Around the horn: public option edition

  • I promise most of this post will not be about the NEA, but here are some loose ends to tie up: Rocco Landesman’s Peoria comments have not surprisingly rubbed some people the wrong way, and as predicted, Arlene Goldbard has arrived with an essay about it (though she’s more generous to him than I expected). Meanwhile, the Chairman himself is taking a trip to Illinois to visit the theaters (two of them, as it turns out) of which he was unaware, and RealClearArts has a great backstory to share.
  • As for the larger issue of navigating the arts and their political pitfalls, Isaac Butler concurs with Barry Hessenius that it’s all about the gays, and Corwin Christie says that art needs to be for conservatives too.
  • Barry H follows up on his previous post with five myths about the nonprofit arts that continue to hamper advocacy discussions because of the extent to which they have tended to dominate the debate. I think Barry nails it with these; the myths are 1. Arts managers aren’t real business people (and the corollary that arts organizations aren’t real businesses); 2. The nonprofit arts should be funded by the private sector but not public funds; 3. The nonprofit arts don’t have public support or as wide an audience as other forms of entertainment; 4. Too much of nonprofit arts are either controversial or just plain worthless junk; and 5. The arts are a luxury, a “frill.” Some of these may not be myths so much as prejudices (#5 seems a matter of opinion, for example), but all of these attitudes are quite prevalent among the general public and really get in the way of advancing forward intelligent arts policy.
  • Americans for the Arts is giving it a shot, though, and is organizing a number of arts organizations in support of health care reform. You can view the statement here.
  • On to philanthropy. The Hewlett Foundation Performing Arts Program, where I interned last summer, has a new director in John McGuirk, who rejoins Hewlett after leading the arts program at the Irvine Foundation for three years. (h/t GIA blog)
  • Via Sean Stannard-Stockton, I found out about an awesome-looking new foundation called (wait for it) The Awesome Foundation for Arts and Sciences. Started by a bunch of techies in Boston, the Awesome Foundation delivers a $1000 grant each month to the most awesome idea submitted during the month prior (the inaugural grant is to a RISD professor who wants to construct a huge hammock in Boston Common). It’s pure, serendipitous, few-strings-attached risk capital, the kind that the arts need so desperately — and with a healthy dose of fun to boot. Sean uses the example to argue that we shouldn’t be so beholden to logic models and notions of effectiveness that we squash donors’ enthusiasm and unique passion for whatever gets them going. I happen to think that Awesome’s model is actually really smart microphilanthropy, though the trustees may not fully realize how smart it is. Sean may be right about the dangers of imposing a top-down model on donors, but the real potential lies in enabling the top and bottom to better inform each other, in my opinion.
  • Now, one reason why Awesome works is that they plan to give out a total of $12,000 a year. When you’re the 7th-largest foundation in the country, though, the rules are a bit different. The Leona M. and Harry B. Helmsley Charitable Trust, which made waves last year with the disclosure that a “mission statement” signed by the donor directed that virtually all of the trust’s money go to caring for dogs, is back in the news again. It seems that animal welfare groups are upset that the trustees, having been given the green light by the New York Attorney General’s office, distributed only $1 million of its initial $136 grant payout to dog welfare charities. For its part, the Helmsley Trust has issued a lengthy statement on its own website addressing the matter.
  • And back to policy for a moment, as Lucy Bernholz is proposing an intriguing Philanthropy Policy Project. If we had the power to change how philanthropy is or is not regulated, what would we change?
  • This is interesting: the Gates Foundation has sold off nearly all of its holdings in biotech, healthcare, and pharmaceutical companies in the most recent quarter.
  • Seems incoming first-years at Penn will be analyzing a painting instead of the traditional exercise of reading a novel over the summer.
  • Seth Godin thinks education is going to follow in the (economic) path of newspapers sometime soon. I can see his logic, though it seems to me that the scarcity of status and legitimacy is a factor in colleges’ favor that newspapers cannot take advantage of in the same way.
  • The audiences for classical music and jazz may be getting older, but everyone likes the Beatles. Meanwhile, music schools are finally starting to wake up and offer entrepreneurship training to students.
  • Addicted to the internet? There’s probably a good reason for that.
  • In a stunning demonstration of the power of crowds, a mega-collaboration of more than 30 lower-ranked teams has overtaken a supergroup comprised of the top two entrants in the in the Netflix Prize, one of which was already a hybrid of heavy hitters formed earlier in the competition. The group is called “The Ensemble” and is providing plenty of follow-along-at-home drama for this otherwise very nerdy event. As the author ofthe Wired article states,
    Say what you will about the future of Netflix’s business model as we shift from discs to downloads, but this contest is pure genius. Most brand-sponsored contests are little more than transparent marketing efforts. (”Upload videos of you enjoying our products to enter!”) The Netflix Prize, on the other hand, is science — a meritocracy in a sea of mediocrity.

