Changes in the Environment for Arts & Culture

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A report on Changes in the Environment for Arts & Culture: Part 2
A transcript of Changes in the Environment for Arts & Culture: Part 2

John McGuirk:
So today, we get to dive in with Adrian's further research (The Changing Place of the 501(c)(3), from GIA Reader 18:3) on the structure of 501(c)(3)s and have a discussion. Like the conference we want this to be very participatory and interactive, so while it says John McGuirk interviews Adrian Ellis, I'm counting on all of you to help me to interview Adrian as well. So that this is a dynamic conversation about not only the essay, but how as grantmakers we can take this back into our daily practice, and as arts administrators how they can begin to implement that in their practice as well.

The framework for our discussion today I thought would be quite simple. I was going to give a brief overview of messages that I took from Adrian's work for about five minutes, and I have several pages of questions that we could dive into, if we get really bored, about economic theory and topical markets. So I'll launch with Adrian on a few of those questions. And then very much we'd like to open up to your questions and have this be a dialogue amongst all of us with Adrian and his expertise here as a tool.

I tried to do an overview summary of some of Adrian's key points here. This is a great essay that has a lot of economic theory in it, and I could sit—as a minor in economics back when I was in college 20 years—could sit and discuss economic theory with Adrian for days! But we tried to boil it down and get some of the essence out of the essay to talk about some of the structural problems and some of the environmental conditions that we're dealing with, particularly in this essay.

So from an environmental perspective, Adrian points out that the past 20 years have had unimaginable change, and that this is due to a number of factors: geopolitical, technology, demographic shifts, economies… There's lots of external environmental conditions that have changed very rapidly over the past 20 years.

And the key point that he is making is that cultural organizations are much the same as they were 20 years ago. That the cultural organizations are changing more slowly, and are unhealthily insulated from the market forces that would be if we were a commercial sector, for example. That the private sector capital markets have become more international, more liquid, and more efficient, and the profit motive remains there in the private sector for shareholder value, increasing shareholder value.

However, in nonprofit arts organizations we tend to remain based in funding from government and foundations, that there is a social profit rather than a financial profit as a motive. And that these external environments can be at disagreement with each other, that the commercial or capital markets are moving very quickly in response to all these environmental changes, while the nonprofit sector tends to turn much more slowly.

Adrian then goes in to point out about the 501(c)(3) structure and some fundamental flaws that exist in this structure that's 50, 60 years old now, for most of our nonprofits. That there's an enormous amount of time spent by board and staff to secure capital in this sector, that's lacking an un-persuaded by quantitative dye-lot or performance.

We're going to talk about jobs a little bit more I hope, and the California Cultural Data Project at some point in this, but I think it's important to recognize that develop directors—executive directors—are spending enormous amounts of time soliciting us for capital. And as funders we become the quasi-capital market for the nonprofit sector. Absence of a substantial developed capital market…it's rare for us to consider overall organizational performance, and how our funding impacts overall organizational performance towards its mission, rather than just project support or the very specific intent that we have as funders tied to our specific purposes, programs and projects.

The nonprofit sector has a failure to have a mechanism to balance supply and demand. And I think this is a key issue that comes out of his work as well. That the supply continues to grow as we invest in arts organizations, more money to them typically means more supply—I'm going to do another show; I'm going to bring more artists; or I'm going to put on another exhibit—rather than how do we reallocate the resources and try to become more responsive to the demands or the lack of demands within our community.

Adrian also points out that the non-executive board, with fundraising and community representation, are diametrically opposed. And again, a disproportionate amount of time is spent trying to fulfill both roles as a board member. And then from staff leadership, that there's difficulty attracting, training, retaining strong, skilled staff in our arts organizations. And that this has the result of impacting our ability as 501(c)(3)s to operate efficiently within this capital market.

So that's my overview. And now I'm going to turn to some questions, Adrian, and let you sort of launch us off into a discussion. Certainly many arts organizations feel that it is not their job to respond to capital markets. Just the opposite. It's their job to sort of raise the bar for the community and bring the community to the artistically excellent product. So should the nonprofit sector go through major structural changes to become more like capital markets?

Adrian Ellis:
No!

John McGuirk:
Oh come on! (laughter) It's going to be a really fast discussion.

Adrian Ellis:
I thought it was a great summary. My only worry would be that you make me sound like a neo-con, which I'm not at all. And I'm not suggesting for a moment that a philanthropic community incentivized by maximizing rates of return on capital would be an attractive or laudable or worthwhile thing. So I want to make that clear. Simply, all I'm trying to point out is that in the absence of a capital market—and I think I'd try to emphasize that there are good reasons why there isn't a capital market—the information signals that capital markets give to inform the allocation of resources in a capital market, are absent.

Now in the private sector that is basically about rate of return on capital, maximizing rate of return on capital. Rate of return on capital is a constraint and not an objective in the not-for-profit sector. Not to say that numbers don't mean anything for us, but it is to say that in making decisions we have all sorts of more complicated, calibrated judgments to make about the allocation of resources.

But where the information signals come from is another question. The information signals come from a sort of proxy capital market, if you like, which is funders, the funding community, or if you can call it a community, the funding communities plural I should say, because I think that different categories of funders come at the cultural sector from different angles and with different sets of preoccupations.

But I do think that in a period of incremental change it may well be that those signals, muffled as they are, can somehow reflect adequately, changes in society. I think that in periods of very, very rapid change, and by rapid change I mean rapid change in the demographic composition of… I know we've done work in Phoenix, Arizona, that sort of influence some of my consideration around what it really means to live in a community with very, very rapid changing demographic population.

Changes in technology, I don't need to tell you that the way in which we access some cultural experiences or other experiences in the role that technology plays in the mediation of those experiences is changing very rapidly. I don't need to catalogue the changes, I mean I can catalogue the changes but all I'm saying is that these very fundamental and rapid and profound and ongoing changes, it's much more difficult for our sector to respond to, because those signals are not coming in quite the same way.

The way the signals come in a capital market is basically pretty horrible. It's about the reallocation of resources through closures, through mergers, through fundamental withdrawal of shareholders with investment in one form and reinvestment in another form. The very liquidity of that market is a brutal, fast mechanism. There's no sort of moral…well I am making moral judgment, the opposite one that you were implying. But all I'm saying is that in the absence of that mechanism, we have to think very carefully about how it is that signals to change are articulated in our sort of quasi-capital market that some of us represent.

So I think that that's the main point of the first half of it. I mean there's only two points in the essay, one is about that, the other is about the fact that a 501(c)(3) is, for all sorts of laudable reasons, extremely hierarchical and fairly sort of creaky. And when it comes to making rapid decisions, a 501(c)(3) has attributes of the antithesis of most of the things we associate with intelligent, flexible, creative organizations. And it's very difficult to get those attributes into a 501(c)(3) structure. I'm not saying it's impossible, I'm just saying it's difficult.

