• The dreaded sequester began Friday, affecting all federal accounts including that of the National Endowment for the Arts. The NEA will lose 5% of its budget, which works out to about $7.3 million. Grants and administration will be reduced by the same percentage. The reductions only apply through March 27, however, which is the date through which the federal government is currently funded. Congress has yet to pass a budget for Fiscal Year 2013, which we’re already almost halfway through. Let’s hear it for democracy!
• John Paul Titlow predicts that 3D printing will be the next big copyright battlefield – and the lines aren’t necessarily drawn where you think. (Here’s more from Public Knowledge.)
  
• “It’s true that without exposure to the arts, it’s difficult to develop an interest in them. But it’s also true that many of the people who had, say, music education back in the 1960s and 1970s are the same people who are not going to orchestra concerts today. Some arts organizations will have to confront the fact that their audiences are declining because of an irrevocable shift in the culture, rather than simply a lack of education.” Anne Midgette explores the recent resurgence of arts education in our nation’s schools. Here is more.

MUSICAL CHAIRS

• The Kresge Foundation has named Ariel Simon to the new position of chief strategy officer and deputy to the president. Simon formerly worked as a senior consultant in McKinsey’s social sector practice.

ALL ABOUT THE BENJAMINS

• Poncho, a Seattle public charity that raised money for the arts through galas and other special events, is closing its doors and donating its remaining assets to the Seattle Foundation.
  
• Interesting: in recent years, needy communities in the United States are receiving millions of dollars in aid from an unlikely source – the United Arab Emirates.

IN THE FIELD

• Should museums be looking outside the traditional pipeline for their management talent?
  
• Congratulations to Inocente, the first Kickstarter-funded movie to win an Oscar (for Best Documentary Short).
• Howard Sherman draws very appropriate attention to the lack of consistency in labeling the arts and culture in newspaper listings.
• The Met Opera, long criticized for astronomical ticket prices, is actually lowering them for next year – and not as an “accessibility” measure. Attendance is down, and leadership wonders if the opera’s much-ballyhooed cinema simulcasts are partly to blame.

BIG IDEAS

• I think local programming is one of the more underexplored areas of community engagement for establishment arts institutions – especially outside of major artist meccas like New York and LA. Oregon Arts Watch’s Brett Campbell considers.
• William Deresiewicz reconsiders the is-food-art debate – he had originally come out strongly in the “no” camp, and got, uh, creamed for it.

CONFERENCES AND TALKS

• The NEA’s Jen Hughes reports on a new white paper and symposium covering the emerging field of design for social impact.
• Keith Sawyer shares notes from a small conference on copyright and patent reform to which he was invited to contribute perspectives on creativity.

RESEARCH CORNER

• The Wall Street Journal performs an analysis of US Department of Education data, finds that “median debt loads at schools specializing in art, music and design average $21,576.” This compares to $19,445 for liberal arts colleges and $18,100 for research universities.
• Americans for the Arts is putting out a new ebook series on arts education.
• The IRS will more frequently publish data on which nonprofits have lost tax-exempt status.
• Now that everyone’s talking about walkability, more and more competitors to Walk Score are popping up. We already heard about Walk Appeal, a mostly theoretical innovation by urbanist Steve Mouzon. Now comes Walkonomics, created by Adam Davies, which uses an eight-factor index to judge walkability. The Atlantic Cities’s Sarah Goodyear has a review.
• Keith Sawyer reviews Bruce Nussbaum’s new book, Creative Intelligence.
• Can’t wait for this Barry’s Blogathon on arts research and data featuring some of the leading establishment names in the field.
• Nesta’s Hasan Bakshi explains the UK creative industry classification scheme and a fascinating critique that his organizations developed of the existing classifications. This is a dense read as blog posts go, but Sunil Iyengar helpfully puts it into simpler terms. The whole thing is essential if you do any kind of creative economy or creative industry work, but here are a couple of key quotes:
  

  “The annual DCMS Creative Industries Economic Estimates have shown that Gross Value Added (GVA) in [advertising, architecture, art and antiques, computer games, crafts, design, designer fashion, film, music, performing arts, publishing, software, and television and radio] has in recent years grown at twice the rate of other sectors, helping to raise their profile with policymakers.”

  After conducting sensitivity analyses and other validity checks, Nesta not only can locate those industries which employ creative workers at disproportionately high rates, it can also show how most creative workers are employed in non-creative industries.

  Importantly, our analysis also shows that there are serious misallocations in the DCMS classifications; this includes a definite group of industries, which DCMS does not currently treat as creative, but which have exceptionally high creative intensities, including ‘Computer programming activities’ (62.01) and ‘Computer consultancy activities’ (62.02), which between them account for over 400,000 people.

