in depth? And then do you sort of structure the process in such a way so that you are looking at some of them at a shallow level, some of them at a deeper level, and so forth?

EH: The biggest filter that is imposed in the health interventions is we give serious priority to randomized controlled trials, which are created explicitly to evaluate the causal relationship between the intervention and the outcome in a way that other study methodologies have greater challenges to overcome.

That said, we don’t only focus on randomized trials. There’s evidence in our reports that comes from other types of evaluations, other types of studies, but because other types of studies often are not created in such a way to answer causal questions as directly, as easily, and it’s really the causal question is the one that we have (meaning “what can we say generally about bednet effectiveness?” is a question of what the causal relationship is between distributing bed nets and cases of deaths from malaria), we tend to prioritize the randomized studies.

TTL: The other thing that can be really useful when there’s thousands of studies in a general area that you’re trying to understand is using other people’s literature, or in the case at least when there is a lot of randomized controlled trials, there’s some times meta-analyses that are done to try to combine the statistical power of many of these different studies.

Now, I don’t know if this actually applies in the arts. I don’t know how common randomized controlled trials are or whether there is …

IDM: They are not. And I’ll just tell you guys that it’s a little bit funny to hear you talk about how you have so many doubts about the room for more funding in the arts and the general impression that the arts are overfunded. I don’t think that you actually used those words, but the thing is that compared to, like, the NIH spending on research, the amount of resources that actually go into research on the arts is incredibly paltry.

It’s true that there are big, big sums of money spent on arts organizations and arts interventions, but a lot of times that goes to things like buildings, whereas only a tiny fraction of that amount might actually go into studying whether that building ever made a difference to anybody.

I think it’s interesting because, while I think there are lots of arguments that you can make about the relative proportion of funding in the arts versus other areas, I would imagine that the typical ratio of funding that is spent on research about the topic or evaluations of the topic compared to the amount that is actually spent on the program delivery is way, way, way lower in the arts than it is in a lot of other fields.

TTL: It sounds like you think there is a lot of, the research on arts effectiveness is very underfunded.

IDM: I think so, yeah, and it’s, and because of that, you know, by the kinds of standards that you guys are using, the overall quality of evidence in the arts is pretty poor. There’s just, there are a lot of things that haven’t been studied, or they have been studied but not with the kind of rigor that you guys are looking for in your process.

EH: You know, the reason that earlier I was trying to distinguish between sort of these evidence-backed interventions versus other types of research that we’re doing for GiveWell Labs is I really think the latter is the one that seems like an easier fit for the arts, and the one that makes more sense.

It’s almost like I think there needs to be something of a more qualitative case that some part of the arts is underfunded or there is some segment that should be funded to a greater extent than it already is. I wouldn’t expect that rigorous evaluations are the right fit for evaluating that type of activity because I’m not even sure that we could agree on what impact we’re trying to evaluate.

IDM: Right. That makes sense. Could [you] describe a little bit more what that more qualitative analysis looks like? And in particular, I’m curious, is that entirely or almost entirely a theoretical exercise, or are you drawing in research that maybe doesn’t reach the level of randomized controlled trials and is maybe a little bit less expensive or less ambitious as part of the background for information-gathering for that analysis?

EH: I think the best way to get an idea of how we do that research is, we have these web pages that we’ve published that we call GiveWell Labs investigations of new causes or also called shallow investigations. They’re our initial look into various different areas.

On each of these pages, we do our best to answer the questions that we have about that area. It’s kind of like the things that we want to know in 10 to 20 hours of investigation. The questions we’re trying to answer are, what is the problem, and as part of what is the problem, some sense of how big a problem this is in the scheme of things. I think we’ve taken a lot of different approaches to answering that question, but on some level, trying as much as we can to quantify the problem and when we can’t quantify anymore, trying to explain it more qualitatively.