And so I suppose what I might be saying about both the capital market side and the 501(c)(3) side, it's a bit like democracy, you know, it may be better than the alternative. It's probably better than all the available alternatives, but it still has issues, and we need to, I think, really address perhaps more seriously than we have tended to, those issues. And the faster change in the surrounding society, the more acute the issues become. They may well have been sort of chronic issues that are endemic in the model to start off with, but as change in the environment accelerates, their implications become much more important.

McGuirk:
One of the questions I had for you Adrian is in your international work. Do you see these issues in other countries? Do you see other countries addressing them differently than they are addressed here in the United States? Are there lessons that we can learn from others?

Ellis:
Yes. The problem with a lot of this discussion is that it gets very abstract very quickly. And I would like as much as possible, because I think it sort of illustrates these points, to ground them as concretely as possible. I think that it's very easy to make very, very high level generalizations that may have some validity, but the only test of them is in specific circumstances.

But I've been a consultant for 17 years and with the company that I just recently left, was working all over the States, in Mexico, in Canada, in the UK and Germany, in Azerbaijan, in Australia, in Cypress. And we worked exclusively in the cultural sector, so we have some sort of overview of what's different and what's the same in different countries.

I would say that the impact of globalization, the impact of these rapid changes in demographics, rapid changes in income distribution, rapid changes in technology, are affecting everybody, everywhere. They're affecting people in different ways. We are witnessing currently a massive tipping, if you like, of the world, and a tipping of the world towards the Middle East, Southeast Asia. And that tipping is fascinating to watch as those economies become culturally very self-confident, and as they invest in nation-building exercises around, for example, what's happening in the restitution issues around museums, and what's happening in a building boom throughout China or a building boom now throughout India.

So those are ways in which other countries are responding, may not be better, may not be worse, but are responding to these sorts of global changes. And they will have a profound impact in the longer term, because I believe that in the longer term we will see a situation in which there are asset poor, cash rich economies, and there are asset rich, cash poor economies, and there will be a trade between them intermediated through not-for-profits and through governments. But the trade will be very similar to what we saw at the close of the 19th century where there was an enormous transfer of cultural heritage from Europe to America.

We are beginning to witness a very similar phenomenon, and we will see… you know, the Louvre deal in Abu Dhabi was one example that we will see increasingly sort of less dramatic, more pedestrian, but probably in the long term more intelligent examples of long-term loans of curatorial partnerships and so-forth. That's one half of the answer.

The other half of the answer I would just say is that one of the pluses, having worked a lot in Europe and a lot in the States, one of the pluses of the States is the highly decentralized, devolved funding system in which every city has its politics but each city's politics are different. Every community has its politics of funding, but the politics of funding is different.

The upside and the downside of, for example, the UK model, is that there is only one set of politics, that's the politics of the UK treasury. The UK treasury's funding is basically, you know, tax funding which is the principal mechanism. That may come down and go to the local authorities and come out into the arts community, it may come down through the Department of Culture, Media and Sport, and then to the Arts Council, then into the funding community. Basically it's the same route.

The downside of that is you're either on the agenda or off the agenda. If you're on the agenda your issue is on the agenda totally, if you're off the agenda you've got to fight very hard to get that issue on the agenda.

The upside of it is that when an issue is on the agenda, the funding implications are thought through and acted on much more rapidly, so that for example the debate around the structural imbalance between supply and demand, which I think is on the agenda in the UK, probably filtered through into discussions around strategic funding decisions much more rapidly. I mean the reason that America doesn't… or different communities don't really have cultural policies in the US is a very obvious one—there is no synoptic intelligence anywhere capable of implementing a cultural policy as such.

So I think that when you're talking about the big, strategic issues that you want the funding system to be informed by, or you think that it's desirable that the funding system is informed by, then it's much easier in a European model than it is in an American model. There are all sorts of other compensatory benefits of the American model, but I think that in this particular territory I think it's very tough to get an issue onto the agenda because of the lack of a single context in which to have a policy debate about these sorts of issues.

You know, Grantmakers in the Arts is an obvious context, but as we know, foundation funding is a tiny and decreasing component of the totality of cultural funding.

McGuirk:
Let's go a little bit deeper with that. I mean both foundations and government, and corporate funders, many of whom are represented here in this room, are there ways for us to behave more like a capital market investor? Or more like a UK system without a massive disruption to the system?

Ellis:
I'm not sure whether it's behave like a capital market, because a capital market basically is formed by, or the micro-decisions in it are formed by such a criteria that are simpler, but not appropriate for this sector. I do think that there is a very strong case for the funding community to both deepen its own knowledge of, and create a community of debate about, things that are otherwise unmentionable by individual organizations. Issues around, basically, you know, what is your mission as an organization? Your mission appears to have atrophied to the extent to which your mission is institutional survival.

There are a large number of what I call “living dead” organizations in our sector which are organizations that look like arts organizations, smell like them, but they actually don't act like them because their entire raison d'être is that demographics have changed around them, the vitality of their mission has died, but there is no way of actually putting them out of their misery. If anyone has ever tried to kill a 501(c)(3), you will know just how difficult it is because there are appeals to historiography and appeals to politics and all the rest of it.

You can waste enormous time, money and emotional reserves for the community in the prolongation of organizations that effectively, no longer have a vital mission. All the time you are doing that, you are misallocating resources that could go to more vital, younger, not necessarily more relevant organizations. Relevant takes a lot of unpacking, that word relevant, I need to be careful about using it.

But I think that because we spend so much time as a community lobbying for the arts in some general sense, either to our own, you know, hierarchies or to the wider community in one way or another, we find it very difficult to turn 180 degrees, and then have an honest, open discussion with a community about actually the vitality of our sector and how to allocate resources in an intelligent way.

We have clearly, over the last 20 years, misallocated resources fairly dramatically. We've put way too much money into capital, compared with operating. We have shifted the balance of fixed costs to variable costs in our sector in a way that absorbs enormous costs just in keeping venues alive. And there's a scale which isn't informed by demand but is more informed by other agendas that, you know, arts facilities have informed.

Those sorts of discussions, it's very difficult… I think that we're very uncomfortable having because we feel somehow we're going to let the side down, it's disappointing and we need to be out there smiling and saying how wonderful everything is. The reality is, in the long-term, the long-term health of the sector has been, I think, adversely affected by our inability to find an honest, analytical language in which to talk about really sort of, you know, appropriate cultural provisions.

McGuirk:
I'll just say that Moy Eng and I ____ the term of Dr. Kevorkian, whenever we tried to look at some significantly underperforming organizations and how we either assist them in their closing, or help them to reframe what it is that they're doing from a mission perspective. So it's a very difficult role for a funder to play.

