Category Archives: economic impact of the arts

Privatizing Community Quality of Life: Coming Soon to a Community Near You

Imagine this scenario: by 2020 your parks, your performing arts centers, your community art gallery, your neighborhood community centers, your soccer fields, your local walking trails, your zoo, maybe even your library will be operated on contract by businesses that find ways to make a profit. Those businesses will form the nucleus of a growing new economic sector of real profitability to America. Some of them will no-doubt even trade on the NY Stock Exchange. Too strange to believe? Not any more.

Cities across America have spent decades upping the ante on investment in livability as their mechanism to up the tax revenues they have received, and it has been a profitable strategy. Build the aquatic center, the new tennis courts, the lovely performing arts hall, the zoo, the botanical gardens, the gallery complex, the fabulous library and then reap the rewards with high property values and a desirable community that in turn attracts businesses and on-going economic investment.

Don’t accept any of it as a given any more. In fact, anticipate and get out ahead of the ways where quality of life investment has been and will continue to evolve.

In the past few months there have been all sorts of interesting RFPs for private management of civic assets, and the tempo seems to be increasing, not slowing. “Private management company sought for pool complex.” “ Private management sought for community neighborhood centers.” “Private management sought for arts centers.” “ Private management sought for operation of city parks.” “Private management sought for zoo.” Not “local nonprofit” sought. Not “local partner” sought. Private management sought.

It is a sea change, and it could be coming to a neighborhood near you before you blink twice. Cities are actively soliciting and searching for profit businesses to take on many of the quality of life assets that are not producing. Basically, they are dumping responsibility for under-performing or deficit-causing assets while still seeking ways to benefit from the property tax revenues all municipalities need to earn through having a comprehensive set of quality of life offerings. And in the process, they don’t want to become once again potentially saddled with bailing out non-profit operators that would stand to become permanent arms-length extensions of government. No more “hand over the arts center to a nonprofit that you’ll end up, in turn, having to fund to operate the arts center.” Cities have had it with that shell game. Instead contract a management company to run it and let them figure out how to craft a financially viable model. And they will.

What does it mean?

First, it means a real civic fatigue with the given assumptions of subsidy is a norm. Debt is just too big to be willing to enter into partnerships that are simply going to remove direct red ink from one column only to put the red ink – in the form of operating grants, for example – into another column. Frustration with subsidy-as-norm approaches is over the top.

Governments are looking for something better. They want flourishing, brightly lit and well maintained public amenities that work for the facility operators – who, ideally, make a profit – and that aren’t a drain on public resources. They want a win-win out of a dead-end.

What are the results of this trend?

Chances are, citizens will be paying more out of pocket to use those assets. Have you had to pay for your kids’ music or sports in school lately? Steep, right? Well, expect the same thing for swimming classes at the pool this summer or for art camp for your eight year old in August. Expect the same thing for the water color class you always wanted to take through parks and rec, and anticipate paying commercially competitive rates to rent the neighborhood center for your family reunion. Your library card? How’s $25 a year for one person or $40 for a family?

Really affordable “public” amenities are going to disappear. It will be pay-as-you-go. Your first graders’ soccer team will pay to rent the soccer fields. You’ll have to pay a competitive “for profit” rate to take your pottery class. Your community band will pay more to rent the performing hall.

The businesses that contract to operate these once-public assets aren’t stupid. They know they have to find the price points for their markets and still be able to turn a profit. There will be different prices at different locations. Looking for a way to save? You may drive to the other side of town to get a better deal than your own softball fields offer. Chances are, these new service-merchants will focus only on what can sell, and sell out. Rather than broadening the offerings, they may limit the camps, sports classes, arts classes and after school programs to those that have a large enough popularity to work.

Does it have to happen? Will it be terrible? Or, will it be at least be tolerable?

It probably does have to happen, because we as a society have let it happen. We’ve just assumed and assumed that more amenities can be added every year, no matter the cost, and that somehow it will all work out fine in the end. Too much red ink and too many required subsidies later, our elected officials are drawing lines in the sand.

As for how terrible it will be depends on your perspective. Chances are there will be some real messes out there. But maybe we are in for a complete redo in the way we think about delivery of amenities, and in the process there may be an entire new industry of service providing businesses that excel and thrive and grow to become a valued economic sector. Maybe we’ll find out that a lot of the amenities we thought needed subsidy don’t, and that we’ll all pay for those amenities we value.

If we look at it through the lens of the American entrepreneurial eye, the benefits can be huge. Why not? “Zoos, Inc.” as a Fortune 1000 company. “Arts –n-Kids” as a national provider of quality arts learning in summer camps at parks in 500 cities across the country, and growing. “Community Center, Inc.” as the leading provider of facilities and program management for neighborhood centers in the northeast. You get the idea. It has happened in higher education. Our community amenities could possibly move from subsidy rolls and taxpayer responsibilities to businesses with values that attract investments and shareholders. And, possibly, there is something attractive about seeing quality of life elements that had no determinable financial value potentially transformed into businesses that could provide share-holder benefits to thousands.