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Fun with data: arts organizations and grants in New Haven

A little while back, I posted a summary of my end-of-semester arts policy brief for the New Haven region. As part of that effort, I downloaded some Foundation Center and IRS data and played with it a bit to see what was there. Here were some of the more interesting findings:

  • My quick-and-dirty search found 138 nonprofit organizations in New Haven and immediate surroundings (East Haven, West Haven, North Haven, Hamden, Woodbridge, and Bethany) with arts or arguably arts-related programming. This included several that we don’t normally think of as “arts organizations” but who are nevertheless important to the arts infrastructure (such as Yale University or the United Illuminating Company Foundation).
  • Of these 138 organizations, I found that just five accounted for 88.5% of the $5.6 million in private foundation arts grants recorded cumulatively by the Foundation Center to New Haven institutions in the years 2007 and 2008. (I took two years of data to lessen the risk of outliers skewing the numbers.) These five recipient organizations were the Yale Repertory Theater, the Long Wharf Theater, the New Haven Arts & Ideas Festival, the New Haven Symphony Orchestra, and Neighborhood Music School.
  • Most of the private foundation money for the arts in New Haven comes from out of state. In fact, only 46% of New Haven arts grants originate locally.

I also plotted a map of the organizations as follows (thanks to the free service

This is not high-intensity number-crunching, but it demonstrates how even a little bit of playing around with this stuff can help you see things you might not have seen before. I’m hoping to do a bit more of this kind of analysis going forward, so let me know if you have any requests.


Around the horn: NEA edition

Fox News’s misleading attacks on the NEA, coming as they did just prior to the confirmation of a new Chairman for the organization, seem to be raising a lot of hackles in the arts world. Is the concern justified? Barry Hessenius thinks so, and warns that things might get a lot worse as conservatives gear up for a new culture war. Barry also links to a report that I meant to cite in last week’s essay, but forgot: 51 Republican Congressmen signed a letter to NEA Acting Chair Patrice Walker Powell demanding that the money from the “offending” grants be returned. The Congressman who spearheaded the effort, Cliff Stearns (R-FL), learned about the grants from (surprise!) Fox News, who contacted his office seeking comment on their original story. (Stearns is known as a reliable NEA basher, according to the article.) Predictably, the letter reflects all of the worst distortions and errors in the article, claiming that “much of this taxpayer money is being used to fund art projects that many Americans find offensive” despite only being able to name the same three grants cited in the Fox article that collectively total 0.2% of the NEA’s stimulus money (and 13 millionths of one percent of the stimulus bill as a whole). But don’t worry, friends — as Stearns says, “our intent is not to censor artistic freedom.” Barry certainly agrees; here’s what he thinks the real intent is:

I still believe those who make these kinds of baseless attacks are not at all interested in the art the organizations it seeks to attack are, or are not, involved with. I don’t think it was any coincidence in the first Cultural Wars that almost brought down the NEA that the “issue” in most of the attacks was gay related – Mapplethorpe nudes, a gay film festival in Texas, the production of the play Angels Over America in North Carolina – because what the attacks were really about wasn’t taxpayer money or art or pornography, they were about fund raising for the evangelical wing of the Republican party – and nothing has ever been more successful in raising funds from that sector than the specter of gay rights. When the coffers of the right wing are running dry, the time-tested solution is to trot out the threat of gays having equal rights – and it has, for a long time, worked very well. Couple the gay rights issue with the accusation that taxpayer money is spent on anti-American pornography – and, well, the potential for a fund raising bonanza is just too tempting for the right wing to ignore. A new cultural war is an easy way to grab headlines, raise the level of visceral response, and rally their troops.

