Arts Advocacy Update LXXIX

The content below is from Americans for the Arts' Cultural Policy Listserv, email blast of March 5, 2009:


Fine arts are in survival mode as funds dry up
USA Today, 3/3/2009
"The downturn walloping the entire economy has hit non-profit arts organizations especially hard. With millions of people scrambling to pay for food and other basics, a night at the opera can seem frivolous. So museums, symphonies, theaters, ballet companies and opera companies have cut staff, canceled performances, shortened seasons and, in some cases, shut down.... A USA TODAY/Gallup Poll in December found that 69% of Americans are cutting back on entertainment."
Not especially groundbreaking reporting but what it does show is how the topic is really spreading into even most mainstream publications.


Study: Arts endeavors net $153.5 million in state
Lawrence Journal-World & News (KS), 2/27/2009
"The Kansas Arts Commission this week released a study showing expenditures by arts and culture organizations, as well as audiences, totaled $153.5 million in 2007. In addition, the study, by Americans for the Arts, found that arts-related activities generated 4,612 full-time equivalent jobs; $95 million in household income; $6 million in local government tax revenue; and $9 million in state government tax revenues."
As percentages of overall employment, income and local and state tax revenue, that strikes me as particularly high, no? Red state irony.


Study: Film industry adds $763M to state during 2007
Shreveport Times (LA), 3/3/2009
"In an economic impact study released Monday, the motion picture industry is estimated to have added $763 million to the Louisiana economy during 2007 at a cost of $105 million to the state."
And to think that Gov. Bobby Jindal want to divert some of that money to volcano research... :-)


Access to Arts Education
General Accounting Office, 2009
Asked by Congress to investigate four questions related to the the effect of NCLB on student access to arts education, the GAO found that 90 percent of elementary school teachers reported no change between the 2004-2005 and 2006-2007 school years, and four percent reported an increase. "However, about 7 percent reported a decrease, and GAO identified statistically significant differences across school characteristics in the percentage of teachers reporting that the time spent on arts education had decreased. Teachers at schools identified as needing improvement and those with higher percentages of minority students were more likely to report a reduction in time spent on the arts."
Here's more of the pertinent text: "Specifically, teachers at schools identified as needing improvement and those with higher percentages of minority students were more likely to report a reduction in time spent on the arts. In addition, when we examined the average amount of change in weekly instruction time among teachers that reported either an increase or a decrease, we found that teachers at elementary schools with high percentages of low-income or minority students reported larger average reductions than teachers at schools with low percentages of these students."


To win hearts and minds, get back in the game
Foreign Policy, 2/26/2009
Indiana Senator Richard Lugar opines, "As part of a broader overhaul of its public diplomacy effort, the United States should reinvigorate the old American Centers concept-putting, when possible, new ones that are safe but accessible in vibrant downtown areas-support active cultural programming, and resume the teaching of English by American or U.S.-trained teachers hired directly by embassies. That would help draw people to the centers and ensure that students got some American perspective along with their grammar. America's best players in public diplomacy have always been its people and its ideas. The United States should get them back into the game instead of standing on the sidelines."
People have been pushing this for years. Wasn't this part of Karen Hughes' job under Bush?


A really new deal would stimulate the economy of the future, not the past
Globe and Mail, 2/28/2009
Richard Florida argues that economic stimulus funds in both the U.S. and Canada are misdirected toward traditional infrastructure and the "old economy." "For a stimulus to work today it has to stimulate the emerging creative economy, the engines of regional economic growth and higher incomes across Canada and the U.S.... The creative economy already includes roughly 30 per cent of Canada's work force and about a third in the U.S. It accounts for more than half of all wages and salaries paid in each country. So, if the stimulus were allocated proportionately, between $250-billion and $375-billion should have gone to the U.S. creative economy; in Canada, the figure would be $12-billion to $20-billion."
What does this mean in practical terms when we say "creative economy"? I mean, I love Richard Florida, but how would these figures specifically translate on a granular level? I found a bit of a clue -- though arguably an elusive one -- by re-reading Florida's article a second time:

"The creative economy already includes roughly 30 per cent of Canada's work force and about a third in the U.S. It accounts for more than half of all wages and salaries paid in each country. So, if the stimulus were allocated proportionately, between $250-billion and $375-billion should have gone to the U.S. creative economy; in Canada, the figure would be $12-billion to $20-billion.

Stimulus funds could be used to strengthen Canada's science and technology infrastructure and its music, film and art scenes; it would provide entrepreneurial assistance and garage-like incubation spaces for innovators the Bloomberg administration is doing in New York City.

It would make far greater sense to invest precious infrastructure dollars in high-speed rail and broadband Internet lines to connect our communities than in roads and highways.