Ellis:
It's really tough, it's really tough. I mean I think it's genuinely tough because you get very rapidly into the territory of coercive philanthropy, “Who the hell are you?” And if a funder leads too much with their chin, they'll almost invariably get themselves into some political tangle of some sort. You also have the fact that actually you too are, you know, very porous when it comes to lobbying, and therefore, you know, you've all got boards who tend, you know, not necessarily to take a long view, but to have preoccupations around their own particular things.

Strategy is very tough, it takes a very strong sort of organizational will to implement strategy. You're also only one funder, and if other funders aren't sort of acting in some sort of parallel, approximately parallel universe, then all you'll do is just pass the parcel to somebody else.

So I do think it's very difficult. And that's why the climate of debate is as important as the funding decision. The funding decision made in a vacuum will almost always get reversed. The funding decision that is made in the context of some longer-term understanding of, listen, this is where the city is going. The city cannot afford this number of vital institutions in this sector. Or it can. That sort of debate about what constitutes a vital cultural community, and what are the art forms that we want to see? And what's the level of amateur participation and what's the balance between amateur and professional and so-forth? It's really in the context of that debate that you can then come back to the individual organization. It's very difficult to make funding decisions about an individual organization. No matter how insightful your own analysis, if there isn't a wider understanding within the community of what the debate's about.

So I do think, although you know, debate sounds easy, I do think that the debate around long-term issues of sustainability and vitality is the only way into getting the legitimation you need and the backing you need to make a tough decision. Otherwise, you just don't make tough decisions. And as you know it's… You know, what a lot of this is about is making tough, allocative decisions and feeling that you are justified… that they're rational decisions with political backing.

McGuirk:
There was a comment that you had about, if you allocate resources to one organization, there's an opportunity lost with another organization. Any ways for us as funders to evaluate how that occurs?

Ellis:
Yes, but not without data. So I think what you're contemplating and what is done in Philadelphia I think is extremely important. It's very difficult… You know, without good data on what's happening in your community both in terms of participation and in terms of where the money is going, it's basically proof by anecdote. You know, my anecdote's better than your anecdote and therefore, you know, I win the day. So that the sort of…

We are way behind other sectors—transport, health, education, environment—we are so far behind in terms of having the basis for a rational policy debate. Basically what we do is, we lob random statistics at people in order to support a… You know, in order to create a ramp for funding, usually.

The level of sort of dispassionate policy analysis in the sector is not terribly high. There are all sorts of reasons for that, there's not a lot of money in the sector and policy analysis costs money. And Marion Godfrey's made at various times, you know, there's very little now by way of a national perspective from funders on these issues, so you know, developing any sort of comparative benchmarking is very difficult.

But most of the research that we commission, we commission in the context of lobbying rather than analysis.

McGuirk:
Everybody nods their head. (laughter)

Dave Moore:
Dave Moore. I agree with everything you're saying, and yet I want to… This may sound like a nit, but can you elaborate on your comparison to transportation? When we look at the decaying infrastructure, can you just say a little bit more in that comparison?

Ellis:
Transport may be a mess, but there is an academic community that has analyzed that mess with greater energy and greater analytical rigor than the cultural factor is analyzed. And therefore the mess is better understood, that's all I can say.

Unknown:
I want to go back to some of the things that you've said. I don't think there's much disagreement about the need for quality hard data. I think I want to get back to two things, one is how do you define quality data, and is it all quantitative? And how do we tackle the question of a nuance, qualitative and quantitative data? I'd like to understand what that means from your framework, and what would you suggest, given your thinking?

And secondly, could you define what you mean by relevant?

Ellis:
Oh damn! (laughter) Data first. You remember Rand did a thing about all the arguments about impact on the arts. It was a study about three years ago. And it was basically a literature survey and it took, you know, economic impact arguments and it took social impact arguments, and it took psychological impact arguments, and it went through all of these and it destroyed them, it eviscerated all these arguments, basically. And it said, and therefore here is a new agenda.

I thought that was crazy. And the reason I thought it was crazy is that there is no field that afford to… there's no policy area where you could possibly afford the research agenda, never mind the arts, that they have suggested needed filling in. In other words all these different instrumental arguments.

I've got a much simpler way…I'm not sure I can explain this clearly. Imagine a cultural policy is a box, like that, and all the relationships between different parts, between capital investment and revenue, between access and… That's the policy box.

What a lot of the Rand report was about was not about cultural policy, but the impact of cultural policy on other areas, whether they were cognitive skills, whether it was long-term economic, whether it was cultural tourism, long-term impact on tourism, etc.

I don't believe that the policy research and the quantitative data should be about what's outside the box. What's the impact of culture on X, or what's the impact of culture on Y. I think where we need to invest is actually understanding the policy model in that box. That box is currently pretty well a black box. In other words, understanding what it is… if we've got so many dollars to spend on culture, and we imagine that those dollars are fungible, what is the most intelligent way of spending it? Is it more intelligent to spend it on community participation, amateur events? What's the balance between that and capital investment, etc. That's where we need to look. We need to look at understanding causal models.

And the objective, I would assert, of the causal model, is pretty simple. It's a vital cultural ecology. Now, therefore, the energy that I think in policy terms, should be spent on: (1) what constitutes a vital cultural ecology? And (2) if we agree on that definition, how should what resources we have be intelligently spent on that?

It isn't actually all that difficult to see how you can fill in that argument. And indeed, the information and the frameworks are around in different people's, you know, cupboards and gray literature and bits of doodle here and bits of what a foundation's done here, and what a trust has done there. In other words, it's about consolidation.

But if you think about a vital cultural community, you would assume that that community would have access to different art forms at different levels of participation. You would start off with saying, what constitutes a vital cultural organization? You know, what are the economic, what are the participation rates, etc. And you can begin to form views of what your community…what a vital… you know, how you would recognize the vitality of your community. I think those vitality indicators are very important.

And then, it's about having the stamina, if you like, to begin to map your community against that. And that's why I think that long-term, it's not about having a lunge at one of these things, which is what we tend to do and we, you know, we do it once and then we move on. It's about long-term, systematic data collection over time. And it's about participation ___, it's about uh…

And it needn't all be quantitative, you know, there's plenty of strokes for qualitative. But I think the assertion should be…it's a rhetorical assertion, the rhetorical assertion ought to be about the importance of a vital cultural ecology in your community. It shouldn't be why, because it does X, Y and Z, because it does all these things, it should be to try and articulate, if you like a…I don't know whether it's non-instrumental or instrumental, but to say, a vital cultural ecology should probably be an end in itself. In other words, as we are looking at resources between, you know, environmental issues and transport issues, etc., we should be able to assert articulatively why it is that a vital cultural ecology ought to be an end in itself. And I think that by not doing that, we've diverted a lot of our energies and resources into secondary arguments, secondary instrumental arguments about the impact from adjacent sectors. And I think that's probably led us astray in terms of, you know, research effort.