Unbelievably (or maybe all too believably), Fox News’s clownishness about the NEA doesn’t stop with their execrable July 30 article. Poking around as I am wont to do on political websites, I found this gem from News Corpse, an entire website dedicated to exposing Fox’s liberal relationship with the truth:

The National Endowment for the Arts??? Are they really mobilizing against town hall protesters? Were those artists who were crashing community centers and public halls where Tea Baggers were fighting to keep the insurance companies between you and your doctor?

The problem with this picture is that Carpenter’s article [linked to from the image] says nothing about the National Endowment for the Arts whose logo is prominently displayed in the upper-right corner. There is a passage that mentions the NEA, but she is referring to the National Education Association. Rather than ascertain the facts, Fox Nation saw an acronym that could just as well have belonged to a favorite foe of theirs, so they giddily inserted the wrong logo into their graphic.

(Emphasis mine.) The graphic is off the front page now, but in case you suspect News Corpse (an admittedly partisan website) just made that graphic up, I went to the Fox Nation website myself before they took it down and took the following screen cap for posterity:

…and detail:

Busted! Reminds me of Fox’s practice of “accidentally” labeling Republicans as Democrats as soon as they get caught in some sex scandal or other.

This is all, of course, very entertaining, but in the rest of the arts world life goes on:

  • New NEA chief Rocco Landesman has raised a few eyebrows with his suggestion that arts organizations in geographically remote areas shouldn’t receive any special consideration. The loudest voice in dissent (so far–I expect he’ll be joined soon by Arlene Goldbard) is that of Scott Walters, whose (ironically, NEA-funded) <100k Project has values diametrically opposed to those reflected in the new Chairman’s quote.
  • Meanwhile, you can hear the former Chairman (Dana Gioia) speak at a Sonoma County Community Foundation fundraiser here. And Jean Cook and Casey Rae-Hunter from the Future of Music Coalition offer a roadmap to engaging with the federal government beyond the NEA.
  • Man, and I thought orchestra heads were well-paid: the Museum of Modern Art’s director Glenn Lowry took home a cool $2.7 million in total compensation last year. Bloomberg has the dirt on other museum directors as well.
  • Are arts departments and schools at universities getting hit harder than other subject areas? Anecdotal evidence suggests so, according to this New York Times article. One institution, though, isn’t cutting back: Goucher College. The Baltimore-based institution is debuting a new Master of Arts in Cultural Sustainability program, focusing on the practice of sustaining cultural traditions in a changing world. (The syllabus for a class at Goucher this spring is available at CANu.)
  • Thankfully, some philanthropists are getting smart about their arts investments. Deutsche Bank is pumping $1.4 million in emergency funding to arts organizations that “have established strong roots within their communities, but lack access to deep-pocketed donors.” And The Kresge Foundation is giving community revitalization through the arts a try, piloting a $600,000, two-year program in Baltimore, Detroit, and St. Louis. (h/t Philanthropy News Digest) More of this please!
  • Speaking of smart philanthropy, remember our friends at GiveWell? They just announced an open application for a $250,000 grant (or group of grants) for economic empowerment in sub-Saharan Africa. The application materials and notes from the review process will be shared publicly unless expressly prohibited by the applicant, there’s a simple first-round application to filter out all but the strongest candidates, and they’re open to funding research if necessary. This is what disruptive innovation looks like. Meanwhile, the Chronicle of Philanthropy catches up with the group’s progress since their very public marketing flame-out a year and a half ago (subscription required).
  • Seth Godin sets up an interesting graph of “bandwidth vs. sync,” posits that commercially viable products either require high levels of attention or involve interaction with multiple people, and places art in the “scrap heap” of neither. (At least he acknowledged art as a means of communication.)
  • CultureFuture’s Guy Yedwab responds to my Gifts of the Muse Arts Policy Library write-up here and here, making some good points about the two supposedly unique intrinsic benefits of the arts that I identified myself as well as the internal logic of the monograph.
  • The NonProfit Times has been making a splash recently with their Power & Influence Top 50 feature about the movers and shakers in the field. But I found another product of theirs more compelling: their “Best NonProfit Organizations to Work For” list. It’s a brilliant idea from a business perspective: first of all, everyone loves lists, and everyone cares about work, so a lot of people will want to read this issue – it will probably be a big seller for them. Second, lots of organizations will want to be on that list for the reputation capital it will provide them, so they’ll get lots of entries. But the best idea is the reporting function. See, the magazine will survey all of your employees for free as part of your participation in the program – you can be one of the best nonprofits to work for without paying NPT a cent. But you don’t ever get to see what your employees actually said about working at your organization – unless you pay about $600-900 for the customized report. It sounds like a lot at first, but actually, it’s really not much at all considering how much it would cost to hire an outside consultant to perform the same survey for you. And even for a relatively small organization of 15 employees, having that information for internal planning would be really valuable – definitely worth 600 bucks. For a larger organization the price is a steal. All in all, a great example of a win-win business model.
  • Acclaimed Harvard economist Edward Glaeser is attempting to do a real cost-benefit analysis of high-speed rail, taking into account not just direct purchases but also externalities such as environmental impact, quality of life, etc. This is the direction economics needs to go in to stay relevant. The series is in multiple parts and only the first two are published so far. Meanwhile, Empire State professor Eric Zencey makes a compelling case for why we should just dump GDP as a concept altogether.
  • How Netflix gets those movies to your home so fast.

