The IRS and Treasury Department are finally starting to bring some clarity to program related investments, releasing a rule that represents the first update in 40 years to the language describing how these financial instruments can be used. Unfortunately, the one arts example in the mix describes a 501(c)(4) “social welfare” organization, rather than the more standard 501(c)(3) nonprofit. This is a little worrisome given that the arts aren’t actually mentioned as one of the categories in the tax code that qualify for tax-exempt status, and 501(c)(4)s are not able to provide a tax deduction to donors.

Elizabeth Quaglieri describes the Obama administration’s Turnaround Arts Initiative, a pilot program spearheaded by the President’s Committee on the Arts and Humanities, the Turnaround Arts Initiative provides arts curriculum resources and the attention of celebrity artists to eight struggling “turnaround schools” across the country. The arts materials are designed to be thoroughly integrated into the schools’ turnaround effort, and the whole shebang will be evaluated by Booz Allen Hamilton after a two-year trial.

STATE

Obviously, the big news of the month was Kansas getting its arts council back, reported here on Friday. Elsewhere, the news is mostly decent. New Hampshire arts advocates were successful in turning back a threat to the state’s Department of Cultural Resources and public art fund by mobilizing more than 100 business leaders, artists, teachers, economic development officials, and others to attend a public hearing, impressive for a small state. A somewhat controversial plan in Connecticut to replace line item funding for arts organizations with a competitive pool also ended up going nowhere. I have mixed feelings about this one – I get that you don’t want to expose institutions to major financial risk on short notice, but as a general practice I think line items for specific arts organizations are pretty undemocratic (because the organizations with the resources to procure them tend to be on the richer side anyway) and bad policy (because the line items are not subject to any kind of centralized performance review by industry professionals who know what they’re doing).

This is slightly old news, but the New York State Council on the Arts reversed the trend of the past four years and came out of the latest budget process with a $4 million increase, to $35.6 million. NYSCA remains the best-funded state arts council in the nation.

LOCAL

The Washington, DC city council has given preliminary approval to an increase in the budget of the DC Commission on the Arts and Humanities from $3.9 million to $11.9 million. That sounds a lot better than it actually is; the increase just partially makes up for a combined loss of over $16 million from the DCCAH and the National Capital Arts and Cultural Affairs program over the past couple of years.

INTERNATIONAL

England cut funding to arts groups two years ago, and the Brits apparently aren’t missing it too much. A survey reports that support for public funding for the arts has dropped from 52% to 44% since 2009. Meanwhile, Scotland’s arts council is moving many of its arts groups to short-term, project funding in an effort to get more mileage out of its shrinking budget.

The Australia Council for the Arts has just completed a five-month review process, its first in two decades, and the results are making some waves. The review advocates that the Council reform its “rigid” structure that silos arts grantmaking by discipline, and also put up much more of its funds for competition as opposed to guaranteeing money to specific institutions. Interestingly, it puts this move under the rubric of emphasizing “excellence,” whereas in the United States that word is typically code for the larger, established organizations.

Turkey has become the latest battleground for the arts and government censorship, with conservative Prime Minister Recep Tayyip Erdogan taking a hostile stance to Turkey’s theatrical community after performances of a Chilean play sparked controversy in Istanbul. The events led to Istanbul’s Islamist mayor taking over decision-making for the city-funded theater troupe that staged the play. Supporting that move, Erdogan also threatened to cut off state funding to Turkey’s theater companies in response to protests and resignations by artists pushing for freedom of speech. The bad vibes apparently date back at least to a performance of a different play when Erdogan’s daughter found herself the involuntary recipient of an onstage actor’s attention during an improvised scene and subsequently walked out of the show. That incident led to the actor, who claimed he didn’t know that the young woman in the front row wearing a headscarf was Erdogan’s daughter, being suspended and brought before the country’s minister of culture to explain himself.

• Remember that debate a while back about whether video games qualified as art? Well, the NEA just declared it over by including support for “digital games” in its new Art and Media program.
• To Scott Walters’s everlasting chagrin, however, the NEA is still providing funding to organizations in New York, LA, and Chicago disproportionate to the population level. Scott has more here and here. I think this is helpful and important analysis; the one thing to keep in mind is that it focuses only on grants in one discipline of one round of one the NEA’s grant programs.
• The Library of Congress, in partnership with Sony Music, has unveiled a “National Jukebox” of early sound recordings – and it got a million page views in the first 48 hours.
• Kudos to the Future of Music Coalition for staying on top of the potential implications of the AT&T/T-Mobile merger for artists. And speaking of mergers, don’t miss FMC’s collaboration with Fractured Atlas looking back at the Live Nation/Ticketmaster merger, one year later.
• A window into Finnish cultural policy.
• So now Congressmen want to micromanage the Smithsonian’s gift shops?

