Leverage Lost

As the Twentieth Century approaches a finale, the arts in America exist in a vast array of styles, disciplines and organizational structures. The purpose here is to examine one major organizational component of the American arts scene, the nonprofit sector, as an organic system that has progressed through three distinct stages over the past century. Although the nonprofit arts world contains thousands of organizations populated by tens of thousands of artists, administrators, technicians, trustees and donors, few are aware of its systemic features, nor are there many knowledgeable about its origins and the influences that have shaped its evolution.

As with participants in most large organizational systems, the citizens of the nonprofit arts world find it difficult to perceive changes, even massive developments, that occur gradually. The natural tendency is to assume that the arts firmament is a fixed tableau, marked by an occasional meteor that leaves a momentary trace. It is widely believed within the arts community that nonprofit organizations are experiencing extreme financial pressure due to governmental funding reductions and a downturn in the American economy. These pressures are often described as temporary hardships that will soon fade, thereby enabling arts organizations to return to more normal conditions. Current government funding patterns and economic trends are certainly of consequence to nonprofit arts organizations, but by themselves these pressures do not fully account for the deep changes that are now becoming discernible in the nonprofit arts ecosystem.

Early in the twentieth century, astrophysicists learned that the universe is not static, but rather is expanding in every direction and subject to the interplay of immense forces. The nonprofit arts are also a complex and changing system, and as this system has gradually evolved, the defining trends and influences, like planets in a solar system, have occasionally aligned in ways that have produced striking new directions. The onset of the industrial revolution in the nineteenth century, and the Ford Foundation's major arts initiatives, beginning in the late 1950s, will be cited in this essay as decisive moments in the subsequent progression of the arts.

In any complex system, many plausible interpretations are possible of the most potent influences and the precise moments when major new directions have emerged. In the analysis that follows, just one interpretation, the author's, is offered of the evolution of the arts ecosystem over the past century. While this interpretation is sometimes supported by factual and anecdotal evidence, no effort is made to back every assertion with data. The point is to demonstrate that the unique history of American nonprofit arts organizations is due to the distinct American social, political and economic system, and that an appreciation of this broader system will be useful in any discourse on future evolution.

Part 1: The Pre-Ford Era Industrial Revolution to 1957

Classic economic theory predicts that, at a given price, consumers will demand a set amount of a good or service, which will be supplied by producers. The marketplace, then, is an ecosystem constantly seeking an equilibrium that embraces prices, supply, demand, and a host of other influences. Throughout the past century, the dynamics of the marketplace have had a fundamental influence on the development of commercial and nonprofit organizations that produce art in the United States.

Today, in part due to a movement that was set in motion by the Ford Foundation, the great majority of arts organizations operate as nonprofit corporations. As a result, it is easy to forget that the earlier prevalent model for arts organizations in the U.S. was that of the individual proprietorship. In the nineteenth century, many theaters, orchestras, opera companies, performing arts impresarios, and even some museums, operated as for-profit enterprises managed by individual owners. As with other commercial ventures, these proprietorships had to meet the test of the marketplace: to provide services responsive to market demand at a competitive price, or cease to exist. This seemingly straightforward and endlessly studied relationship of marketplace influences has always been complicated in the arts, however, by the willingness of American artists and other arts workers to accept deeply discounted compensation for their labor.

An illustration of this point is provided by Horace Lewis, a journeyman actor of the late nineteenth century. Horace's father, the assistant tax assessor for the City of Boston, did his best to dissuade his son from a career in theater, and even sent him to Europe for a year to find a higher calling. Upon his return, however, Horace took to acting as a full time profession. At this juncture, the elder Lewis legally disinherited his son, but Horace nevertheless remained an actor for the rest of his life.

Lewis' specialty was pantomime and character roles. In the early years of his career, he often appeared in touring productions with Edwin Booth, one of the leading actors of that time, though Booth's popular appeal had been tarnished by his brother's assassination of President Lincoln. In 1878, Lewis played Rosencrantz to Booth's Hamlet, and the Drunken Porter to Booth's MacBeth at the Pittsburgh Opera House.

Lewis married the actress Portia Albee in 1880, and thereafter formed a proprietary theater company, The Lewis Dramatic Party of Professional Artists, which toured New England, the upper Midwest, and the maritime provinces of Canada. Their three children, Walter, Harriet and Elise, grew up on stage. Life for the Lewis family was arduous. Theater touring entailed true hardships, and the pay and occupational status were low. Whereas an actor of Booth's renown made a comfortable living, the Lewis family had to be exceptionally resourceful to get by. On their small town touring circuit, urbane intellectual plays did not sell tickets, so many of their productions were melodramas and morality plays performed in churches, union halls, and other makeshift venues. Besides acting, they had to conduct much of their own publicity, backstage technical work and financial management. Ultimately, if audiences failed to materialize, there was no income.

In 1889, Lewis' son Walter, then a five year old child actor, fell into a canal in Redmond, Michigan and was rescued by a local bypasser, Mr. Carey. The next day, the Lewis company's production of The Count of Monte Cristo was dedicated to Mr. Carey, and much of the town attended the performance to pay homage to their home town hero. Little Walter Lewis began the evening by reciting the “Fouyar” scene from this play, which he had never before performed in public, in gratitude for his deliverance from certain death. Although there is no definitive evidence, subsequent legend has it that Horace Lewis staged his son's mishap as a publicity stunt to assure a full house.

At the core of Horace Lewis' life as an actor is a characteristic persistence, often bordering on compulsion, shared by many American artists and other arts workers, up to current times. Few artists, working in either the commercial or nonprofit arts sectors, achieve compensation or social status commensurate with their skills and levels of educational attainment. In many respects, the training and practice required of a professional musician, painter or actor are comparable to those of a physician, engineer or banker, and yet the disparity in income and status is enormous. Granted, some artists do attain high levels of income and prestige, but these are a very small fraction of the total profession. Throughout American history, most artistic occupations have been viewed with suspicion, and even in current times, art is often regarded as a form of self-indulgent recreation rather than real work.

In their pioneering 1966 book, The Performing Arts: The Economic Dilemma, economists William Baumol and William Bowen noted, “At the first recorded theatrical performance in the American colonies, the performers were arrested.” With regard to the position of the American performing artist in the mid-1960s, they went on to say:

During his time, Horace Lewis, a religiously sincere man, understood his second class status. In 1879, he founded the “Church and Stage” movement, which sought to demonstrate that religion and drama were “...not antagonistic to each other, but working harmoniously together for the public welfare and moral improvement.” The Lewis company mounted a touring production of The Village Blacksmith by W.S. Gilbert, which was designed to illustrate this new harmony. The production was widely endorsed by Boston's leading clerics and opened at the Union Hall on Boylston Street, following an address by a minister. A review of this play noted, “The pecuniary results were not encouraging, but if Mr. Lewis takes this company on the road, the public will be sure of a good performance, well mounted, of a play both pure and lively."

Given Horace Lewis' good fortune to have been born into a fairly prominent Boston family, he could have easily chosen a profession that would have maintained his social and economic standing. Lewis, along with many thousands of artists throughout U.S. history, elected to become an actor in full knowledge of the likely sacrifices, but his choice was not illogical. Surely he sensed that the combined monetary and intangible rewards of acting were, from his perspective, adequate compensation. He must have believed that acting yielded greater financial and personal rewards than a career in tax assessing, or whatever line of work his father might have preferred.