New Blogs!


Flux Theatre Ensemble
August (Gus) Schulenberg is the main writer for this blog on behalf of Flux Theatre Ensemble, a small company based in New York. Gus writes thoughtfully about a number of theater-related issues including some good arts policy stuff here and there. You can read his recent post about Arlene Goldbard’s talk at the NET Summit here.

Nonprofit Law Blog

“Wouldn’t it be awesome if there were a blog about the intersection between the nonprofit sector and the law?” I can only imagine you have asked yourself this question countless times before reading this post. Enter Gene Takagi’s Nonprofit Law Blog, at which you’ll find helpful legal information you won’t get anywhere else (well, except maybe below). Takagi and contributor Emily Chan have been especially helfpul in staying on top of the L3C saga as the hybrid legal form makes its journey through various state legislatures and the IRS.

Nonprofit Law Prof Blog
Not to be confused with the Nonprofit Law Blog, above, the Nonprofit Law Prof Blog is part of something called the Law Professors Blog Network. Whereas Gene Takagi is a practicing California attorney, the Nonprofit Law Prof Blog is written by a team of academics, several of whom hold adminstrative positions at their respective law schools. NLPB tends to focus more on news than analysis, and closely follows court decisions that have implications for the nonprofit world.

The Mission Paradox Blog
I’ve admired Adam Thurman’s posts at the Americans for the Arts blog for a while now. Turns out Adam has had his own blog at Mission Paradox all this time. The self-proclaimed “Best Arts Marketing Resource in the World” (you gonna take that sitting down, smArts&Culture?) offers intelligent commentary with a Seth-Godin-esque calm assurance.

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Landesman confirmed as NEA Chair

It’s official: Rocco Landesman will be the next Chairman of the National Endowment for the Arts. He was confirmed by voice vote by the Senate yesterday along with Jim Leach for the National Endowment for the Humanities and a host of other public officials.

Sitting down for an interview with the Times‘s Robin Pogrebin, Landesman lived up to his reputation as a firecracker. Witness this series of no-BS quotes from the man who will be the most prominent public face of arts policy in the near future if not beyond:

In American politics generally, he added: “The arts are a little bit of a target. The subtext is that it is elitist, left wing, maybe even a little gay.”

“I don’t know if there’s a theater in Peoria, but I would bet that it’s not as good as Steppenwolf or the Goodman,” he said, referring to two of Chicago’s most prominent theater companies. “There is going to be some push-back from me about democratizing arts grants to the point where you really have to answer some questions about artistic merit.”

Though he would not put a dollar figure on his own fiscal goals, he called the current appropriation of $155 million “pathetic” and “embarrassing.”

The new chairman said he already has a new slogan for his agency: “Art Works.” It’s “something muscular that says, ‘We matter.’ ” …. As for the former agency slogan, “A Great Nation Deserves Great Art,” he said, “We might as well just apologize right off the bat.”

We also learn that Landesman offered himself up for the job, rather than having been recruited for it, and that he seems to harbor few feelings of reverence for his immediate predecessors at the helm. He indicates that he would reinstate the individual artist awards “tomorrow” if it were up to him, though it would take an act of Congress to make that possible again.

