Nonprofit Arts in America in Crisis?

Posted on February 16, 2011

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Nonprofit Arts in America in Crisis?

Rocco Landesman chairman, of the National Endowment of the Arts asked, “How much art is too much?” Landesman thinks America has over developed nonprofit arts organizations.

“Look,” he explained. “You can either increase demand or decrease supply. Demand is not going to increase. So it is time to think about decreasing supply.” Rocco Landesman

He isn’t alone, Congressman Paul Ryan chair of the Republican Budget Committee doesn’t want to reduce funding to the NEA, he wants to eliminate the NEA. He also wants to eliminate the Corporation for Public Broadcasting PBS and NPR along with the National Endowment for the Humanities and many, many other programs government wide to achieve a $100 billion dollar reduction in this years budget. Please note that the 2011 Federal budget is now in it’s sixth month. The Federal Government has been spending money they assumed was budgeted and much of the funding legislated for 2011 has already been spent. This happened through what is called a Continuing Resolution, an act of Congress to fund the Federal government without approving a final budget.

I know I know it doesn’t make much sense at this point? The proposed spending reductions at this point will severely affect the budgets of most Federal Agencies. They will have to adjust their budgets to compensate for the lost funding in the last six months of their physical years. Well, that is if the Congress passes the 2011 budget in the next week or so. The longer it takes the worse it will be for all government agencies, not just the Arts.

Today two amendments, one proposing the elimination of funding for the NEA and the other reducing funding to $124 million from $167 million already budgeted. That is a $43 million dollar cut that the NEA will have to adjust with what ever funding they have left? House Amendments Threaten NEA Funding

The move will surely put State Arts Agencies/Councils is Crisis. The NEA “grants,” funding to State Art Councils/Agencies. State Arts Councils/Agencies then “grant,” funding to their state nonprofits arts organizations. I don’t know the specific schedule of funding from the NEA, to States from States to Nonprofits, but I can assume the money is already Granted, Budgeted and Allocated! We are six months into the Federal Funding cycle.

My experience in Nonprofit Management raises an Important Question.

Will this money have to be paid back to the Federal Treasury? And the Feds always get their money back even when they are at fault!

There are going to be severe cuts in Arts Funding in the 2011 budget.

The cuts are going to create a reverse of funding ripple across the entire National Arts sector, perhaps even a Tsunami depending on the final, outcome of the Congressional Budget Cuts.

Now combine the Federal Cuts with funding cuts by State Governments and we have a perfect storm. Right now many State Legislatures are cutting funding to their state Arts Councils/Agencies. Again these cuts will ripple through the nonprofit sector… More on that story at Createquity blog

Now you see Rocco Landesman’s dilemma!

This is going to play out several ways. If money has to be returned to the Federal Treasury then everybody who has received money will have to pay it back to the Federal Government. States will have to return Federal funding. The States will be faced with either funding the Grants they have already awarded to nonprofits or nonprofits will have to return the Money to the States. It is going to be a big hole to fill for struggling Arts Organizations and struggling States. Many nonprofits may become insolvent.

The question is do we have too many Nonprofit Arts Organizations? As the funding axe falls the answer is yes.

Non Profits have exploded throughout the country over the last decade. Arts nonprofits are no exception. As the demand for the Arts declined nonprofit Arts Organization grew. They grew into unsustainable programs that rely on government funding and private donations. Both sources of revenue are in decline and have been for several years. Many corporate and business donors no longer exist. Some more established Art organizations created endowment funds to help off set times like this. The problem is those endowments took big hits when the recession trashed the markets. I am sure some endowments have recovered some of their loses while others had principle drawn downs to meet budget shortfalls. If there was ever a worse time for all of these events to come together I don’t know when it was.

The Arts have become too dependent on the government for funding along with a dependency on donor support.

If Art Organizations are going to be part of Americas future then they have to find ways to support themselves. They have to learn to earn money to keep the doors open. It is going to get tough for everybody. The old model just took a dump!

I have included some heavy reading for those of you who are interested

 

Triangle Art Works

Too many arts groups?  ArtWorks reacts to Rocco’s statements.

 

(Rocco’s remark’s)  Needless to say, this statement ricocheted across the news, Twitter and the blogosphere (e.g. Diane RagsdaleCreative Infrastructure) with people taking strong stances either supporting Landesman’s statements, or expressing shock that such a statement could come from the nation’s chief supporter of the arts.

 

PhilanTopic Too many nonprofits or not enough

 

NEA chairman provokes heated debate: How much art is too much?

 

The Old Model

 

Barry’s Blog is a service of the Western States Arts Federation (WESTAF). The opinions expressed here do not necessarily reflect the views of WESTAF. Reactions

1. The Overbuilt Arts Infrastructure:

In response to the blog conversations of late on the overbuilt nature of the arts (Including NEA Chairman Rocco Landesman’s blog) several quick observations:  Is the sector overbuilt?  If by that people mean are there too many arts organizations – the answer is no.  How can there be too many arts organizations?  That’s like saying you can have too much fun.  There can never be too much art and thus never be too many artists or arts organizations.  If, however, we mean are there too many arts organizations given the limited financial resources and funding available to support all the arts organizations there are, then the answer is yes, of course.

 

NEA SURVEY

2008 Survey of

Public Participation

in the Arts

 

House Amendments Threaten NEA Funding

February 15, 2011—Two amendments have been introduced regarding the funding bill for Fiscal Year 2011 currently being debated on the floor of the House of Representatives that would further cut/eliminate funding for the National Endowment for the Arts (NEA).

The first amendment offered by Rep. Scott Garrett (R-NJ) would zero out funding for the NEA completely.

The second amendment of concern is offered by Rep. Tim Walberg (R-MI). It would reduce funding for the NEA by an additional $20.5 million, resulting in an allocation of $124.5 million for the Endowment.

The amendments are scheduled to be heard, along with over 400 more, some time over the next few days.

To help prevent these amendments from being included, visit our E-Advocacy Center.

 

The National Arts Index is an annual measure of the health and vitality of arts in the U.S. The Index score for 2009 is 97.7, down 3.6 percentage points from 101.3 in 2008. A score of 103.9 would bring the Index back to its highest point.

 

Okay, it’s official: State arts agencies are in trouble

By IAN DAVID MOSS | Published: FEBRUARY 10TH, 2011    Createquity

 

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