COMINGS AND GOINGS

• Rahm Emanuel has announced that Michelle T. Boone, formerly of the Joyce Foundation, will serve as the next Commissioner of the Chicago Department of Cultural Affairs and Special Events.
• Marc Vogl is out as program officer for the William and Flora Hewlett Foundation, and in as executive director of the Bay Area Video Coalition.
• Heather Hitchens has quit as director of the New York State Council on the Arts to take the top job at American Theatre Wing, which presents the Tony Awards. NYSCA’s budget has declined from $55 million to $35 million over the past four years.
• Blueprint Research + Design, a major consultant to foundations, is being bought out by Arabella Philanthropic Investment Advisors. As part of the transaction, Blueprint founder Lucy Bernholz will become a half-time managing director of Arabella, spending more time on writing and in her partnership with Stanford’s Center for Philanthropy and Civil Society.
• The Sloan Foundation, whose main focus is science and technology, is now getting into arts funding.

MULTI-PART BLOGSTRAVAGANZAS

• ARTSBlog has a great-looking discussion on tap this week about new business models, the 501(c)(3) legal form, and potential alternatives. The lineup of bloggers is stellar, including Diane Ragsdale, Adam Huttler, and Janet Brown.
• The indefatigable Barry Hessenius was blogging up a storm earlier this month at the 98th Arizona Town Hall focusing on arts and culture. The convening, which included addresses from Marian Godfrey and the suddenly ubiquitous Rocco Landesman, comes at a poignant moment for the state, given recent cutbacks in public funding for the arts in Arizona. Here are Barry’s reports from Day 1, Day 2, Day 3, and the final wrap-up. There’s also a 268-page background report in case you’re looking for some further light reading.
• The staff at GiveWell, the charity rating agency, spent three months living and working in Mumbai last year. They have now posted thoughts and impressions from the visit, which provide an interesting check against their working assumptions going in. Here are the notes from staff members Holden Karnofsky, Elie Hassenfeld, and Natalie Stone, as well as thoughts on evaluating local charities in India.

RESEARCH CORNER

• The long-awaited Strategic National Arts Alumni Project (SNAAP) study has finally been published. The press release puts a positive spin on the findings, noting that 92% of alumni of arts training programs who responded to the survey have work (of any kind) and that two-thirds indicated that their first job after school was a close match for what they wanted. However, I’m more intrigued by the stat that only 57% of the over 13,500 respondents have ever been a professional artist, and only 41% currently are (keep in mind that most of the survey pool graduated within the past five years). We’ll be taking a closer look at this one.
• Meanwhile, last August, student loans surpassed credit cards as the largest source of debt in the US.
• The NEA has a new research note applying data from the American Time Use Survey to the performing arts industry.
• At ARTSBlog, Lynne Kingsley reports on the unequal distribution of arts education programs by discipline (a lot more visual art and music than theater or dance). And Tim Mikulski shares recommendations from the new report on arts education from the President’s Committee on the Arts and Humanities.
• The Alliance of Artist Communities has a new study on support for dance through artist residencies.
• Rosetta Thurman reports on a new study of perceptions of diversity in the nonprofit workplace.
• Americans for the Arts aren’t the only ones doing economic impact estimates. Google says that it benefits the American economy to the tune of $64 billion – in pure profits. Take that!

CONFERENCE CRANNY

• The Cultural Policy Center at the University of Chicago has been on fire lately, and held a great-looking Emerging Practice Seminar last month. Materials from the session (including lots of video!) are available here.
• Matthew Guerrieri provides a dispatch from the Rethink Music Conference in Boston.
• Beth Kanter reports from the Center for Effective Philanthropy Conference.
• Trista Harris has video from the “Philanthropy On Trial” event at the Council on Foundations Conference.

TRENDWATCHING

• Wow. For the first time since 1992, the rate of television ownership in American households has declined. To 97%.
• Crowdfunding isn’t just for donations and loans anymore; MicroVentures is now taking tiny equity investments for new startup companies.
• The Daily Beast on Amazon.com and the future of book critics.
• Composer Jeff Harrington offers a personal history of his reliance on free content distribution as a career strategy, and relates it to the issue of class in the arts.

ETC.