I have to admit that I kind of love the idea of a tough-talking NEA Chair, and feel that it will be a helpful weapon in the culture wars that the right seems itching to start up again. The fact that Landesman both has artists’ priorities at heart and is willing to fight for them is very promising indeed. The one quote out of the above that worries me a bit is his attitude toward arts in regional areas — sometimes it’s not all about artistic merit, and there’s certainly something to be said for developing local talent rather than continually losing it all to New York or LA. (Isaac Butler has much more on this here.) On the other hand, Landesman does recognize the arts’ importance to downtown urban economies–presumably, whether they’re in Peoria or anywhere else–and says that he wants to make this focus a “signature” element of his tenure. Landesman promises to be an entertaining figure at the helm if nothing else, and hopefully will end up accomplishing far more than that.

In related news, Joan Shigekawa of the Rockefeller Foundation has been appointed Senior Deputy Chairman of the NEA. While at Rockefeller, Shigekawa served as Associate Director for Arts and Humanities and led forward the notable NYC Cultural Innovation Fund. During her tenure, Rockefeller funded Social Impact of the Arts Project’s Dynamics of Culture and Culture and Neighborhood Revitalization initiatives (the latter a collaboration with The Reinvestment Fund), which collectively represent some of the most sophisticated research ever undertaken on the arts and local communities.

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Fox News gets facts, math wrong in report about NEA grants

Over the past week, Fox News has pushed a storyline on the recent National Endowment for the Arts “stimulus” grants that has an eerily familiar tone:

The National Endowment for the Arts may be spending some of the money it received from the Recovery and Reinvestment Act to fund nude simulated-sex dances, Saturday night “pervert” revues and the airing of pornographic horror films at art houses in San Francisco.

Tellingly, however, the author of the Fox story, Joseph Abrams, can only actually identify three instances of supposedly objectionable programming, all of them in San Francisco: a $25,000 grant to counterPULSE, which has a “pansexual performance series” called Perverts Put Out; another $25,000 to the Symmetry Project, whose dance performance involves nudity; and $50,000 to Frameline, a gay and lesbian film festival and support organization that screened the “pornographic horror film” in question. A grand total of $100,000 of supposed licentiousness. Gee, it’s almost like someone said to someone, “go find some kinky gay stuff in San Francisco that we can use to make the NEA look bad.” Care to wager that’s exactly what happened?

As is rather par for the course for Fox, the network has trouble getting even the most basic facts in its story right. First, these programs are not actually funded with taxpayer dollars at all — the NEA grants were specifically earmarked for staff positions, not programming, a fact pointed out by everyone Abrams interviewed but presented in the article as if it’s some sort of unverified claim. As anyone who has actually applied for an NEA grant knows, there are these things called “contracts” that come along with them that make damn well sure you spend the money on what you said it would get spent on.

Second, as Media Matters points out here, all of these groups got funding from the NEA before, under the Bush administration. Where was the outrage then? Could it be that a change in President suddenly makes things look a little different?

Third, in most cases the offending programming is a tiny portion of these organizations’ activities. The Frameline example is perhaps the most egregious: the organization presents hundreds of films a year and distributes many others; it did not produce or fund in any way the film that’s getting the attention here, which by the way was made 34 years ago.

Even these gaffes, though, pale in comparison to Fox’s strained relationship with basic reading and math skills. Whoever sent out the talking points about this got–get this–the NEA’s portion of the stimulus money wrong! You can’t get much more basic than that. Fox claims that the NEA got $80 million of the ARRA funds, when in fact the agency only received $50 million. Fox is confused by the fact that 60% of that number, or $30 million, was for direct grants to arts organizations, with the other 40% going to state and regional arts agencies. Fox apparently thought that all $50 million was for the direct grants, and that the $30 million was the number going to the states and regions, making for a total of $80 million.

What’s hilarious is that this is not hard information to dig up. EVERY single news story about the NEA and the stimulus since the appropriation took place has included the $50 million number. This $80 million business came out of thin air. Go ahead, Google NEA stimulus $80 million and all you’ll find are this story and related reactions, mostly on right-wing blogs. Now Google NEA stimulus $50 million and you’ll see all the stories by real news outlets. What’s more, Fox links in its own article to the NEA’s list of direct grants, at the bottom of which is the correct total: $29,725,000.

More lack of reading comprehension on Fox’s part:

  • We have this exchange between Greta Van Susteren and Steve Moore from the WSJ last week on On the Record:
    VAN SUSTEREN: See, this is a good place to put taxpayer money. I’m going to write the check for how much?

    MOORE: That one was, you know, several hundred thousand dollars.

    VAN SUSTEREN: I mean, and we have people who can’t make mortgages.