So you’ll see that on these pages. The other question that we’re trying to answer is a question about tractability. We can define the problem, but what can be done, and how likely are these goals to be achieved? Again, these require, without a doubt, a large degree of qualitative judgment about what it is and is not feasible and what is and is not likely, and we largely form these conclusions through conversations with people in the field. In the issues that are listed on this page, the shallow investigations, maybe we have two or three conversations with people in the field. Then there are other investigations that are larger, we call them “medium investigations,” maybe there we’re talking to 25 or 30 people to just try and triangulate what we can understand about the area.

Then finally, we’re asking the question, how crowded is this area? Who else is working here? How much are they funding? What are they funding? Putting it all together, areas where the problem is large and seems particularly tractable, and there is relatively little philanthropic funding, or if there is funding, we can understand why it is focused on part A of the issue but not part B. Those are very attractive and areas that say seem less important, less tractable, but highly crowded are less attractive.

In practice, things don’t kind of fall out so nicely; like normally problems have some combination of these factors and ways that require some thinking about how exactly to prioritize them. Those are the types of questions we’re asking and the types of information that we’re trying to feed into our process as we think about what we’re doing. To me, you know, these are the questions that I would have about the arts. Are we talking about, I don’t know, large museums in major cities? It seems like there is a lot of funding that goes to the Met, and the Guggenheim or other museums like that. I’m sure I sound hopelessly naïve when talking about the arts but that’s one type of question.

IDM: You are stating fact, my friend.

EH: And then maybe on the other hand, you know, you say, well, really the issue is funding of arts access in poorer communities. You could do a little investigation of that area and try to determine, is this something that people focus on and to what extent do they? We would wonder, like, is it that there’s no funding from local government as part of schools? Is there just no interest from major donors? How much money really is there? What could we expect to happen if this were to go well?

Those are all the questions that we ask. One thing just to add, and I know I’ve gone on for a little while on this, but another broad type of activity we’re undertaking in this area is what we call the history of philanthropy project where we basically say we recognize that all of these areas that don’t have that same type of rigorous evidence so arts, but also policy, or even science – it’s harder to know what will work.

One of the things we’re trying to look at is just what has worked historically when philanthropy has been involved, and this is an area where there is very limited information available. The basic idea is to try and do something that is more like investigative reporting or journalistic reporting where you better understand the role philanthropy has played. And I could imagine that also being helpful in thinking about arts philanthropy, where you can look back and say you know, what did someone do 30 years ago and what impact does that seem to have had? It obviously can’t be quantified in the way that saving lives with bednets could be quantified, but it can perhaps offer a deeper picture of what role philanthropy plays in achieving some outcome.

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What’s Next for State-Designated Cultural Districts?

(Rebecca Chan is Director of Programs for Station North Arts & Entertainment, Inc., which manages a cultural district in Baltimore. She holds a Master’s of Science in Historic Preservation from the Graduate School of Design at the University of Pennsylvania and B.A. in Anthropology and Cultural Resource Management from the University of Illinois, Urbana-Champaign. -IDM)

It’s a crisp spring evening in Philadelphia’s East Passyunk neighborhood, and the avenue is coming alive. Market lights cast a warm glow over a restaurant patio where groups of people dine at picnic tables and a band does a quick sound check on stage. A little further down the block, shops and boutiques begin to close up for the evening, dimming their display window lights as a nearby gallery begins to fill with people out for an opening and a cafe prepares for open mic night. Pedestrians meander the sidewalks and through a small public square, chattering as they pass sandwich boards advertising restaurant week and lampposts plastered with flyers for upcoming film screenings and art shows.  A cyclist darts past a couple hailing a slow moving cab on the narrow street, and a group of twenty-somethings crack open the door of a crowded bar before stepping in.

