Next To Pick Up The Reins

Since there is a bit of a cross-readership, many of you may have already seen that Drew McManus announced yesterday that he was going to cease posting regularly on the Adaptistration blog. Drew is one of the few people who has been posting on the topic of arts management longer than I have.  Way back when he reached out to me about moving my blog from the Movable Type platform I was on to the Insidethearts.com site back in the early days of WordPress.

In his post, Drew noted that even after posting for 18 years, potential topics of discussion have not been exhausted.

Having said that, it still feels very odd to reach the realization that it’s time to stop while simultaneously having no shortage of ideas and topics that deserve attention…but it’s also clear that now is the time to let new voices step in and pick up that conversation. The emerging practice of audition fees, virtual audition practices, underpaid/overworked staff, the post-pandemic compensation reports, and so much more are all issues that need the sunlight of public examination in a non-partisan environment.

I will readily admit that the blog format has gradually fallen out of favor. My active readership has gradually decreased over the years. But I am also pretty clear that I am writing as much to help myself work through thoughts about arts policy and practice as informing a readership. Just as many people have a daily discipline of writing in a personal journal, I am mulling things over publicly.

My intent is to continue writing this blog, but as Drew says I equally hope new voices step up and address topics of concern for the arts and culture field.

Arts Orgs Are Shifting Approach Post-Pandemic, Will Grantmakers?

A link to a video presentation about a study the Michigan Arts and Culture Council commissioned of SMU DataArts popped up in my feed last week. I am not sure what inspired me to listen all the way through because I am glad I did. There were some small unexpected revelations that popped up.

For instance, right around the 30 min mark director of SMU DataArts Zannie Voss discusses how Michigan arts organizations have a higher median working capital than the national median, however the average working capital was quite a bit lower than the national average. (Reminder of median vs average) But both the median and average were close together which Voss says is unusual. After some investigation she found this was due to Michigan arts organizations having smaller budgets than the national average.

This carried over to organizations who primarily served BIPOC communities versus those who did not primarily serve BIPOC communities. Overall BIPOC serving groups in MI had the same liquidity as non-BIPOC serving groups in MI, whereas nationally BIPOC serving groups are more liquid than non-BIPOC groups.  This is due to the fact that in MI the budget size of both groups are closer to each other than their peers nationally.  Generally smaller organizations tend to be more liquid than larger ones.

Voss delves more deeply into this factor by noting that smaller BIPOC serving organizations especially tend not to grow large because there is a lot of unrecognized sweat equity being invested by people. This is one of those “you have to have money to make money” situations. If an organization can’t show a cash expense because so many people donate their effort, they don’t meet foundation/donor funding thresholds to receive more money.

She the moves into recommendations for funders as organizations try to recover from Covid restrictions. The first one is to “support grantee defined strategies for recovery and adaptation” and to “place bigger bets on BIPOC serving organizations who have been disproportionately by the pandemic and racial injustice” on the scope of decades rather than a couple years.  Another is to provide capacity building by supporting salaries and benefits for staffing and other operational expenses.

Specifically she encourages funders to focus on capacity building over organizational growth.  Instead of pushing organizations to add programs, granters should encourage organizations to set down deeper roots to ensure stability.

Likewise she advocates for the exploration of different business models, multi-year grant commitments and encouraging arts organizations to build cash reserves.

None of these suggestions are particularly new, but the pandemic reignited the discussion of many of the issues and created a context for implementing policy changes going forward.

Would You Pay For News In Return For Tax Credits?

There was a story last month on Nieman Lab looking at how successful a tax credit for digital news subscriptions has been in Canada.  The intent was to help news organizations stay in business and according to the article, there is a similar bill being considered in the U.S.

Unfortunately, the number of people taking advantage of the program, which allows you to write off 15% of your subscription, has been pretty small. Only about 1% of Canadian taxpayers claimed a credit and some news organizations didn’t apply to be part of the program.

Some news orgs that may have qualified have declined to apply. A number of those that were deemed qualified Canadian journalism organizations have pitched the tax credit to existing subscribers, and used it as a perk to entice new ones.

At The Logic, … information on the tax credit was sent to all existing subscribers and advertised to potential subscribers, …

The end result was “negligible,” Skok said.