Relevance. If we expect an inflow of resources into the cultural community, we should be able, very simply, to say, why that's worth doing. And I think that comes back to the same point, what we should be able to do is, I think… What we tend to do at the moment is to be at two ends of the spectrum. We either say, if you have to even discuss it, it's not worth discussing. Of course this is important, of course it's important to keep the canon of classical music alive and performed, of course it's important to…whatever it is. And we just say “of course” and it's…

Either that, or the other extreme, we have relatively light-weight instrumental arguments about economic impact. I think we need to find some territory in the middle, where there is a sort of common sense common dialogue about what it is, why it is, that in the sort of society we want to live in, we want our children to grow up in, they should have access to, and what it is they should have access to.

So I think we have to relate arts funding back to community objectives, but we have to do it in a way in which the primacy of cultural engagement is emphasized. In other words, it's experiential, it's about the cultural engagement, it's only secondarily about what that cultural engagement in turn does for other ______.

Marc Vogel:
Hi, my name's Marc Vogel. I have a couple questions, I guess, or maybe it's a two-part question on the same topic about the nature of the frame. And you touched on it a little bit in this comparison with the transportation sector.

The first part is, is the question really about what's relevant within the nonprofit cultural sphere, or the nonprofit sphere more generally, as far as at least those questions about that double bottom line in terms of the profit here is both a social award and a financial viability.

And I think the other question is, what is this shifting, maybe permeable wall between the nonprofit culture and everything else?

Ellis:
Yeah, it is shifting. I would say that if you were a funder and you had as your objective helping to facilitate a vibrant cultural community within whatever the geographic domain is that you fund, then it strikes me that you should possibly be neutral between funding not-for-profits, funding individuals, funding public sector, and funding private sector. In other words, it doesn't seem to me axiomatically obvious that you should have a preference of 501(c)(3) as your chosen vehicle. It's easier to do it that way, but it's not necessarily better to do it that way.

If you look at where, certainly, a great deal of creativity and vitality is at the moment, it's in very small private sector organizations. If you look at whether that's in publishing, whether that's in music, etc.

So it strikes me that by emphasizing, by overwhelmingly—not exclusively but overwhelmingly—choosing to support in a sense the easiest thing it is to fund, which is the 501(c)(3), we may in turn be absolutely skewing that balance. So I think that it's worth thinking about why it is that the 501(c)(3) overwhelmingly is the chosen vehicle for philanthropic investment is basically because it's easier.

Godfrey:
I think there is also, vestigially at least, a mission assumption behind that. And it may be out of date. For instance our foundation for many years had as part of its charter that we could only fund 501(c)(3)s, because there was an assumption that that was the only charitable way you could spend your money.

So you know, I think that there's a huge amount of inertia, which I think you would agree with. But I think that there's also a kind of a values argument that needs to be made to get people beyond the fact that there should be a primary focus on 501(c)(3)s.

Ellis:
Right. And it's also… I mean when you're funding, surely it's not about the moral worth, it's about the functional output of the organization. We were talking just in the margins at the beginning of this meeting about Pandora. How many of you know about the Pandora Project?

So Pandora, for those of you who don't, is a thing called the Music Genome Project. The Music Genome Project is an analysis, it started off with independent rock music, it's moved into classical music, it's an algorithm in which music of a vast number of the sort of the middle class, if you like, of lesser-known performers, their music is analyzed in a particular way, by rhythm, by instrumentation, etc.

And there is now a radio station called Pandora which is… you can access it on broadband. You push in the artist of your choice, and after playing a piece by them it will lead you to other music by similar artists or similar music. Now the point is it therefore takes you through into music that you wouldn't spontaneously find yourself. It's enormously valuable as a way of giving people comfort, in curating their choices in an intelligent way.

Now this is a private sector venture, but in terms of audience development capacity that is enormous! You know in an area like jazz where, you know, people absolutely have no idea where to start in jazz, they walk into a record store and they see A for Armstrong and they listen to that and they think, oh that's jazz. Somebody else goes into C for Coltrane and listens to that. And they can't work out how to find the things they like. It's a fantastic way through!

And it also avoids the biases in collaborative filtering like Amazon, where basically if you're famous and you sell a lot, you will continue to be famous and sell a lot because it's based on sales.

Now that seems to me, in various areas, to be enormously worthy of support, and pushing through past its venture-capital stage. It doesn't seem to me…and it may well be that there are ways of investing in it that can create not only functional value but a return in terms for the philanthropic investor, that can be reinvested.

All I'm saying is that I can't think of any not-for-profit that has the technological capacity or the adaptability or the entrepreneurial drive to get that thing off the ground, and yet that off-the-ground has enormous benign impact on an area of audience development. So why should we be prejudiced against investing in it and accelerating its development?

Unknown:
I wonder if you could talk a little bit about the range of responses that you've gotten from the cultural sector from cultural organizations themselves? I know I talked to you earlier and you were saying sometimes you feel a little bit like a Cassandra. And I think some of us feel like Cassandras too because we do have the luxury of a long view, but we also have the danger of the coercive philanthropy thing.

So you know, I wonder, do you see some hopeful signs of organizations that are responding, particularly to the issues that you enumerated in critical issues on California, and do you see some ostrich like behavior and anything in between?

Ellis:
Enormous variety of responses. I think one of the things about that work and this paper is that it's long on diagnosis and short on prescription. And so I think if you're a hard-pressed director of a mid-sized arts organization and someone comes along and waffles to you about long-term, you know, glacial, secular trends in the sector, “Okay, I get it, I get, but meanwhile where's the money?”

So I think that there's some of that response, and I think that also, well supposing you're wrong, you know? So I think that a lot of the response of an individual actor is completely rational to say, yes, it's all very well, but… So I think there's some of that.

I sense, increasingly, though, however, that the sheer toughness of daily life in cultural organizations in a lot of organizations, is giving people pause for thought. And I think that a lot of this sort of resonates for them increasingly. My take… some of us were at the conference at the Getty—three, four months ago—and whereas I think if that had been two years earlier there would have been a lot of blow-back and there would have been a lot of sort of antipathy to the idea that we have larger structural issues that needed to be dealt with. Funnily enough, there was a very rapid consensus diagnostically, and then we moved on to, okay, so what are the areas you can move forward on?

I think one of the reasons why it's tough is you've got… You know in Animal Farm where someone says, “I must work harder, I must work harder.” I think that our tendency in the sector when confronted with a problem… our tendency is just to throw off all that and work harder and harder. And I think that that is generally… you know, if that behavior has served you and got you to the top of the organization and all the rest of it, it sounds like defeatism to turn around and say, well actually just throwing myself harder and harder at this issue, you know, trying to develop the demographic of my audience and so-forth, it doesn't appear to be working, but if I just throw myself harder at it, it will work. I think that that tends to be the instinct of a lot of people, social entrepreneurs in the not-for-profit sector. So getting them to think, well actually there's a logic problem here, and it doesn't matter how hard I throw myself at this, actually, the availability of philanthropic funding is inexorably declining, or people are simply finding there are fewer and fewer people who find what we do compelling, is a very, very difficult psychological adjustment.

