Finance

Another Effort At Efficiently Crunching 990 Data

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Thanks to the Non-Profit Law Blog’s weekly curated link list, I learned that there is a new collaborative working on a way to provide a clearinghouse for raw, clean, and standardized nonprofit tax data gathered from Form 990 filings.

While that may not sound like it is relevant to your daily life at all, being able to easily access that day will make researching non-profits much easier, hopefully resulting in data which will support better decision making.

Drew McManus painstakingly extracted data from 990 filings from 2005 to 2022 for his annual Orchestra Compensation Report project on Adaptistration. He would frequently grumble about the fact that the data was not available in a machine readable format that would make that data so much easier to process and shift through. If I recall correctly, his go to source was the Pro Publica Non Profit Explorer which is contributing their data to this new clearinghouse.

Having good data about things like compensation can help advance equity and inclusion goals. The Association of Performing Arts Professionals (APAP) is engaged in an Art Compensation Project for some of these very reasons.

Better data crunching capabilities can also facilitate the study of differences by region and discipline for revenues, expenses, impact of private vs. public & government based grant making, etc.

Given that there have been so many groups who have attempted to serve as a clearinghouse for 990 data, the biggest question perhaps is whether this new collaboration can make it work better than in the past.

Give A Kid A Culture Voucher And They Buy Books As Well As Experiences

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I have been keeping an eye on the cultural voucher programs various European countries employ to encourage young people to get out and engage in different experiences. The program differ in detail. There are some that provide rail passes to allow people to explore different geographic areas, including outside their own countries. Others are focused on arts and cultural experiences within the country.  I have written about Germany’s KulturPass before, but I recently caught a story about the most recent round of the program.

According to a recent article, as of August 9, in terms of units purchased since this year’s KulturPass program began on June 14, books and other printed materials have lead the way by far.  Then cinema tickets, concerts and theater, museums and parks, musical instruments, audio media and then sheet music.  In all, about 200,000 units have been purchased in the last two months. About 136,000 German 18 year olds have activated the passes worth €200 (US$219)

In terms of amount spent, concerts and theater lead the way given the greater cost. “….at something around or above €12 million (US$13.2); books follow with so €11 million (US$12.7 million); and cinema tickets follow in third place with €461,000 or more (US$505,900).”

Lest you think Germans are particularly bookish with 49% of voucher funds being used to purchase tomes, Italy has seen similar results with their pass.

“…Italy’s corresponding “18App”—the original “culture voucher” for young citizens in Europe. There, in 2021 specifically, the publishers association reported that 18-year-old Italians were spending 80 percent of their €500 vouchers on books during January and February of that year.”

Obviously, there may be differences in the design and implementation of the pass in Italy that encouraged larger purchases of books. The fact these numbers come from a period 10 months into the Covid pandemic when there were reduced opportunities for other activities likely influences the numbers as well. However, these programs are good examples of a tool to provide bottom up funding to provide a little stimulation to arts and culture organizations.

Australia’s Last Poet Laureate Was A Convict?

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Big news out of Australia where the first national arts policy since 2013 was announced.  In addition to commitments of funding to specific entities and organizations, arguably the most significant element of the policy is a commitment  “….to protect First Nations knowledge and cultural expressions, with a particular brief on cracking down on fake art that plagues the $250m-a-year Australian Indigenous art market.”

Other elements of the plan include the establishment of a poet laureate position which last existed during the country’s convict era,  a state of the arts report to be issued every three years, and the establishment of  “a quota for expenditure on Australian content by multinational streaming platforms such as Netflix and Stan..” The amount of this quota is rumored to be about 20% and The Guardian article quotes people who are concerned streaming platforms may pull out of the country if they are required to produce Australia based content.

It happens that I saw a piece on Vice last night before I saw The Guardian article. Vice asked Australian artists what they thought about the plan.  Many felt the money was going to the usual suspects and advocated for a universal basic income plan for artists.

Others felt that the arts were unfunded in proportion to their footprint:

“The arts sector will get $286M over four years, or $72M a year. The fossil fuel industry gets $11.6B a year in government subsidies. Australia’s arts sector employs about six times as many people as the fossil fuel sector.

The requirement for locally generated content was cause for hope for some:

“I started to lose hope in local content knowing that reality TV filled up much of our “Australian” quota on broadcast networks. The possibility of streaming services now being made to spend 20% of their budget on original, local content honestly makes me feel hopeful and excited to pursue my career on my home turf.”

A Look At Who’s Managing Foundation Funds

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For the third year in a row, the Knight Foundation has conducted a survey of the top 55 charitable foundations with the intent of measuring the diversity of those managing the assets. Of the 50 eligible to be measured, (five do not have funds under active management or engage in other approaches which don’t meet study criteria), 15 declined to provide a response to the survey.

Knight Foundation was disappointed in the lack of transparency. I had written about the problem of donor advised funds essentially sequestering charitable gifts with no obligation to to distribute them. Some of those on Knight Foundation’s list of non-responders are set up in this or similar arrangement.

Knight Foundation had examined their own practices about 12 years ago and appalled by what they found, set out to diversify the companies that handled their investments.  Reading the report, you may be disappointed to learn that 81.9% of the top 50 charitable foundations funds are invested with firms primarily owned by white men. However, at 18.1% charitable foundations are veritable role models in the investment world at large where the industry average is 1.4% invested with diverse owned firms.

Knight Foundation isn’t simply pursuing this policy to provide a fairer distribution of assets under management to diverse owned firms. They have seen that diverse owned firms engage in more diverse investment strategies avoiding “group think” approaches which may result in unhealthy concentrations of assets in problematic companies and industries, but this investment approach by diverse owned firms is no more risky than non-diverse owned ones.

That study, and the two in the series that proceeded it, found no statistically significant difference in risk- adjusted returns between diverse-owned and non-diverse-owned asset management firms. Put another way, despite no performance advantage, firms primarily owned by white men manage 98.6% of the over $80 trillion under management in the United States. And that $80 trillion represents more than three times the entire GDP of the United States.