We will begin to move toward a durable recovery only when we stop unnecessarily propping up the old economy. Indeed, we have to make housing and transportation cheaper, as we did with agriculture during the New Deal, in order to free up the demand that will provide enduring stimulus for the creative-economy businesses and jobs of the future."

Lower Manhattan Arts Groups Join Forces for Survival
Tribeca Tribune (NY), 3/2/2009
"These days, arts groups are thinking creatively, not just about the work they produce, but about survival. Nowhere is that more true than in Lower Manhattan. Seeking clout in numbers, Battery Dance Company and 11 other Downtown-based small- and medium-size arts organizations recently banded together. Calling themselves the Lower Manhattan Arts Leadership Group, they are sharing their financial and audience numbers for the first time, hoping to convince policy makers that, together, those figures carry weight—in jobs, taxes, neighborhood business support..."
Here's some great stuff from the story:

"The 12 groups range from Blue Coyote, a theater group with an all-volunteer staff and operating budget of $29,000 to Dance New Amsterdam, with more than $3 million in annual expenses. But all share uncertain futures as public funding is cut and foundations—many tied to the fortunes of the stock market—search for ways to continue their missions.

“Some of us are on the verge of, or in, an immediate crisis. Some see a crisis six to nine months out,” the group warned in a report issued last month.

For 3-Legged Dog, the experimental theater and multimedia group at 80 Greenwich St., the need is immediate. The non-profit is behind on its payroll and rent, said the director, Kevin Cunningham, because its promised portion of $7 million in New York State Council on the Arts funds was not distributed last year. This, he said, at a time when individual donations have dropped and foundations are in a “wait and see mode.”

“We can’t wait and see,” said Cunningham. “We have to move or die, basically.”

With that sense of urgency, the groups came together, assisted by Paul Nagle, director of cultural policy for City Councilman Alan Gerson. The “micro economic picture” of what these Lower Manhattan arts group contribute, he said, “puts a face on [the arts community]. That makes it very neighborhood-specific and difficult to ignore.”

According to those figures, the 12 Downtown groups yearly serve an audience of nearly 300,000 (with hundreds of thousands more reached via the Internet). They spend more than $15 million and pay out millions of dollars in taxes.

“We aren’t just a bunch of kooky artists in a room with our fingers up our noses,” said Carol Ostrow, producing director of the Flea Theater on White Street. “We really are much more of an economic driver than people think we are, and if we’re not on this street a lot of other people are going to be hit.”

Neighborhood businesses benefit from the Flea, said Ostrow. Costumes must be cleaned, cars parked, sets built, scripts copied. And audience members who come to the Flea shows often eat in local restaurants."

Measure to fund arts fails in House
Argus Leader (SD), 2/26/2009
"Funding for the South Dakota Arts Council, and in turn dozens of art programs across the state, failed to pass the House of Representatives vote Tuesday. House Bill 1229 had a majority vote, 44-26, but was shy of the two-thirds it needed to pass. But that doesn't mean the hope for funding the arts is dead - it just was placed in the wrong vehicle for getting that done, said Rep. Shantel Krebs, who voted against the bill.... Proposed state budget cuts include $668,000 for the arts council, which is matched by the National Endowment for the Arts - money also lost without a state arts office, along with funding in the national stimulus package.... Gov. Mike Rounds recently spoke in favor of preserving arts office funding."
Let's not give up on this one.


Some Nonprofits Can't Touch Their Money
ABC News - AP, 3/1/2009
"It's a frustrating quandary for universities, orchestras and other nonprofit organizations in two dozen states. They have the [endowment] money they need to save jobs, offer scholarships and put on a solid schedule of programs, but face state laws that keep them from using any of it."
Read this, it's horrifying:

"It's a frustrating quandary for universities, orchestras and other nonprofit organizations in two dozen states. They have the money they need to save jobs, offer scholarships and put on a solid schedule of programs, but face state laws that keep them from using any of it.

"I don't imagine the donors anticipated a situation where the market would fall so dramatically that the money would be held hostage and unable to support the symphony at all," said David Chambless Worters, the symphony's chief executive.

Rules governing how nonprofits in North Carolina and 23 other states use their endowments date to the 1970s, when most states adopted a uniform law that prohibits withdrawing money from endowments that fall below their "historic dollar value" — the money given to create the endowment, plus any later gifts.

The law is designed to protect endowments by preventing institutions from dipping into the principal. An endowment is supposed to be a perpetual source of revenue, with institutions drawing off only the earnings.

The rule affects newer funds most severely, since they have had less time to invest a gift and build the endowment's value.

Neither the National Council of Nonprofits nor the Council on Foundations, both based in Washington, keeps track of how many of its members are struggling with endowments that are now underwater.

But "anecdotally, it is a serious problem. And if the current financial downturn continues, the problem will only get worse," said Harvey Dale, director of the National Center on Philanthropy and the Law at New York University."

