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Leverage Lost
The Nonprofit Arts in the Post-Ford Era



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)

Published in In Motion Magazine February 16, 1996.