Stay tuned. I have a feeling we won’t have to wait too long to find out.

More than Creative Workers: Creative Exports

There’s much more to creating a creative economy than calling your city a friendly home for creative workers. There’s more to it than offering jobs that are (potentially) sustainable, more than a convivial lifestyle for the creatively inclined. There is even more than winning new visitors who spend money locally, though this is in itself significant. A centerpiece of economic development is exports – gaining new dollars into the economy from other markets that buy what you produce. As such, an export plan, strategies, and sales force are essential to the success of a creative economy. When I think about the arts councils of tomorrow, the roles of chambers of commerce and economic development agencies in fostering the creative economy, the first thing I think of is how all of these can work together to create a climate favorable for and even facilitating the export of local creativity-based products and services to create new revenue from outside the market.

Exporting drove the growth of the American arts sector in its early post WWII decades, though it was largely focused around the major institutions from the major population centers. In the heyday of recordings and tours, performing arts organizations and museums alike realized revenue from export sales far outside their own markets. (The recording contracts of old brought in real new dollars from around the country and around the globe. And the brand and image boosts from tours brought in more than audience and donor revenue: it rubbed off on other export products, opening up markets for other products from the same cities. Mayors and business delegations used to go along on international tours with their local orchestras or ballet companies for this very reason.)

Those days are largely gone. At the same time, hundreds of smaller cities and towns now seek to realize economic gain from creativity, and the creation and maintenance of such an economic gain needs more than cultural tourism to drive it. Today’s smaller markets need to export creativity, just as our big cities did a generation ago. We need a new generation of export strategies, developed and implemented at the local levels, to open up, expand, and sustain national and international markets for local creative work that includes everything from fine art to creative innovation – and is likely delivered via technology.

To get there, new training for the field is important. How does an artist move from a local market or a regional tour market to an international market? How does an artist entrepreneur connect to and supply an international buyer market? And how does this local export industry grow and thrive, so that the attention and money that comes into the market from the first sale leads to greater opportunities as your city becomes increasingly known for its creative products? What about protecting intellectual property rights for the creator?

There’s another interesting point to thinking about the exportability of creative work. Is it of the quality and uniqueness that claims interest and purchase from other markets? The ability to succeed as exports drove a huge number of America’s arts organizations to invest heavily in excellence in the decades post WWII. Local leaders rationalized making investments to attract top artists to take up residency in their communities and spend their careers on their stages so that they could compete and win market share outside their own communities, through the unique product to entice new visitors, recordings, touring and other outlets. (I have a hunch that a great deal of what was initially thought of as short term investment to build highly competitive creative (arts) product went on to become annual grant funding. Along the way, the original rational of funding excellence that had export value was lost, to be replaced with more locally-oriented definitions of excellence, outreach, or service, which I think led to a lot of the anti-funding sentiments out there from politicians and local business leaders who once supported arts funding.)

As it was a generation ago, it is time to raise the exportability issue. Other revenue options are constrained. Funding is diminished. Local markets aren’t big enough to sustain local creative economies. Yet creative product is highly prized and valued world wide, and America’s creatives take the back seat to no one. In this global economy, our collective creative economy goals should be to win ever greater international market share and benefits back into our local economies.

Creating an Economy of Creativity

There is a lot of talk, writing – and even the beginnings of policy development – around the role of creatives in our 21st Century knowledge-based economy. Readers of my blog know that I’ve been on the creative-cultural bandwagon, advocating creatives as a large and encompassing economic sector with a lot more clout that our current splintered arts and cultural community. Getting there, however, requires an understanding of creatives, and out of that understanding it requires a method of expanding the economy of creativity.

We’ve fallen down on describing creatives, I believe, and revert to an and arts-crafts construct of jobs. Creatives are too often thought of as artists who work in the for profit sector while artists are those who create in the nonprofit sector, a la the Richard Florida descriptions of the creative class from a decade ago. It was great break through thinking, but is still too narrow to build a value system that, in turn, fuels the economy.

So let’s dig into this for a few moments. What are creative jobs? What is the creative workforce everyone wants? If we can appropriately create understanding around the fullness of creative occupations, we are further on our way to creating a viable economic sector.

Yes, creatives are artists and designers and related professionals trained in creative methodology. But I’ll put forward that the largest portion of the creatives field are the knowledge makers who solve problems and identify new products through creative thinking. Creative thinking is a talent and a skill that can be taught and exercised, focused and directed. It is fueled by presence of other creatives, creativity, and exposure to the creative process. This is why communities rich in creatives get progressively more exciting in their knowledge-based outputs, and why everything from learning arts in school to wandering through a museum collection to soak in the aesthetic of hundreds of creative perspectives matter in fostering innovation.