In comparison to most occupations, artists and other arts workers (technical and management personnel) tend to accept a high measure of non-monetary rewards, that is, the gratification of producing art, as compensation for their work. By accepting these non-monetary rewards, artistic workers, in effect, discount the cash price of their labor. One way to conceive of the value of this discount is to estimate it as the difference between the wages that artists typically earn and the wages earned by workers with comparable skill levels.

In any attempt to understand the artistic ecosystem of the United States, it is of paramount importance to grasp the significance of discounted labor. Market prices and consumer demand have never fully accounted for the output of artistic goods and services produced by American artists and arts organizations. Indeed, artists and arts organizations often give little consideration to market demand and prices in their determinations of how much and what kinds of art they produce. Even chronic indifference of the market may not induce an artist to change the amount or character of the produced art. This behavior usually would be catastrophic for a farmer or manufacturer, but it is commonplace among artists and arts organizations.

In addition to discounted labor, several other factors were significant in the evolution of the arts in the pre-Ford era:

Education: Many recent studies of arts attendance at performances and exhibitions have found a high correlation between individual educational attainment and engagement in the arts. Indeed, educational attainment may be the strongest predictor of an individual's likelihood of becoming an arts consumer or an artist, and this correlation was probably as forceful in the pre-Ford era as it is today. The rise of public education during the industrial revolution surely contributed much to the development of both artistic labor and arts consumerism during that time.

The studies that link education to arts participation usually use grade levels as the measure of educational attainment. Thus, college graduates are far more likely to attend museums or become poets than high school dropouts. It is quite likely, however, that nonformal educational attainment also correlates closely with arts participation. For example, children who are encouraged to sing in the home are probably more inclined to sing or attend choral concerts as adults . In the 19th century, amateur and church-based choral ensembles flourished, and it is likely that this movement helped to stimulate public demand for the services of professional orchestras that were beginning to form in the latter decades of the nineteenth century.

Prosperity: Next to educational attainment, personal income may be the most potent predictor of arts participation. The transition of the United States from an agrarian to an industrial economy greatly increased the number of wealthy and middle class people. A larger proportion of the population became arts consumers, and some of the new wealth was used to amass unprecedented collections of art, which later became the basis for many American museums.

Societal Values: The values embedded in any society have much to do with the nature of artistic expression and the manner in which art is presented in public settings. The transition from an agrarian to an industrial society, coupled with new waves of immigration, opened the United States to broader world influences that moderated the tight strictures against public expressiveness characteristic of 17-18th century American society. Although at least some artistic professions remained on the edge of social respectability (dancing and acting remained notorious into the 20th century), artists gradually improved their standing over the course of the pre-Ford epoch. By the end of the 19th century, for example, Horace Lewis' theater company was performing plays in Protestant churches in New England, a venue that would have been off-limits in the early 1800's.

Demographic Change: As the U.S. population increased as a result of fertility and immigration during the industrial revolution, it was predictable that the number of artists and arts consumers would also increase; but demographic changes had other consequences as well. The massing of populations of artists and arts consumers in emerging metropolitan areas supported an intensity and quality of creative expression that could not have been sustained in the nation's more agrarian past. By the end of the 19th century, Philadelphia, for example, had well-established fine arts academies, music conservatories, a lively theater district and a prominent community of writers, whereas at the beginning of the century, the spectrum of artistic production had been narrower. A gradual concentration of artistic resources in metropolitan areas occurred throughout the pre-Ford era, and many would argue that the most populous city, New York, attained a critical mass of an altogether higher order. Throughout history, the emergence of urban areas has always been associated with significant qualitative developments in literature, architecture, visual arts and performing arts. Periclean Athens, Mayan Mexico, Elizabethan London, and Ming Dynasty China are examples of this phenomenon.

Leisure Time: Participation in the arts tends to vary, in some measure, according to the availability of leisure time. Progressively shorter work weeks were a pattern throughout the pre-Ford era and contributed to the founding of libraries, parks, museums, music halls, professional athletic leagues and a host of similar leisure time resources. According to economist Juliet Schor, shorter work weeks became almost as important as higher wages during the heyday of the American labor movement.

Implications of the Pre-Ford Era

The cumulative result of the changes in education, prosperity, demographics, societal values and leisure time that occurred in the latter half of the 19th century was an overall increase in the output, variety and quality of artistic goods and services. America began to produce more of its own art, and proportionally imported less. The economic model for producing this art, however, was quite distinct from the pattern that was prevalent in Europe during this period. Unlike Europe, there was very little governmental support of the arts, and little tradition of upper-class patronage. So for professional artists, there was usually no choice but to work for a profit and to accept deeply discounted wages.

The experience of American symphony orchestras provides one illustration of the evolution of arts organizations during the pre-Ford era. By the mid 19th century, musical literacy was relatively high among Americans. Children learned to sing and play instruments at an early age, and performance within families was a popular form of entertainment. Amateur choruses began to form, and some of these hired musicians for accompaniment. The musicians, in turn, formed themselves into orchestras, hired conductors and began to produce public concerts as proprietary organizations independent of the choral societies. Many orchestras continued to operate in this manner until the end of the 19th and early 20th century when a transition gradually was made to nonprofit organizations as the primary organizational model. In the nonprofit model, the orchestra came under the control of a lay board of directors, usually prominent citizens, which employed a professional conductor and manager. The conductors were given responsibility for hiring the musicians in the nonprofit orchestras, whereas the musicians had often controlled the proprietary orchestras in the early pre-Ford era. Whether operating as proprietary or nonprofit organizations, however, all orchestras remained heavily dependent on ticket sales in the marketplace for much of their income.

With the arrival of the twentieth century, proprietary arts organizations began to wane. According to Baumol and Bowen, the number of touring theater companies stood at 327 at the turn of the century, but declined to less than 100 by 1915. After 1932, the number never rose above 25. The traditional commercial forms of theater, vaudeville and circus declined or vanished in the face of the new medium of movies. Other performing arts forms were also affected by the new technologies of recorded music and radio, and ultimately by television. Some observers viewed these developments as the death of the live performing arts, and while it is evident that many proprietary performing arts organizations dissolved, it is not so clear that the overall output of arts goods and services was declining at all.

The fertile trends in education, prosperity, leisure, societal acceptance and demographics continued in the early 20th century, all of which favored strong demand for artistic goods and services, and growth in the number of artists. The new technologies of film, audio recording, radio and television, however, began to strip away from the old proprietary arts world the most popular and lucrative forms of production. Vaudeville became The Ed Sullivan Show and the custom easel painting became the mass produced offset print. Whereas broad-based audiences, comprised of both commoners and educated, well-to-do elites had once attended proprietary productions of Shakespeare, even in small towns and mining camps across the nation, in the twentieth century the commoners began to gravitate toward the movie houses and other new technologies, leaving only the elite to patronize an assortment of proprietary high art.

Given this substantially smaller base of customers, the laws of supply and demand would allow only one outcome: the high art sector had to diminish substantially in rough proportion to the diversion of demand toward the popularized new forms of art and entertainment, and the remaining high art consumers had to accept increased prices to maintain their favored art forms. In large measure, these increased prices took the form of organizational subsidies (donations), rather than user fees. Prior to the arrival of the new technologies, the basic model of the proprietary arts organization had served reasonably well. At this juncture in history, however, popular art continued to follow the proprietary pattern, while high art, cut off from much of its consumer base, started to adopt a new model: the subsidized nonprofit organization.

The nonprofit model remained at its core, however, a money-making enterprise. To this day, American nonprofit arts organizations derive, on average, about half of their income from sales revenues. The remainder of the necessary income, however, began to come from individual contributors, the majority of whom were well-educated, upper income connoisseurs who had an artistic, familial or social stake in the continuation of particular arts organizations. Also during the early 20th century, a few foundations, starting with the Carnegie Foundation, began to award a scattering of grants to nonprofit arts organizations, and local governments directed increasing support to publicly operated museums and performing arts halls.