• Really fascinating indictment of today’s urban planning field and the (unintended) legacy of Jane Jacobs.
• Barry Hessenius interviews Kristen Madsen, Vice President of the GRAMMY and MusiCares Foundations.
• I have to say (and no, I am not being paid for this), I am so glad I signed up for the free trial of the New York Times’s digital subscription service sponsored by Lincoln when I had the chance, and I will certainly be renewing when it runs out. Without it, I’d be missing out on great reporting like this piece on a “pop-up” restaurant that served a six-course lunch to a dozen passengers on the L train, and this exposé of some shady-sounding business practices on the part of Columbia Artists Management promoting foreign orchestras who aren’t what they seem.

The Ortiz Foundation for the Arts (OFA) works to foster the visual, musical, theatrical, and terpsichorean arts in the five boroughs of New York City. In doing so, we aim to stimulate a highly creative environment that brings the community of artists and the city-wide community of New Yorkers together, strengthening each. Our grants are designed to enhance the vitality of both communities through diverse support for participation in the arts by artists and audiences, professional and nonprofessionals, and experts and amateurs.

In the course of our research, we found that the NYC arts community currently enjoys strong support from a trio of private and public funders, all in the $30 million range (stats for the city only). These are the Mellon Foundation, the New York State Council on the Arts, and the NYC Department of Cultural Affairs. (Technically, the New York City DCA has a [much] larger budget, but for the purposes of this discussion we’ll consider its competitive program funding pool only.) The Ford and Peter Jay Sharp Foundations follow at $22 million and $20 million respectively, while the National Endowment for the Arts provided just over $14 million in 2008. The most significant corporate giver is the JP Morgan Chase Foundation, with $6 million in NYC arts funding.

At $41 million, then, the Ortiz Foundation would be the largest arts funder in the city by 2015. How to set ourselves apart? We identified five key areas of differentiation:

• Emphasis on smaller players. Although we recognize the indispensable role of large and institutional organizations like the Metropolitan Museum, the Public Theater, the Metropolitan Opera, and Alvin Ailey American Dance Theater, we believe that the Ortiz foundation’s resources would be better spent fostering creativity among less-established artists and organizations. Although this emphasis means that many grants will not end up producing art that turns out to be popular, this is an important gap in the current structure of arts funding. Supporting organizations early in their careers—and later in their careers, if they do not wish to scale up to the size of a large institution—will have tremendous benefits to a large number of artists, and a corresponding large and disparate potential audience.
• Attention to non-professional artists. Primary and secondary arts education receives a good deal of attention from existing foundations. Citi’s arts funding is entirely devoted to education, a portion of Starr, JP Morgan Chase, and Hewlett’s giving is earmarked for it, and the Wallace Foundation, an education foundation, gives a small amount to arts education. However, the existing foundations mostly treat adults who are not (aspiring) professional artists as primarily potential audience members. This is a mistake. The benefits of the arts are many. Some of them accrue primarily to the artist; others are enjoyed by the audience, but would be enhanced if the audience has some experience with the art themselves. Part of the Ortiz Foundation’s mission is to support amateur or informal artists, contributing to the vitality of artistic life and the overall creativity of the city.
• Encouragement to experiment. The tendency to support established, professional artists and large institutions presumably arises because of the lack of objective standards in judging art. Arts funders are wary of saying, “We support the production of 100 new paintings,” without the imprimatur of a major museum or artist’s name to indicate the quality of the work. While this motivates a great deal of valuable arts funding, it reflects an erroneous belief about the arts: namely, that the only art worth supporting is the kind approved by one or another external force. In fact, the arts thrive on unrestrained experimentation and innovation. Supporting this by supporting start-up organizations and below-the-radar community groups is central to Ortiz’s mission, and is another factor that makes it distinctive as a grantmaker.
• Building community. The watchword at OFA is “community,” by which we mean not just the artistic community by the New York community, and all the communities within it. The arts have an indispensable role to play in tying and uniting us as New Yorkers. In a city as delightfully multitudinous as ours, the arts serve the important civic function of helping us understand one another’s beliefs, backgrounds, and cultures. The arts also bring together people of entirely different walks of life, and allow them to exchange ideas and experiences. While many foundations seem to classify their programs into those that serve communities and those that serve the arts, we believe that we serve New York as a whole by serving the arts, professional and otherwise.
• Supporting the field holistically. Many foundations and arts funders tend to treat each grant as a separate project, too often ignoring its interactions with other arts organizations and its implications for the field as a whole. With its strong emphasis on infrastructure and research, the Ortiz Foundation for the Arts seeks to achieve superior leverage for its funds by ensuring that many more stakeholders will benefit from the work supported by the grant than just the initial recipients. In this way, OFA supports the city’s arts ecosystem holistically rather than haphazardly.

(above section mostly written by my colleague Daniel Reid, with minor editing from me)

Tomorrow, a look at the specific program areas we developed, as well as our evaluation procedures.