I also… there's the logic of collective action problem. If you are the leader of an arts organization in Detroit —let's say you're one of the leaders of a larger arts organization in Detroit, where your demographic is absolutely blown and you're in this city and you're in the middle of it, and you've got this enormous big staff. There is no solution. And the possibility that there is no solution to your problem I think is a very, very tough one.

And I think that there is a class of organizations for which there is no solution. Or at least no solution within the box bounded by what you regard as acceptable. And indeed, you know, one of the things in consulting is, what do you do, when here is the box of solutions, and here is the box of what's acceptable, and there is no overlap between those two boxes? Then you know you've got a real problem, because you can't actually help them.

And I think that, you know, the reality is that there is a class of organizations, and I think that class of organizations is larger than we necessarily want to allow; who necessarily are, probably in the next 10 to 15 years, going to become obsolete. And the question is, at what pace they become obsolete.

Now for each one of these there is absolutely something over here, which is vital and exciting and thriving. And we can back it with conviction. But for that class of quasi-obsolete or technically functionally obsolete organizations, I just think it is very, very difficult for them. And so it's hardly surprising that they get grumpy when their obsolescence is pointed out to them.

McGuirk:
I think you also did some really great work with Duke and around innovation, and how we fund innovation at Irvine or Duke or a few other of the majors that are trying to find new pathways…

Russell Taylor:
(I am) Russell Taylor. Honor means that I have to say that the convening you referred to at the Getty was a National Art Strategies convening. I'll stump you about that later.

And I agree with your assessment of, what happened is that the conversation, had we had it two years earlier, and Phil Nolan and I did talk about having that conversation two years earlier, everybody would have left after the first day, and in a very bad mood.

But the point of that convening was to talk about how America's use of leisure time is changing —and changing very, very dramatically —and how the cultural institutions respond to that. And you can get all the information about what we talked about, more or less, on our website or the Getty's website.

But one of the things that did come up in that convening that mirrors something that Marian was saying, and there is a big difference between Europe and the United States, and I worked in Europe for nearly 20 years in England, and it has to do with nation-building and national identity, that the conversation around the values of the arts, generally, is much less self-conscious in Europe than it is here. And there are lots of historical reasons for that to be true.

But I think, funnily enough, we're actually entering a time in America's history when defining our culture is going to be more important to us, and we're going to be less self-conscious about it, because there hasn't been a time in any of our lifetimes when America was actually under threat, in the way that some of these smaller countries have known on a repeated basis.

And I just wondered, Adrian, what your view was on… I think, yes, foundations ought to be having a wider level of debate about the value of the arts. I also think that arts organizations and service organizations ought to be having a wider level of debate. And at some point those two conversations ought to converge.

Ellis:
Right, but only if we break down the arts a bit and don't just greet the arts as this undifferentiated glob, you know? So here's money for the arts. Wow! And it doesn't matter whether it goes on a building or it doesn't matter whether it goes on an individual. It's not differentiating between different forms of cultural participation and different ways of spending money on that.

And I think that we need to be much more nuanced in saying, well the arts isn't an undifferentiated glob, and if you spend, you know, half a billion dollars on a big arts facility downtown, that might not be, you know, the most intelligent way of spending 600 million dollars. The problem is, of course, that that 600 million dollars is not fungible. It's only there for that purpose. And if it were another purpose then it wouldn't be there. And I completely understand that.

But on the margin, as we know, we have made some catastrophic long-term investment decisions in the sector, at the very time when the rest of the world is becoming as light as possible, and as fleet-of-foot as possible, and as flexible as possible, with the highest ratio of variable costs to fixed costs, our sector has done exactly the opposite. And that legacy I think will be with us for a generation or two generations.

Jane:
I think my question is becoming more complex. I agree with what Russell says about the national situation is a question of values, but my personal feeling is that the whole discussion of values has been co-opted by the religious entities in our nation. And the rest of us as Americans, don't even know how to have that conversation.

So one of the things that I'm concerned about, which gets back to your definition of relevance, and a data study that's about to be done, I think there is a danger that unless part of what's built into that data-gathering, is that the data will be used not only as a score-card, but as some kind of an educational tool for arts organizations. You know, I welcome the idea of the data, but also there's a little fragment of my brain or fear, as I think about the arts organizations I love, and how that data may actually impact them.

Ellis:
Yes, but I think we have to be prepared, if we're only looking for good news and good data, or sort of favorable data —I also think that data by itself is meaningless. What we need to do is work on causal models. Because you know, with the policy areas where somehow in our brains we have some sort of idea of the relationship between means and ends.

I mean if you're a monetarist and a Keynesian, you know, and you're arguing, you're arguing about what the impact of, you know, a growth in M-1 is, you know, narrow money is on inflation, then at least you know what you're arguing about. You know you've got two causal models and they differ, and then you look at data and you're arguing about what data supports this and what thesis.

We don't think causally in this sector, because that thing's still a black box. We don't think, or we don't articulate it as intelligently as we might. This is my point about just, you know, money on the arts, like that.

What we should be thinking about is, what is the most intelligent form of investment, and why is this an intelligent form of investment? What is its impact? What is its impact on levels of participation? What's its impact on long-term sustainability, etc. And being prepared, as it were, not to just grab data and look to supporting arguments, but to have a thesis about investment in culture, and then test that thesis with data. It's really about sort of testing hypotheses with data, rather than looking for data that we think we can use to pitch.

Kirk:
I just wanted to push on the issue of relevancy a little bit more for a second with a really specific example that came up in my organization recently, around funding a community-based group, and this idea of this specific community choir doing really great work, but kind of insular but very member supported, volunteer-run, doing that kind of informal participation that we're talking a lot about, these days. And yet when it came back to the panel that was mostly arts professionals, they said, well, they're just not professional enough, they don't have the infrastructure. It came back to these criteria that the 501(c)(3) model, and we were looking for very traditional indicators of success within the 501(c)(3) model.

So I'm just wondering, how do we change our thinking about what we fund in terms of looking for new models?

Ellis:
I don't know, but…it does strike me that…I mean I lead you to it at the end of that short essay. But we're living in a sort of Golden Age in some ways, with amateur participation.

Some of you probably heard me give this example before, but there was a 1970s acoustic guitarist, a Brit called Nick Drake, who you probably all know. And Nick Drake used very odd tunings on his guitar, tunings that he basically developed himself, and it's one of the things that gives his guitar technique its distinction. If you go on YouTube now, and you hit Nick Drake, you will find amateur guitarists from Uzbekistan to Wisconsin to Caracas, all with a tiny little camera, tuning to each other. It's incredible! And it's just one illustration of how technology has facilitated a very, very easy, cheap access, international community in almost any area of amateur participation. And that's fantastic! I mean, the level of music instruments is at the highest point since the second world war. And what's more, this, in turn, I believe will continue to inform trends in consumption of and listening to more mature music forms.

