One of the biggest lessons I’ve taken away from my study of philanthropy over the past two years is that poor communication between funders and grantees can create a lot of problems. My class on philanthropic foundations demonstrated the point rather vividly by showcasing one of those horror stories you sometimes hear about: a high-profile funder with big pockets encourages the president of a university to develop a new program for curriculum reform; the dean submits a proposal despite reservations about the program’s feasibility; sure enough, the program, while funded for a pilot round, is essentially a failure; but in order to preserve the relationship with the funder, the program is spun in the report to seem like a success; therefore, the program is funded again and the foundation’s board members pat themselves on the back for a job well done. The names were fictionalized in the materials we read, but anyone who has been in the nonprofit trenches knows that situations like this happen far too often.

What’s really going on here is that each of the parties has a strong incentive to delude themselves into thinking that a poorly performing program is successful. Organization leadership wants to secure more money for the institution and preserve its relationship with the funder. Development and program personnel want to keep their jobs, which means doing what the people in charge tell them to do. The funder’s staff and board, meanwhile, want to believe both that they have designed the right kind of programs and that they have done a good job by selecting the right partners to carry them out. Pretending that the program is successful, even if it’s not, is the easiest way to keep everyone happy. It’s a dysfunctional culture that enables mediocrity and rewards effective grantsmanship over effective outcomes. I call it success disease, and sadly, the people who ultimately get hurt by it the most are a) the organization’s constituents who have to deal with subpar programming, and b) innovators who come up with better ideas but can’t get support for their implementation because of commitments already made.

Now, it should be said that plenty of funders don’t act this way. Some, like the Hewlett Foundation where I worked last summer, sincerely want to do the best job possible, and understand that that necessarily means being honest about their own failures as well as those of their grantees. But even if some funders adhere to this philosophy, their grantees have been trained too well by all of the other funders and donors who just want to feel validated in their investment. Not to mention, there’s a hell of a lot of money at stake. So instead of honesty, we get these complicated guessing games, with the funder wondering: are they telling the truth? What are the numbers hiding? What haven’t we asked them that might crack this nut? And on the grantee side, it’s: what are they really looking for? How do we measure up? What can I tell or not tell them that will make a difference? It’s all very inefficient, and does more than perhaps anything else to get in the way of long-term, productive, truly satisfying partnerships.

Think about other kinds of relationships that involve close collaboration toward shared goals. (Because they are shared, are they not?) Would this be any way to treat a trusted employee? Or a student? Even business-customer relationships are often more open and straightforward than this, in the sense that there’s usually not a whole lot of doubt about what each party is looking for. Having had experience now on both sides of these conversations, I can appreciate that promoting trust in the grantmaking process is easier said than done. With that said, here are some suggestions that any funder can use to encourage healthy relationships with their applicants and grantees.

• Cut down on unnecessary procedures. Make sure that everything you’re asking for will actually be used during the proposal review process. If you haven’t read the Project Streamline report, Drowning in Paperwork, Distracted from Purpose, please do yourself a favor and download it now. It contains numerous cogent recommendations for reducing the cumulative administrative burden faced by nonprofits who operate in a sea of heterogeneous grantmaking requirements and procedures.
• Be transparent about criteria and process. While most grantmakers are pretty good about publishing eligibility requirements for their programs, quite a few are secretive about the actual considerations used to make decisions. If some criteria are more important than others, say so! If there’s a scoring system involved, why not publish it? The more information applicants have about how they’ll be judged, the more likely they will be to apply for the right opportunities and not for the wrong ones.
• Require a letter of inquiry or preliminary application for any new grant. Many funders already do this, but it’s worth mentioning because of the incredible timesaving device it can be when used well. You don’t want to waste energy reading uncompetitive applications, and neither do organizations want to waste energy preparing them. A simple, no-fuss form designed to screen for eligibility and general fit with program goals can save everyone valuable time.
• Incorporate feedback along the way. Wouldn’t it be great if, after the initial pre-evaluation of new grants, applicants got back not just a “yes” or “no” but some meaningful information about their chances? Why not divide responses into, say, four categories, with some applicants being strongly encouraged to apply based on their materials, others encouraged with reservations (specifically noted and communicated to the applicant), still others told that they are welcome to submit but would not stand a high likelihood of success without a substantial reworking of the application, and the final group strongly discouraged from applying?
• Encourage communication between applicants. One of the most creative strategies I encountered in my fundraising days came from Rockefeller Philanthropy Advisors during their administration of the New York State Music Fund. Apparently, many of the pre-applications in a particular category bore a number of similarities to each other, so RPA created a voluntary exchange by which applicants could share abstracts of their pre-applications with all of the other participants in the exchange, with the goal of forming partnerships and potentially combining bids where appropriate. It was kind of an awkward experience, but getting a peek at the competition gave us a better understanding of our role in the field and helped us decide that a full application would not be the best use of our resources.
• Provide feedback to unsuccessful applicants. These people just spent quite a lot of time preparing a proposal, only to have it all come to naught. Particularly if they haven’t received feedback earlier in the process, they deserve to understand why their application was not successful and what they might do to improve their chances in the future. Make sure systems are in place to record notes of discussions or investigations of the proposals as they’re happening, so that advice given later won’t be of the off-the-cuff variety.
• Stay active during the grant period. And I don’t just mean active in the sense of, “are you doing everything you said you would do?” Ask them if they need any help. Ask them what aspects of the project are going well, and what aspects aren’t going so well. Do site visits if you can. Interests are never more strongly shared between funder and grantee than they are during this stage – never forget that their success is your success, and vice versa.
• Use the reports! This is also mentioned by Project Streamline, but I wanted to call it out specifically because it absolutely flabbergasts me how times I have heard about reports from previous grants never even being read, much less used in the evaluation process. Ideally, I would think, a report should look much like the final paper one hands in for a class – in other words, it should be more detailed than the application, not less. And then that report should receive a grade: actual feedback from the funder, both quantitative and qualitative, on how successfully their efforts advanced the funder’s overall goals, including specific suggestions for improvement. This report should then become part of the track record for the organization when considering future investments.
• Reward intelligent failure. Ultimately, most of the problems basically come down to this: the disproportionate impact of grants on the grantor and grantee. Failing to secure a big grant can be life-or-death for an organization, but for a funder, not awarding that grant just means the money will go to someone else. Funders drive success disease by being unwilling to accept failure from their investments, or from the investments of others (when considering new grantees). But this is silly: failure can be extremely useful when it results in a learning experience for an organization or, better yet, the field. The trick is to distinguish between failure that is handled with intelligence and dignity from the kind of failure that tears apart an organization at the seams and renders it unable to operate effectively going forward. In fact, one of the most important things a funder can do is to spot potential troubles on the horizon and help the organization to avert them, rather than leaving its grantee to fend for itself.