By the end of the pre-Ford epoch (the late 1950s), the American arts ecosystem was characterized by a significantly reduced and still declining cadre of high art proprietorships, a small but steadily growing group of nonprofit and civic arts organizations, and a booming popular arts and entertainment sector operating commercially and reaping the advantages of a variety of technologies. More consumers were being served by these commercial and nonprofit systems of arts delivery than at any previous time in American history. In some artistic disciplines, notably the abstract expressionist painting movement that began in the late 1940s , the United States was at the forefront of international high art.

Part 2: The Ford Era 1957-1990 (Leverage Gained)

Despite the ample progress of the pre-Ford era in the production of both high and popular art, America had a hefty cultural inferiority complex by the late 1950s, by no means a new phenomenon in the nation's history. Our high art, in at least some circles, was not high enough, and too much of the artistic initiative had been conceded to the new populist technologies. The vigor of American culture was plainly visible and audible in its popular music, dance and television, but less evident in many high art disciplines.

In the 1960 presidential election, a strong undercurrent was the rejection of the low-brow 1950s style personified by Richard Nixon, in favor of the high-culture style epitomized by John Kennedy. During his presidency, Kennedy would distinguish his administration through widely publicized appearances by internationally renowned artists at the White House, and Mrs. Kennedy became the symbol of high international fashion. With the emergence of America as the world's post-war economic dynamo, there was an increasing mandate for comparable supremacy in the arts and culture, including cuisine and fashion.

Just as the mood of American culture was changing, a startling new invention appeared on the art scene: the arts grant. Invented by the Ford Foundation in the late 1950s, the arts grant was a vehicle for the long term advancement of individual nonprofit arts organizations, as well as a means for the strategic development of the entire nonprofit arts sector. As created by Ford, these grants were national in their distribution, and seen as a form of highly leveraged investment, rather than simple personalized charity.

Until the arrival of the Ford Foundation's broad vision of arts funding, virtually all cultural philanthropy had been vested with individuals, and generally lacking in any strategic intent. Most cultural philanthropy in the pre-Ford era consisted of individual patrons providing gifts to their favorite nonprofit arts organization, motivated by their love of art or sense of civic duty. While these gifts were often significant in the life of a given institution, they were rarely associated with a formally constructed plan for that institution's progression, and even less often with a grand scheme for systemic advancement of the entire arts field.

If anyone deserves credit for inventing the arts grant it is W. McNeil Lowry, the Ford Foundation's Vice President for the Arts from 1957 to 1976. Over a span of twenty years the Ford Foundation invested more than $400 million in:

• The financial revitalization of existing major nonprofit arts institutions including elimination of debt, establishment of endowments and operating reserves, and support of building campaigns;
• The establishment of new regional nonprofit arts organizations, especially theater and dance companies, to decentralize the arts beyond the city limits of New York;
• The formation and advancement of a battery of arts service organizations, such as the Theater Communications Group, to promote broad sectors of the arts, and;
• The enhancement of conservatories and visual art schools to generate a labor supply to complement the emergence of stronger, more decentralized and numerous arts institutions.

In addition to the already noted strategic goals of the Ford, it is highly significant that the Foundation viewed itself as a catalyst for these major developments, but not as the perpetual funder. The majority of Ford's grants were limited to less than five years duration and required matching support two to four times greater than the amount awarded by the Foundation. So, while Ford was attempting to increase the capacity of arts organizations to manage themselves on a fiscally sound basis and increase program output, the assumption was that other sources of money, both contributed and earned, would support long term maintenance. The concept of the matching grant, accordingly, was not merely to assemble additional funds to accomplish a specific purpose, such as a cash reserve for a museum; it was also a tactic intended to recruit new donors, who would continue a pattern of support long after Ford had moved on to other projects. This extended pattern of support was the most important form of leverage that Ford was seeking.

The leverage element of the Ford strategy succeeded brilliantly. Whereas only a few institutional funding sources had entered the realm of arts philanthropy in the pre-Ford era (notably Carnegie, Rockefeller and Mellon), a virtual cascade of foundations, corporations and governmental agencies now became active arts funders, and many of them, knowingly or unknowingly, emulated Ford's approach to institutional advancement and high leverage funding. The evolution of this new and highly pluralistic funding system for the arts had no precedent in the U.S. or any other nation. Even today, this institutional funding system, involving many hundreds of foundations, corporations and governmental agencies, remains unique in the world. Nor was this approach in any way limited to the domain of nonprofit arts organizations. Similarly vigorous applications of funding leverage were to be found in many other initiatives launched by Ford and other national funding sources during the 1960s, including the Johnson Administration's monumental “War on Poverty", which often required matching contributions from state and local government.

Borrowing from physics, Ford's influence on arts funding can be likened to a chain reaction. Ford's leadership, both by the example of its grants and through direct political advocacy, was highly instrumental in the formation of the National Endowment for the Arts (NEA): a federal agency conceived during the Kennedy Administration and inaugurated in 1965 by the Johnson Administration. Major initiatives of the NEA, including its Treasury Funds, state block grants, and Challenge and Advancement programs, owe much to the Ford strategy of leverage, decentralization and institutional expansion. Moreover, from the beginning, the preponderance of NEA grants were made on a matching basis. The logic was, and remains, that the NEA would stimulate a broad and ever-expanding base of funding from individuals and institutional funders that would carry most of the weight of sustaining contributed income for the nonprofit arts economy.

The NEA's original legislation contained provisions for block grants to state arts agencies. Prior to 1965, only four states operated arts funding agencies. With the stimulus of the NEA's block grants, all states and territories had founded arts agencies by 1980. This growing snowball of state and federal arts funding, in turn, led to the formation of more than 3,000 local arts councils, a quarter of which were organized as units of local government while the remaining three quarters were formed as nonprofit organizations, often with some formal link to local government.

Aside from this pyramidal evolution of governmental funding, two other philanthropic branches grew from the Ford roots: foundation and corporate support of the arts. Foundation and corporate funding for the arts had been miniscule prior to the Ford era, and that which did exist was mostly motivated by the same drives that stimulated individual arts patrons: love of art and civic duty. The first to follow the Ford example were some of the large national foundations, but even greater numbers of regional and local foundations were to join the cultural funding movement by the mid 1970s. Many of these foundations would employ specialized staff to formulate funding strategies and analyze grant applications, again taking a cue from Ford, which was the first foundation to utilize professional staff for these purposes. By the end of the Ford era, the aggregate arts funding from foundations alone would surpass $1 billion per year, more than three times the amount spent by state and national governmental arts agencies.

The Evolution of Institutional Arts Funding

The corporate arts funding movement started somewhat later than the foundations and was spearheaded by a few national leaders including Exxon, Dayton Hudson, Philip Morris and AT&T. Although corporate funding did not attain the same level as foundations and government, and was more immersed in marketing agendas (and therefore less concerned with the strategic advancement of the arts), corporate funding was considered the fastest growing source of contributed income for the arts in the early 1980s.

Income Sources of 218 San Francisco Bay Area Nonprofit Arts Organizations, 1980

The result of the entry of government, foundation and corporate funding sources into the arts economy during the Ford era was quite dramatic. According to 1980 data collected on 218 nonprofit arts organizations in the San Francisco Bay Area, 45% of total income was earned and 55% came from all contributed sources. Of the contributed funds, 25% was provided by individual patrons, 18% by government, 7% by foundations and 4% by corporations Although similar figures are not available for the comparatively small sector of nonprofit arts groups in the pre-Ford era, it is evident that a strikingly different pattern must have prevailed. The preponderance of funds in that time were either earned through sales or donated by individuals. For the dominant sector of proprietary arts organizations in the pre-Ford era, as personified by the Lewis Dramatic Party of Professional Artists, virtually all income, by definition, had to be earned.