Summer night on East Passyunk Ave. in Philadelphia. Photo credit: Christopher Woods (Flickr user: ChrisinPhilly5448)

A summer night on Philadelphia’s East Passyunk Ave. Photo credit: Christopher Woods

If Passyunk Avenue sounds like a place you would like to be on a Friday evening, you are in good company. Known for their bustling pedestrian-oriented streets, repurposed historic buildings, inviting public spaces, diverse cuisine and retail offerings and the presence of the arts, informal or “Naturally-Occurring Cultural Districts” (NOCD) such as East Passyunk are highly desired by those vying for an apartment in the hippest area in town, budding entrepreneurs seeking space for new venues, not to mention urban planners and policy makers around the country. The term “cultural district” has been used to refer to a variety of different types of urban neighborhood, and there are even some cultural districts in rural areas (note: for the purposes of this post, arts, entertainment, and cultural districts are collectively referred to as cultural districts). NOCDs evolve without any government intervention, which is the ideal scenario from an urban planning and economic development perspective—due to a fortuitous combination of circumstances, a particular neighborhood turns into a hotbed of cultural vitality without any effort or public spending. Indeed, studies have shown that the benefits of successful cultural districts go beyond their nightlife; these areas are often home to ethnically, educationally and economically heterogeneous populations, and also offer residents a variety of services, making them convenient and distinctive places to live and work.

Designating Cultural Districts

Many cultural districts seek to replicate the success of NOCDs through careful planning and policy, with varying degrees of success. Since the 1980s, cities across the country have tried to foster the development of these planned cultural districts in areas that share many characteristics of NOCD, but where cultural life remains somewhat isolated from the rest of a community, or is just beginning to emerge as a significant factor. The idea is that with a little extra help these neighborhoods could turn into the next cultural hotspot. The development of these districts typically begins with identification of a neighborhood’s potential, often through the nomination and application by local stakeholders. If selected, an official designation is awarded, sometimes accompanied by a suite of government incentives targeted specifically at artists and other cultural producers. Usually positioned as economic development strategies, these programs are designed to encourage artists, entrepreneurs, institutions and potential developers to build on and organize around existing arts- and culture-based assets. If successful, the initial effort to designate a district will eventually result in increased tourism, tax revenue and outside investment in the designated areas.

A concert in a vacant lot in the state-designated Station North Arts & Entertainment District in Baltimore. Photo credit: Theresa Keil, courtesy of Station North Arts & Entertainment, Inc.

A concert in a vacant lot in the state-designated Station North Arts & Entertainment District in Baltimore. Photo credit: Theresa Keil, courtesy of Station North Arts & Entertainment, Inc.

Mere designation of neighborhood as an officially recognized cultural district can by itself provide several benefits, including:

  • Credibility: Though the designation process and standards vary from state to state, designating a cultural district recognizes the arts and cultural resources as defining characteristics of an area. A state-level review process and subsequent designation also lends credibility to this recognition.
  • Catalyst and Organizing Principle: Cultural district designation at the state level can function as an organizing principle amongst artists, residents, business owners, and community development professionals to establish cooperation and consensus as a neighborhood undergoes redevelopment or creates a neighborhood vision plan.
  • Marketing Potential: Given the cachet of cultural districts, designation can be a powerful marketing tool for a neighborhood undergoing active development. Designation offers the opportunity to change or influence the narrative about a given neighborhood in a positive way, as well as influence future investment.
  • Leverage Funding: In addition to some states enabling designated cultural districts access to specific loan funds, state designated cultural districts are uniquely positioned to attract regional and even national funding that might not otherwise be possible in the absence of designation. As an added bonus, the inherently place-based nature of a cultural district draws funding toward defined geographies.
  • Formalizing Relationships: Designated cultural districts offer the opportunity to strengthen state and local partnerships, strengthening relationships between agencies at these levels. Depending on the district’s management model, designated cultural districts can also link artists and informal arts collectives and bolster working relationships across the nonprofit, private and public sectors.

There are currently 13 state-designated cultural district programs, with designation criteria and process varying by state. Statewide programs are usually administered by the program’s respective state arts council, or in some cases by a state Main Street program, another economic development strategy that leverages local assets and emphasizes local heritage and historic character in its approach. Management strategies vary at the local level as well: some are volunteer-led organizations, others are fused with a Main Street program or community development corporation, and a few are autonomous nonprofit entities.