I was interested that President Obama was in Silicon Valley last week to talk about innovation, calling for more innovators to fuel our economy. I think he (and we as a society) are all using the wrong language. Instead of calling for more innovation, he should have called for more creativity. Innovation is an outcome – not the root of – of creative thinking and creative problem solving. Always, creativity is the spark, the “I see this in a different way” that leads to and shapes the capacity of innovation. Our society seems to like the word innovation because it suggests a mathematical-scientific process or formula that can be captured and transfered to others. But without the creativity that is at the heart of innovation, there is nothing. Creativity is not a formula. It is a process, a way of thought.

We are societally unlikely to immediately accept and praise creativity as the engine of innovation – especially when economic and political rhetoric alike are prone to pit the cause of science -”wise investment” – against that of creativity – “we simply can’t afford it.” But imagine if we very, very broadly marketed and lobbied and changed thinking so that over time – five years, say – the American public becomes tuned to and “gets” the creativity-innovation partnership. That parents who want their children to grow into careers as scientific researchers or in management realize their kids must be well trained in creativity as a way of thinking and problem solving. That there is a broad spectrum of “creative jobs” – and that perhaps the majority of creative jobs are those that rely upon the talents and skills of creativity to do work that fits into entirely different job types or classifications. That there is a financial, economic value placed on the proven skill of creativity (not just on innovation) so that America wants to “race to the top” as a creative economy.

Reinventing America’s Cultural Support System

Imagine for a moment that the current tumult over federal and state funding for culture led to the opportunity to pause and thoughtfully reinvent a viable public support system. A silver lining to the dark cloud, if you will.

Would it look like the support systems and amalgamation of agencies our country invented – one piece at a time, over a half century ago? Chances are, not at all.

Anyone looking for good thinking about a new type of cultural system would do well to read Culture and Creativity in the EU Structure, a report that came out last September. It studies EU investment in culture over the past decade and makes a solid case for what it calls “a focused, flexible and integrated culture-based development
strategy” throughout communities and regions of the EU.

At its foundation for examining the value of investing in culture, the analysis uses the tri-part definition that the EU Cultural System has employed since 2006:

Core Arts Areas: Performing and visual arts, cultural and architectural heritage, and literature.
Cultural Industries: Film, DVD and Video, TV and Radio, Video games, New media, music, books, and press.
Creative Industries:Those industries that use culture as input but whose outputs are mainly functional, including architecture, advertising, design, and fashion.

Both the Cultural and Creative Industries are further defined as “Those industries that have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the creation and exploitation of intellectual property.”

In a few simple lines, this glues together all the splinters across arts, heritage, history, and combines non-profits and for-profit industries. Wouldn’t it be great if our cultural system was as straightforward and inclusive as this?

By taking this holistic view, the report (an outgrowth of a policy group brought together in Brussels in 2009), was able to examine both the traditional impacts of core areas – tourism and related economic value of attending and participating in arts and culture – and contributions to a larger economic future. The report points to the “the rich and dynamic contribution” that all three of the above areas make to the knowledge economy and innovation, and to employment creation and social cohesion. In policy, the EU is unafraid to talk about supporting creative entrepreneurs at the same time as supporting traditional institutions. They have equally important roles worthy of investment, and the report notes that even in the past two to three years, the ROI on supporting culture and creativity as drivers of broad innovation has been well documented and demonstrated.

It is in this area of arguing for investment in culture as an economic driver of wide ranging knowledge-based industries that the EU has come the furthest in making a case for a comprehensive approach to culture and creativity. According to the report, “Culture-based creativity is an essential feature of a post-industrial economy. Culture drives technological and non-technological innovation, stimulates research and optimizes the application of human resources in the development of new products and services.” Basically, it makes a coherent case that the knowledge-based economic system cannot thrive without a healthy cultural-creative capacity.

How refreshing. How non-defensive. Imagine if we could restructure, reinvent, and optimize our investments in America’s cultural-creative system along similar lines. Imagine if we could go beyond the economic impact studies we rely on so heavily to make our case. (Per the report, a research institute in the UK that focuses on the nature of innovation has documented the supply chain linkages between artistic and creative activities, demonstrating positive relations to innovation and showing that creativity and culture “play an important role in the ecology of innovation.”) We could and should do the same.

Imagine, too, if like the EU we recognized that artists are important leaders in demonstrating entrepreneurship and small business development. The report writes that “The creative sector makes many of these processes evident and communicates the positive attitudes, the excitement and the vision that provide the motivation for entrepreneurs.” Rather than seeing the arts community as off to the side of entrepreneurialism and small business development, the EU is increasingly putting artist out ahead as models to others.