Besides helping to fuel expansion of the population of artists and arts organizations, the most significant effect of Ford era institutional funding was that it channeled the formation of new high art organizations into a nonprofit mode, rather than the proprietary mode that characterized the pre-Ford era. In the San Francisco Bay area, only 20-30 nonprofit arts organizations were in existence in the late 1950s, while a far greater number of theaters, musical ensembles, performing arts presenters and galleries were operating on a for-profit basis. By the late 1980s, at the end of the Ford era, the Bay Area contained approximately 1,000 nonprofit arts organizations, and far fewer proprietary arts organizations continued to operate. Commercial art galleries remained significant, though much of the vigor in contemporary visual art had gravitated to nonprofit galleries and artist-run spaces. Virtually no commercial theaters were operating, and almost all commercial performing arts presenting had ceased. The arts organization profile evident in the San Francisco Bay Area may be somewhat atypical, but high growth in the number of non-profits combined with a decline in the commercial high art sector appears to have been the pattern in all metropolitan regions in the U.S.

While the Ford Foundation and NEA deserve much credit for their early support of the nonprofit arts movement, by far the most significant factor in this movement's origin was the sudden arrival, in the 1960s, of a huge generation of Horace Lewis-style artists, technicians and administrators, driven not by funding or economic gain, but rather by their own desire to produce art.

The willingness of this new generation of arts workers to heavily discount its wages is borne out by various studies. Richard Harvey Brown of the University of Maryland's Survey Research Center notes that:

A 1982 report by the National Endowment for the Arts, which compared 1971 to 1980 data, reinforces the picture of more arts workers and less compensation:

• There are now over a million persons in the artist labor force. Figures for 1980 show that 1,020,000 people identified themselves as employed or unemployed actors; architects; authors; dancers; designers; musicians/ composers; painters/sculptors; photographers; radio-TV announcers; teachers of art, drama, and music in higher education; and other artists not elsewhere classified.
• The artist labor force grew steadily from 1971 to 1980 and increased by 323,000 persons, or 46%. This is a higher rate of increase than the rate for all professional and technical workers, which was 40% in the same period.
• The artist labor force is now about one-third female and two-thirds male as a result of women entering artist occupations at twice the rate of men during the decade of the 1970s. There are now two artist occupations which have a majority of females: dancers and painters/sculptors. In 1971, this was only the case for dancers.
• The most chronic artist unemployment existed among actors, with rates during the decade ranging between 31% and 48%. As many as 10,000 actors were out of work in 1979.

Another NEA report, which examined the lives of visual artists in four major cities, provides some remarkable insights into the economic realities of this profession:

• The median of artists' income from art sales, commissions, and grants or awards was $718 in 1978, and only 8.5 percent reported over $10,000. Even though all the artists had exhibited in the three-year period covered by the income question, over one-forth earned nothing at all from their art.
• Most artists do not support themselves by selling their work. Median art income for the artists sampled was $718 in 1978. Median production costs were $1,450, approximately twice the median income. Not only do artists fail to make much money from their art, but they generally spend much more producing it than they make.
• Since artists in general do not earn enough to support themselves through art, they receive the rest of their incomes from other sources, either by holding other jobs or by support from their households. Sixty percent worked at paying art-related jobs, with median income from those jobs of approximately $5,000. Over 63 percent of art-related jobs were part-time, and teaching jobs accounted for 62 percent of them.

Similar findings are cited for performing artists in a 1977 survey of performing arts union members commissioned by the AFL-CIO:

• Most performing artists actually work considerably less than full time at their profession, primarily because not enough work is available. Only one-third of those for whom the arts is a principal profession managed to work full time in the arts in 1976, the year on which the survey focused.
• Employment in the arts is very sporadic — with most performers working for multiple employers during the year. At best, only one in five worked for only one employer. It is not at all unusual for a performing artist to work for at least ten different employers.
• Contrary to popular belief, when performing artists get other jobs, the jobs are more apt to be unrelated to the arts than they are to be related. Performers do not all get jobs as arts teachers or coaches — as is commonly thought. Instead, they are much more apt to get jobs in the service industries or in sales or clerical work.
• A very substantial proportion of the performing artists report some unemployment during the year. Further, the proportion experiencing unemployment is much higher than occurs in the labor force as a whole.
• Although median household income for performing artists is not out of line with the median for the nation as a whole (and in fact was slightly higher), considering the educational attainment of the performing artists, it was very much out of line with income received by other groups with similar education and training.

George C. Koch, a veteran employee of the U.S. Department of Labor, the Vice President of National Artists Equity, and himself a visual artist, summarizes the reality of being an artist:

The Ford era generation of arts workers described by the foregoing statistics founded an unprecedented number of arts organizations, clearly not because of financial rewards or arts grants, but rather because they had the training and desire to produce art. This training and desire resulted from several broad influences that coincided at roughly the same moment: significant shifts in societal values, a peak in economic prosperity, the arrival of the massive baby-boom generation on American college campuses, the momentary ascendancy of liberal arts education, and a high water mark in leisure time.

Demographic Change: American fertility during and after World War II had much to do with the genesis of the Ford era. The era had truly arrived when the baby boom generation appeared in vast numbers on college campuses throughout the nation. This large, mostly white, and relatively affluent generation not only provided most of the discounted labor for the surge of arts production and formation of new nonprofit arts organizations, but also contributed substantially to the enlargement of consumer demand for the arts. In addition, this generation formed the bedrock labor supply for the massive expansion of the entire nonprofit sector of health, environmental, educational and social service organizations that were being founded concurrently.

Societal Values: Just as a shift toward more permissive and tolerant values had favored greater public expressiveness in the pre-Ford era, an even more pronounced shift developed in the late 1950's and early 1960s in reaction to the widely held perception of cultural inferiority that marked the post war years. This shift in favor of open expression (free speech, free art, free love) was accompanied by a complementary change in attitudes toward public service. The notion that work in public service was virtuous, in comparison to work in private enterprise, gained currency. John Kennedy's 1961 inaugural invocation to work for one's country was greeted with enthusiasm by many Americans, especially the young, who signed up for the Peace Corps, Vista or other public service work in government, the nonprofit sector, or volunteer groups.

Prosperity: In taking stock of this shift in values favoring public service and expressiveness, the influence of the exceptionally strong U.S. economy deserves much of the credit. While the Kennedy challenge of public service galvanized new idealism, it was easier to respond to this challenge in an economy in which multiple career options were available in the event that public service proved to be too much of a sacrifice. This general aura of prosperity may have also contributed to the willingness of large numbers of Americans to become consumers of the arts.

Education: Another planet that aligned at the beginning of the Ford era was the pinnacle of the American public education system, and a heightened emphasis on the liberal arts. A greater proportion of the population was enrolled in higher education than at any previous time and, according to some authorities, the quality of the public educational system reached its peak. It is also significant that, given the values and prosperity of this time, unprecedented numbers of college students chose to study the liberal arts. Comparative literature, drama, fine arts, art history, music and a host of other arts-related disciplines flourished.

