The Arts Funding Model is Dead…

As a nonprofit director, I’m often baffled at how funding?—?especially arts funding?—?works in the United States.

The typical arts funding model looks something like this: 50% ticket sales / 50% fundraising (individuals, grants, government, sponsors). Most institutions, especially the larger ones, are somehow able to make this model work. They have enough sources to squeeze out more funds when there’s a deficit, or they have enough flexibility to make some cuts on expenses.

But what about the little guys… the smaller organizations where every dollar is essential?

What about the community orchestras that are doing significant outreach into our nation’s suburban and rural communities? What about the startup organizations that are innovating our space, but their ideas fall silent because of a funding gap? This 50/50 model falls short for these organizations, and it's time we look at why.

For the sake of this particular discussion, I’m leaving ticket sales and individual donors out of the equation (another day, I promise). I really want to focus in on the biggest pitfall of our arts funding philosophy in the United States:

We’re all chasing this pot of gold called “ sustainability”.

And when we reach this magic sustainability, all of our troubles will disappear?—?we’ll find success with enough new audience members, diverse funding sources, sufficient staff and community resources, etc. This kind of thinking is everywhere in the industry, whether explicit or not. But I challenge:

If we’re funding what already exists and hoping it will grant us this magic sustainability, we’re going to find ourselves damp and dismayed standing at the end of a wet rainbow.

(I rant on some reasons why current arts programs aren’t working in a recent Huffington Post article.)

Arts organizations need to stop chasing sustainability?—?it’s a byproduct of something much greater. Instead, we need to start running after massive cultural-habitual change in how people consume art.

We need to start directing funding towards innovation and programs that support a clear community or industry impact.

This statement really warrants a word of caution: changing our industry’s funding model doesn’t mean we all have to come up with new programs. I’ve been on the other side of that phone call where a foundation says, “Hey, we liked your proposal and your ideas are great, but we’re really looking for new programs.” (P.S. we’re a new organization with a completely new programming model, so that call is always comical…)

But I do think that we need to consider that chasing impact should take priority over finding sustainability.

Let me elaborate:

If all arts organizations are chasing sustainability, then we’re all admitting that we’re doing the best work possible. Funding is just a financial means to an end. But I don’t think any organization's director will tell you that they are 100% satisfied that we are doing everything we could be (individually or as an industry).

What if, instead, grantors and government sources started funding innovation; the ideas that would be game-changers for our industry? “A rising tide raises all boats”, right? Our current model just steadies the water, when we need the tide to be rising.

Look at the for-profit sphere...

People invest their funds and energy into companies that are innovating (startups) or keeping an impactful momentum (Facebook, Twitter, Uber, AirBnb, etc.). Big or small, these for-profit companies all reached the public's eye by becoming part of the cultural-habitual lives of our communities. 

Mark Zuckerberg didn’t sit in his Harvard apartment and think, “If only I could get $5,000 more to keep this Facebook thing running.” Rather, he said, “The thing that we are trying to do is just help people connect and communicate more efficiently”, and the influx of money followed his innovation. That rising tide gave birth to thousands of successful online platforms, and created a unstoppable cultural-habitual movement.

Now, look at the arts.

• Most foundations and government sources?—?large and small?—?require three years minimum of artistic activity before they will even consider an application. Innovative arts nonprofits have to bootstrap, beg individuals for support, and “get by” until they can enter the circus ring of chasing their sustainability, too. The change: Foundations should divert a % of funding to new organizations, innovations, and game-changer ideas. Remove the 3-year rule, and reward something that will raise the tides for all boats. 
• With ongoing funding, there’s little benchmarking or accountability between grantors and grantees. Rather than creating community or industry impact, grants become a means to fill budget-gaps. The change: There needs to be ongoing dialog about the impact of ongoing support. If a program or project doesn’t succeed, talk about why and publish your findings to an industry source.
• In most cities, there is little discussion among arts organizations and funders, either together or separately. Very few communities are looking at collective impact, and how to divert resources to raise the tide for all.The change: grantors should require grantees (and interested prospective grantees) to participate in roundtable discussion about challenges and successes.

I’m certain there are countless more issues and solutions around this very topic, and I’d love to hear your ideas. Tweet at me: @DailyClassical

To highlight my main point:

When we start chasing impact, innovation becomes the means, and sustainability becomes the side-effect.

Encourage your foundation and government leaders to take a hard look at arts organizations’ impact in your communities, and let’s get the discussion going on how this all plays out in the next decade. Sustainability won't be the answer for anyone; it’s just the icing on the cake.

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Andrew Goldstein is the co-founding Executive Director of Emerald City Music, a nonprofit inspiring Seattleites to discover classical music. He holds a BM in Music Management from The Hartt School and a graduate certificate in Nonprofit Management from Northeastern University, and makes his home in Seattle with his wife, Eryn, and daughter, Hazel. On Twitter at @DailyClassical