San Francisco, CA / The Mission District

ArtPlace has released a report on the “top 12 ArtPlaces” in the country – the neighborhoods or clusters that scored highest on a subset of the funder’s much-discussed vibrancy indicators: number of “indicator” businesses (“eating and drinking places, shops, personal service establishments and other businesses that cater to consumers”), percentage of independently owned businesses, walkability, percentage of workers in creative occupations (“artists, writers, entertainers, architects, engineers and designers”), number of arts-related nonprofit organizations, and number of arts-related businesses. The results are organized by ZIP Code and then ranked, with a half-mile radius being drawn around the epicenter of activity in each ZIP.

Carol Coletta of ArtPlace and Mayor Tom Barrett recognize the Third Ward as one of America’s Top ArtPlaces 2013.

The list is clearly media bait – there have already been five events scheduled to provide mayors and city officials an opportunity to crow in public about making the inner circle, and ArtPlace is openly soliciting more. And, no surprise, the list does not provide any insight on how ArtPlace’s own investments fit in to the mix. That said, I do like the fact that it is quantitative rather than editorially-driven, and if what we’re really measuring is “rapidly gentrifying hipster paradises,” it passes the smell test at least for two of the places I’ve spent significant time: Washington, DC (the intersection of U Street/Adams Morgan/Dupont) and San Francisco (Mission District).

Washington, DC / Adams Morgan and the U Street Corridor

Having just recently moved to (and therefore looked for an apartment in) DC, it’s uncanny how well the methodology captured my preferences in that city. Although we ended up in the somewhat less exciting neighborhood of Cleveland Park for commuting-related reasons, I recall being instantly attracted by the obvious bustle and life around the corner of Columbia Road, Adams Mill Road, and 18th Street during early and subsequent visits. New York’s entries are a little more surprising – Manhattan is represented not by the West Village or the Lower East Side, but by Manhattan Valley, a term I have never heard before despite living in NYC for six years but that apparently refers to the area spanning upper Upper West Side and lower Morningside Heights. (A slightly odd choice to normalize the results by income, pushing up lower-income areas that have higher-than-expected concentrations of cultural resources, might be affecting what we’re seeing here.) Brooklyn also makes the list with what is now known as the BAM Cultural District (home to the new Barclays Center), rather than ultra-hot Williamsburg, I’m guessing because there aren’t enough nonprofit organizations in the latter neighborhood. I was surprised not to see the Boston area represented in the top 12, although both Back Bay and North Cambridge made a longer list of 44, representing the nation’s largest metropolitan areas. The press release notes that a “Top Small Town ArtPlaces” list is being prepared for later this year.

Brooklyn, NY / The intersection of Downtown, Fort Greene, Gowanus, Park Slope and Prospect Heights

At the very least, it all makes for some pretty maps.

Related: the NEA’s Our Town gets a glowing review as an “example of powerful placemaking” in The Atlantic Cities.

Update: here’s some more local perspective from Dallas.

• Narric Rome tells us about where the arts fall in the federal government’s new tourism strategy.
• After threatening to cap the tax deduction available to donors as a means of raising revenue, the British government has abandoned the plan.

• Barely two years after changing things up last time, the Kresge Foundation has announced a further evolution of its arts grantmaking. Now, all of its considerable funding will be concentrated under the umbrella of “creative placemaking.”
• Kickstarter may be the big name when it comes to crowdfunding in the arts, but its $99 million in pledges last year is only a small fraction of the $1.5 billion crowdfunding platforms raised across all causes worldwide in 2011. And this interesting article argues that crowdfunding (the investing kind, not the donating kind) could create unaccustomed competition for venture capitalists. One observer notes that if every American set aside an average of 1% of their liquid net worth to invest in new ventures, the available capital for entrepreneurs would jump by a factor of 10.
• McKinsey & Co. has published a white paper on social impact bonds, which are currently being piloted in the United Kingdom.
• Is investing in art an asset class? Not yet, according to Felix Salmon, who picks apart a new “index” of artists’ market value put together by Artnet. It seems to me that the art market is not so different from the real estate market, and that investing in artists is rather like investing in a particular home builder. To make art a real asset class, someone would need to build the equivalent of real estate investment trusts (REITs) that buy up particular artworks and then sell shares in the collection. It would be an interesting experiment, no doubt.
• The Council on Foundations conference, an event that’s only open to grantmaking institutions, is becoming more transparent, with resources from the event becoming available online. One such resource is this report from Katherine Miller.
• The Cultural Data Project and Nonprofit Finance Fund are teaming up to offer a new Financial Health Analysis tool to arts nonprofits. When you submit your financials to CDP through the normal process, you’ll be presented with a report detailing your organization’s financial strengths and weaknesses. Congrats to Kim Cook and the other folks at NFF and CDP for what looks to be a useful resource.