Probably the majority of liberal arts students had no particular career ambition in these fields. The number of drama graduates in any given year, for example, substantially exceeded the supply of full time acting jobs in the entire nation. Still, at the time it was widely believed by students that any college degree, even in the arts, was a passport to an entry level job in some reasonably well-paid profession. Until the early 1970s, a seller's market prevailed for holders of undergraduate degrees, so one could afford to obtain a college degree for its own sake rather than committing oneself as an undergraduate to a business or technical degree. Thus, institutions of higher learning were producing legions of students, many of whom, whether they realized it or not, were becoming prepared to work in the nonprofit arts or to become arts consumers.

Leisure Time: Many books and articles in the late 1960's and early 1970s announced the arrival of a new era of leisure. Expectations were widespread that the U.S. would soon adopt a four day work week and concern was voiced for how Americans would utilize their expanded spare time: passively, in front of a television, or in more active, enlightening pursuits. According to economist Juliet Schor, leisure for the average working American reached an apogee in 1971. In some measure, this additional leisure probably contributed to the ability of people to engage in artistic endeavors and to become arts consumers.

Implications of the Ford Era

In summary, then, it was the sheer number of inspired and educated youth that provided the main fuel for the Ford Era. In an earlier time, this labor force probably would have founded a wave of new arts enterprises using the proprietary model that had been the only choice for Horace Lewis' generation. In the 1960's, however, the nonprofit model was available and convenient, besides fitting the contemporary anti-business ethos. Moreover, the nonprofit model had the benefit of heavy backing from the new circle of institutional arts funders led by the Ford Foundation, though many, probably the great majority, of start-up nonprofit arts organizations began without the prior commitment of a grant.

Although this period was largely driven by discounted labor, and secondarily by institutional funders, it could never afford to ignore consumer demand. As in all eras, much art was produced for its own sake with no concern for its consumer appeal. Nevertheless, the high arts in America, even with the advent of institutional funding and nonprofit organizations, continued to depend far more heavily on earned revenues than their counterparts in virtually all industrialized nations. In some European countries, government subsidies alone account for 80% or more of a typical organization's budget, and in some cases critics have argued that the incentive for attracting a large clientele base may have been eroded by over-subsidization.

In the U.S., by contrast, client-based revenues have remained critical to the survival of most nonprofit arts organizations, so as these groups proliferated in the Ford era, they tended to devote considerable energy to sales. Indeed, many government, foundation and corporate funding sources insisted on the development of a paying client base and often provided grants toward that end. Even without pressure from the funders and economic necessity, many arts organizations were imbued with the ethic of public service and willingly did their best to attract large followings. Thus, the Ford era was more than a partnership between nonprofit arts organizations and friendly funding sources that appreciated “high art.” It was also a period when the clientele of the high arts rebounded, in part driven by increased supply, but also by advances in education, societal values, economic prosperity and leisure time, the same factors that spawned the new generation of arts workers.

As the Ford Era evolved, however, it could be fairly said that most of the new consumer demand came from a relatively well-defined segment of the population: persons with high levels of formal education. This point has been confirmed by virtually all surveys of performing arts and museum audiences over the past three decades. Thus, though the nonprofit movement in the arts was partially founded on the ideal of public service, an unintentional result was that most of the beneficiaries came from a narrow band of society. What was true at the outset of the Ford Era was at least as true at the end. Most of the public obtained its arts and entertainment from commercial sources. While the nonprofit arts were expanding in organizational numbers and output, the big money and most of the technological innovation continued to reside in commercial broadcasting, musical recording, movie production, and a host of new home electronic media.

In 1993, McNeil Lowry, age 79, passed away in New York City. More than any other single individual of his time, he saw the potential and conceived the strategy for this three decade era. The arts and the nation benefited greatly from his leadership and skillful application of resources. While the history of the Ford era is too fresh to evaluate its lasting imprint, there has been no period of the arts in America that has surpassed its intensity.

Part 3: The Post-Ford Era 1990 to Present (Leverage Lost)

Just as abundant cheap labor and institutional funding were the defining elements of the Ford era, reversals in these two resources are now defining the Post-Ford Era. Despite the Ford era's remarkable successes in preserving and advancing American high art under the nonprofit banner, it was not an era that could be sustained.

The most obvious, though rarely acknowledged, reason that it could not last indefinitely was that the institutional money supply could not continue to grow. An early assumption of many arts funders, including Ford, was that high leverage funding would stimulate other sources of contributed income for the arts, most notably from government, that would provide a steady and expanding flow of revenues: the so-called “pump priming” or “seed funding” strategy. Meanwhile, government was using the same logic to justify its arts funding. Each year, the National Endowment for the Arts would partially argue the case for its appropriation bill in Congress by pointing out that each dollar of Federal funding of the arts would stimulate a many fold return in arts support from private sector funders. Similarly, state arts agencies would employ this same rationale in their annual appropriation processes. Over the years, many public funding agencies would commission economic impact studies that would attempt to demonstrate not only the leverage of governmental dollars on private sector contributions, but also the effects of public arts spending on commercial sector revenues and on the generation of sales and income tax revenues.

Today, the funding leverage concept continues to be advanced by many governmental arts agencies as a primary rationale for public support of the arts, even though much private sector and governmental arts funding has been on a downward trajectory for several years. Some private funders, as well, continue to operate matching grant and challenge grant programs that assume the potential for high leverage.

Any student of biological, physical or economic systems would immediately recognize the flaw in the logic of funding leverage, as it has been practiced not only in the arts, but also throughout the nonprofit sector. One of the fundamental tenets of systems studies is the “free lunch” principle: no system can depend on the unlimited growth of resources. The leveraged funding strategy of the Ford era can be likened to a chain letter, a Ponzi scheme, or any other pyramidal growth system. The initiators of chain letters and Ponzi schemes often claim that, for a small effort or investment, a virtually limitless return will be realized, and though initially this prophecy may appear to be feasible, inevitably all such arrangements must fail because resources are finite. In other words, there is no perpetual free lunch. Ultimately, funding leverage will become unsustainable.

Although reduced or stagnant funding from governmental and private sources is now a pervasive topic in the nonprofit arts world, the emergence of this trend has been fairly gradual, and it is commonly believed that the reductions are a temporary aberration of the economy. The state of the economy certainly does influence the resources available to many funders, as well as the buying power of arts consumers. Nevertheless, to singularly blame the economy for the substantial pressures now bearing on the nonprofit arts sector ignores the hard reality that for three decades the arts were able to rely on exponential growth in financial and labor resources, and now the chain reaction started in part by the Ford Foundation, with the best intentions and spectacular results, has arrived at a point of systemic purgatory.

While the loss of funding leverage may appear to be an overwhelming problem for nonprofit arts organizations, an even bigger, though less acknowledged, issue is the loss of labor leverage. The most elemental force in the massive growth of arts organizations in the early Ford years was the arrival of a large new generation of artists and other arts workers who were willing to support their work through discounted wages. The continuation of Ford Era nonprofit organizations is, therefore, fundamentally tied to the ongoing availability of this core resource. For two reasons, the outlook is not good for the sustainability of discounted labor: a significant portion of the veteran generation that founded the Ford era organizations is departing, and it is not being adequately replaced by a new generation of discounted labor.

The departure of the veterans is principally due to a simple axiom of aging: as one becomes older, the expectation of earning more increases. During the early Ford years in particular, tens of thousands of young people entered the arts with little thought of it being a career that would bring adequate compensation. The 1960's economy was so robust, the cost of living was so low, and job opportunities so abundant, that a young person with a college degree could easily become a writer, curator, dancer or lighting technician, often by holding a supplementary non-arts job, and still have the option of entering another profession if the arts proved to be unsatisfactory. As this generation of arts workers has aged, however, the expectation of making money has increased. In part, this higher expectation can be viewed as a natural characteristic of becoming older and desiring increased material comfort. In the case of the highly educated baby boom generation, however, this natural expectation may have been accentuated for arts workers by the exceptional financial success that has been achieved by many of their non-arts peers who have used their college educations to obtain high incomes.