Now let’s be totally honest. Culture is not all rosy in the EU. A great deal of what the EU has attempted in what it calls “social cohesion” through culture has failed to live up to expectations. Some, including most recently the President of France, say it has failed completely.

That said, there is much to consider if we in the United States were to advance our system of cultural support and related advocacy for investment as has the EU in its support of the three part cultural system and the related recognition of both culture and creativity as central to innovation. We hear a lot these days about “invest in clean energy” or “invest in new technology.” Wouldn’t it be great if we could similarly talk about America’s investment in culture and creativity? We could, and should. The first step is to reinvent our cultural support systems and structures, and bring the field together around a new vision and expanded purpose.
Culture and Creativity in the EU Structure

Trend # 10. Create Jobs to Sustain the Creative Economy

Tenth in our series of Eleven Trends for 2011 is a prediction that this year we will come to realize that job creation and retention in the creative industries – is a major contributor to how to create, save, and sustain creative cities, and, as a result, to our economic recovery.

There are roadblocks. And they need to be addressed if we can fulfill this vision.

One problem is that a large portion of the creative sector hasn’t been holding onto jobs. Nonprofit cultural institutions have cut their payrolls to the bone. Despite the job-retention intentions of the Federal stimulus funds passed along to nonprofits through Federal appropriations to state arts agencies, the nonprofit creative sector is not adding extra staff. Even foundations that fund creativity through their grants don’t ask grantees how many jobs they have created in their organizations.

At the same time, those foundations have also been investing less in the arts. As I have discussed in previous blog posts, working capital is at what could be an all time low.

So when we talk about the ability of the creative sector to rebuild and sustain our cities, are we simply talking about the so-called ripple impact of the arts onto other sectors – the waiter jobs created when people eat out before going to a performance?

This is the point: the creative sector has been limping and hasn’t been sustained through any systemic approach. No one has provided realistic growth goals for the creation of jobs in the creative sector.

But at the same time, the creative sector has real potential to create jobs, lots of them. Not jobs based on ripple effect spending that supports, for example, x number of jobs in hotels or restaurants that are near performing arts centers, but true creative industry jobs. (Of note, these are not predominantly nonprofit, educational, or public sector jobs.) The true creative jobs are commercial musicians playing gigs and making recordings, tattoo artists and chefs, game designers and film screen writers, commercial and industrial designers, photographers and animators. They are custom furniture makers and stone fabricators. They are clothing designers and the creatives sketching out newly aerodynamic running shoes. They are videographers, website designers, the writers of sitcoms and documentaries, the entertainers at the ever-expanding number of casinos, the comedy club owners. They are the architects and designers who have hung on through the tough times, the landscapers who have introduced beauty back into urban neighborhoods. They are the novelists and ghost writers, the technical writers and the designers of tomorrows apps. Even the precious few music and theater critics left.

It has been a long time since Richard Florida started talking about them (us) all as a sector, but our industry still is just as fragmented and splintered a sector as it was a decade ago. We all need to work to make this happen.

Who represents this commercial sector so capable of growing in response to society’s quest for the new, cool, and aesthetically next thing? Who gathers them together as an industry to lobby and win economic incentives? Who represents them in seeking their start-up and business building capital? Who creates industrial parks for their start-ups?

And, if we figure that out, how does the sector go about growing jobs in all these fields and careers?

Here are some ideas.

Who:

Our industry should champion for economic development councils, redevelopment agencies, job corps and workforce development entities to take this on. We should build a case for them to stake their own economic development goals on it. We should challenge and support them if they pledged to grow the creative sector jobs in their town by x% a year for 10 years. We need to build this partnership.

How:

As an industry, we have to develop and sell a portfolio of investment strategies. For example: the start-up funds for those musicians needing pre-major label recordings, or the business growth funds to capitalize the potter whose new lines could go commercial. We need to show our partners in economic development the advantages of investment pools for backing local film makers on their next fund, and backing the next playwright on the next play. We need to demonstrate to individuals that investments in the future of artists can have viable returns. We need to push for annual creative industry job fairs, standing industry round tables, and industry promotions. We need to promote the use of government programs like AmeriCorps to provide on-the-job training and career growth in creative industries, and job bank resources.

We need to work to update the funding and grant paradigm of the last decade that placed audience growth as a top priority and job reduction as the top necessity, moving now to favor a job growth and capital growth as the dual top priorities so that nonprofit cultural and creative institutions can do their part in building the industry. We need strong metrics, however, to make sure that both the jobs and the capital do what they should to develop new excellent product that in turn garners additional earned and contributed income. And we need to change the all-too-common mindset that still thinks healthy cultural nonprofits are those that just manage to scrape by.

