Wednesday, November 16, 2011

Occupy Lincoln Center (part 1)

Occupy Wall Street encampment
(First in a series)

As I write these lines, the Occupy Wall Street movement has been protesting for two months that the top 1% of Americans take home roughly 25% of the nation's total income, a shocking statistic that is very difficult to justify morally or politically. For the sake of illustration: if there were 100 people dividing a million dollars, it would look like this:
  • 1 person would receive $250,000
  • The remaining 99 would each receive $7575
  • The ratio is about 33: 1
Sets my liberal blood a'boiling. Of course, this isn't how it works out in reality. While the 1% is correct, the 99% would not be evenly distributed -- some would get more, some much less. But for the sake of simplicity, we'll use this model. 

The OWS movement, and now all the similar movements across the nation and the world, has effectively changed the narrative in discussions about the American and global economy -- suddenly, we are all part of the 99% -- and artists and non-profits have, overall, been strongly supportive. The editor of the Blue Avocado blog, which provides "practical, provocative and fun food-for-thought for non-profits," encapsulates the general opinion: "The nonprofit sector has always been about the 99%. Let's embrace this narrative and movement, talk about it, build upon it, join it." 

Indeed, let's.

A 1% of Our Very Own

At the end of October, the National Committee for Responsive Philanthropy issued a report entitled Fusing Arts, Culture and Social Change. Holly Sidford, who wrote the report,  researched philanthropic giving to arts organization across the US. What she discovered is as disturbing as the Occupy Wall Street facts about income disparity. Sidofrd found that nonprofits in the arts with budgets over $5M, which she says represents just 2% of all arts nonprofits, receive 55% of contributions, gifts and grants. Let's break this out in the way we did with national income above. 

If there were 100 nonprofit arts organizations dividing a million dollars, it would look like this:
  • 2 organizations would split $550,000 ($275,000 each)
  • The remaining 98 organizations would each get $4591
  • The ratio is a about 60:1
In other words, the income disparity between nonprofit arts institutions is nearly twice as bad as the income disparity in the economy as a whole. If the arts are supposed to hold the mirror up to nature, it is a magnifying glass.


Let's look at this another way. In addition to the income gap, the Occupy Wall Street protesters also discuss the wealth gap. Income is what people earn from work, but also from dividends, interest, and any rents or royalties that are paid to them on properties they own -- it's the money you make. Wealth, on the other hand, is the value of marketable assets, such as real estate, stocks, and bonds -- it's the value of the stuff you own. 

In America, the top 1% possesses over 40% of the wealth in the country. Going back to our imaginary 100 people splitting a million dollars:

  • One person would possess $400,000
  • The other 99 people would each have $6060
  • The ratio is 66:1
Which made me curious: how does that shake out in the arts; specifically, in the theatre, my primary interest? Thanks to the TCG Theatre Facts report for 2010, we can get a sense. TCG analyzed data from 171 member theatres. They analyzed the data as a whole, but they also compared data for theatres according to their annual budgets. They had six categories, the top comprised of 27 theatres with budgets over $10M, and the bottom of 14 theatres with budgets under a half million. 

On page 33 of the report, they compare "average total net assets" for each category (in this case, using only 160 theatres), focusing on land, buildings, equipment, investments and other assets. The theatres with budgets of $5M or more (representing 34% of the total) possessed 80% of the total average wealth. Again, using the hundred arts organizations dividing a million dollars:

  • 34 organizations would possess $800,000 ($23,529 each)
  • The remaining 66 organizations would possess $200,000 ($3030 each)
  • The ratio is about 8:1
In summary, arts organizations with budgets over $5M have more wealth and get more, and by very large margins.

Less than a year ago, January 2011, I was present when Rocco Landesman, speaking to the assembled artists attending the Arena Stage's New Play Development Program convening, opined that the reason artists couldn't make a living doing theatre is that there was an overabundance of theatre companies. Indeed, Landesman suggested, perhaps the nonprofit theatre system was "overbuilt." After all, demand was falling at the same time as supply was rising, and artists might be better off if the NEA and other arts supporters focused their funds on fewer institutions, so they could give larger awards to a smaller number of theatres.

Following Landesman's comments, Kirk Lynn of Austin's Rude Mechanicals took the microphone to ask whether this weeding out of the theater community would be likely to concentrate more resources in the hands of already large institutions. And what would that mean, he wondered, for the companies whose work isn't compatible with the structures of large institutions?

What Lynn and the assembled artists snuggled into the Arena's brand new, multi-million dollar theatre might not have realized, but that NCRP report now has dramatically brought to light, is that the centralization and concentration that Landesman proposed and that Lynn feared was already in place. To put it bluntly, the nonprofit arts scene makes the general economy look like a model of socialist income redistribution. 

