Wednesday, March 26, 2008

HOW SMALL IS 9-1000ths OF A PERCENT

I’ve been helping my fifth-grader work out some math problems during the past few weeks and doing so has provided me with even more perspective on the work we do at the Arts Council.

Some of the problems had to do with the relationship between decimals and percentages. No matter how often I said the conversion from decimals to percentages was a mere matter of moving the decimal two places “over to the right,” it didn’t sink in until I started putting some examples into play.

Starting with a dollar, I asked her how much 10% was. She immediately responded “10 cents.” And how do you show ten cents? “\$0.10,” was the reply. Right, I said, so point 10 equals 10%. See how it’s the same number, only the decimal place has been moved from the left side of the number ten two places over to the right when it’s expressed as a percentage?

Okay Miss Smartypants, let’s do one that is a little more complicated. Express 546,000 as a percentage of 1,235,740,000.

After a moment of concentrated engagement with her calculator, she said (a little perplexed) “4.418e minus 4…What does THAT mean?”

It means that the result is so small that the calculator has to tell you to move the decimal point over four places to the left in order to give you your answer. Frowning in thought, she returned to the task, and said “Okay, 546,000 is 0.0004418 of 1,235,740,000 or--pausing to move the decimal two places over to the right--.004418 percent. Why this number?”

Why, indeed. Very few people besides me would recognize the ratio—44/1000ths of a percent—as being the Arts Council’s appropriation compared to the State’s General Fund budget.

Yes, our budget is a mere 44/1000ths of one percent of the State Budget. Our requested increase of \$103,000 (to meet the required match from incoming Federal Funds from the National Endowment for the Arts) would increase that figure by 9/1000ths of a percent of which most would be spent in communities across the state on local community arts projects.

But it appears that even that tiny increase is too rich for our elected officials in these times of austerity. The House Appropriations Committee has done its bipartisan best to increase our request during the past couple of weeks.

But all of us who lurk about the State house at this time of year keep hearing “there just is no money.” Why, though, am I having a hard time believing it…?

I run an organization. I pay attention to the money we spend. I don’t like to waste a dime. And I don’t focus only on the expense side of the ledger. I look for ways to enhance our revenue—or at the very least look for ways to leverage revenues from other sources to provide financial benefits to our arts and cultural constituents.

Next year the National Endowment for the Arts will give us \$103,000 more than it is this year. The State (appropriation) is supposed to match this increase. In turn, the Council is supposed to use this increase to provide grants and services to the field. Of the \$206,000 combined increase, we have committed to putting \$180,000 out in direct grants. These grants, in turn, require a one-to-one match from local municipal and private sources. When all is said and done the State’s increase of \$103,000 will generate an additional federal (\$103,000) and local (\$180,000) match totaling \$283,000. That’s an ROI of 275%!

It’s also the part of the revenue stream that is by far the easiest to measure.

The rest of the revenue stream is what happens when the combined state/local matching funds of \$360,000 starts underwriting cultural activities all over the state, such as festivals, art openings, concerts, plays, performances in parks, and local events around the “Art Fits Vermont” project we are about to announce to follow up our wildly successful Palettes Project.

People travel to those events. They eat at restaurants and stay in hotels. They shop for mementos, for clothes, for works of art and craft. They come back. They bring friends and family. They spend money—a portion of which finds its way back into the coffers of the local municipality and into the coffers of the State of Vermont.

The revenue generated by Vermont’s “cultural community” (i.e. the community that tends to look to us for support) is usually captured in the tourism statistics. But that’s usually not what is most significant about our work.

The things that are most significant about our work are the relationships that people form in their communities from shared memories of evenings spent at the lake listening to Mozart, attending a barn dance, or raising money at an art auction for a local senior center. Social scientists tend to call these intangible results “social capital.” Difficult to measure, sure, but no less real than the sales and meals tax collected by restaurants on Church Street right before the Flynn has an event.

The bottom line is this…a \$103,000 increase to the Arts Council will result in an immediate \$283,000 increase in additional spending in Vermont’s Creative Sector. I can’t believe the State cannot find 9/1000ths of a percent lurking somewhere in some “rainy day funding pot.”

Meanwhile I continue to help my daughter with her math. She couldn’t comprehend 44/1000ths of an inch so I gave her a tangible example. According to the Times Argus, the Bennington Monument is 308 feet tall. If the Bennington Monument represents the State Budget, the Arts Council portion is not quite 1 2/3rds inches of it. About the length of my daughter’s little finger. The requested increase—add another knuckle’s-worth.

Maybe the Senate will find it. Stay tuned…