We need to broaden our concepts of commissions and the use of funding streams such as percent for public art, to provide start-up opportunities and portfolio development for every type of creative. Decades ago, it was not uncommon for cities to commission symphonies or plays. Governments have long commissioned sculpture and other public visual art. Let’s look at commissioning the full range of creative work, and let’s also create the comprehensive rosters of creatives so they can advertise and promote their own excellence.

In many states and more than a few communities, government arts agencies have already become a part of economic development departments. Some have begun moving into this more comprehensive direction. But it is still viewed as a sidebar to the core task of traditional grants to nonprofit cultural organizations. But rather than ad hoc movement in this direction, let’s now go for the logic-path of realignment to the creative industry of today. Let’s focus on jobs, backed by working capital. Let’s treat the creative sector as what it can be, a true engine of economic development.

Trend # 6: Should Cultural Institutions Pay Property Taxes in 2011?

Happy New Year everyone! May your year be creative and exciting as you lead the way in the world of arts, culture, and creativity.

Today is the first business day of 2011, and today’s trend in our Eleven Trends for 2011 sets the tone for thinking about the relationships between local governments and nonprofit cultural organizations this year.

Does your organization expect to pay taxes on your building this year? NGO watchers expect municipalities to look increasingly at various forms of tax on land-owning nonprofit institutions that have traditionally remained exempt. While the early targets of this have been entities such as nonprofit senior living centers and educational institutions, along with some churches, it will be increasingly hard for governments that are starting to tax these types of nonprofits to leave museums, cultural centers, and nonprofit cultural facilities off the municipal tax rolls. Some of the taxes will come in the form of user fees – sewer, water, street maintenance, snow removal, security – but others will be a straight property tax. Expect this to come up for discussion as budget season starts everywhere and local government face shortfalls. Be ready to advocate, and organize to develop win-win solutions.

And win-win scenarios can happen. Economic development specialists and many others recognize the importance of nonprofit cultural institutions and related districts to economic vitality. Cultural districts that work can literally save urban areas, which economic leaders well know.

Performing arts centers or museums that need a subsidy to keep their programming alive, at the same time create the restaurant scene that keeps downtowns lit, exciting, safe at night, and create business for nearby parking facilities, retail, and more. The net positive economic impact is usually much greater than any subsidy, but this equation may need to be stated and documented with more clarity than ever before.

When good documentation of this net positive benefit is offered, look to economic development and planning specialists to be strong advocates and important allies in finding equitable solutions that keep tax/fee costs down while stressing -and building – the value of nonprofit cultural institutions as drivers of business and property values. Cultural organizations that have never met their colleagues in local economic development agencies need to start building good partnerships now for this to happen.

A tested and viable approach is service in lieu of taxes (or fees) that can be win-wins for the public sector and NGO cultural organizations. These approaches have typically included options such as free admission days to the public for museums, or free performances for civic celebrations. While not always easy to arrange – i.e. the contractual issues of professional musicians or actors doing free events – the public willl see tremendous benefits and the in-kind arrangements are almost universally more favorable than the tax or service fees would be.

Among other scenarios: look to more currently unaffiliated groups of nonprofits in a downtown or other part of the city to define themselves as a group and establish BIDs or similar districts, with strength to market themselves as a group and create an advocacy base that establishes favorable contracts with municipal departments and works toward building the excellent reputations that attract developers to a neighborhood. While this, too, has been a tested practice, count on seeing it more widely used with the goal of creating economic value for the municipal government by boosting the overall property values in what could be multiple small cultural and creative districts. (Sometimes smaller districts, each with a unique identity and niche, can be more effective in notching up investment a few blocks at a time.)

Look, too, at the marketing and fundraising opportunities that may come about as groups see strength in banding together. Even donors that aren’t particularly interested in, say, a historical society or community arts center may get behind “The Cultural Centers of City X” based on what the group of institutions make possible in economic growth.

Consider this to be a newly focused type of united fund concept, in which savvy organizations work in small and symbiotic coalitions – perhaps subsets of larger cultural funds, or groups coming together for the first time – to attract attention from today’s cause-oriented donors. Look to coalitions like this to develop joint case statements about their combined contributions to the six or eight block areas they anchor, demonstrating their value in social and economic stories that compel more financial support – even in the face of municipal fees – because of their combined net value. When groups can show that “in our six blocks, our four organizations make X economic difference” and when they can show that the net positive difference far outpaces the cost of public services for their few blocks of geography, they can develop quite a case for support.

At the end of the year, expect there to be some impressive new models in place, where marketing, advocacy, and excellent working partnerships with municipal governments and economic developers pave the way for actual boosts in overall local support for cultural institutions.

The City of Architecture: Buffalo

Find the essence of place, and build on it. There’s no better summation of this cultural planning truth than the attached video on Buffalo. And there are few cities where so many groups have come together – CVB, economic development, business leaders, elected officials, neighborhood groups, arts and cultural organizations, even pro sports franchises – to redefine their city for future generations around architecture, art, and design.