Occupy Lincoln Center, anyone?


Diane Ragsdale said...

Scott, terrific post. One other resource you may want to check out are the annual 'fiscal snapshots' that Grantmakers in the Arts has posted on their Website, which shows data on where the money goes ... And the Foundation Center online also has a strong database that you can query to look at these sorts of issues. I have been curious to examine data collected over the past few decades to see whether the disparity has been growing over time and, if so, when that trend started. You have inspired me to think about doing this sooner than later.

RVCBard said...

Careful, Scott. Talk like that might get you branded a plebe and a socialist.

Anonymous said...

MICRO-FINANCING? Give us an Empty Space!

Why am I so bad at numbers? And how in the world do financially confused artists find those who are willing to help them learn?

NeoconSocialCapitalisCrackerWithFreckles, former Plebe

Art said...

Great post Scott,

Some research I did in 2006 into numbers up our way in Boston confirms this disparity.

I did a cursory look into the current numbers and the ratio looks to be about the same.

Gwydion Suilebhan said...

After a big discussion with a colleague, who didn't find your argument as persuasive as I do, I'd like to see you compare the theater industry against, say, the airline, hotel, and restaurant industries. How would we fare in that comparison? And what would it teach us? Because it's potentially a bit misleading to compare institutions and individuals... no?

And I say that as someone who agrees with what I think you are saying. I just want us to be fastidious in our analyses...

Linda said...

Excellent food for thought. Your unit of analysis here is the organization. What would it look like if the unit of analysis were the individual artist? I don't have an answer, but the disparity between the top and bottom organizationally would be more palatable (at least to me) if those large organizations were using their greater wealth to support more artists -- and the creation of new work -- more equitably. Perhaps a way to to do so would be to implement two of DIane Ragsdale's suggestions on her Jumper blog: "What if theaters maintained a minimum ratio between ‘wages or fees paid to artists’ and the total operating budget?
What if investments in the buildings, administrative budgets, and salaries of full-time staff of theaters were matched with a relative increase in artistic budgets and, specifically, wages or fees paid to artists?"

My concern with laying blame at feet of large organizations merely for being large is that it is akin to laying blame at the feet of big government merely for being big. If the organization is doing a good job of *employing* artists to make art, then the size of the organization, large or small, shouldn't really matter, just like the "size" of government shouldn't be the issue if it's doing a good job of governance.

There is some interesting research to be done on the individual artist piece in relation to organizational size. I hope someone can take it on.

Aaron Andersen said...

These numbers are not really surprising. In the world of performing arts, my employer is among the 1%. I can give all kinds of defenses--like it's really, really unlikely that you can pay artists a living wage unless you're in the 1% of wealthiest orgs--but I know they are not that satisfying to those concerned with the health of the sector overall.

Unfortunately for the 99%, I think resources accrue to those with resources, just like capital accrues to capitalists. Most funders, from individuals to corporations to foundations and even Rocco's NEA all prefer to back organizations with a lot of staying power, which is the same thing as the wealthiest organizations.

Of course, we who work in the 1% want the same thing that other arts orgs want. We want to produce a lot of art, we want to produce it at the highest possible level, and we're not satisfied with stagnation or downsizing. So of course, we use everything we have at our disposal, including our reputation and stability, to develop more resources for what we do.

I'm sure this comment will not make me any friends. I'm trying to be honest. And not for the first time, I'll say that equilibrium of an ecosystem represents sustainability, but that is not the same thing as justice.

Scott Walters said...

I will more fully discuss ramifications in future posts. However, a few brief comments.

Scale is important, particularly if these large theatres are garnering over half of the philanthropic support, which deeply threatens and curtails diversity. As far as employing artists, it takes the same number of actors to do "Hamlet" in a big theatre or a small. When plays like "I Am My Own Wife" sweeps through the regional theatre circuit, these big theatres are not employing proportionately a larger number of actors.

Gwydion, I suspect you might want to introduce your friend to the concept of "analogy." And while you're at it, he might be asked whether the centralization in the hotel industry, for instance, has been good for our society. Do chains benefit us? The question I am raising is not whether the theatre is the same as other industries, but rather whether an art form is served by this level of centralization and concentration of resources.

Scott Walters said...

Also, Linda, I suspect that the income disparity between the highest and lowest paid workers is great. But my concern is the system. It would only be a small improvement, in my opinion, if the workers in these large theatres were all paid identical wages if the systemic problems are not addressed.

Aaron Andersen said...

Linda, I agree with you, but it's a very different thing for different art forms. A large symphony employs over 100 musicians, full-time, year round, plus guest artists and conductors and lots of other artists on a part-time basis. The biggest part of the budget is the orchestra of musicians.