The 501(c)(3) world, for the most part, is like completely outside of that. In other words, what you're pointing to is exactly the dilemma, which is that in this almost Gold… I would describe it as Golden Age of creativity in terms of access. If we stick to the model of professionalization and professional standards of infrastructure that we're looking for, we will simply miss the plot.

So I would suggest that that is a beautiful example of a framework which is no longer relevant to, and no longer captures, the potentiality of current technology and current participation.

So I don't know what the answer is. That's not an answer, it's just an adumbration of the same question.

Paulette Black:
Hi, I'm Paulette Black from the Kirkpatrick Foundation, and I have a thought about access and relevance. And it seems that with many 501(c)(3) cultural organizations, they focus on their longevity, of course, and sustainability, but are not willing to become flexible in how they serve their constituents or who their constituents are.

And that those organizations tend to not talk to other organizations that may be in a similar but yet different approach. And I'm specifically meaning that, I think it's time for the cultural arts industry to open the umbrella to include sister professionals such as art and music therapists. And I think that those professionals work with individuals in groups in a way that is not typically discussed within art and cultural organizations that seem to want to close the net of what they do and how they do it and who they include in the discussions.

So I would just like to encourage some thought about looking at, and expanding the umbrella to include those professionals who have unique qualifications and training, that can maybe give us some re-invigoration of relevance. And those are the American Art Therapy Association, Music Therapy Association, and those groups that I don't see at national conferences or in discussions like this. And I think that we need them.

Ellis:
Yeah, I mean it's basically pre-economics territory. I mean you're going to create barriers to entry if you can. If you want to secure your funds, you want to create some sort of wall around what you do, that defines what you do as tightly as possible, and defines itself referentially.

And a mission…mission can very easily become a shield for solipsism. In other words… You know the two organizations with missions that overlap to anyone else looking at them, you know, 60%, and yet when you talk to those two organizations, they will say, “My mission is/our mission is unique. Our mission is quite unlike any other organization.” And why? I mean it's basic institutional logic, that you will define your mission in a way which maximizes the distinctiveness of that, and therefore maximizes your prospects of securing funds.

I mean it may sound a bit Machiavellian, but you know it's just behavioral economics. I mean it's unfortunate but it's true.

Jennifer Hill:
Hi, my name is Jennifer Hill and I'm a Michigan funder, and so I am dealing with enormous changes happening and the absolute bottom dropping out of our economy. And I have presided over the death of two organizations in my two years as an arts funder in Flint, and one was pretty much self-inflicted and the other was not.

But I actually come from an environmental background. And all of a sudden the metaphor just occurred to me that the conversation now moved in the environmental movement from protection and conservation into, how clean is clean? And deciding that what we needed for a playground is not the same as what we need for a parking lot.

And that kind of helped me get some grounding on what you're saying, because we're talking about the passing on of what I learned from my grandmother. And I think about in Pasadena when you had that woman giving the hula, and then there was her grandson, you know, also giving a dance, and that's why it's hard to talk about! This is what I learned from my grandmother! You've got to be kidding that I'm not going to get to do this anymore.

So it's the question of values. So values around, how dare we leave any contamination? Contamination is bad, we should always clean to 100%. And there are environmentalists who will tell you we should always clean to 100%. Well, that last 10%, that last 20% is going to cost another two billion dollars. But if we clean it to 80% we will have only spent one billion dollars, and then we have taken care of most of the problem. It is no longer completely dangerous.

And so that's kind of where our laws are right now. But it took 30 years to get to that point, I think.

Ellis:
It's maybe a bit lateral, but that prompts another observation, which is that in our conferences and in the illustrations of our conferences, and in the illustrations of our annual reports, and in the rhetoric surrounding arts funding, we tend to highlight, for the most part, participatory small-scale activity of folk-art, community involvement, etc. And yet if you look at where our funds go, I would say that something like, you know, 85-90% of funds go on organizations whose demographics of support are more affluent than the median member of the community.

In other words, that our job is primarily a regressive redistributive one, which is to provide money for art forms that are primarily supported and attended by people who have a higher than medium…whether it's income level or education level, etc. And I think that that gives us all sort of existential queasiness about a lot of the work in the cultural sector.

But it also… there's a sort of inbuilt… It makes the articulation of the larger rationale for public funding, and indeed for philanthropic funding for culture, often problematic when you get tied up in it. Because the reality of so much of our funding is it tends to go towards the larger organizations, and the larger organizations and conventional art forms that are predominantly supported by and attended by more affluent members of our community.

And we haven't overcome that, in other words, you know, a generation or two generations of vigorous attempts at broadening the demographic of our audiences, have not been particularly successful, and we're sort of stunned by that. And there's a sort of intransigence to the demographic of support of the majority of the organizations that we fund.

McGuirk:
Well in light of that, would you talk a little bit more then about…because on exactly that point, when you look at some of those large organizations, and if we want to characterize them as the “living dead.”

Ellis:
Well, some are and some aren't.

McGuirk:
Exactly. But when you look at a lot of what you're having to consider as you consider funding, they often have the largest audiences. They have subscription bases many times the size of others. They are the most successful at managing the resources. They tend to have the most positive balance sheets, etc. And even though we may not like the work because of our individual taste, for 40 or 50,000 people who are willing to be subscribers, they are doing work that is deeply meaningful to those people's lives. And the money is not flowing just for the tax break, it's an expression of depth of connection.

So how do we, then, recognize who is no longer vital, and who is?

Ellis:
I didn't think there was the 1:1 correlation between size and vitality at all. In other words, it's not necessarily the big guys. There are some vital big guys and there are some living dead big guys, and in the middle, and at small scale.

And I think that the signs of vitality are actually around the sort of indicators that you're suggesting. The signs of vitality are around, you know, first and foremost, audience levels, in absolute terms of participation. Something around the demographics of them. Something around long-term supporters who have moved beyond just audience into philanthropic support. And you can't get away from it, something around the vitality and quality of what it is that they do.

In other words, we have to be able to talk about the art, and we have to find a language in which we can talk comfortably about the quality of what they do. So quality has to be in there somewhere. And if we run away from any sort of discussion about quality, then I think it's very difficult to fund culture intelligently.

So it's things to do with financial stability… it's to do with size and scale of audiences… to do with quality of work. But it's not science, per se.

Diane Sanchez:
I am Diane Sanchez, I work at a very small community foundation. And I want to get back to the relevance because of what you said about relevance being equated to community objectives.

And in the first part of both your articles you talk about this massive change, and as a small funder trying to rationalize how I spend money and try to pull the community together, I'm not sure I know what the mechanism is for finding a community of judges!