This little list is only the beginning, I’m sure. Certainly, the little things count as well: telling applicants when they can expect to hear from you, for example, or making sure that board and staff members have a consistent understanding of eligibility requirements and review criteria so that applicants aren’t told different things at different stages of the process. A general attitude of respect is similarly essential. Issuing public requests for proposals instead of maintaining an invitation-only policy can help applicants feel that they are being judged fairly and based on objective criteria. What other strategies can build trust in a funding relationship and combat success disease? I welcome further ideas in the comments.

One of the memes that’s been coming out of the “best practices” camp for philanthropists the last few years is that organizations need more general operating support, rather than the project support that many funding entities are accustomed to providing. The advantage of general operating support (or GOS) is that it can be shifted around to different parts of the organization depending on needs, rather than being tied up in one program that may turn out to be overfunded relative to other priorities or encounter unforeseen problems. A funding base that is heavy in GOS thus gives a grantee much greater flexibility with which to design its offerings, which is appropriate because organizations on the ground are likely to understand their constituencies better than their funders (and certainly better than a haphazard aggregate of funders that may have different priorities and agendas at stake, which is pretty common in this field).

One of the dangers of project support, when pursued too zealously, is that it can take the funded organizations away from their core mission—and often, then, their core competencies. Grantmakers need to remember that any money they have to offer, no matter how small it may seem to them, acts as a powerful incentive to those on the other side scrounging for every penny they can. Attaching program-related restrictions or conditions to the use of funders’ money may direct attention to the causes or ideas in which they are interested, but the long-term effect on the field can sometimes be deleterious if organizations are jockeying among themselves for opportunities that take resources away from what they are actually good at.

I think the same principle can be applied to artists, either when they are funded directly or when their activity is supported through a grant to an organization. A composer or a playwright is not like a graphic design shop or an IT consulting firm that will create something to a customer’s specifications, no questions asked. The whole point of supporting the arts, to my mind, is to encourage innovation, expectation-challenging, and all what goes along with leading a creative life. Laying out the path ahead of time with too-great specificity potentially squashes the very thing that makes the arts special. What’s more, the non-alignment of incentives that I talked about in the previous paragraph is even more severe for individual artists trying to make a living from their creative work. I’ve seen projects in the music world greenlighted for little reason other than the possibility of getting a grant for them. Were those always the best projects to undertake, either for the organizations/artists themselves or for the field as a whole (e.g., audiences)? For example, if the most talented artists are unwilling to create works to specification, does that mean that less talented artists receive those opportunities instead and ultimately become better-known to the public as a result? Or if a high-dollar-value grant also includes an educational workshop component, will the panel end up selecting a fine composer who is terrible in the classroom?

Furthermore, I can tell you from my own experience and that of my friends that it is somewhat demoralizing for an artist if the only realistic path to receiving anything resembling professional compensation is to create a work that has nothing to do with what you’re about. Artists are very invested in creating public identities that reflect their personal aesthetic goals and ideas—not to mention devoting their limited creative time and resources to projects that similarly reflect those things. If you’re a creator-for-hire, it’s much harder to maintain that kind of integrity and voice in your own work. It’s a choice that many artists trying to make a living must grapple with.

I would like to think that most philanthropists who truly believe in the arts can trust creators enough not to try to do their work for them. Of course there could be occasions when highly directed creative activity is entirely warranted. This is not a black-and-white issue. But in general, I think it’s worth considering the potential unintended consequences of a “top-down” strategy of arts giving, especially if that strategy becomes the norm.

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.

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.

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.

Measuring impact is a hot topic in the nonprofit world right now, if the title of the 3^rd 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.