A theater is totally different, but Scott isn't quite fair to say it takes the same number of actors to produce Hamlet. That glosses over casting compromises that organizations often make (role combinations, less spectacle than artistically desired) for the budget. It also glosses over the fact that the large theater producing Hamlet runs that show for a lot more weeks than the small storefront would.

So to make your metric more useful across more art forms, maybe it needs to be number of weeks of artist employment times average dollar of artistic compensation per week or something.

Ian David Moss said...

A couple of suggestions for further reading:

I assume you've heard of Occupy Museums?

Instructive on a number of levels.

Mark Stern has done research on artist income inequality. Bottom line: it's unequal, and getting more so. Check it:

Aaron Andersen said...

There is something else... because nothing much prevents any group of people from starting a theater company or any other sort of arts nonprofit, and because it costs very little to keep a small arts nonprofit going, at least at a survival level, there are a ton of nonprofit arts organizations out there that, frankly, are probably not contributing that much, or are duplicating what others are already doing. You see a lot of that in Chicago. This probably sounds like something Rocco would say. But I don't think there is an obligation to support every single group of people that decides to incorporate as an arts org. And there is no moral, justifiable way to make them stop. So the number of arts orgs at the lowest end of the budget spectrum is going to be very high.

Scott Walters said...

Aaron -- At least so far, nobody is suggesting that philanthropists support "every single group of people that decides to incorporate as an arts org." However, supporting only a handful is destructive. To give 55% of the philanthropic money availabe to the arts to a mere 2% of the arts orgs is unjust and unhealthy for the arts and for society in general.

JJisafool said...

Great post, Scott. I have two comments.

I actually agree, in a way, with the idea we need fewer organizations, but with a twist. We need fewer resident companies, or solo resident companies. I think one way we could end up paying artists more is to sever venue management and artistic production - put for-profit venue managers in charge of the spaces, and let art producers focus on producing art.

The other may be in Part 2, which I haven't read yet. Have you looked at income disparity within theatres? I recently left a regional theatre with a $5M budget, and the top two salaries - and just salaries, no benefits cost - accounted for fully 5% of the annual budget. Add in the third-highest and it was just over 7%. And the gap between the third and fourth highest was more than the median administrative wage, and the fourth highest earned nearly double the median.

We've gutted the middle at regional theatres, meaning no growth path, and concentrated wages at the top.

Anonymous said...

I think for any of us who have ever aspired to creating a sustainable situation built around the arts, this has been a reality for a long time. Our arts communities would be a heck of a lot stronger if more money was given to start up fledgling companies and projects. This would help the arts to expand instead of becoming stagnant. I think of larger more established theatres getting large chunks of the philanthropic pie, only to do the same old shows year after year because they are "safe". Meanwhile you have not so well established theatre artists trying to push the envelope with no budgets having to beg and borrow and possibly fail because they havent been allowed the support to try something new. I sometimes think about the value of the arts. How it can be measured. Especially theatre. It occures to me that perhaps its not the finished product, the show, that is most valuable, but the process that gets us there. If more processes were allowed to happen, the final products would be grander, and perhaps of more value. Money is needed to push the arts forward, to make more viable.

Margot H Knight said...

I worked for grantmaking organizations for 21 years. In my last position, as a grantmaker and passionate believer in unrestricted operating support (complicated by the fact the source of our dollars to grant were a mixture of public and private dollars), the equitable way to distribute was to tie grants to a %-range of contributed income for the larger organizations. The "smaller" ones in our marketplace received project grants. This all stemmed from mission which was to be in the sustainability business. This method responded to the marketplace of interest as expressed and quantified through private donations. HOWEVER, the pool of total funds available was allocated based on aggregates--so if 90% of the budgets were of the larger groups, their pool was 90% of what we had available. In practice 13 groups received 90% of the available funding--the other 35 or so received 10% or so. The 90% also served more people, hired more professional artists and, largely (though not always) managed themselves more professionally.
In my PERSONAL philanthropy, I support large institutions, start-ups and individual artists via KickStarter. It all starts with the missions of the donors--governments, individuals, foundations, and corporations. The current income inequity among organizations of any discipline reflects donors' and consumer philanthropists (ticket buyers, members, sponsors, etc) inclinations and interests. Birds of a feather flock together, I'm afraid.

Scott Walters said...

Margot -- So boiled down to simple language, the policy was "them as has more gets more," right? And once that is the case, then justify this policy by saying that those organizations employ more artists (of course they do, they have more money) and "managed themselves more professionally" (meaning used their money to hire people who had a corporate orientation). If I am misinterpreting, please correct me; if I'm not, then I recommend Arlene Goldbard's recent post:

Margot H Knight said...