Ellis:
So what you're saying is that you find it difficult to articulate the rationale for your funding, is that right?

Sanchez:
I find it difficult to connect this notion of relevance to community objectives because, as you said in the beginning, there isn't cultural planning because there isn't any support for it once it's done. So I look out there and all I have is this sea of organizations to fund or not to fund, and again this business of what's the community objective?

Ellis:
You've got finite resources, and you've got potentially infinite demand. Your institutional responsibility is to develop some sort of coherent, articulable strategies that can be articulated and that help you make tough choices.

Now that may be related to the community, it may be related to your donors' intentions, it may be related to anything. But you've got to have a stab at that.

In other words, if you're simply responding to the vector of political pressures put on you from whatever cause it, you'll never have any sense of whether your money is well-spent or less well-spent. It strikes me that, you know, the first step… there's a larger issue about the relationship between your own organization's funding objectives and that of the wider community, but your first step is you've got to get somewhere with being able to articulate why it is that you fund culture. I mean it just strikes me that that's probably the first responsibility of any funder, even before they start making decisions on what specifically to fund, which is to have some stab at an articulation of what the rationale is.

Because if you don't have a rationale, then why do it?

Diane Ragsdale:
Diane Ragsdale. I recently read this book, Cultural Convergence, and I apologize I can't remember the author's name. [Convergence Culture: Where Old and New Media Collide, 2006. Henry Jenkins. NYU Press, New York.] But in it he's talking about the entertainment industry and how there's a lot of discussion now about effective economics. And the examples he gives mostly have to do with, for instance, Nielsen ratings and measures of numbers of people tuning in being increasingly less important to advertisers or the people producing these shows.

And that what they want are deeper and deeper qualitative relationships, and they talk about love-marks instead of brand-marks and trademarks. And they talk about how they can go deeper and deeper and develop these relationships with consumers.

So going back to maybe the living dead and Ben's point, you know, maybe it's not about numbers of people. I think in some ways we've pushed these organizations toward the commercial model by increasingly saying, how many people are you getting in the door? What's your earned revenue? You know, when do we have to sort of stop and understand, how are we helping them assess the quality?

Ellis:
I can agree with that, and it's particularly strong in museums where we strategize just the absolute number of visitors, irrespective of the nature of the experience. And it's clear that in terms of realization of your mission, if you had half the number and twice the depth of experience you would be fulfilling the mission of most institutions much better.

Max Anderson's done a piece of work at the Getty which was to try to push past just absolute numbers in visitors and think of a whole list of—I think he's got about 48 or 50—indicators of the vitality of the experience of the visitor, including how long they've been there, how many of them take the audio guide, how many of them…some sort of exit interview, etc.

I think we need to go much further than that. Building experience seems to be the heart of where the entertainment industry has gone successfully and where we need to go successfully if we're to retain and grow audiences. Which is not just thinking of the event but thinking of the totality of the participant's experience from the beginning to the end, and then thinking about building loyalty around that.

Unknown:
Adrian, I'm curious about your new position.

Ellis:
So am I.

Unknown:
How Adrian Ellis the consultant and Adrian Ellis the executive director of this capital-rich, infrastructure-rich… I mean I'm fascinated in how this is going to inform your next couple of years of work there with that organization. What's your vision of how you're going to move that?

Ellis:
I don't know where to begin, really. I mean I've known Jazz at Lincoln Center sort of reasonably intimately for quite awhile and helped them do a strategic plan last year, so in effect I've done a lot of the analytical work that constitutes due-diligence before taking the gig. It doesn't mean I won't necessarily make a good stab at it, but at least I know sort of what I'm going into.

And I took the job because after 17 years as a consultant, somebody who has known me more than 17 years know I'm a jazz nut and fanatic, and as somebody who lives about, you know, 15 blocks north of there, it seemed to me a sort of… I thought about it for all of 30 seconds before taking it. I'd like to pretend I'd agonized for weeks over it, but actually it just struck me as absolutely the right thing to do now. I'm 51 years old, I've been a consultant for 17 years, I've been pontificating about all this stuff, it's about time I went back and did something.

Okay, so how does all this sort of stuff relate to it? Well you know the first thing is, I think that Jazz at Lincoln Center is in an extraordinarily privileged position, and it's in a privileged position by virtue of the fact that it's in this extraordinary city where there's a very, very supportive demographic. It's a world city like London, like Tokyo, like Los Angeles, where in fact… I mean just to give you an illustration what I mean by that, I quite like classical music too, and I love Prokofiev, and there was a Prokofiev piano sonata marathon in New York at the Miller Theater. And Prokofiev wrote about…I don't know, 12 hours worth of piano sonatas, you put them back-to-back, and it was a show just in totality. I'm mad enough to think, oh I'd like to go and see that. When I went to go and see it, I didn't think I needed to buy tickets, and I couldn't get into it.

And that told me something about the demographic of New York, which is that if you market right, there are just so many stacked up on one another. Plus all those tourists who are flowing through. That if you market right, there's almost no niche that you can't fill, and that's a very important thing, I think, about very large cities. And I think we forget that, because we build the same sort of kits for almost every city, irrespective of the supporting demographics.

The second thing is, it's in Columbus Circle, so it's in now what is the hottest piece of real estate.

But I think the longer-term issues around the vitality of Jazz at Lincoln Center are exactly these. Not around the supply side, we're very equipped in the supply side of jazz, you know, Jazz at Lincoln Center has got these beautiful three auditoria, there are no more active, technically competent jazz musicians probably now than there have been at any time in the point of the evolution of music. All the challenges are on the demand side. All the challenges are, I believe, about not just in the demographics of New York, but in the long-term, building the audience for jazz and finding ways into that.

And I believe that the virtual territory will be as important for the mission of the organization in the long-term as the physical territory. In other words, building up the presence of Jazz at Lincoln Center's virtual identity, and making easy gateways to people who think they might like something that's a bit jazzy. And getting them from thinking they might like something that's a bit jazzy, to having a sort of informed appetite for, you know, finding their way around within jazz, seems to me what the mission of Jazz at Lincoln Center is.

And that mission of longer-term audience development, and harnessing, you know, the technology of Pandora or the technology of YouTube, whatever else, to that, and then in term hoping and intending for some of that traffic to come to Jazz at Lincoln Center, I think will be very important. As will, over time, you know, broadening the diversity of programming.

In some ways it's a mad enterprise because, you know, jazz is a club economy basically. So to get a very, very expensive piece of real estate right in the center of Manhattan and have, you know, halls that are superbly equipped physically, and the right size physically for acoustics, but a terrible size economically —i.e. 1000 feet and 600 feet —is extremely challenging.

But you know, the other side of it is that New York is… we're living in this odd plutocracy. And you know, if one works hard at it and one is intelligent about it, there is an availability of philanthropic funding I think probably for the right mission in the right place that, you know, gives it a reasonable stat.

