The third-party consulting firm was hired by Mayor Ford at a cost of $3M to review services and recommend budget reductions. Those who have scanned the report have reasonable cause for alarm as KPMG systematically explores cutting pretty well anything that isn’t deemed mandatory or essential and therefore within the power of the city to cut. The report then rates each item in terms of its savings potential, risk and possible barriers. Seven service areas were reviewed including Infrastructure and Public Works, Economic Development and Culture, Parks and Environment, Community Development and Recreation, Licensing and Standards, Governance and Management, Planning and Growth Management and Executive Committee.

Service areas were measured against a handpicked control group of cities and other governments to determine whether Toronto services were being delivered below, at or above standard. Any service that was deemed to be “above standard” as compared to the control group was marked as “opportunity for savings”. Suggestions included things like reducing recycling targets, eliminating water fluoridation, further privatizing garbage collection and “reducing the number of subsidized child care spaces over time to eliminate 100%”. KPMG also proposed eliminating the Community Partnership and Investment Program (CPIP), which contains the budget for the Toronto Arts Council, as well as other cultural and social services with a total budget of $47.4M.

The report for the Economic Development and Culture Committee is available here (see pages 11-13 for the discussion on Cultural Services), with some additional background at this link. A few reactions, if you’ll permit me:

1. WTF?!
2. Although I’m sure it’s not the first time it’s happened, this is the first time I’ve heard of pressure on arts budgets (to say nothing of elimination talk!) coming from third-party professional consulting firms rather than originating from within government.
3. While KPMG, to its credit, recognized that such cuts would “impact the cultural vitality of Toronto,” it’s disappointing to see that the firm did not see culture as part of the solution to the city’s economic circumstances. The fact that cultural services were situated within the economic development agency appeared to be lost on them. (Not that it would have made a difference; two pages earlier, the firm incomprehensibly recommended considering cuts to business services even though “these steps will impact the Toronto economy.”)
4. The entire study appears to rest on a questionable assumption: that if a city provides services at a high level relative to other cities, that city should automatically consider reducing those services. What if that high level of services is an integral part of the city’s competitive advantage? Should Orlando cut back spending on airport infrastructure because Buffalo is spending less? Even so, in the case of the arts, the report noted that Toronto’s spending was less per capita than other cities – and yet recommended cutting them anyway.

I’m glad that we have infrastructure and programs in place as a field to educate policymakers about the importance of arts and culture in their communities. It seems that we may have some work to do on consulting firms as well.

[UPDATE: Russell Willis Taylor writes in with a couple of additional tidbits: first, that KMPG’s advice here seems in tension with its corporate sponsorship strategy in DC; and second, that KPMG got hired to design a library grant funding program for the South African Department of Arts and Culture. Included in the latter report is a recommendation “that the revenue-generating ability of the responsible sphere of government, provincial in this case, is further developed…in the absence thereof public libraries, especially those in previously disadvantaged communities, cannot thrive without national government funding in the foreseeable future.” You don’t say?]

• So this is what I’m up against in the philanthropy job market? How very, very sad. It’s hard to tell whether the writer of the column (who prefers to remain anonymous) is just feeling sour grapes or actually speaking truth to power, but I’m inclined to believe the latter. If true, it highlights the need for parties that work with multiple foundations (such as philanthropic advisors, community foundations, and executive search firms) to take more of a leadership role on behalf of the field. The 2008 SOM Philanthropy Conference, which I’m spending much of my time right now planning, will seek to address these issues in depth. (h/t Tactical Philanthropy)
• Around the same time as discovering the link above, I saw this post on Philanthromedia entitled “Overcoming Board Inertia” as well as a Philanthropy News Digest piece reporting that “a significant number of CEOs at midsize nonprofits are dissatisfied with the performance of their boards.” My rant last week defending the nonprofit sector notwithstanding, board dysfunction is one of the huge factors holding nonprofits back from their true potential. This difficulty is not surprising given that most nonprofits tend to identify extremely busy people with their own projects and priorities as prime board candidates. I would be curious to find out if any countries have explored non-board-based governance schemes for their equivalent of nonprofit organizations.
• Fractured Atlas wants to pick your brain. I find this project interesting, not so much for the idea itself (several arts service orgs are already developing this type of content), but for the way in which FA has gone about pursuing it. Specifically, I love the fact that they’ve issued a Request for Proposals (RFP) for the content. Most nonprofits I know of would have simply chosen a content provider based on reputation alone, or at the most invited a small group of organizations with established track records to submit bids privately. By opening up the process to the public, Fractured Atlas casts its net a lot wider, with potentially much more to show for it. (I also like the idea of giving providers a cut of the profits for advanced courses–way to align incentives there!) The compensation levels, interestingly, are significantly below what a typical consulting firm would charge to create an interactive course, but significant enough that a freelancer or interested amateur would no doubt consider it. I expect we’ll see a lot more of this kind of “semi-pro” pricing/compensation structure in content creation fields in the future. More about that later this week.