Ed Healy – an incredible marketer and champion of Buffalo who heads the CVB’s marketing department – has for years believed that Buffalo’s legacy of breathtaking architecture – its magnificent necklace of parks with contemporary and historic public art, and its commitment to preservation evidenced by its multiple culturally vibrant residential neighborhoods and authentic cultural districts – make Buffalo as singular an attraction as its nearby natural wonder, Niagara Falls.

Having had the joy of working with Ed and so many others in shaping this theme of architecture, arts, and design into a winning cultural tourism strategy that has truly taken off over the past five years, I know first hand that this city I call “The American Story ” is rapidly growing into a major international cultural tourism destination.

The aim of the video is to promote Buffalo as the location for next year’s National Trust for Historic Preservation annual conference location. It tells its own story: the residents of this great city have geared up like never before to show the world their pride in place – their architecture, their art, and the great culture that is Buffalo. Every building, every block, every cultural organization, every garden, every sidewalk: this is a city determined to show its cultural greatness.

Anyone looking for a case study in redefining a sleeper city into a culturally shining star need look no further. Go to Buffalo.

Cultural Councils for the Future

I love arts councils – or cultural councils, culture and heritage councils, whatever they may be called – and have probably clocked well over a half million frequent flyer miles just on working with this structurally vital segment of the cultural and creativity sector. Out of the cultural councils that haven’t folded or been eliminated due to budget constraints, my bet is that at best only 30 percent are both healthy and focused on future-oriented needs as opposed to the traditional services and rationale. The field needs a radical remake: cultural councils have to get out in front again to make a substantive difference in saving and transforming community arts.

1. My calculations in reviewing thousands of Form 990s from scores of metros around the county suggest that at least 70 percent of United States arts and cultural nonprofits either have on-going structural deficits, have such low (or nonexistent) working capital – or have both dilemmas – that they are as stuck as Sisyphus, constantly trying to roll their institutional rocks up the hill only to watch them slip back down. Cultural councils know (and have championed) the cause of fiscal health, but at the same time they get stuck furthering the bad practices. An example is when I see a cultural council devote four months’ staff time and hundreds of volunteer hours to “pass through” $10,000 in state grants into ten $1,000 grants, at a negative cost benefit ratio of easily $50,000 administration for the $10,000 in grants. This is neither a smart business practice or making wise use of limited resources. (In fact, I have to wonder what the state agencies that have passed this yoke along are hoping to accomplish.)

Instead, cultural councils should be facing the dragon straight on: putting their constituencies’ structural deficits on the table, calculating the needed working capital, and defining new business approaches that can turn things around. Right now, there is a huge opportunity in helping nonprofits to digitize and sell tremendous amounts of e-product, and there are new opportunities in beneficial mergers and subsidiary development. Unfortunately, not many cultural councils can seem to get away from those maddening re-grant cycles to study, gain expertise, and lead their constituencies toward this point.

2. Cultural councils have largely adopted the creativity-sector language and inclusiveness made popular by Richard Florida, but have dragged their collective feet in expanding their services to the larger creative sector that goes far beyond nonprofit cultural groups. I recently attended a cultural commission meeting that opened with one of the commissioners telling the story of her daughter’s most recent business and financial successes with international public art commissions, and of how she has built a solid business based on sophisticated marketing plans and business strategies. That same commissioner went on to wonder at the dichotomy between the way the council sees individual artists – step children who should perhaps form local nonprofit associations – compared to the way artists create successful businesses.

Those councils that have small business development programs, start up loans, training in international sales and marketing and who even represent their constituents on trade missions overseas are on the right track, but they are the distinct minority. Yet in an increasing number of US markets, there are more for-profit artists/cultural/heritage businesses than nonprofits. This shift to for-profit cultural businesses is particularly profound among young creatives, who almost unanimously tell me they have absolutely no interest in founding nonprofits. They’d rather look for venture capital.

(I know one such creative who was recently fired by the board of the theater company he founded – by the board members he’d recruited – because he couldn’t “win” enough grants. He walked away from the nonprofit model, found investors, and is in the business of producing shows booked year round by dozens of casinos around the country. Business keeps rolling in. Dollar for dollar, he’s now the biggest player in his local cultural community, but has real difficulty fitting into the framework of the “arts community” served by the arts council.)

3. Cultural councils know that arts education in the United States is almost more of a mess than it was twenty years ago. Rounds of budget cuts have eliminated many bright spots developed over the past decades: magnet schools for the arts have ended, and little to no (or backward) progress has been made in enforcing arts learning standards. Record numbers of students are headed to music conservatories and art schools, but symphony orchestras, opera companies, and art galleries are closing and eliminating jobs and career paths. At the same time, there are entirely new creative fields waiting to be explored.