As expectations of making money have been escalating for veteran arts workers, their actual wages have been increasing as well. The problem is that the expectations have increased at a faster rate than the actual levels of compensation. One of the common stories among young performing artists of the 1960s was their pilgrimage to a large city, usually New York, where they worked for almost no wages for a theater or dance company. In those years, an entry level job for a college graduate might be $5-8,000 for a position in teaching, accounting or management. For these young performing artists, however, survival was a matter of living in shared housing, earning money in a menial part time job, and maybe receiving assistance from parents. In New York City, many nonprofit performing arts organizations with annual production seasons learned how to supplement their workers' wages through periodic layoffs that made them eligible for state unemployment insurance. So, while these young performers were usually aware that their worth on the open job market was $5-8,000, they might accept little or no compensation with few regrets. In effect, they were donating all or most of the value of their labor to the dance or theater company in which they worked.

Today, these same arts workers are in their forties and fifties. At this point in their careers, they may be earning annual wages of $25-40,000, no longer living in shared housing, intolerant of periodic layoffs, and almost certainly receiving no help from their parents. Moreover, the open job market has far fewer opportunities for their skills, and the time for developing the qualifications to enter an alternative career is past or becoming short. For many of these veterans, the realities of acquiring equity in a house, saving for retirement, obtaining medical insurance, or helping their children through college have become grim. Given their levels of education, advanced skills and seniority, these veterans feel entitled to incomes more in the range of $50-75,000, and yet only a small fraction of them, especially in small and medium size arts organizations, are able to reach this expectation. The net effect, then, is that the veterans are giving up more income to work in the arts today than they were in the early years of the Ford era, and the pressure of their need for increased income is a major cause of their exodus from the field.

In the bygone days of the early Ford era, labor exerted its own form of leverage. Artists would start new organizations, which became magnets for yet other arts workers, even without strong economic incentives. As long as labor was inexpensive, new nonprofit organizations provided a platform for artistic labor to pursue its need to produce work. In the post-Ford era, however, it appears that this leverage has been lost, or at least diminished, with respect to a younger generation of arts workers. Fewer in this generation are majoring in the liberal arts, and for those who do, there is less often the desire to take a chance on a low paying career with minimal long term security. A more typical strategy among undergraduates is to prepare for highly paid occupations, and to work hard at getting an entry level position with good prospects for advancement. A corollary of this change in career perspective is that within the relatively small pool of young college graduates who are willing to work in the nonprofit arts sector, there is often a demand for higher starting wages. Ironically, it is not unusual to find cases in which veteran arts workers are leaving the field, and being replaced by younger, less experienced workers, who start at wages comparable to those of the departing veterans.

A problem that compounds the dual trends of reduced discounted labor and reductions in grant funding is the apparent slippage in public demand for the services of many nonprofit arts organizations. In recent years, much of the performing arts industry (operas, symphonies, theaters and dance companies) has reported lower audience results. Here is an instance in which the recession of the early 1990s may have had a significant impact; but it is also likely that several other trends, all of them likely to last well beyond the recession, are significant. In essence, these longer lasting trends are reversals in the very factors that gave rise to the Ford era:

Societal Values: The 1980s are widely viewed as a time when personal gain triumphed over the public good, and there is little doubt that the one-time credibility, if not prestige, of a career in public service was set back by the political scandals and anti-government invective of the last two decades. While the ethic of volunteerism remains a strong element in American life, it is now more often practiced as an adjunct to an otherwise successful career, rather than as a way of life that diminishes one's earnings.

The nonprofit arts sector has also received a public relations body blow from the spectacle of Congressional muckraking over the various controversial grants awarded by the National Endowment for the Arts. At a time when “family values” are in ascendancy, it has become increasingly difficult to justify public spending on art that challenges the societal mainstream. In some ways, the arts have become discredited in the way that they were in Horace Lewis' day: not a place for virtuous people.

Prosperity: The erosion of favorable sentiments toward art and public service may also be related to long lasting changes in prosperity. In the post-Ford era, the average American no longer enjoys the premier standard of living in the world economy. Not only has total real income declined for Americans, but also disposable income: the money available for spending beyond the necessities of food, shelter and taxes. Less disposable income has obvious and direct implications for consumer demand for all forms of arts and entertainment.

Education: The pressures of a less bountiful economy and the retrenchment in attitudes toward the arts are compounded by changes in American public education. According to many authorities, overall literacy and educational attainment have slipped, and many arts education programs have been reduced or eliminated. Various campaigns have been mounted over the past 20 years, including those by the National Endowment for the Arts and the Rockefeller and Getty Foundations, to improve arts education curricula and convince school districts of the fundamental place of the arts in a balanced education. These efforts have often been pitted, however, against the realities of less money for public education and greater emphasis on so-called “basic” subjects that are viewed as essential preparation for employment. The newly promulgated “Contract with America” proposes even greater emphasis within public education on employment skills.

These trends in general education and arts education are particularly worrisome for the arts because of their exceedingly long term impact. Whereas societal values and economic prosperity may shift over spans of several years, changes in the educational system tend to be more glacial, and the impact on individuals can be lifelong. Thus, if a child establishes no arts literacy, especially during the early primary school years, the likelihood of that child becoming an artist or an active participant in the arts may be significantly diminished.

Given that much of the baby boom generation graduated from the educational system at or near its pinnacle, one might suppose that this relatively affluent group would be a prime source of new and stable audience support for the arts in the 1990s, even if the participation of subsequent generations is being dampened by a weakened educational system. The book Megatrends 2000 predicts a strong upward trend in arts audiences in the 1990s resulting from the well-educated baby boom generation's arrival at its prime income earning years. Unfortunately, there is little evidence that this trend is materializing, and it is quite possible that the baby boom generation will be less engaged in the arts than their parents' generation.

Leisure Time: The problem of low arts demand within the baby boom generation, and subsequent generations as well, may be due, in part, to the decline in leisure time that began to appear in the early 1970s, but became more evident toward the end of the 1980s. Overall, leisure time in the U.S. has declined by about one-third for working individuals since 1971, with both men and women spending more time engaged in work. According to Juliet Schor, the U.S. and Japan are the only industrialized nations in which a decline in leisure has occurred over this period. Not only does this decline have implications for arts audiences, but also for the volunteer activity that artists and non-artists invest in arts organizations.

Judith Huggins Balfe examines this issue one step further in an article about the baby boom generation's audience patterns. She suggests that this generation is approaching its limited leisure time in a manner different from its parents' generation. Given the pressure of work, Ms. Balfe sees a reluctance within the baby boom generation to commit itself in advance to a schedule of leisure time activities. Thus, this generation is less likely to buy season tickets because it wants to retain freedom of choice and the opportunity to attend activities spontaneously. This generation also may be reluctant to purchase even a single ticket to a high art event that requires arrival at a set time, and constrains the audience to a silent, passive posture until the performance ends. Rather, the increasing preference may be shifting to forms of performance, such as comedy, literary salons and jazz, that are more interactive, flexible with regard to arrival and departure times, and less constraining on one's behavior during the course of the event.