Of the 13 states that have designated cultural districts, only five (Iowa, Louisiana, Maryland, New Mexico, and Rhode Island) offer tax incentives for activity occurring within districts. These tax incentives can take the form of income tax exemptions, property tax incentives, sales tax credits or exemptions, preservation tax credits, or admissions & amusement tax exemptions. Other benefits for state designated districts include technical assistance programs or small grants offered directly to organizations, artists or other entities that are either located in designated districts or partner with the districts’ managing body.

A street view of Central Avenue in Albuquerque's Arts & Cultural District. Photo credit: Kent Kanouse

A street view of Central Avenue in Albuquerque’s Arts & Cultural District. Photo credit: Kent Kanouse

Evaluating State-Designated Cultural District Programs

With the earliest state-designated cultural district programs now more than a decade old, it’s time to ask whether they are working effectively. To date, unfortunately, limited research evaluating state designated cultural districts exists. The National Assembly of State Arts Agencies (NASAA) produced a 2012 overview of state cultural district policy and programs. The topic of cultural districts, designated and not, has also been addressed by Americans for the Arts, and was the focus of a 2013 AFTA preconference.

Several states have attempted to shed some light on the broad impact of their cultural district programs. The Maryland State Arts Council provides a yearly report on the economic and fiscal impacts of its arts & entertainment districts. According to the analysis, which uses the IMPLAN software and input/output methodology, an estimated 5,144 jobs were supported by arts & entertainment districts along with $458.2 million in total state GDP and $38.3 million in total tax revenues.

The Texas Cultural Trust used interviews, case studies, census data and tax records from Texas cultural districts to measure economic impact based on five indicators: population, employment, property tax base, taxable sales, and annual operating budget of the cultural district. The document also attempts to forecast the three-year impact of Texas’s designated cultural districts based on increased marketing and promotion, and changes in property value/property tax base increase.

The Iowa Department of Revenue evaluated its three-tiered state historic preservation tax credit program, one part of which is specifically applicable for the renovation of historic properties in designated cultural and entertainment districts. Using tax credit recipient surveys and Iowa Department of Revenue tax data, the study compares the Iowa historic preservation tax credit to similar programs in other states and evaluates the economic impact. It claims that every dollar awarded in state tax credits leveraged an additional $3.77 in federal and private investment.

Overall, the reports present the presence of a designated cultural district as a benefit and driver of economic development. Data on the number of people taking advantage of the tax incentive programs and the economic impact of these programs is missing from these reports, however, and from other state-designated cultural district programs with yearly reporting mechanisms. While the Iowa report provides an analysis of its historic preservation tax credit, it does not provide an analysis of those used specifically in its cultural and entertainment districts. This may be because certain data is difficult to locate: cultural district income tax benefits for artists, for example, are filed with an individual’s yearly tax forms and are therefore not publicly accessible.

Challenges

If better data on cultural district tax incentives were available, there’s a good chance it would show that the incentives are of little consequence for the artists, organizations, and developers catalyzing revitalization in designated cultural districts. Several sources, including the NASAA policy overview, a Johns Hopkins University report, and anecdotal evidence from conversations with district managers, suggest that even where tax incentives are available, not many people or organizations take advantage of them.

This is likely a function of the limitations of state cultural district incentives. Specifically,

  • Stringent definitions of “qualifying artist” and “artistic worksignificantly reduce the number of individuals eligible for the incentives. This is particularly true of the income tax and sales tax incentives offered by several state programs. The definitions often require art to be made and sold within district boundaries, which does not reflect contemporary art-making, marketing, and sales practices. “Industry-specific work” such as graphic design or commercial photography does not qualify for most state incentive programs, which prevents many creative professionals from using the incentives.
  • Unclear guidelines for administration of incentives make it difficult for comptrollers or other government officials to determine eligibility for the incentives and to administer the programs consistently. In turn, this lack of an established protocol makes it difficult or impossible to use the credits, causing artists to seek alternatives.
  • Insignificant amounts of eligible income derived from the sale of art, tickets, or other work that does qualify for the incentives further limit the potential pool of applicants. In a time when many artists derive their primary income from other jobs, proceeds from the sale of work might not meet minimum thresholds for reporting, or might go unclaimed on an annual income tax form due to complicated documentation requirements.
  • A lack of promotion highlighting the availability of tax incentives leaves them relatively unknown to the public. Simply put, the existence of cultural district incentives is not widely advertised.