There are marvelous national and international models in which councils lead in fostering local-level understanding and curriculum that pairs creativity and innovation, targeted as much as fostering the creative inventors of tomorrow as encouraging new innovations in the arts. These should be the manifestos that cultural councils champion, the pilots they support.

4. Many cultural councils have extensively justified the economic impact of arts and culture, and deserve great credit for elevating the discussion of culture as an economic sector. It is vital, now, that they take the next steps of working hand in glove with their municipal planning departments, economic development commissions, business improvement districts, CVBs, redevelopment agencies, and other stakeholders to anchor economic development with arts and creativity enterprise and venues (for profit and nonprofit alike).

The best and the legendary cultural councils are doing this, and have been showing results for years. When cultural councils put together investment groups to build hotels and condominiums, lead the charrettes for redevelopment zones, help corporations work through how they can include theater spaces in bank buildings, determine the unifying elements and principles for zones, downtowns, suburbs, corridors, gateways and more, they are demonstrating culture as real economic development.
Time for a change? The exciting news is that many foundations and corporate leaders see the potential and are striving for change. Economic development commissions are taking increasingly active roles in fostering new thinking. Academics from MIT to community colleges are making the arts-innovation-invention links. Municipal planning departments are asking their cultural councils to lead in shaping unifying principles for development projects. CVBs are taking the lead in rebranding their communities around cultural assets. Exciting new thinking is underway. Our challenge? Make this the norm for the next generation of cultural councils.

The New Generation Local “Cultural” Council

By my calculation the US local arts agency movement is now – post recession – into its 4th generation. The first generation were the few pioneers who promoted the very concept of a local coordinating agency in the arts. Then came the big boom second generation, promoted heavily by the presence of federal and state leadership. (These included the NEA Locals Program as well as state programs that provided incentives and grants to launch local arts agencies and provide them with funds to re-grant.) Then came the third generation of retrenchment and loss as many local arts agencies simply closed their doors due to a lack of resources and equal lack of focused purpose. And now rising from the ashes are the fourth generation of councils, with a lineage and concept consistent with their heritage, but a new focus and tremendous urgency.

The hallmarks of this new generation are:

1) They are far more inclusive in their concept of “culture.” While “arts” councils have long done “cultural plans,” at the end of the day most of these councils were still just about preserving, protecting, funding, coordinating, and advocating for the arts sector. Increasingly, new generation councils (including those that have lasted from pioneer days, and have actively sought to remain relevant) are inclusive of heritage, history, humanities, and the arts. Zoos, libraries, heritage centers, science centers and more are now the constituents of progressive local councils.

2) These councils are given new energy and focus by local economic development leaders who want a very vibrant cultural life that appeals to the companies and workers they wish to attract. The pressure on them is now coming from the outside, rather than from within the arts, history, heritage, humanities field. Equally, their success is measured by the economic development leaders, to whom they are increasingly accountable.

3) Regionalism is in, redundancy is out. Those same economic development leaders are unlikely to be interested in local arts or cultural agencies in every city or suburb within a region. A hub and spokes, maybe. A “virtual” office, sure. But no redundant overhead.

4) Return on investment is key. Those that are directly in the business of boosting attendance – i.e. on-line ticket sales service for the region, “big list” database back office services for every nonprofit, centralized experts that rove between organizations saving each on cost and providing what each can’t afford alone – these are among the new interests of those that provide funding. SWAT teams – archivists who provide services to all the house museums in a region, IT teams, roving HR experts, web designers and more – these are “fee for services” offerings that funders want to see strengthen the overall field.

5) New business models, new money. The new generation councils are expected to establish a culture of new business models within the entire sector they serve/lead. These business models hold down costs, may include mergers, and make no assumptions about “business as usual.” At the same time, the new generation councils are expected to implement substantial efforts to really and truly deal with the monetary fuel needed to sustain the sector. This may mean regional taxing districts, workplace giving, dedicated revenue, pooled funds or more. They are expected to be high level brokers among the funding community, able to accomplish what others before them could not.

6) Similarly, these sector-wide councils work fluidly with for profits and non-profits. They know how to package their sector for the tourism business, how to support new business recruitment, work comfortably in tandem with those in recreation, public lands and resources, pro sports, and other “quality of life” sectors.

7) They may increasingly be in the development business, as partners, pre-development planners, owners, administrators, landlords. As regions take a look at the duplicated cost of running multiple facilities that could potentially be served by a centralized administration, the entire spectrum of development and facility management tasks are growing.

8) They are funders, but in a very streamlined way. Many former generation arts councils burdened themselves and their constituents with the weight of excessive paperwork and grants reporting to the point of the absurd. Twenty page applications and final reports for $500 grants became the reason to spend months of salaried and volunteer arts council time. More and more funders have pointedly asked the new generation of cultural councils for efficiency, streamlining, sensible approaches.

