Capitol Hill, Washington DC – by Flickr user KP Tripathi, Creative Commons license

Several policy shifts are underway in Washington that may have significant effects on arts nonprofits and funders. First, the U.S. House of Representatives passed the America Gives More Act, which would 1) make permanent three expired tax deductions – including the important IRA Charitable Rollover provision that allows seniors to donate up to $100k of their retirement disbursements without paying taxes on it – while 2) allowing individuals to credit deductions made before April 15 of one year to the previous tax year, avoiding the Christmas scramble for donations before patrons know their tax situation, and 3) simplifying the excise tax rate paid by foundations to 1% (it can currently rise to 2% in some circumstances). The future of the bill is uncertain: Obama Administration and many Congressional Democrats oppose it because it does not contain any revenue provisions to offset the reductions in tax income. The Senate is not expected to consider the bill before the fall.

Second, the IRS has released form 1023-EZ, a dramatically streamlined application for 501(c)(3) status that will allow applicants to become tax exempt simply by filling out a 3-page form (vs 26), paying $400 (vs $850), and swearing under penalty of perjury that they have less than $50k in annual income and less than $250k in assets. Some 70% of applicants are expected to be eligible for the EZ path, and the IRS won’t even review these applications as a matter of course. Some fear this may open the door to abuse, but aspiring nonprofits eying the 60,000-organization line to be reviewed may feel differently.

Finally, in pre-legislative news, the House Appropriations Committee approved level budgets of $146m for the NEA and NEH, restoring $8m cuts made to each in subcommittee, while the artist resale royalty rights bill is gaining momentum, attracting new Congressional co-sponsors in advance of a potential vote this year or next.

More money, more problems at the DIA: As the City of Detroit’s much-anticipated bankruptcy trial looms – it begins on August 16 – two contending valuations of DIA’s art have emerged. Artvest Partners, hired by the city, placed the total value of the 60k-piece collection at $2.8-4.6B; a creditor’s expert, Victor Weiner Associates, at $8.5B. But that’s in theory: Artvest estimated that the works would fetch only $850m to $1.8B in the current market, accounting for a potential glut of masterpieces if the museum were to deaccession en masse. (Victor Weiner acknowledged the actual haul would be lower but did not venture to say by how much.) Meanwhile, donations continue to flow toward the “Grand Bargain” that could spin DIA off as a separate non-profit, if the courts allow it, with a group of business leaders, companies, and corporate foundations pledging $26.8m toward the $100m DIA must raise. Oh, and there is art happening, too: DIA began installing reproductions of its masterpieces in Michigan communities for the fifth year of its Inside/Out project.

The fate of the Corcoran’s collection hangs in the balance: Back in February, the long-troubled Corcoran Gallery of Art and College of Art and Design announced they would be taken over by the National Gallery of Art and George Washington University. The Corcoran’s 17,000-piece collection would be split up, with the bulk going to the National Gallery and the remainder distributed to museums around the country. Now, a group of advocates — including museum donors and alumni of the college — has filed suit to stop the deal, arguing longtime board mismanagement is to blame for the current state of affairs. At issue is whether the Corcoran’s lawyers can show that the proposed arrangement is the “next best” option to maintain the original intent of the institution. While alternative solutions are bandied about and exhaustive arguments laid out on both sides, the Corcoran’s fate should be decided by the end of August.

Another shakeup at the William Penn Foundation: Philadelphia’s only remaining major arts funder is showing alarming signs of instability. Managing Director Peter Degnan, the foundation’s second leader in less than two years, has resigned after less than six months on the job, citing “personal reasons.” He succeeded Jeremy Nowak, whose tenure ended in 2012. Chief Philanthropy Officer Laura Sparks will take over as leader of the foundation with the new title of executive director. While she will likely have broader authority and responsibility than her predecessor, she is not expected to make major changes in the grantmaker’s strategic areas of focus.

Looking for affordable artist housing? Take a number: In a jarring indication of how bad New York’s affordable housing crisis is, a recent lottery for housing slots in one renovated Harlem building generated a whopping 53,000 applications from artists. The building, El Barrio’s Artspace PS 109, is a former public school that was sold to Artplace two years ago. Foundations, politicians, and local departments of housing and cultural affairs contributed $52.2 million in renovations to create 89 housing units — begging the question of how big an investment would be needed to make a dent in artists’ demand for affordable living spaces.