• Next American City’s Diana Lind reports from the CEOs for Cities conference, hosted by the Contemporary Arts Center in Cincinnati.
  

  It’s a nice unfiltered window into how the urban planning community views/engages with the arts: [T]here was…no one at all who left the reception on the lobby floor to explore the upper galleries (which were free to the public, by the way). It was just me and three security guards whose boredom was palpable….I went back downstairs where people drank beer and talked about how to make a better city. Somehow that disconnect, right there in the space, seemed like a perfect metaphor. Hundreds of people came to a contemporary art museum to talk about engaging the city’s art scene but missed all the art.

• FSG (the originators of the “Collective Impact” concept) explains how collective impact is like a symphony orchestra:
  

  “It is Sunday afternoon and the musicians have all convened to play a symphony. Indeed, they’ve even agreed to play a Beethoven symphony. But now imagine the following scenario: they have not actually agreed to which Beethoven symphony. None of them have any sheet music. And there is no conductor! This is the setting of isolated impact: wonderful individual efforts that don’t actually add up to a cohesive whole. A lot of noise, but no symphony…”

• The NEA has announced its first-ever round of research grants.
• Don’t miss this sponsored supplement to the summer 2012 issue of the Stanford Social Innovation Review, featuring reflections on evaluation and strategic philanthropy from five major foundations. And Grantmakers for Effective Organizations has just published a manual called “Four Essentials for Evaluation,” one of the readers for which was Jerome Vielman of Houston Arts Alliance.
• Surprise, surprise: self-publishing is a winner-take-all market too: “a survey of 1,007 self-published writers…found that while a small percentage of authors were bringing in sums of $100,000-plus in 2011, average earnings were just $10,000 a year. This amount, however, is significantly skewed by the top earners, with less than 10% of self-publishing authors earning about 75% of the reported revenue and half of writers earning less than $500.”
• We’ve had a strong sense for a while that walkable neighborhoods are more valuable, but just how much more valuable? A new study from the Brookings Institution looking at the DC area puts the price premium at up to $1200 per month. This will be something important to take into consideration when thinking about research studying the effects of creative placemaking: how can we disentangle the contribution of arts amenities when those amenities tend to cluster in areas with lots of other things that people find valuable as well?
• Richard Florida offers a defense of his economic theories against a critique of him on the Forbes website, which serves double-duty as his latest thinking on the composition of creative cities. At the end, he advocates for a both/and approach, encompassing investments in amenities with business-friendly practices. I’m not sure I buy that that’s “been [his] message all along,” but it does make sense – after all, while the “coolness” of a city’s reputation certainly factors in to many people’s relocation decisions, jobs do too.
• What would it mean to quantify the potential value-add to society of a third grade teacher?

• McKinsey has an interesting report out on philanthropic prizes. (pdf)
• WolfBrown has been rather on fire lately with systematic arts analysis. First, this cultural action plan for the Richmond, VA region is a comprehensive policy prescription for creative vitality. I hope to accomplish something similar, though on a smaller scale, for the New Haven region as the final project for one of my independent studies. The Richmond plan itself (skip the exec summary, it misses much of the good stuff) is a wonderfully thorough document, with specific time frames, cost estimates, and model examples included with every recommendation. It’s an impressive achievement and one can only hope that it will find a receptive audience with the appropriate decisionmakers. The other publication of note is the Philadelphia-based Cultural Engagement Index, which measures various types of community participation in the arts over time. The CEI was commissioned by the Greater Philadelphia Cultural Alliance, which apparently plans to do one of these every year (or at least regularly) until 2020, with the goal of doubling arts participation in the region by that time. More on the CEI at smArts and Artful Manager.
• Social entrepreneurship in the arts? The Yale School of Music has established an unusual grant fund for alums who have started music-related projects or nonprofit organizations. The first-round winners include Createquity reader Tina Lee Hadari, with whom I had a lovely conversation a few weeks ago about her string quartet and music mentoring program called Music Haven.
• Missed this last time around, but Allison Fine wrote a follow-up to her arts and social capital post from a couple weeks back.
• Might the Fed help with nonprofit capacity building? Chuck Grassley and Max Baucus want to do just that:
  

  The Senate Finance Committee’s top two members — Democrat Max Baucus and Republican Charles E. Grassley — teamed up today to introduce legislation that would provide money to help small and medium-sized charities get training and management assistance.