Sorry, Scott. I posted a response but it got lost somewhere. But YES, that is exactly what I am saying. Having said that, I abhor the false dichotomy of big vs. small organizations as if there are inherent virtues or vices of being either. Grantmakers have a responsibility to understand the WAY in which their money affects the work of any organization. And to honor the source of the funds. Sometimes money is the worst thing to grant when an organization needs technical or capacity building.
Having said that, it's useful to think of large organizations like jellyfish--comprised of scores if not hundreds of activities and programs that make a difference to the cultural life of a community. And sometimes small organizations are not really organizations at all, just one narrowly focused program that would be more effective in a partnership with another organization as opposed to the burden of the non-profit apparatus.
And, please, don't attach a pejorative to accountability or professionalism by equating it with a "corporate" orientation. Organizing our work effectively matters for US and the hallucination others have about art and its place in society.
AND, having said that I am very proud now to work for an organization whose mission is to support the gift of time for individual artists. And I hope to do it in an organized way to attract those with a "corporate orientation"!

Scott Walters said...

Margot -- I am curious as to how big and small are a "false dichotomy."
While I agree that the arts should be "accountable," as someone who currently works in an academic setting currently being overrun by the "assessment" mania, I have a fairly skeptical attitude toward "accountability," which usually means the creation of rubrics to measure that which cannot be measured.
I believe arts organizations ought to be sustainable. I have said at other times that I think arts organizations should be funded for three years after which they should have found a sustainable business plan. These rich organizations that have been around for decades and that rely on unearned income year after year remind me of middle-aged people living in their parents' basement.

Aaron Andersen said...

It's not accurate to imply that contributed income is inherently unsustainable. There is probably an unsustainable ratio of earned to contributed income that varies for each organization, based on a variety of factors including size. And we've definitely seen recent examples of arts orgs which cost structures couldn't be sustained through a revenue shock, but that shock affected both earned and contributed revenue.

As a finance professional, bringing my "corporate" skills to bear in the arts, I would and do say my job is ALL ABOUT sustainability, as supported by fiscal discipline and rigorous planning. A big part of my job is also to help the organization be financially accountable to the Board of Trustees and others, so they feel good about supporting and sustaining us.

Scott Walters said...

Aaron -- I am using sustainability to mean largely self-sufficient -- not entirely, but largely. And I am saying that a reliance on unearned income supports the ongoing centralization of arts funding in large arts organizations in urban areas.

I also agree with Arlene Goldfarb: there has been an unhealthy measure of corporate techniques and methods in cultural settings -- techniques and methods that create priorities that, once again, privilege a certain demographic.

Aaron Andersen said...

Scott, I actually think that contributions, in particular from corporations and individuals, are sort of another "product" that arts orgs can sell. To corporations, we're basically selling advertising and sponsorship opportunities. And to individuals, we're selling a sense of association (that does indeed connect in many ways to privilege). I went into a lot more detail on this here:

And individual donors might give more to big arts organizations then to smaller ones. It's quite likely. However, it is reasonably unlikely that these donors will contribute to arts organizations far from their own communities. So if there is more individual wealth in NYLACHI, there is going to be more individual giving to organizations in those communities. And yes, rich people will give to bigger organizations, which reinforce their sense of association, status and, to some extent, exclusive privilege. And corporations are certainly going to go for more "bang for their buck" with their sponsorships.

These are sort of market-driven transactions. In my mind they indicate sustainability, and they actually make it possible for tickets to be much, much cheaper than the cost of producing the performances. They are also subject to individual decision-making. To change this requires changing the hearts and minds of those who contribute.

I think your focus, though, is on foundation and public funding--funding decisions that are more affected by policy. Is that accurate? I think if you limited your analysis to ONLY foundations and government funding sources, the spread would change a little, but the concentration among the largest organizations would still exist.

I agree that this is truly sad, because foundation and government funding is the smallest revenue share for large organizations. If you took half of these funds away from organizations like mine, we wouldn't like it, and we'd have to cut back on something that we'd certainly prefer not to cut, but we wouldn't be thrown into an existential crisis.

Aaron Andersen said...

I guess the short version is that the largest arts orgs are not actually reliant on foundation and government funding, so we could stand for it to be spread around more. We ARE reliant on individual giving to a large extent, but those monies aren't necessarily fungible to other arts orgs, because they are driven by individual decision-making rather than a distribution of a somewhat fixed pie.

Think Again: Funding and Budgets in the Arts

Every once in a while, I think I'll post a link or two to posts written earlier in the life of Theatre Ideas that seem worth revisiting ...