    Umm, no: as mentioned above, none of the grants in question (in fact none of the direct grants at all) were for more than $50,000. And has it occurred to them that some of the people who can’t make their mortgages might, you know, have just lost their jobs working for arts organizations?

  • The article quotes Luis Cancel of the “San Francisco Arts Council.” There is no such organization; Cancel is director of cultural affairs for the San Francisco Arts Commission.

Fox’s laughably bad reporting is certainly hilarious, but unfortunately for artists themselves it’s not such a thigh-slapper. It’s easy to recognize this for what it is: it’s not about the arts at all, but merely an excuse to stoke the base’s anger in order to push other issues that corporate conservatives actually care about (like blocking health care reform) and give Greta and Glenn an opportunity to titter about porn with their guests while pretending to be outraged by sex. Nevertheless, the reality is that support for the NEA in Congress is fickle at best, and even many Democrats are all too easily swayed by the mere fear of having the arts blow up in their faces the way they did 15-20 years ago. Those controversies eventually led to a 40% cut in funding for the agency, from which it is just now only beginning to recover.

So if you care about the arts in your communities, and you don’t want your Congressperson to be distracted by naked fear tactics like these, please: call them up and thank them for supporting the arts. Just as with health care, we need them to know that there ARE people who care on the other side.


Around the horn: hello Providence edition

I’m writing from sunny Providence, RI, where I’ll be based for the rest of the summer while I work on some projects and continue the search for a permanent landing spot. In other housekeeping news, Createquity is getting ready to move permanently to, with a snazzy new design and blogging platform (WordPress). We’re working to make the transition as smooth as possible for subscribers and casual visitors alike, but if there’s anything you need to do I’ll be sure to let you know.

Meanwhile, here’s the roundup:

  • Via the indefatigable Kira Campo, this report from the new-to-me Art & Seek blog covering Dana Gioia’s Arts and Culture panel at the Aspen Ideas Festival is worth a read.
  • A Createquity reader tipped me off to an interesting article about Portland’s arts scene. Seems that living in a lower-cost environment has its downside: namely that the artists don’t make any money either.

    Cortright, who’s been one of the city’s most ardent economic champions, says the issue is partly existential: not everyone is guaranteed a way of life. On a practical level, the increase in arts professionals has raised arts activity but hasn’t necessarily elevated the standard of living. It’s made the search for dollars and attention more competitive.

    “We love this city and its quirkiness,” Cortright says. “But the local market is not large enough or challenging enough, so you have to expand. You have to work outside Portland, maybe even outside the United States, if you want to grow or show that you are world class.”

    A lot to think about there in terms of the way artists’ winner-take-all markets interact with geography and location.

  • Add New Jersey to the list of states facing drastically reduced funding from their arts councils, stimulus money or no. At last check, Pennsylvania and Michigan were still hanging in the balance.
  • Corwin Christie, whose blogging at Technology in the Arts I am really coming to admire, has a wonderfully lucid post up about the consequences of not bringing the arts into the larger conversation.
  • Peter Dobrin at the Philadelphia Inquirer says that the blind audition process for orchestra spots might not be so blind after all, and posits that African-American players suffer as a result.
  • I found this interesting in light of recent discussions of arts-related instrumental benefits: a new study out of the UK shows the so-called “Mozart effect” manifesting itself primarily in a certain population: right-handed non-musicians. According to the researchers, musicians already process spatial exercises differently from non-musicians, and are therefore immune to the effect (presumably because they’ve already reaped the benefits from it). Of course, as Judith H. Dobrzynski explores, not all arts research is good research. Clyde Fitch Report has more on that story here.
  • Starbucks is experimenting with anti-branding: “stealth” coffee shops that look and feel like homegrown operations. This is either incredibly evil or absolute genius, depending on your perspective. Or possibly both. In any case, more evidence that local, authentic differentiation/style/identity is good business. (h/t Selena Juneau-Vogel)
  • Last spring, I wrote:

    I’ve…been taking a course called Media Economics and Financing Journalism, taught by a member of the family that used to own the Boston Globe. As the semester has progressed, I’ve slowly become convinced that newspapers are in almost the exact same boat as symphony orchestras. [...] If we can agree that journalism does provide an indispensable public good, in the form of in-depth, factual information not available anywhere else, I can’t help but see it gravitating toward a contributed income model in the coming years.

