ACT 160 UPDATE, Vermont Performing Arts Organizations, PLEASE READ!!

Act 160, the omnibus tax bill signed into law last spring (May, 2010) contains language that will require those of you that sell $50,000 or more in tickets to performances this year to charge a 6% sales tax on tickets to your events starting this April 1st.

We have just learned that ANY organization that uses a third-party ticketing outlet will probably have to charge the sales tax, EVEN IF YOU SOLD LESS THAN $50,000-WORTH OF TICKETS IN 2010!! The reason for this is that the Tax Department is interpreting the statute to read that the ticket seller is responsible for collecting the tax, therefore it is the ticket-seller's threshold, not the presenting entity's threshold, that matters.

Therefore, REGARDLESS of whether you believe this law will apply to you starting in April, WILL ALL OF YOU PLEASE fill out our incredibly brief questionnaire on the subject, by clicking HERE?

If you filled out a similar survey we sent out last spring, please fill it out again--you probably have more accurate numbers to report anyway...

Thank you!

Whose Art is it Anyway?

Much has already been written about the (Hide/Seek) brouhaha over David Wojnarowicz’s video “Fire in My Belly” at the Smithsonian’s National Portrait Gallery. Last week the Flynn Center for the Performing Arts’ director, John Killacky wrote a wonderful commentary on the issue—giving some much needed context to his position that the Smithsonian was profoundly wrong to remove the video from the exhibit.

Wojnarowicz died in 1992 of AIDS, but his work, much as it did in the late 1980s, apparently continues to drive some people over the edge. Why?

Outside of church, people invoke the Lord, God, Jesus, or any number of Saints for a variety of reasons; usually to celebrate something good that has just happened to them (“Before I thank the Academy for this award, I’d like to first thank God…”) or because something bad has just happened, or is in the process of happening. For people who face death, a crucifix serves as a talisman of something spiritual and redemptive; a tangible reminder that Christ suffered for our sins and that the journey to the next place will be made bearable by His suffering and His presence.

So why is it somehow more acceptable for an NFL wide-receiver to catch a pass in the end-zone, point to the sky, and drop to one knee for a short prayer, than for an artist, suffering from AIDS, to use a video-image of a crucifix covered in ants to express, in part, the pain and torture of his condition? Aren’t these two sides of the same coin? If it’s okay to include God in your victory dance, shouldn’t it also be okay to include God in your rants against pain and suffering?

From where I sit, the Church (Catholic or otherwise) has pretty broad shoulders and casts a pretty large net. Millions of the faithful will not suffer as a result of Wojnarowicz’s work being exhibited in the National Portrait Gallery (despite the fact that some of the video is for mature audiences). In fact, Wojnarowicz’s video will probably bring more people to a more spiritual place than will the US House Speaker-elect’s efforts to remove it from view.

So what is really going on here?

Somehow, 25 years ago, it became politically acceptable for some politicians to impose their own intolerant moral and religious views on all Americans, and this is the latest chapter in their war on people who “aren’t like them.”

I guess we are supposed to ignore the fact that people who aren’t conservative Christians also pay taxes, represent us in Congress, fight for us every day in Iraq and Afghanistan, and (for those of us with large families or large circles of friends) are loved and respected by us without question. In the eyes of a few powerful political leaders, you can’t be a “non-conservative-Christian,” create works of art using religious icons, AND have your work exhibited in a publicly-funded institution all at the same time. Why? Because you’re DIFFERENT.

Sadly, the Director of the Smithsonian removed the work without even inviting the critics on Capitol Hill to come and view it for themselves. Had he done so, an important educational dialogue might have opened.

The real question is, how tolerant can we be, or should we be, of someone else’s art if that person’s sexual orientation and/or religious views give offense? I was raised with the understanding that true Christians should be tolerant and forgiving, and that before judging others I should walk in their shoes. Aren’t elected politicians elected to represent ALL the voters, even the ones who are different?