Given the hurdles for using districts’ incentives and the fact that most state programs do not offer incentives at all, it appears the success of cultural districts primarily stems from designation itself and the opportunities to market, program and organize that the designation provides. However, even the components of the programs that do not provide direct financial assistance still require funding and a management structure through which to administer the program. This brings us to another challenge for cultural districts: sustainability.

Regardless of management structure, dedicated staff time is vital to realizing the goals and reaping the benefits of a designated cultural district. Beyond small technical assistance grants, only two states offer operational support for the management of districts at the local level. The minimal funding available for this purpose seems disproportionate to the economic impact that cultural districts are expected to yield.

Perhaps the greatest challenge of cultural districts lies in maintaining affordability for the artists, entrepreneurs, and other longtime residents and businesses of designated districts, ostensibly those catalyzing the economic impact of the neighborhoods. While many NOCDs are celebrated success stories, some, like New York City’s SoHo or Miami’s Wynwood District are criticized for becoming victims of their own success, having experienced rapid commercialization, rising rents and displacement of the artists and longtime residents of the neighborhoods.Policies for state-designated cultural districts do little to consider the long-term sustainability of cultural districts whose “assets” are in large part reliant on individuals who are vulnerable to economic shifts and rising cost of living. Existing cultural district policy does not address issues of affordability, putting the creative clusters that rely on affordable live and workspace options at risk of displacement.

Conclusion

State-designated cultural districts benefit communities across the country, serving as a organizing principle, lending credibility to creative communities at the local level and boosting marketing potential in the neighborhoods in which they are initiated. With some programs now more than a decade old, however, it seems the policy and incentives programs accompanying some of these programs lag behind. While steps are being taken to increase advocacy efforts and expand the applicability and usefulness of these credits, including an expansion of geographic limitations for eligible artists in both Maryland and Rhode Island, progress remains slow. As arts organizations, researchers, and policymakers continue to explore cultural districts and make decisions about the creation of new districts, several key pieces of data need to be added to the equation.

First, data on cultural district tax incentives should be collected and compared to the expectations of policymakers at the time of their creation. Specifically, how many individuals are using the incentives, and how much is being claimed as a benefit of these programs? In addition to providing a clearer picture of the costs and benefits of designated districts, this data would enable more strategic decision-making for promotion of incentives.

Secondly, policymakers and researchers should adjust programs to better support and sustain artists, administrators and organizations. Where incentives for artists and creative professionals are offered, policymakers need to consider how art is marketed and eventually purchased. For example, the relatively recent emergence of Etsy, Kickstarter and other online platforms has changed the way artists and creative professionals seek visibility for their work, network, and sustain their business. Furthermore, increased connectivity between major urban areas makes it common practice to live in one city as a practicing artist and participate in exhibitions in another metropolitan area. Existing policy incentives do not align with these practices.

Finally, cultural district programs need to consider and promote affordability when it comes to residential and work space within districts. Whether at the policy level or local district level, administrators need to consider how to incentivize property owners to continue developing and maintaining safe and affordable studios, galleries, venues and living spaces. Another aspect to consider is adjusting policies and programs to incentivize renters to remain in cultural districts.

At their best, designated cultural districts provide a policy framework that leverages existing creative energy to foster the type of asset-based economic revitalization observed in NOCDs. However, as designated cultural district programs age and additional states create similar programs, it is vital that administrators delve more deeply into the research and evaluation of these programs to monitor the success of these districts, as well as some of their unintended consequences and areas for improvement.

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