    A little over a year later, sure enough, one of the two parties bidding to buy the Boston Globe is talking about “a ‘civic approach’ that would involve a nonprofit foundation to help fund and run the news operation.” The other, incidentally, is the guy who taught that course.

  • This week’s BLOGGER ON FIRE award goes to Sean Stannard-Stockton for a double series of thought-provoking posts: the first on the role that intuition should and does play in philanthropy (here and here), and the second on the distinction between high-performance and high-impact nonprofits (here and here). In the middle, he even found time to spread this awesome video of Bobby McFerrin getting a crowd to sing in unison pentatonic scale without any verbal instructions.
  • A group on facebook claims that a library-themed Ben & Jerry’s ice cream flavor would be “tasty awesome.”
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Value generators

Following up on my economics and value posts from last month (here and here), I’ve been trying to do a little research on how economists presently think about the relationship between value and economic growth. It’s a difficult proposition, frankly, because the concepts involved are so slippery. Most of the normal measures of value generation (real income, standard of living, etc.) operate under the assumption that more equals better: the more goods and services that are available to buy (and are bought), the better off everyone is. While true to an extent, this approach ignores obvious side effects that often go along with “more” such as pollution, crime, urban crowding, resource depletion, and so forth. But that’s not the only problem: the other issue is that more of A is not the same as more of B. In other words, are we better off if the market for wireless internet access is developed or the market for hot dogs is developed? If they result in an equal total value of financial transactions, the numbers say no….but I think we’d all agree that internet access is more useful. And not just in the grand societal sense of spreading democracy and all that, but in an economic sense too: broadening wireless access does much more to making further increases in goods and services possible in the future than does adding a hot dog a day to everyone’s diet.

The economic issues that I’ve been wrestling with for the past two years center around the concept of externalities. An externality is a cost or benefit imposed upon or granted to anyone who is not party to a direct transaction. Although we usually tend associate them with negative effects, most commonly environmental impacts like pollution and global warming, important positive externalities are possible as well, like network effects associated with the widespread adoption of common standards, or the positive spllover that a new art gallery opening has on the value of the house across the street. In the hot dog vs. wireless example above, we have positive externalities such as network effects and knowledge spillover on the wireless side, vs. negative externalities of an increase in obesity, decline in overall health, and the environmental consequences of meeting the demand for meat products on the hot dog side. Since externalities by definition do not affect the transaction itself, economists have a nasty habit of ignoring them (the issue is first mentioned in chapter 17 of my microeconomics textbook, and is tellingly the only topic without an article yet in right-leaning economist Russell Roberts’s Ten Key Ideas: Opening the Door to the Economic Way of Thinking”). Yet in any kind of public policy work, whether in government, nonprofit, or social enterprise contexts, thinking about the whole is essential — and that means thinking seriously about externalities.

The Holy Grail of economic thinking is a way to have externalities accurately reflected in prices, much the same way that investors (try to) price out risk in financial transactions. Numerous initiatives in this direction, from investment heuristics like SROI, expected return, and Best Available Charitable Option to broad-based macroeconomic indices like the Genuine Progress Indicator, have tried to integrate several different concepts of value into one overarching social metric. By choosing to deal with life in all of its complexities, however, they forfeit the easy modeling that’s possible in traditional economics’ vacuum-packed artificial world, making the pursuit of exactitude exceedingly difficult. Not to mention that these tools can suffer from conceptual difficulties of their own. I plan to explore them more carefully in the coming weeks, but my initial sense is that they typically narrow the focus to only a few externalities, deal with them in a manner that greatly oversimplifies the way they actually work, and treat them as isolated linear effects rather than complex functions that interact with and are affected by each other. It’s not to say that they aren’t steps in the right direction, but the destination appears to be a long way off yet.

For now, though, we can at least think about what kinds of economic activity ought to be relevant to those concerned about maximizing positive externalities and minimizing relevant ones. Rather than trying to develop a single unifying theory of value, which is, as President Obama might say, above my pay grade for the moment, I want to focus the discussion initially on financial transactions alone. In doing so, I hope to preserve at least some hope of being able to price externalities in to existing models, figuring that a business case for some of these things could made more easily that way.

We can do this via a simple method: 1) pinpoint desirable economic outcomes; 2) step back and say “how is this made possible?”; 3) repeat. This is the same method used for developing theories of change at the philanthropic level, and can be incredibly effective for mapping out short-term strategies for long-term goals. Working this out, even at a very high level, will take much more than one post. But here is the first step in case you want to follow along at home. Since I’ve chosen to limit things to the language that economists already use, there’s exactly one desirable economic outcome: more transactions for more goods and services. Thus the first question is: what makes such a thing possible?