In my view, the Government is supposed to do more than feed and clothe people, ensure their safety, and provide shelter. It should also enable a clear and accurate record of our collective journey through life to be documented and preserved. AIDS, while less in the news than it was 20 years ago, is still poignantly with us. Gay artists have always been with us, and always will be, as will their art. Religions will always compete for followers, especially in this country where freedom from religious persecution is guaranteed by our Constitution.

The Smithsonian is, if nothing else, the MOST appropriate place to present the record of one artist’s journey with AIDS. Like it or not, we all pay taxes, and we’re all going to die—some of us very slowly and painfully. Bottom line, David Wojnarowicz’s journey is our journey, his art is our art, even if Speaker-elect Boehner doesn’t seem to know it yet.

For more on this subject, click here.

To all Vermont Performing Arts Organizations...

Act 160, the omnibus tax bill signed into law last spring (May, 2010) contains language that will require those of you that sell $50,000 or more in tickets to performances this year to charge a 6% sales tax on tickets to your events starting this April 1st.

We still do not have accurate numbers from all of you about what impact this will have on Vermont revenues. Furthermore, there have been questions from various sources about what impact this would have if this tax applied to ALL performing arts organizations that sold tickets (ie., eliminating the threshold of $50,000).

Therefore, REGARDLESS of whether you believe this law will apply to you starting in April, WILL ALL OF YOU PLEASE fill out our incredibly brief questionnaire on the subject, by clicking HERE?

If you filled out a similar survey we sent out last spring, please fill it out again--you probably have more accurate numbers to report anyway...

And, since my most recent post commenting on Doug Hoffer's fine report commissioned by Melinda Moulton ran without Artmail, please scroll down...

Thank you!

A Time for Thanksgiving

A couple of weeks ago, policy analyst and man-who-would-be-auditor Doug Hoffer issued a four-page report on the Economic Footprint of the Arts in Vermont to Melinda Moulton, the Burlington entrepreneur and developer who commissioned it. I have known Melinda for a few years and had many rich conversations with her about the relationship between healthy communities and the arts and whenever the conversation has turned to a discussion about the “economic impact of the Arts in Vermont” we have argued about the benefit of doing such a study.

In my 35 years in the arts I have read hundreds of such studies, all of which have been commissioned by a local, state, or regional arts commission or arts advocacy group. With great anticipation, and usually at great cost, organizers of these studies have spent months articulating exactly what they hope to achieve, more months gathering data (most of the time in the form of questionnaires and surveys), and even more months crafting and publishing their reports which, with very few exceptions, prove only that the arts matter to a lot of people—a fact that I consider self-evident.

Most of them claim things like “every dollar spent on the arts has a seven to 13-dollar impact on the community where it’s spent;” or “studies prove that if your child studies a sequential program of art in school he/she will score 30-50 points higher on standardized tests, including college entrance exams.”

The problem with such claims is that policy-makers (legislators in particular) are very smart people and have access to even smarter people to advise them on how to interpret such claims. It turns out that while it may be true that a dollar spent at the Flynn may circulate throughout the Burlington economy, changing hands seven to 13 times before it finds itself in the wallet of a Jet Blue passenger to Fort Lauderdale—that is not economic impact, that’s just economic activity.

Also, while it might be true that kids that study the arts do have higher scores, on average, than those who don’t, there is nothing that says the relationship is causal. A far likelier reason might be that schools that have sequential arts programs for all their students are probably in wealthier communities. Wealth and parental educational achievement is a far likelier reason a kid does well in both the arts AND on standardized tests. The relationship between arts study and test scores is therefore, at best, correlative—not causal.

Sorry to burst your bubbles.

So why am I thankful? Because for the first time an independent policy analyst who, it turns out, is probably even more skeptical than I am about these types of studies, has been commissioned by a local businessperson who is anxious to prove that it IS possible to derive important, “impactful” conclusions about the arts in Vermont. Even more important, the cost of deriving these conclusions was a small fraction of what such studies usually cost. If I understand correctly, Doug looked at a variety of data, all readily available from sources like the Bureau of Labor Statistics, the Census, and Vermont’s Dept. of Labor, and examined them through an “arts prism.”