MUSICAL CHAIRS/COOL JOBS

• Andy Horwitz is leaving New York City to launch a new consultancy called Applied Creativity; though he will continue writing in other venues, Culturebot will go on sabbatical indefinitely from September transition to new leadership.
• Reuben Roqueñi will join Hewlett as a program officer in Performing Arts; he is currently program director at the Native Arts and Culture Foundation in Washington State.
• Laura Packer has become ED of the Howard Gilman Foundation in NYC. She had been Arts Program Director at the Geraldine R. Dodge Foundation in New Jersey.
• The Nathan Cummings Foundation has tapped former Trustee Ernest Tollerson as interim CEO while a search gets underway.
• Longtime National Arts Strategies VP Gail Crider will take over as President and CEO from Russell Taylor at the start of the year.

NEW RESEARCH OF NOTE

• The California Film Commission reports that film and TV projects worth $2 billion relocated their production away from California over the last four years, often when other states offered better tax breaks.
• Another bleak snapshot of the writer’s life: median author income in the UK fell by almost a third over the last decade, to $18.5k per year.
• Meanwhile, on stage: Last year, London’s 241 theatres served 22m patrons, earned $1B, and employed 3,000 performers at a time. This was the first quantitative report of this kind, so the historical trend is unclear.
• More than a third of 18-34-year-old tourists to the UK identified culture as a major draw in a new survey; historical buildings and arts institutions got special mention.

In the recently released federal budget for fiscal year 2015, President Obama proposes a meager increase in allocations for the arts compared to last year. Federally-backed museums will enjoy the bulk of that increase, while funding for NEA and NEH is essentially unchanged after factoring in inflation. Speaking of those agencies, President Obama also announced his plan to appoint William “Bro” Adams as head of the National Endowment for the Humanities. Adams is currently President of Colby College; he is also a member of the Board of Directors of the Maine Film Center and the Maine Public Broadcasting Corporation.

Democratic Congressmen have introduced a revised version of a droit de suite bill that would require payment of royalties to the creators of visual art when it is resold at public auction. The bill, American Royalties Too (ART), is less generous than its stalled predecessor – reducing the rate from 7% to 5% and adding an overall cap of $35,000 – but may gain momentum from a December report from the Copyright Office supporting resale royalties. California’s royalties bill, recently declared unconstitutional in federal court, may offer useful lessons for how not to implement the policy.

STATE AND LOCAL

Tom Finkelpearl, head of the Queens Museum and former director of NYC’s Percent for Art program, will be the city’s next cultural-affairs commissioner. Among his innovations at Queens, Finkelpearl hired a community organizer to build ties between the museum and the borough. Mayor de Blasio used the announcement to wax lyrical about the importance of access and the power of the arts to strengthen neighborhoods; we’ll get a sense of how this translates into arts policy when his capital budget is released in a few weeks.

The city of Atlanta has proposed an ordinance that would make it much more difficult to display public art on private property- or “areas of private property which are visible from the public right of way or other public spaces.”

And how’s this for a nonprofit/for-profit smackdown? Maryland’s General Assembly, eager to keep production of Netflix’s political drama House of Cards in the state, tried to swipe $2.5 million from the state’s arts fund to secure additional tax credits for filming. Lawmakers argued the decision came down to simple economics, claiming the show “contributed $250 million to the economy and 6,000 jobs during the past two seasons.” (Too bad the research on the economic impact of tax incentives for film and TV suggests those benefits are less attractive than they seem.) In the end, the legislators held firm – or maybe they just didn’t have their act together – and now, we’re all waiting to see whether a change of venue is in the cards for House of Cards.

(Update: According to an email newsletter from Americans for the Arts, the $2.5 million did end up getting transferred from the arts fund after all. “Governor O’Malley originally allotted $7 million in his budget proposal, which then grew to $11 million.  The amount proved to not be enough….To raise more money, the General Assembly authorized applying the Special Fund for the Preservation of Cultural Arts, a fund of $2.5 million on reserve for supporting local arts organizations, toward film incentives. The Senate pushed for the amount to be raised to $18.5 million and requested $3 million from the general fund, which the House rejected. The final agreement stood at $15 million.”)

INTERNATIONAL

Lots of news from Britain this time around: Maria Miller, the UK Culture Secretary whom some accused of not being especially interested in culture, has resigned amid a scandal over her expenses. She will be replaced by Sajid Javid, the current Treasury Financial Secretary. As the EU eases copyright law to make it easier to transfer purchased music from one of your personal devices to another, most countries are simultaneously levying a tax on device manufacturers; the money would go to a fund to support young musicians. In Britain, the potential tax is being fought strenuously by manufacturers. Meanwhile, the UK has closed a tax loophole on domestic music, book, and app purchases; the move could raise as much as half a billion dollars, which retailers may pass on to consumers. In more local news, the Mayor of London has released a revised cultural strategy, which includes support for smaller arts organizations and your friendly neighborhood busker.

Italy has pledged to spend €135 million to restore 46 heritage sites in the southern portion of the country, following an earlier distribution of €222 million last September. On the other side of the Adriatic in Athens, the Greeks are not so lucky: their cash-poor government is thinking about selling off public landmarks near the Acropolis to private investors. Protestors have been staging angry demonstrations to tell the pols to leave their built heritage alone.