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Further thoughts about Gifts of the Muse

I’ve been mulling over my Gifts of the Muse write-up for the past few days, and have come up with a few more reflections on the implications that the document holds for advocacy and policymaking.

  • I hinted at this one at the end of my summary, but here it is fleshed out a bit more: the fact that the arts’ instrumental benefits can be produced by other interventions is not, in and of itself, all that interesting or important. What really matters is what combinations of interventions produce the best results. No one would suggest that the arts are the only way to create jobs in a community, for example; but on the other hand it seems likely that a community that engages economic development initatives across several industries and populations will tend to have greater success than a community that focuses on only one. I mean, after all, one of the lessons of Gifts of the Muse is that people are different; if that’s the case, won’t having more choices and more possibilities end up serving more people more effectively?
  • Just as individuals are not the same, communities are pretty different too. That would seem to suggest that arts-focused development and community-building strategies might be better suited to some places than others. I don’t think this necessarily has to do with the size of the region or whether it’s urban or rural; it’s more about building on community strengths–and if the arts don’t happen to be one of those, maybe it doesn’t make sense to push it too hard. (I’m not sure how much I really believe this though.)
  • Finally, one of the most profound lessons I drew from the report is that the arts, in some ways, might really be kind of a red herring in this discussion. Csikszentmihalyi’s research on highly creative people suggests that the distinctive pleasure associated with the arts (identified by the authors as the primary intrinsic benefit) comes from the joy of creative work and expression, regardless of the form or medium in which that creativity appears. Frankly, our conception of “the arts” is rather artificial as it is, with the requisite question marks on the borders (does literature count? folk traditions? history museums?) and a pervasive uneasiness around commercial art forms like popular music and film, television, graphic design, etc. What should it matter if one feels truly alive while composing while another does so through nuclear physics or conducting market research or cooking? If the goal is to get the arts to be taken seriously in broader policy discussions, it seems to me that the creativity connection is crucial. And not just in the sense of drawing the line between the arts and creativity: I also mean advocating for supporting creativity itself, with the understanding that creativity includes, but is not limited to, the arts. This is really the premise for the creative economy movement worldwide. It seeks to take nonprofit arts organizations out of their shell as a distinct entity and instead showcase them in full collaboration and interaction with an entire extended family of related pursuits. It attempts to draw the connection between creative capacity and the ongoing advancement of the human race. To me, that argument is a winner.

Around the horn: bye bye New Haven edition

  • Long overdue, but Atul Gawande’s incredible article on the economics of health-care costs and the dark side of competition offers many lessons for the current debate in Congress and, indeed, for policy in general.
  • The artists = crazy people thing just won’t go away. (Though, as Holden Caulfield might say, maybe it’s everyone else that’s crazy?)
  • Could more newspapers soon be moving to a nonprofit model? The Nonprofit Law Prof Blog is all over the story. Apparently the New York Times is giving it serious thought, and Senator Ben Cardin has introduced a bill that would make it easier for print publications to convert to nonprofit entities.
  • Could senior discounts be on the way out? Daniel Hamermesh (a senior himself) suggests the justifications for such discounts are largely spurious and predicts they’ll start disappearing once the recession’s over.
  • Venture capital for musicians? It’s here.
  • In case you’re wondering how the NEA got to be where it is, this Times article should get you up to speed.
  • Thinking about saving some cash by laying off staff and replacing them with unpaid interns? It might just get you into a bit of trouble with the law. In fact, according to, most unpaid internships “are probably not legal.”
  • Jim Undercofler, former chief of the Philadelphia Orchestra and board President of the American Music Center (where I used to work) has taken a professorship in Drexel University’s arts administration program.
  • The Cultural Data Project is one of the case studies included in this new Hewlett report on breakthroughs in shared measurement. (pdf)
  • Sean Stannard-Stockton vividly describes the growing potential of social media in Knowledge Sharing and Ambient Intimacy.
  • So umm, this seems kind of significant: Hamas Shifts from Rockets to Culture War (h/t Culturebot)
  • RIP Merce Cunningham.
  • Want your community to be included in the next Americans for the Arts economic impact study? Here’s the info you need.
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