Lemons, economics and cultural ecologies…..  Diane Ragsdale poses some interesting cultural policy and business planning challenges regarding funding, non profits and public value.

 

Since January of this year a discussion has been tumbling in fits and starts across the US; it concerns the growing supply of nonprofit arts organizations relative to (evidently) shrinking demand. On the face of it, there appears to be an insufficient number of donors and audiences to support the existing nonprofit arts infrastructure. Given flat or declining budgets, many funders are becoming ever more selective about whom to fund with the hope of encouraging a winnowing. Arts organizations are often frustrated by this process and suspicious of the criteria by which they are being evaluated and decisions are being made. Truth be told, the evaluation process makes me more than a little uneasy, as well, for at least a couple reasons.

First, the criteria are often fuzzy, they often change, and arts organizations have learned to game the system. So, for example, funders try to come up with criteria by which to compare kiwis and lemons and state in the funding application that some combination of factors—let’s call it ‘juiciness’—will be used to evaluate organizations; arts organizations write applications doing their best to seem juicy; and funders hope that, at the end of the evaluation process, juiciness (which we trust correlates with public goodness) will prevail. Organizations send reports (highlighting their juicy activities), and then the cycle starts all over again; only this time funders have determined that a different combination of factors—let’s call it ‘tartness’—will be used to evaluate organizations. Such a shift will often result in sudden tart-like behavior by organizations or the reordering of the list of organizations to be funded.

Second, current evaluation processes tend to assess what is funded and ignore what is not funded, or missing entirely. Thus, funders often end up with a skewed picture of the cultural landscape. Not to belabor the fruit metaphor, but it seems we need a process to assess whether all this tartness is, in fact, good for society or whether society might have been better off if some organizations had stayed focused on juiciness—or (better yet) on something not prioritized in the funding system.

Rather than using evaluations to help funders assess and rank organizations based on one public value criterion (e.g. excellence) rather than another (e.g. innovation), perhaps they should be used to help organizations and funders alike better comprehend the arts ecosystem (how it works, where it’s healthy, and where it’s ill) and their role in it; to understand where they are playing an important role; to understand where they may be duplicating efforts or missions with other organizations; and to understand where gaps in the system exist that need to be addressed.

Some have suggested that in the US we don’t have an oversupply problem, per se; rather, they perceive a mismatch between supply and demand (too many organizations in some niches or markets and not enough in others). If that’s the case, perhaps an evaluation process as I’ve proposed could help organizations identify gaps in the system and create public value and develop new revenue streams by doing what’s missing (in their hometown or perhaps a neighboring town).

Here’s what I know: if we don’t collect the data we won’t know whether arts groups (and those that fund them) are creating too much of a good thing, or perhaps not enough. Funders and arts organizations can close their eyes to the larger system and hope that decisions made (without an understanding of the big picture) end up to be the right ones; or they can seek to identify gaps and overlaps in the system and begin working together to do something about them.

Diane Ragsdale’s blog The Jumper features in artsjournal.com. Diane is currently attending Erasmus University in Rotterdam (in the Netherlands), where she is researching the impact of economic forces on US nonprofit regional theaters since the 80′s and working towards a PhD in cultural economics.  For the six years prior to moving to Europe, Diane worked in the Performing Arts program at The Andrew W. Mellon Foundation, where she had primary responsibility for theater, dance, and technology-related strategies and grants.