Rather than prompting new subscribers to sign up, Skok said, “the people who would have subscribed anyway are using the credit.” Skok suggests that subscribers weren’t swayed because they wouldn’t see the benefit until tax time and because the 15% credit was too low to change many minds on paying for news.

That doesn’t bode well for the corresponding bill proposed in the US which covers 80% of the subscription cost, but requires a multi-year commitment.

…cost of a local newspaper subscription or donation to a local news nonprofit in the first year, and 50% in the subsequent four years. So in order to earn the full $250 credit, you’d have to spend at least $312.50 on subscriptions or nonprofit news donations in the first year, or $500 in the following four years.

That’s a lot more than what most Americans pay for local news currently. Just 20% of people living in the United States say they pay for online news of any kind,…

However, the news outlet doesn’t need to be digital print media. It could be a local television or radio station as well so presumably NPR and PBS stations could benefit by seeing larger donations over multiple years.

Unfortunately, since this is a tax credit, people in lower income brackets who don’t pay taxes wouldn’t benefit if they made an attempt to support local news outlets.

What caught my eye in the article about the US bill is that it incentivizes small businesses to increase their advertising. My first thought was that this would benefit arts organizations until making the obvious realization that most arts organizations don’t pay taxes. On the other hand, it might allow arts organizations to promote activities which generate taxable unrelated business income and bolster an additional income stream.

A tax credit of up to $5,000 for small businesses that buy ads in their local publications. Small businesses could use this tax credit to advertise with local news sites, newspapers, television, or radio. As with the tax credit for individuals, local businesses would foot 20% of the costs the first year and 50% in the following years. So a local business could quintuple their current advertising in Year 1 and double it in Years 2 through 5 at zero net cost. Under the Senate bill, to qualify as “small,” businesses must have no more than 50 employees.

From what I can tell, the House version of the bill went to Ways and Means committee last June. Unless it got wrapped up in another bill it may be languishing there.

As great as this bill, which has bipartian support, may sound in terms of reviving local journalism, the article notes that most local news outlets have been bought up and drained of assets by hedge funds. So a lot of the money would end up being channeled to large corporations despite the limits on employees in the bill’s definition of local news entity.

On the other hand, the opportunity to garner greater support may see the emergence of new news outlets on the local level.

Starting Small And Building Momentum

Last month, The Art Newspaper reported that NYC would begin requiring all employers to disclose the salary range of jobs starting on May 15. Many saw this as a positive step for the arts world as well as the employment environment at large, especially since it applies to many different employment arrangements, including internships.

The new ruling, an amendment to New York City Human Rights Law passed by the city council last December, applies to roles that are remote or in-person, permanent and short-term contracts, and to interns. Any company with more than four employees must adhere to it or risk civil penalties rising to $125,000 from the New York City Commission on Human Rights.

[…]

This small shift, he says, could transform the hiring process, and potentially the wage structure, of some of the top cultural institutions in the US, many of which have been subject to activist campaigns and union pushes in recent years due to huge internal wage inequalities

[…]

Finkelpearl describes New York City’s new law as being “long overdue” and sees it as part of a “generational shift around how people look at their jobs”. He points out that it comes in the wake of the so-called Great Resignation, or the Big Quit, which saw millions of workers across the country resign from their jobs during 2021.

A tidbit I found interesting came near the end of the article where it was noted that New York State (NYS) had made it illegal for employers to ask about salary history in January 2020, but that New York City had passed that law in October 2017. As far as I can tell, New York State hasn’t passed a law about wage transparency similar to NYC’s, but there was a subtle implication that it may come in the future.

While we have seen some state governments use preemption to overrule laws made on the municipal level, there are frequently times that city level laws can evolve to encompass the whole state –even in the face of preemption. The Ballotpedia article on preemption I just linked to cites NYS governor’s override of NYC’s plastic bag ban in 2017, but a statewide ban was eventually implemented in 2020.

I bring this up because there may be some hope and value in advocating for arts and cultural causes on the local level and seeing it expand to the state. Of course, a large segment of the population needs to see the need/value to have an investment in putting laws and rules forward.  The report by the American Academy of Arts and Sciences I wrote about yesterday frames the need to support culture in terms of extant support for other industry segments.   Or as in the case of Minnesota’s Legacy Fund, Art & Culture made common cause with wildlife/wilderness preservation.