U.S. Conference of Mayors President Miami Mayor Manny Diaz Blasts Louisiana Governor
Bobby Jindal for Recent Statement on the Arts
PR Newswire, 2/26/2009
The nation's mayors criticize Louisiana Governor Bobby Jindal for "his remarks made at the White House questioning the economic impact of the arts on the national economy: America's Mayors are extremely disappointed by your recent statements questioning the economic impact of the arts to our national, state and local economies. We are also highly concerned by your repeated attacks of the American Recovery and Reinvestment Act (the 'Act') by highlighting the $50 million dedicated to the National Endowment for the Arts. While we certainly respect your right to oppose the Act, this funding, which represents .00635% of the total funding provided in the Act, has, we believe, become a convenient political scapegoat.... The nation's 100,000 nonprofit arts organizations and their audiences generate $166.2 billion annually in U.S. economic activity. They support 5.7 million jobs and provide nearly $30 billion in government revenue. This economic stimulus will minimize the concern that ten percent of arts groups could close this year and helps save thousands of arts workers from losing their jobs."
Yet some people don't want to acknowledge that the right is going to bash the arts as a way to unify its troops.


U.S. Stimulus Efforts to Have ‘Modest’ Impact, NABE Survey Says
Bloomberg News, 3/2/2009
"The $787 billion economic stimulus package signed into law by President Barack Obama will have only a 'modest impact in shortening the recession,' a private survey of economists showed.... Survey respondents ranked infrastructure spending, expanded unemployment benefits and income-tax cuts as the three measures that will have the greatest effectiveness in stimulating the economy. The three that are expected to be the least effective are: spending on social endowments such as public housing and the arts, the earned income tax credit and lump-sum tax rebates."
Since this flies in the face of the fiscal-impact argument, who will challenge these people?

Arts Get Whacked by Rich as Companies Face Losses in Endowments
Bloomberg News, 3/4/2009
"Corporations and wealthy individuals are donating less to nonprofits, with arts groups taking the biggest hit, according to two new studies.... Arts and culture will see the biggest drop, with 41 percent reporting a decrease in resources."
It really does feel like 2002 and 2003 all over again.


Half of Wealthy Americans Say Taxes Don't Affect Their Giving, Study Finds
Chronicle of Philanthropy, 3/3/2009
"A majority of affluent Americans say their charitable giving would be unaffected by the elimination of federal tax provisions designed, in part, to encourage philanthropy, according to a new study by Bank of America and Center on Philanthropy at Indiana University. Nearly 52 percent of wealthy donors said their giving would remain the same if they no longer received any income-tax deduction for their donations, while 54 percent said their level of philanthropy would remain unchanged if the estate tax were repealed. That said, a significant minority (47 percent) of people in the survey reported that they would give less if they could no longer claim a deduction for their charitable gifts."
This really surprised me. I would have thought the numbers would have been more extreme, especially in light of...

Limiting Deductions on Charity Draws Ire
New York Times, 2/26/2009
"Wealthy donors and the nonprofit groups they support were in an uproar over the Obama administration’s proposal to limit the value of deductions for charitable gifts, which was included in the budget the president presented to Congress.... Nonprofit groups have been urging the administration and Congress to increase incentives for charitable giving by raising the limits on deductions and eliminating taxes on the investment income of foundations."
The really intriguing/alarming copy comes toward the end of the piece:

"Roughly half of the high net-worth donors responding to a 2006 survey by the Bank of America reported that they would keep giving the same amount to charity if deductions for that giving fell to zero, while about 38 percent said their giving would decrease somewhat. Only 7 percent said their gifts would fall steeply.

Eli Broad, who has made some of the biggest gifts in recent years, said through a spokeswoman that his giving would not be affected, as he has already donated far more than he can deduct.

Robert F. Sharpe Jr., a fund-raising expert in Memphis, said many of the wealthiest donors are already limited to deductions of 28 percent for their charitable gifts because they are subject to the alternative minimum tax.

Congress has long debated whether donors should get the same subsidy for gifts to wealthy universities and art groups that they get for contributions to nonprofit groups serving basic needs like food, shelter and health care.

“The administration’s proposal is doing just that, reordering charitable priorities by taking money wealthy people would have given to other charities and making it go into the health care system” through higher taxes, Mr. Sharpe said."

Tax-Deduction Proposal Would Cause Giving to Drop by 1.3%, Study Finds
Chronicle of Philanthropy, 3/3/2009
"President Obama’s proposal to limit the tax breaks would cause giving to decline by an estimated 1.3 percent a year, the Center on Budget and Policy Priorities said today in a new analysis. They said that other proposals in the budget further minimized the effects of the tax changes."
I think this is called shared sacrifice, no? If so, it's going to be painful.

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