But you know, mainly I'm just stumbling around trying to find my way to the “gents.”

Unknown:
I have another question for you, but I'm going to precede it with a comment, and I want to thank Diane for her comment about “art hickies” is what I'm going to think of them now, “love bites”.

ou know, I'm wondering from this discussion whether we're not starting to, in some inadvertent way, say that maybe relevance is a kind of dead-end. And partly, I'm only coming to this because I just came from a high-tech conference where it was very clear what the issues were, and around global warming and around international relations with Iraq, but no one in the room said, “Gee I'm struggling to understand the Iraqi point of view, I think I'll go to the opera tonight and figure that out” you know?

And so this idea of, in the room where everybody… and the artist was a constant presence… where everybody related to the arts experience, which there was a consistent need about, how do I slow down? How do I switch off the multi-tasking nature of my brain to really surrender to a kind of captivating experience with a singularity of focus? I mean there was that hunger.

But when it came to the issue around social relevance… it just wasn't…

Anyway, my question to you is, since you are still kind of a consultant on this, given everything you've said today, if you were in charge of the next GIA conference, what would you change about what we should be discussing at the conference thematically to move the arts and culture sector forward? And who should be in the room?

Ellis:
I think who should be in the room would be some of the adjacent technology people, people who can tell you about these changes in the world so that you can calibrate what they mean to you. So demographers, technologists, people thinking about the impact of globalization on income distribution.

I mean the whole income distribution issue… For me, I mean one of the things I've witnessed, I've lived in America 10 years, and I've just witnessed it living in New York, but also seen the data on income distribution is now more unequal than at any other time since what… we've passed 1928 in terms of inequality of income distribution.

That's actually, in New York, one of the motives of funding of culture, weirdly and horribly. In other words it's the very inequality of income and conspicuous philanthropy that is funding and keeping the sort of lifeblood of our organizations going. That isn't going to last forever. Long-term changes in income distribution, whichever way, are going to have a profound effect on the ecology of funding.

I think I would certainly suggest that if the changing environment is important, then we need sort of more authoritative understanding of that changing environment. I mean that's certainly one thing I'd go for.

Unknown:
So to that, going back to your capital markets, wouldn't individual donors actually be a primary capital market for these organizations?

Ellis:
They are! What do you mean “would be”? They are!

Unknown:
So if that's the case, if that's who they're in large part responding to, and they're long-time subscribers who they think of as being, you know, sort of the cash that sets them up every season, how effective can we even be in intervening when we're such a small portion of that?

Ellis:
You are a small part, but you're also the brainy part in some ways. In other ways, your very organization gives you… Your capacity for organization and professional debate is disproportionate to the relatively modest resources you bring to bear. In other words, you can push the debate forward, and you can… You know, there's a leverage associated with, I think, the foundation funding. And an expectation that you'll be more rational in a sense, that (A) sets the bar high for you, but (B) also gives you an opportunity to articulate what it is, what the issues are.

Individual funding is now, I think, immensely important and will continue to be, and grow in importance. I mean it's earned data. And it's very difficult to talk intelligently about motive.

But to come back to the earlier point, one of the… One of my soon-to-be-ex-clients is a not-for-profit theater in New York that's also on Broadway, and there's only two so you can probably… Three, sorry there are three.

I was telling one of their board members who also is an angel in Broadway and speculates in Broadway, and he was saying, “Well you know, I love the theater and I really understand the mission of this not-for-profit theater, but I also like investing in serious theater on Broadway too. And when I look at the ways in which I can spend my money, if I invest in a Broadway production I have an opportunity to have an intelligent debate about substantive issues relating to that production. I am meaningfully engaged. My money carries with it a certain weight in which I am listened to. It's not like throwing my weight around, but I've been knocking around this sector for a long time, I'm engaged enough to make speculative investments, and I expect my voice to be heard. And when I'm a venture philanthropist in other context, I get listened to.

When I fund not-for-profit theater, I'm told I'll have my…you know, they'll take my money, thank you very much, but if I get within a hundred yards of anything that's important to this organization around its artistic programming, I'm told, ‘don't go there, go away. That's not the responsibility of the board.'”

And he said, “And I absolutely understand that, I understand the not-for-profit model, but you know, I am never going to be as emotionally engaged by that not-for-profit as I am by either my other venture philanthropy where I'm deeply engaged, or indeed my conversion of essence, because you guys have created a framework that keeps me out. That basically wants my money but doesn't want me. And because that is so palpably obvious in the way in which you've organized your structure, there is a structural ceiling to how much I will ever feel, no matter how much in the abstract I believe that this not-for-profit vision is important. There is going to be an emotional barrier to how much I'm prepared to give.”

And I think that's a really important point in terms of working through how it is that we engage with individuals, as opposed to engage with professional foundations. Or how arts organizations relate to individuals as opposed to relate to trusts and foundations. Because I think if they're to compete in that world, they have to compete at a level of emotional engagement and involvement, which is a step further than we have traditionally been prepared to accept. I don't know whether that's healthy or not, because it means basically you pay if the piper calls the tune. But I do think the underlying instability, if you like, of the current cultural model is, as those individuals become more important, our cultural factor is tending, also, to become the clubs of these people. In other words, we are the kind of…

I haven't got an answer to this, because we're damned if we do and we're damned if we don't. If we go one way we become basically “the private club.” And I've already had conversations with some of my board members who have said, “Well it's easy, with regard to the hedge-fund guys who make this their club, they'll hang out at Dizzy's, it will be their vehicle.” And I say, yeah, but this is public purpose, you know?

But if we don't do that, then we are now so dependent, our model is so dependent on individual giving, and on the inequality of our society, that without it we would be absolutely, you know, stuffed. So it's not a pretty dilemma.

Unknown:
I just want to jog the conversation back to… We talked about causal models, and after Andrew Taylor and John Carter and I did what I thought was going to be an impenetrable presentation on systems mapping, but a lot of people were very, very kind about it, we had a lot of foundations come to us and say, this seems to me to be a way that we could develop a causal model, but we don't know how. And since that's not what we're in the business of doing, you know, we had to say to them, “Gosh, that's a shame that you don't know how, you really should try and learn how.” We were just not helpful or indeed even attractive.

But it seems to me that this isn't necessarily… the development of these kinds of causal models, isn't necessarily a skill that a lot of people in the field that we're in, have. And that actually finding ways to do that, whether it's systems mapping or some other way to do that, is something that, going back to what Ben was saying, that helping all of us get those skills would actually be incredibly useful. Because trying to come up with where the levers for change in your community are so that you can articulate why you're choosing A over B, is a tremendously volatile process. But there are ways to do it, there are actually... You know, there's a bag of tricks to do it, if you like. And not very many people in this world have it, because it's not what we do!

So that might be something to think about.

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