Full disclosure: yes, I had a couple of preliminary conversations with Doug last spring after he was first approached by Melinda. In both cases, however, rather than extolling the virtues of previous studies and recommending them to him as examples of how to do his own work, I spent virtually all of our time on the phone sharing my own deeply-held suspicions, my frustration at how conclusions tended to be exaggerated and therefore unsupportable, and my concerns that very little would come of his work that would be helpful.

I like to believe that my attitude may have helped Doug to achieve the nearly-impossible.

First, Doug ignored “the Creative Economy” since studies about it include for-profit organizations whose work is based on “creative outputs.” Thus, Doug's study isn’t larded up with movie theaters, book stores, gaming studios, and other such enterprises which largely serve as a distraction to what most people are trying to focus on when they think of an “arts impact analysis.”

Second, he focused the bulk of his own analysis on hard data (not surveys) that other sectors use when reporting on their own impact, and he kept it simple, focusing, it appears, only on employment, compensation, and tax data, which are standard data sets and very easy to defend.

Third, his methodology, using IMPLAN analysis, is a standard tool used by almost all policy analysts/economists to help understand or at least gauge the scope of operations that a particular sector encompasses. When economists tell a governor, for example, that it is “a good investment” to offer $5 million in tax breaks to a high-tech manufacturing company as an inducement for them to locate here in Vermont, there is a strong likelihood that someone, somewhere has used IMPLAN to help make the case.

Finally, Doug does not allow himself to render an opinion about “impact” related to the arts and community livability, student engagement, interpersonal and intercultural relationships, health, social capital, and so on. He shares a chart with some of the findings from a group at Princeton and leaves it to the reader to agree or disagree with those findings. Instead, his only statement about impact relates to the income to state and local governments from taxes collected as a result of all the activity in Vermont that is related to the Vermont arts sector.

The bottom line for me is this: we finally have a number…a defensible number derived by a certified skeptic not in the arts and not commissioned by an arts organization, derived using a standard and widely accepted methodology, to reveal what many of us have long suspected: “the state and local tax impact (emphasis mine) of the arts in Vermont is $19,438,480.”

How about that?!!

Like a good skeptic, I had to find out what that meant in ROI terms. Sure, $19.5 million might be the income, but what is the total investment?

I am aware of only a few cities and towns that invest local tax dollars directly in the arts, and a phone call to a couple dozen of Vermont’s best known “art towns” indicates that the aggregate local investment is less than $500,000.* This figure, combined with the State’s investment in the arts (including appropriations from the General and Capital Funds, and line items for the Vermont Symphony, Humanities Council, and Historical Society, results in a total State/Local investment of less than $2.5 million.

Thus, the total ROI for state/local funds invested is just under 800%. And this is not a return over time, this is a return every year. It is also a return that takes place even though the most significant public relations engine in state government (the Dept. of Tourism and Marketing) until very recently (like maybe yesterday) has not considered the arts to be a factor in the Vermont Brand, and that with the notable exception of Vermont Life Magazine, the state has done very little to publicize the arts in Vermont.

To me the policy implications of this report are not only big, but they are important. And it all is something to be profoundly thankful for!

*Burlington leads all towns and municipalities with direct grants and services to arts organizations and activities totaling about $350,000. Coming in a surprising, though very distant second, is Killington whose local arts investment is about $27,500. Jericho is third at $10,000. Most Vermont municipalities and towns have no direct support for the arts, and of those that do, the investment is usually manifested through the Recreation department budget and ranges between a few hundred dollars and $2,500. --ALA

Five Ways to Cope

In my last post (scroll down), I shared five trends that are driving the planning and operating agendas of arts organizations. Since the trends were, frankly, quite depressing, I closed by saying I'd share some strategies for how to cope with--or even take advantage of--these trying times...