  The legislation, introduced as an amendment to a national-service bill now being debated by the Senate, would provide $25-million over five years to a “Nonprofit Capacity Building Program” within the Corporation for National and Community Service.

  The amendment would “strengthen small charities around our country, especially where resources are scarce,” Senator Baucus of Montana, who chairs the finance committee, told his colleagues on the Senate floor. He said it would allow groups to get training, for example, in how to manage their finances, raise money, fill out tax forms, work with new technology, or plan long-term budgets.

  UPDATE: And it looks like it’s passed, as of today. Woohoo! See here and here.

• There’s now such a thing called a city’s Walk Score, measuring how easy it is to access life’s amenities without sticking the key in the ignition. Though the methodology has issues, it’s still an interesting exercise. What I find most interesting is that the list of top 10 cities for walkability bears an absolutely uncanny resemblance to the cities with the most active and interesting arts scenes:
  

  1. San Francisco
  2. New York
  3. Boston
  4. Chicago
  5. Philadelphia
  6. Seattle
  7. Washington, D.C.
  8. Long Beach, Calif.
  9. Los Angeles
  10. Portland

  Switch out Long Beach for Minneapolis, and that list packs a formidable punch.

• Barry Hessenius has a nice interview with Janet Brown, new executive director of Grantmakers in the Arts.
• This is what the future of journalism looks like.
• I’ve been writing recently about executive compensation in the nonprofit sector, and as if on cue, so does the Wall Street Journal.
• Speaking of leadership in the sector, should board members be actively recruited by search firms? Frankly, I don’t think it’s such a bad idea, considering what an important role board members play in a nonprofit organization and how difficult it is to engage them properly.
• Ever wanted to figure out how to make cool graphics without too much effort? Seth Godin has some tips for you.
• Two people whose writings on the NEA I criticized last month, Greg Sandow and Leonard Jacobs, are back at it (see: Exhibit A, Exhibit B). Now that I read them more carefully, I am struck by how they are taking diametrically opposite positions from each other. Leonard says we should rely exclusively on economic arguments for supporting the arts, because “there will be a backlash against artists and arts funding coming from the right-wing and it’s going to be as intense as it was during the NEA wars of the early 1990s.” Greg says don’t sweat the wingers, they’re never going to be convinced anyway; instead, focus on the people in the middle, and the way to do that is by pushing arts’ intrinsic value. (Or at least, that’s what I think he’s going to say; he hasn’t gotten to the good stuff yet.) Frankly, I don’t understand why it has to be an either/or proposition. I’ve felt for a while that the separation between intrinsic and instrumental arts benefits is a little artificial. Why not accept and own them both, and tailor our arguments according to the specific group — or even person — we’re trying to reach? With due respect to Greg, I can tell you from personal experience that the analytically-focused people in my program are a lot more receptive to economic arguments about the arts than they are to wishy-washy expressions of “well, don’t you see, they’re just great!” But on the other hand, I do think it’s possible, to a degree, to measure intrinsic reactions to the arts — and there, I think, we can get somewhere with people who are less receptive to the economic arguments. (As for the right wing, I think that the best way to ballast against the hypothesized coming storm is to put the arts in as strong a position as we can, now, while we have the chance. And if the storm never comes, then so much the better.)
• Yale SOM’s former Dean Joel Podolny weighs in on whether business schools should bear some responsibility for the financial crisis. A very interesting column, but this comment from Aaron James is what rocked my world (emphasis mine):
  

  Business schools teach us that goods and services are good for society, that when people buy and sell things they increase their personal utility. The notion comes from basic economic theory and it finds its way into every business discipline. It justifies commerce by identifying a social contribution: value created through trade. In this convenient theory, every transaction makes the world better; every profitable business contributes to society simply by virtue of its existence.

  Economists will tell you that this theory is too simple, that it ignores externalities like pollution and omnipresent realities like government regulation. But somehow these complications don’t find their way into dominant business logic or core business curricula. Somehow MBAs get stuck with a remedial economics that ignores environmental and social costs and regards regulation with disdain.

  Is it any wonder that managers seek unregulated markets and pursue them blind to the consequences? Is it any wonder that leaders act purely in their own self-interest? They’ve been taught that doing so is the best way to contribute to society. They’ve been taught that doing so is their job.

  This crisis will not be solved by the addition of ethics courses. Too often, such courses perpetuate the same logic described above. If we are serious about teaching responsibility in business education, we need a curriculum that reflects the real world context in which business operates, including its social and environmental consequences and the necessity of regulation for maintaining competitive and transparent markets. Instead of training MBA’s to lead in a hypothetical world of simplistic economic theory, let’s train them to lead in our world. It’s time to get real.