Demographic Change: Whereas the sheer size of the baby boom generation had an influence on the number of artists and audience members available to support the nonprofit arts build-up of the Ford era, population dynamics of a different sort are shaping the post-Ford era. Post-Ford is a more racially diverse time, and many nonprofit organizations based on the high art perspectives of an educated elite are finding it difficult to adapt to a more multi-hued audience. Moreover, governmental funding sources, which are necessarily sensitive to the broad racial and gender landscape of the electorate, are also exerting pressure for greater diversity among nonprofit arts organizations.

Technology: Throughout the pre-Ford and Ford eras, new technologies exerted a constant pressure on the high arts, capturing through electronic media any art form and audience that might be commercially successful. This pattern has continued in the post-Ford era as the new wave of CD recordings, home video, and specialized cable broadcasting has competed with the old guard of performing, visual and literary high art.

Implications of the Post-Ford Era

From our present vantage point in the mid-1990s, it can now be seen that the Ford era was the result of a coincidence of several disparate factors: the idealism of the Kennedy-Johnson administrations, increased leisure, high prosperity, the genius of McNeil Lowry (combined with the plentiful resources of the Ford Foundation), trends on college campuses, and several other influences. In the past three decades, each of these trends has followed its own course. Is it any wonder, then, that the nonprofit arts sector, which boomed during the brief intersection of these trends, cannot comfortably assume that the status quo will prevail? There are numerous examples of far larger sectors of the American economy that ignored major systemic trends to their lasting detriment. Most forms of manufacturing, health care organizations and railroads are a few among the many cases. While it is likely that the various trends affecting the nonprofit arts sector will oscillate, for better and for worse, in the future, they may never again coincide in the fashion that launched the Ford Era.

The main point of this paper has been to examine the nonprofit arts sector as a complex organic system that has been shaped by at least a half dozen major trends over the past century. While in retrospect it may be possible to trace the confluent forces that led to the bounty of the Ford era, it is another matter entirely to predict how the ecosystem will evolve into the future. Any system affected by large-scale external influences must necessarily adjust its behavior or become extinct. Systems tend to be so complex, however, that prediction of their behavior is impossible. In recognition of the chaotic behavior of social, economic and environmental systems, an emerging view among planning authorities is to prepare for alternative futures, rather than betting everything on any single projection of the future.

There is, perhaps, one reasonably safe assertion that can be made about the near term direction of the nonprofit arts ecosystem: that for the present, the arts will have no choice but to adapt to the circumstances of less discounted labor and contributed income, and in some instances, flat or declining consumer demand as well. The most likely result will be an overall decline in the number of nonprofit arts organizations, along with a reduction in the production of program services: exhibitions, performances, and so forth. This near term prediction does not imply that every nonprofit arts organization will follow a declining course, but rather that the nonprofit arts system as a whole will have to come into equilibrium with reductions in these resources. Other nonprofit fields, including environmental, social service and educational organizations, which expanded rapidly in response to the growth of discounted labor and institutional funding in the 1960-1990 era, are experiencing similar declines.

Surely, the most vulnerable organizations are the small and medium size arts groups that have had the highest reliance on inexpensive labor and grants. In the San Francisco Bay Area, for example, more than 95% of the nonprofit arts groups fall into the small or medium size range using, as a rough standard, organizations with annual operating budgets of less than $1.5 million. Many, though by no means all, larger institutions have buffered themselves from some of the exigencies of the post-Ford environment through enhanced capitalization (buildings, cash reserves, equipment and endowments), reasonably adequate employee compensation, and multiple streams of contributed income from individual donors and institutional grants, complemented by dependable flows of earned revenues based on loyal audiences. For many of the major arts institutions, especially in the performing arts, audiences have tailed off in recent years, but given their diverse resource bases, large institutions can often manage their way through this hardship. Cuts are made in various cost categories, emphasis is devoted to increased earned and contributed income, endowments are bolstered, and the ship stays afloat.

For many small and medium size arts organizations, fine tuning of costs and income sources may not be enough. The departure of the founding generation of artists and administrators, and the subsequent inability of organizations to recruit employees of comparable skill and commitment, may be fatal. The loss of one or two key funding sources, usually in the form of previously reliable governmental or foundation grants, may have the same effect.

In a few instances, small, weakly capitalized arts organizations eventually declare legal bankruptcy, though the more common pattern is to retreat from a position of operating as a year-around organization, and instead operate from project to project as resources permit. Another tactic is to abandon operation as an independent nonprofit organization, and to function thereafter under the aegis of a nonprofit fiscal sponsor. Some attempts at merger are also in evidence, but examples of success are few in number.

All of these tactics for reducing fixed costs have in common one feature: a continued need for a supply of discounted labor, without which existence in any organizational structure is not possible. With the possible exceptions of the top echelon of orchestral musicians and a handful of superstars scattered throughout the performing, visual and literary arts, the compensation and status of the American artist are not substantially different from the pre-Ford days of the Lewis Dramatic Party of Professional Artists.

For those who came of age in the Ford era and became acclimatized to its nonprofit mode of operation, the realities of the post-Ford era may seem harsh or even hostile. For artists, administrators and board members, the operation of nonprofit arts organizations has become a thoroughly learned culture with deeply ingrained assumptions about values, ways of conducting business and sources of support. As with any established culture, it will not be an easy task to adapt to new circumstances. From an historical perspective, it can be seen that the American nonprofit model was always built upon the foundation of the earlier proprietary system, which required of arts workers a combination of personal economic sacrifice and the ability to attract paying customers. If the post-Ford era comes to resemble an earlier time when entrepreneurial skills were essential to survival, it is likely that many organizations founded in the Ford era will experience trouble making the necessary adjustments, or even discontinue operations rather than accept any compromise of refined high art standards that cannot be supported, at least partially, in the marketplace.

In the long worldwide history of the arts, artists have always found ways to pursue their work and audiences have found ways to see, hear and read it. The issue today is whether and how the model of the nonprofit arts organization, which has flourished for only a brief moment in the history of the arts, will continue to be a viable, versatile and publicly useful instrument for artistic production.

In considering this issue, those workers involved with the day-to-day operations of nonprofit arts organizations will increasingly have to ask a personally difficult, but fundamental, question, “How long will we be willing to carry on our work in the nonprofit arts in full knowledge of the ongoing necessity of sacrificing personal income?” In effect, an audit of the human resources of an arts organization, which revealed the likely career trajectories of current staffs and volunteers, along with an appraisal of the likely flow of new recruits, would provide a clearer understanding of sustainability than a financial audit.

Arts funders who have an abiding interest in the advancement of nonprofit arts organizations should be equally interested in the arts labor supply. In most instances, grant funding will not be sufficient to offset the value lost to arts organizations through labor attrition. Given the fragility of many nonprofit arts organizations, funders who pursue their usual role of using grants to influence production quality, audience size and composition, fundraising capacity, and financial stability may find that their interventions exert little positive influence. Worse yet, interventions made in the absence of a thorough understanding of the new systemic realities of nonprofit arts organizations, including the key issue waning of labor resources, may result in what systems experts call, “unintended consequences.” Trying to boost audiences, for example, may push an already stressed organization, that should be focused on reducing fixed costs, over the brink.

Although funders are sometimes potent enough to award grants that make a material difference in an organization's long term advancement, it is an open question whether any foundation, corporation or governmental agency, even a coalition of funders working together, could succeed with an intervention that would change the course of the entire arts ecosystem, in a fashion comparable to the Ford Foundation in the 1960s. The post-Ford environment has no single funding institution that could muster the singular impact of the Ford Foundation's ventures into national dispersal of the arts and building up entire sectors of the arts, such as regional theater and ballet companies. The post-Ford landscape of funders is so decentralized and pluralistic that any plausible cooperative effort would seem to have little chance of achieving broad systemic change.