Focus on Excellence
Last July the Kennedy Center's Michael Kaiser shared his thoughts about how organizations could cope with a financial crisis, and the one piece of advice that stood out for me was his admonition to NOT sacrifice artistic quality to save a few dollars. What I particularly noted was that he wasn't just saying "hire the best performers;" instead, he said "showcase new and exciting work." The lesson is, I think, people have seen Macbeth and heard Beethoven's Eroica; but they probably haven't seen Tony Kushner's "Angels in America" or the latest work by Philip Glass. In his experience, during tough economic times, patrons will pay to see something they haven't seen before (that has an excellent reputation) and not pay to see "the sure thing" that they probably have seen many times before. Keep your programs fresh...

Bring your Show to Where the People Are
Why should Philadelphia have all the fun? Two of the most moving examples of "taking it to the people" are the Opera Company of Philadelphia-led "Random Act of Culture" that involved dozens of local choruses, the "Halleluia" Chorus from Handel's Messiah, the Wanamaker Organ, and Macy's department store in downtown Philly; and their equally inspiring rendition of the "Brindisi" chorus from Verdi's La Traviata in the nearby Reading Market. These are extreme examples of what performers have known for ages: sometimes the best way to get people interested in your programs is to reach out to them first--in supermarkets and farmer's markets, in train stations, ski lodges and waterfront parks. Flash mobs may be the extreme version of what is a pretty good strategy for opening up your doors to younger audiences. Don't forget, though, the event has to be high quality to succeed...

Explore "Transient" events
Closely related to flash mobs is a growing segment of arts activities that can only be described as "transient" events. These are cultural events that occur in nontraditional spaces like parking lots, empty storefronts, public parks, and train stations, but instead of an opera company performing opera, or a dance company doing a dance, these are more often a collaboration of artists who are presenting original work that is designed specifically for the site. Whatever the collaboration needs, they figure out the cheapest most expedient way to do it. Collaborators are paid by passing a hat for a suggested donation and marketing/promotion is done entirely on Facebook or Twitter. With virtually no overhead, all of the tangible expenses handled as in-kind donations, and no formal "organization" to pay for, costs are unbelievably low and audiences are left feeling like they have been part of a planned, original "happening." While it technically a fairly "low risk" endeavor, an established arts organization might find this to be a "low reward" activity. This kind of performance, however, is proving to be a very popular pastime for the highly connected under-30 somethings on the west coast. At least that's what I've heard...

Is this the wave of the future?

Do Less with Less
Yes, this one is obvious. So why do we have such a difficult time doing less than we did last year or the year before? Because we are mission-driven, we are passionate, we believe in the all-consuming power of the arts to make our lives, schools, and communities better, and because our funders continually expect us to do more than we ever did before.

So here is a thought: disguise how you are doing less with less. Instead of doing six subscription events in a season, do five (high quality, remember), and, instead of a sixth, convene a gathering of local or regional artists for a day-long discussion of how to address the challenges facing the community. Invite the media--make an event out of it. Charge $10 to attend, and feed them all a box lunch. Your networking/planning discussions may show you new opportunities that you never would have thought of...

Or do five events of your own, and then invite your area schools to come in and present a showcase of their most talented students in a reduced-priced program whose purpose is to, say, raise funds for scholarships for their attendance at an arts school, or to make the local library more physically accessible or some other important community charitable purpose. Once you start thinking of your season as "five-plus-one," instead of "same-old-six," ideas and opportunities will start to flow.

Increase your Marketing/Promotion Budget
Most people have the biggest problem with this one. Again, because as 501(c)3s, most arts organizations are hard-wired to spend that last dollar on program, we insist on cutting marketing and promotion first. As Michael Kaiser pointed out last July, it's better to do one less event, but do everything else well--which includes marketing and promotion. As a percentage of our overall budget, I believe that we should begin to get our boards of directors and our funders comfortable with a marketing/promotion budget of at least 10%. Right now, if memory serves, our field usually spends about 3% on average. This is not enough. If people don't know the good work you are presenting, how are you going to expect them to buy a ticket? Organizations that gain audience share during times of austerity, usually keep those gains when the times get better.