Good news for Dubai’s 137 million metro riders: now they can add a little culture to their wait.  Thanks to a new public art project launched by the Prime Minister of UAE, four metro stations throughout the city will be transformed into museums.

And the government of South Korea is digging a little deeper into cultural exchange through a new project set to introduce Korean culture into emerging markets around the world. The NEXT Project to Dispatch International Cultural Exchange Experts by Region sends staff abroad as both representatives and students of the host cultures and are responsible for managing each regional Culture Centre.

JUST ABOUT EVERYWHERE

Finally, the entire Anglophone world suddenly seems to be slashing taxes on live performance. New York State passed a theater tax credit to induce Broadway producers to prepare for touring shows upstate. (Producers and tour operators had lobbied for the incentives, which are already offered in states like Illinois, Louisiana, and Rhode Island.) Within days, Senator Charles Schumer proposed a more ambitious national tax rebate of up to $15 million per production – benefits already extended to film and TV. Both initiatives appear to be driven by the Broadway League. Meanwhile, the UK opened a consultation period for its own plan to provide generous credits for live performing arts; the exact policy objectives of the subsidy remain unclear. This last plan opens out into the world: as long as at least a quarter of the expenditures are in Europe, costs may be incurred in any country.

The internet just got a little less friendly for pirates. A new “Copyright Alert” system, the product of a voluntary agreement between internet service providers such as Comcast and AT&T, Hollywood movie studios, and major record labels, will inconvenience persistent illicit downloaders first with warnings and then stronger measures such as slowed service. The Future of Music Coalition (consistently the smartest folks in the room when it comes to the arts and copyright issues) is wary but hopeful.

STATE AND LOCAL

Governor Rick Snyder of Michigan is pushing to cut in half the state’s generous subsidy to film producers, which currently gives up to $50 million a year in credits for qualifying expenses to firms that set up shop in the state. Michigan had one of the most aggressive film incentive programs in the country just a few years ago, which attracted such productions as “Gran Torino” and “Up in the Air,” but Snyder has since put on the brakes (even as he supported a rebound last year in the state’s arts council budget).

INTERNATIONAL

My goodness, the stream of news flowing out of the United Kingdom just gets fatter and faster. First, the embattled Arts Council England has a new head in Peter Bazalgette, a former TV executive and chairman of the English National Opera. Local governments continue to cut arts budgets in the face of financial pressures: Newcastle went through with eliminating its £2.5 million culture budget despite intervention from national Labour party leaders, and is attempting to move towards a privatized model instead; Westminster (part of London) has confirmed that it’s cutting its annual £350,000 subsidy out of the picture; and Scotland’s Moray is ditching its more modest £94,000 culture budget. At least Belfast is increasing its local arts support by 27%, to £1.4 million. A survey of UK theater companies suggests that many are cutting back on productions, commissions, and cast sizes due to the cuts, though small sample size should be taken into consideration. In this environment of austerity it’s a great time for university tuition fees to be tripling for artists, but the British government is hoping that the Creative Employment Programme, a rapidly expanding paid apprenticeship system in the creative industries for youths aged 16 to 24, will offer a smooth pipeline for new grads. (Joe Patti has more.)

The combination of the eurozone crisis and austerity policies has decimated Spain’s system of public support for the arts, with funding dropping as much as half since 2009 according to a recent report. The litany of second-order impacts cited in that article includes 100 employees laid off at a single opera house in Barcelona, a cancelled Lucian Freud show at the Museo Nacionale del Prado in Madrid, and a cancelled three-year collaboration between Madrid’s Teatro Real and the Berlin Philharmonic. The Orquestra Girona is down to one concert a year. But depending on who you talk to, there are opportunities lying in wait amidst the upheaval.

Australia’s government is out with a new cultural policy, and Ben Eltham (author of A Cultural Policy Blog) declares it a hit for artists. (Annoying registration required, but it’s free.) The policy commits $236 million in Aussie dollars in mostly new money over five years to various federal arts and culture agencies and programs. The government has also chosen to adopt many of the recommendations made in an independent review of the Australia Council last year, including a controversial proposal to do away with the Council’s discipline-based system of funding. (NEA, take note!) The package even includes $4 million for a “data collection program to inform research for the sector and to  track public value of investment.” More here. And they’re considering a media reform package while they’re at it Down Under.

In other news, Russia may adopt a restrictive rule shutting out small concert promoters, China is considering royalty rights (droit de suite) for visual artists, and UNESCO has pledged to raise an $11 million fund to restore the destruction in Timbuktu, Mali, but at least one observer is skeptical that the money will be used wisely.