Even in European countries in which governments have long been endowed with financial resources, public support, and statutory authority that have enabled them to engineer the dynamics of their arts ecosystem, this unilateral position of control is now eroding in the face of new trends in technology, population diversity, societal values and the global economy. For decades, many American arts leaders advocated quantum increases in governmental appropriations to follow the European example of heavy per capita subsidization. More often today, the Europeans are looking to the U.S. for clues about supporting the arts in a more pluralistic milieu of cultures and funding sources. A new wave of nongovernmental foundations, some of which are funding the arts, are presently growing in several western European countries.

Assuming that governmental and private arts funders could marshal resources comparable to those of the Ford Foundation in its heyday, there is no obvious leverage point in the post-Ford environment. Some funders are fond of the idea that massive improvements in arts education would help to reverse declines in audiences; but would enhanced education by itself be enough to offset negative public attitudes toward public service and artistic expression, declining leisure time, slippage in middle class prosperity, and the constant pressure of new entertainment technologies? Each of these trends is driven by massive forces in the American economy, society and political order that surround and dwarf the nonprofit arts. So, for those with the ambition of rivaling the legacy of McNeil Lowry, there may be no choice but to await a more favorable alignment of the planets, when a leverage point, once again, becomes manifest.

Although the moment may not be ripe for grand strategies, there is no cause to abandon all that arose during the Ford era. In comparison to the last years of the pre-Ford era (the decade following World War II), the high arts sector of the post-Ford era appears to be much larger and more robust. Enough nutrient remains in the nonprofit arts system to support the conviction that many Ford era organizations will make the necessary adjustments to the new conditions, and thereafter prosper and mature. Even in cases wherein nonprofit organizations cease operation, their resident artists may well continue to find other organizational structures to support their work, whether it is under the auspices of alternative non-profit or the other voluntary and proprietary organizational models that will continue to be available.

And who knows? A new planetary alignment could arise at any moment and define an era beyond post-Ford. While it is highly unlikely that the next age will be shaped by the same coincidence of forces that unleashed the boom of the Ford era, there is no reason to expect that the presently prevailing trends in resources, societal values, population dynamics, technology, education and leisure will become frozen in a permanent orbit. Paraphrasing John Milton in Paradise Lost, there is no need to be forever fallen if we awake and arise to the ever-evolving realities of the cultural ecosystem.

Footnotes

1. 1. Throughout this paper, an effort is made to describe the nonprofit arts world as a complex system. The approach used in this analysis owes much to the work of two noted systems authorities: Barry Richmond, President of High Performance Systems in Hanover, New Hampshire, publisher of a systems modeling program entitled “i think”; and MIT professor Peter Senge, author of The Fifth Discipline: The Art & Practice of the Learning Organization (New York: Doubleday Dell Publishing Group, Inc., 1990)
2. Baumol, William J. and William G. Bowen. Performing Arts, The Economic Dilemma (New York, Twentieth Century Fund, 1966), p.18. The performance was of a play entitled, “Ye Bare and Ye Cubb”, performed in Accomac, Virginia in 1665.
3. Ibid. p.81-83.
4. Quote from a playbill, circa 1879.
5. American Art Journal, June 7, 1879.
6. Classic microeconomic theory would take a different perspective. The value of artistic labor would be seen as the market price, that is, the price that buyers would be willing to pay.
7. Schuster, J. Mark Davidson. The Audience for American Art Museums (Washington: Seven Locks Press, 1991)
8. The term “high art” is used throughout this paper to denote forms of artistic expression that require formal education to acquire a degree of connoisseurship. The obverse would be “popular art” or “low art” forms that appeal to masses of people who acquire connoisseurship through their immersion in culture rather than through formal education.
9. Schor, Juliet. The Overworked American: the Unexpected Decline of Leisure (New York, N.Y.: Basic Books, 1991)
10. Op.cit p.28
11. One brief, but at moments illustrious, break in this pattern occurred during a time of supreme national emergency: the Great Depression of the 1930s. In this period of crisis, the Federal Government's Works Progress Administration (WPA) hired 44,000 artists in all disciplines and used them to establish hundreds of orchestras, theater companies and community music schools. Many of these artists were also put to work, either individually or in groups, to write local histories, create sculptures or easel paintings, and paint frescoes in public buildings. One of the most noteworthy features of this enormous project was that it not only absorbed the labor of a large number of unemployed artists, but also attempted to link the output of these artists to a broader, more populist, audience. The WPA made a point of bringing art into settings, including small towns and public buildings, where the arts were rarely seen. Hundreds of symphonies, theaters and arts schools were formed in locales that had little previous history of such institutions. However, in an episode that was to anticipate the harsh attacks on the National Endowment for the Arts more than 50 years later, the Congress abolished the WPA Theater Project in late 1938 in response to the Dies Committee's (U.S. House of Representatives) findings of communist influence, and the remainder of the WPA arts program quickly faded, until World War II brought its final demise.
12. In must industrialized nations, earned income forms a far smaller fraction of the total income needed to operate arts organizations. In some instances, government subsidies provide the majority of the operating income. See Milton C. Cummings, Jr. and J. Mark Davidson Schuster, eds. Who's To Pay for the Arts? The International Search for Models of Arts Support (New York, N.Y.: ACA Books, 1989).
13. Ironically, President Nixon, in the 1970s, was to become a strong supporter of high art through his approval of quantum budget increases for the National Endowment for the Arts. Throughout his administration, Mr. Nixon made a point of attending performing arts events and inviting artists to the White House.
14. Weber, Nathan and Loren Renz. Arts Funding: A Report on Foundation and Corporate Grantmaking Trends (New York, N.Y.: Foundation Center, 1993).
15. San Francisco Foundation. Artsfax 1981 (San Francisco, CA, 1981). 1991 data are used for this chart because that year falls in the middle years of the Ford era when broad diversification of contributed funding sources had already become a well established pattern.
16. Ibid
17. Myllyluoma, Jaana and Lester M. Salamon. The San Francisco Bay Area Nonprofit Sector: An Update (Baltimore, MD.: Institute for Policy Studies, The Johns Hopkins University, 1992).
18. Op. cit
19. Milton C. Cummings, Jr. and Richard S. Katz, eds. The Patron State: Government and the Arts in Europe, North America, and Japan (New York: Oxford University Press, 1987).
20. Ibid.
21. A recent news release of the NEA claims that each dollar of Federal arts funding yields $11 of private sector contributions.
22. A Ponzi Scheme is an illegal form of fraud in which investors are promised high rates of return that are achieved in the short run by paying early investors with funds derived from later investors. The seemingly high rates of return achieved by the early investors serve as a magnate for later investors who believe that they too can become rich. Inevitably, many investors lose all or much of their committed resources. Systems theorists would use the term “positive feedback” to describe pyramidal growth schemes. Positive feedback is an inherently destabilizing characteristic of some systems.
23. Naisbitt, John and Patricia Aburdene. Megatrends 2000: Ten New Directions for the 1990's (New York: William Morrow and Co.,1990).
24. Op, cit
25. Balfe, Judith Huggins. “The Baby-Boom Generation: Lost Patrons, Lost Audience?” from Wyszomirski, Margaret Jane and Pat Clubb, eds. The Cost of Culture: Patterns and Prospects of Private Arts Patronage (New York, NY: ACA Books, 1989).
26. See, for example, Stacey, Ralph D. Managing the Unknowable: Strategic Boundaries Between Order and Chaos in Organizations (San Francisco, CA: Jossey-Bass Publishers, 1992).