Collaborate Collaborate Collaborate
Before you exhaust your organization's resources trying to cope with a tight budget and increased competition; before you burn out your administrative and artistic staff by freezing salaries, asking for more hours, or placing them on furlough; before you allow your facility to slowly deteriorate to the point of embarrassment for lack of attention to regular maintenance, please please please collaborate! Think of your competition not as competition, but your most sympathetic partner. The chances are, if you are struggling, so are they, and they will welcome any overture from you.

Interestingly, I've had conversations with organizations who have a misplaced idea of who their competition is. One individual wanted to start a dance company because, as she put it, "there are no dance companies doing what I want to do in my part of the state." What she wanted to do was reach out to high-school aged boys and girls--particularly girls--and engage them in dance. To her, the competition was other dance efforts. To me, her competition was the local recreation department's after-school sports programs. I haven't heard back from her yet...

On another occasion, I had a conversation with a member of a local theater company whose board refused to allow him to share a production with another, similarly-sized theater company less than 50 miles away. "They're our biggest competition" this person was told. Maybe. It turns out that NO ONE on the board of this theater company had ever even attended a production at the other theater, nor did they know a single audience-member who had either! So with no audience overlap, how could they POSSIBLY be competitors? If ever a collaboration was designed to function well, this was it! So far, no dice...

* * * * *

Times of austerity are times to not just think, but actually ACT outside of the box. Why? You have a ready-made excuse for failure. "We had no choice...we had to try something!" Don't be misled, however. None of the ideas I have suggested are easy. All will certainly take you so outside your comfort zone, but isn't that better than, say, forced retirement...?

Stay strong and do good work.

Five Trends and Then Some...

I just returned from back-to-back conferences in Austin TX (National Assembly of State Arts Agencies) and Chicago IL (Grantmakers in the Arts). Both conferences are designed to help us provide better services to our constituencies and I spent a lot of time absorbing the latest national trends. Here they are...

Trend #1 -- Eroding Public Confidence in our Institutions
With the exception of the US Military and the Small Business Administration, major institutions in all sectors (Public, Private, and Non-Profit) have seen public confidence wane significantly in the past few years. In general, if you are large, have a high overhead, and/or are slow to develop new products and services to meet changing circumstances--you are more likely than ever to be perceived as wasteful and a burden to society. The good news is that if you are a major arts institution, at least you aren't the US Congress, a Health Care organization, an insurance company or a bank--all of which are pretty much despised by the general public these days.

Trend #2 -- Burgeoning Accountability Movement
No matter how long you have been doing what you do, if you aren't "transparent and accountable" you are at risk. No data exists that proves the value of the arts on their own primarily because the arts have never existed in a vacuum. But we are nevertheless being asked to develop performance measures and key indicators that justify the investment. This is clearly a response to both the climate of deregulation on Wall Street (and the ensuing economic meltdown) and a few examples of some serious "worst practices" in the charitable sector and is related to the eroding confidence the public has in our institutions.

Trend #3 -- Declining Arts Funding
Although the amount of dollars going into the arts from the private sector has increased in the last five years, the share of all charitable giving (individuals, corporations, and foundations) going to the arts has declined a half-percent. In other words, while our "slice of the pie" has gotten slightly larger, the pie itself has gotten REALLY large. This is mostly because as governments have turned more and more to the private sector to make up the gaps in education and human services, the arts have been perceived as being less urgent. We have to get better and better at articulating our value to society and backing it up with cogent, believable data.

Trend #4 -- Arts Participation is Changing
Audiences for the traditional "western classical art forms" are declining: getting older, dying, and not being replaced by younger, "salt and pepper" audiences. This is not necessarily all bad news...it just means that if you present symphonies, opera, theater, ballet, jazz, or are a museum, you are probably not prepared to offer "art" the way the under-30 crowd likes to receive it.