9) At the same time, the new cultural councils are demanding of their grantees. Gone are the days of making sure every organization always gets some funding. In are the days of holding organizations accountable for smart business practices, even if it means cutting off all funding to those that don’t pass. It is a tough new world.

Ready for the challenge? These new generation councils will be exciting, powerful, results-oriented entities. Dive in. Your region is waiting.

Boomers – the New “Seniors” – and Cultural Development

Today’s entry is the start of a series related to changing social and economic conditions that impact cultural development and cultural planning. The past few years have brought about such dramatic changes to cultural interests, participation, and economics that we’re headed into a whole new era of cultural planning. Unless your cultural plan is REALLY up to date, it is time to face the future and consider new goals and strategies.

Boomers are one of the biggest factors in the future of cultural development, so I wanted to write this in advance of Tom Brokaw’s special on boomers (March 4, replays March 6) to point readers toward the show and to stir up thinking about the boomer/young seniors impact on cultural development and audiences.

As Brokaw will point out, younger boomers can and will (pending the economy) move to desirable places for their early retirement, as opposed to older retirees, who are more likely to stay put. So, what do young boomers consider to be desirable places? Here’s AARP’s top 15 list:

Loveland, CO
Las Cruces NM
Rehoboth Beach, DE
Portland, OR
Greenville, SC
Sarasota, FL
Ann Arbor, MI
Tucson, AZ
Montpelier, VT
Honolulu, HI
Santa Fe, NM
Atlanta, GA
Charleston,SC
Northampton, MA
San Diego, CA

Interesting list, isn’t it. Natural Beauty trumps in most cases, followed by aesthetic beauty, and then by a good healthy dose of culture. It is also very interesting to see how many smaller communities in all climates, are included. (But then, Brokaw himself has a place “just down the road” – as we say out here in Montana – near another high beauty-strong cultural life community favored by boomer-new “seniors,” Bozeman.)

What does this list of aesthetically rich top new-seniors places mean for cultural development?

1. Count on what has been a promised out-migration of young seniors from big metropolitan areas. (A 30%-40% out-migration among affluent young seniors is projected from New Jersey, alone, in the next few years.) If yours is a community that is banking on the new young seniors to foot the bill for annual contributions to major arts organizations or other nonprofits, and to buy the tickets for those events…caution, the road is about to become pretty rocky. On the other hand, if yours is a smaller cultural center in a young-seniors-desirable place – let’s say a place like Concord, NH’s Capitol Center for the Arts – you are probably entering into a really good ten years. And, if you are building a culturally focused walking oriented creek-side (complete with trout) community like Easton’s planned SILK Creative Community, the odds are better and better that those big city losses will be your gain. Point: small communities that invest in cultural vibrancy and aesthetic excellence will benefit by gaining high yield new seniors who have the time, money, and interest to be local investors and leaders. Think about positioning your community to be competitive through cultural development, and reap the rewards.

2. The new seniors grew up on Woodstock, not Wagner, as their cultural foundation, and have much less relationship to traditional performing arts than their elders. That means that though they have the money and cultural interest to “age into” traditional arts consumers, there will be a smaller subset of this generation interested in classical music or ballet than their elders, without question. And, it means they are much more oriented to “festival” extravaganzas and traveling for their major cultural fix than their elders. Local doesn’t necessarily have to be the end all for them, so they will be content to live what AARP calls the “simple” life in their smaller towns and hop on a plane (economy willing) to take in a great performance at an iconic destination.

3. The new seniors are experience junkies – always have been – while the older seniors have always been more passive in their arts consumption. Older seniors volunteer as docents: younger seniors study painting with diligence. We are entering a time of unprecedented opportunity for arts-lifelong-learning. For decades, we’ve tried to build arts participation by concentrating on the young. Now it is time to concentrate on the young seniors. But don’t stay shallow: offer depth. The younger seniors don’t want the simplistic one hour intros to pottery their mom’s liked when they were 80. This group is more likely to build a complete studio in their house, and construct a state of the art kiln in the back yard than to take an “enrichment” course. In other words, you may have fewer people buying tickets for Beethoven, but your town may be selling more pianos, and your best bet for a new cultural arts center may be to include learning space where top pros provide instruction.

4. Finally, let’s return to that list of the top 15 desired locations. Young boomers will want to move to places where there is design excellence, historic preservation ordinances, public art, park systems with aesthetically pleasing areas for individual recreation (trails, bike trails), and cultural opportunities ranging from great libraries to unique music venues. They also want a community that celebrates its cultural image and identity rather than brushes it aside in favor of other brands.

All this is good and challenging news for cultural development. Remember, these are people who will increasingly choose to move to a specific community based on doing careful research and comparison. Has your cultural plan positioned your community to win at this?