Technology and the internet have created new ways of experiencing the arts, allowing for more direct, idiosyncratic access, even "flash mob" participation. Most significant is the rise of what is now called the "curatorial me;" the individual consumer who decides for him/herself what (s)he wants, when (s)he wants it, how (s)he want it (tv, laptop, or smartphone) and expects it delivered instantaneously for only a few dollars. This is radically redefining what an audience is, what an institution is, even what a community is.

Perhaps most significant is that opportunities for creating, sharing, and consuming art are increasing a lot, despite the loss of traditional audiences and the threats to arts education. One-third of all teenagers have created and shared works of art online--sometimes to audiences numbering in the millions! This is, needless to say, creating confusion and depression on the part of marketing and programming executives in arts organizations everywhere!

Trend #5 -- Woe Woe Woe!
As you might imagine, Trends 1-4 are creating a significant problem for the financial health of the non-profit arts sector. According to Grantmakers in the Arts data, only 16% of non-profit arts organizations are expected to end FY 2010 with a surplus and 65% have less than 90-days of operating cash on-hand. They are responding to this by downsizing, reducing HR benefits, reducing program commitments, merging/collaborating, creating new marketing strategies, waiting for emergencies to occur before taking action (which sometimes works but usually inspires panic), and even closing their doors precipitously.

At the very least, organizations are for the first time planning not to do "more with less," but to do "less with less." This is a new operating condition for our mission-oriented field. We have to start thinking of unlearning practices that are almost hard-wired.
___________________________

These are scary times in the arts. Our field is under-capitalized. Our traditional delivery systems (the institutions) are lacking demand (or perhaps there is too much supply?). Funders are demanding increased accountability and sometimes even collaborative input into programming decisions (egad!).

We are faced with new funding mechanisms that are tailored to the intensely "democratic" tendencies of the web--allowing great ideas to get noticed and funded by the general public through social networks. Strategic planning horizons which used to be five to 10 years out are now less than two. And we have just learned that even though the recession has been over for 18 months or more, it will be at least another two or three years before we begin to see a recovery.

So where do we go from here?

I'll explore some ideas in my next post...

(P.s. a big shout-out to Jonathan Katz at NASAA for setting the stage for this trend report and to others at Grantmakers, the Nonprofit Finance Fund, The Pew Charitable Trusts and the Cultural Data Project for unknowingly giving me some choice sound bytes to share...)

Doing good, or doing well?

According to the National Assembly of State Arts Agencies, one-third of the fifty state arts agencies' per capita state appropriation is $0.50 or less for the first time since...well, forever. (Vermont's per capita support for the arts is around $.82, in case you wondered.) Even more distressing, the amount of dollars that State Arts Agencies have received since 2001 has decreased by an inflation-adjusted figure of 43%.

Put more succinctly, State Arts Agencies are doing everything they do today with about half of what they had ten years ago.

It gets more distressing...

I picked up a copy of the current issue of Forbes' 400 (hey, Jay-Z was on the cover). I was struck by a teaser headline on the cover "Best Year Ever For The Richest Taxpayers."

Turning to the article (page 202 in case your copy happens to be lying around), I read the first sentence: "For the 400 richest Americans, 2010 may go down as the best year ever when it comes to paying taxes." Sure, 2011 won't be quite as good to our richest friends, but even if you are not a close relative of George Steinbrenner (you guys hit the lottery this year!), you'll probably be okay when your taxes go up a few points next year . Better than okay, actually.

When I was growing up I learned at my grandparents knee(s) two important lessons. The first was if you wanted to achieve anything, the best way was to be generous with giving others credit. The second was, doing good is far more important than doing well.

I have a suggestion for the 400 richest Americans starting January 2011, since it is clearly going to be a "rough year" for them. Consider taking one-half of one percent of your wealth, and make a personal charitable donation to your state's community foundation to support the arts and cultural activities of your state.

If just the 10 richest did this, it would enrich our lives to the tune of $1.354 billion. That's a pretty nice tax deduction. Plus, you'll not only be doing better, you'll be doing good.