Alas, Germany Didn’t Allocate $54 Billion In Relief Funding To The Arts

You may remember reading that Germany had rolled out €50 billion ($54 billion) in funding for the arts a few weeks back. The news was touted as putting arts funding in the US to shame. While it may ultimately still be the case that aid to arts will put the US to shame, the claim that all that money is going to the arts is not accurate.

I had received an email about some arts research from long time friend of the blog, Rainer Glapp, who lives in Bremen, Germany. I asked him how things were going with all that funding. He responded that there was a big misunderstanding about all the money being focused on the arts and culture.

He explained the money is intended for small businesses and freelancers. While artists can apply, the money is intended for rent of venues and other expenses and not for personal expenses. He told me that primarily, direct funding for arts comes from the 16 states rather than the federal government.

As I went back to find articles about the €50 billion I had seen, I discovered that pretty much every website references the same ArtsNet article. There is a correction to that article dated March 27 which reads:

The government has clarified a point of confusion in its press release and previous reports in the media, stating that the aid package for small businesses and freelancers in culture, art, and media will come from a larger package for solo self-employed people and small businesses that totals €50 billion.

So artists and arts organizations won’t be benefiting as well as first impressions had indicated.

Rainer graciously dug up some articles on the situation which are written in English. One on the Deutsche Welle website illuminates the problems artists are facing:

But on April 7, the Alliance of Freelance Arts, representing 18 branches, replied that freelance and solo artists and their small business teams had “hardly any” access to such federal measures.

“This is due on the one hand to the lack of federal guidelines on the recognition of work-related living expenses as business or employment expenditures and on the other hand to the fact that the [16 German] states tend to interpret administrative leeway to the disadvantage of freelance artists,” said the alliance.

[..]

Already, the German Music Council (Deutscher Musikrat/DMR) had demanded a monthly basic income grant of €1,000 ($1,088) for “all freelance creative professionals” over the next six months.

Another website Rainer shared provides a chronology of how the coronavirus impacted cultural activities in Germany. It reinforces the fact there is no federal relief funding focused on helping cultural entities and illustrates just how varied the support for artists is in each of the states.

However, there is no specific federal support programme designed to meet the specific needs of the cultural sector. This is still being demanded by the German Cultural Council (April 22), the Cultural Council of North Rhine-Westphalia (April 16) and other associations, in the form of a cultural infrastructure fund.

[…]

The possibility of claiming support services — in addition to the instruments at the federal level — is also very much dependent on the state the applicant lives in…. Baden-Württemberg have an emergency aid programme for freelancers that allow them to apply for EUR 1180 grant money for up to three months, Bavaria offers EUR 1,000 a month in basic payments, but only for members of the artists’ social fund. In Hamburg, self-employed can apply for EUR 2,500 in addition to federal funds. In Bremen, artists can apply for up to EUR 2,000 in emergency aid (in addition to a purchase programme for visual artists); in Saxony-Anhalt EUR 400; and in Mecklenburg Western Pomerania there are bridging grants for artists available in the amount of EUR 2,000. The support fund for artists supported in NRW (EUR 2,000 per month) was only equipped with a total of EUR 5 million, so that only a small proportion of the applicants could take advantage of this fund. Other federal states (e.g. Berlin and Saarland) had to discontinue their support programmes due to over expenditure. In other federal states there are — in addition to the federal programme — no state programmes, for example Brandenburg, Lower Saxony, Rhineland-Palatinate and Thuringia.

Might Be About Time To Get Back In The Fundraising Saddle

If there has been any benefit from the Covid-19 shut down it is the sheer number of webinars being offered to help businesses and other non-profit organizations connect with resources. I am sure we would all have been happier if life hummed along as before rather than necessitating the need to agonize over what loan or grant programs our organizations might qualify for and trying to get applications processed.  However, it also feels like networks of information and resources are being constructed and strengthened through this all. Hopefully they will persist beyond this period of time and become an asset.

By my last estimate, I have participated in 10-12 sessions in the last two weeks. One I found particularly interesting that is generally applicable was the National Trust for Historic Preservation’s session on “Communicating and Fundraising for Preservation in a Time of Uncertainty.”  (slide deck) Since I run an historic theater, I thought there might be information on resources available for our facilities.

What I found helpful was their advice on fundraising during these difficult times. Basically, they opened by saying just like the many stages of grief, there is going to come a point in the way you are processing your current situation where you will start to focus on the future. Part of that will be getting back to fundraising.

They said you can approach donors now, but just for the purposes a check-in with them.  The conversation should focus on how they are doing and what they are hearing about how other non-profits are doing. This will give you a sense of their priorities at the moment. You are also maintaining relationships and laying the groundwork for the future.

In terms of when you can make an ask, you need basically be sensitive enough gauge when the time will be right. But when you do make the ask, the webinar presenters emphasize being worthy, not needy. You should make the case in terms of your worth rather than in terms of your desperation for funding. They also strongly advise against shifting your focus to chase the direction dollars are flowing at the moment.

Here is the relevant slides from the presentation.

The point about being accommodating is in respect to acknowledging priorities might not be focused on your causes at the moment. In terms of hosting events, they point out that this might be a good time to host a virtual meeting or information session. Those that are invested in your success want to hear how you are doing.

I should mention, today my staff and I had a consultation with Michael Kaiser from the DeVos Institute of Arts Management. You may remember he is the former president of the Kennedy Center who was hailed as a “turn around king.” He is offering free one hour consultations to arts organizations about how to cope in these times. (~380 and counting). He provided the same advice about focusing conversations with donors and funders on how they are doing.

He also made a similar suggestion about hosting a virtual meeting on Zoom or other platform. In our case, it would be to discuss our process in planning our upcoming season since our contracting and scheduling process is delayed, not to mention no one really knows when we will be able to assemble in large groups again. Based on the type of calls we have been getting, this type of meeting is likely to help strengthen our relationship with our audiences and assuage their concerns. We are waiting until all the refunds for cancelled shows have been processed so that topic doesn’t dominate the conversation.

Portland, OR Art Tax Update

Back in 2012, Portland, OR approved a $35 tax to supports arts education and arts organizations around the city. In 2017 I wrote a post about how overhead was starting to cut into the amount of money available to distribute to programs. Part of that overhead was attributable to the fact people weren’t paying the tax and so funds had to be diverted toward enforcement.  Last week, via Artsjournal, is another article mentioning that the tax hasn’t proven to be the boon supporters hoped it would be. For one, people still are resistant to paying it.

The art museum, like the rest of the big five, never received the targeted 5 percent support.

That’s in part because the tax has never brought in the $12 million a year voters were told to expect. (Revenues were $9.8 million the first year and peaked at $11.46 million in 2016.)

Portlanders have been reluctant to pay it. Although the city’s population has risen nearly 12 percent since November 2012 and tax receipts should have increased proportionally, figures show revenues still never reached levels proponents forecasted.

A point I want to clarify. The article makes it sound like arts funding for schools has diverted money that was intended for non-profit arts organizations. However, from my earlier posts, it appears the law that was passed intended to fund the schools first and then the non-profits would receive funding. In fact, this recent article says when the measure was passed in 2012, funding the schools was politically more attractive to voters than funding non-profits. While the arts organizations had been pushing the art tax idea for a long time prior to the vote, when the time came, the resolution being voted upon was written to fund the school first.

The other thing the article notes is that between the collection effects and the art tax name, there are public relations and perception issues which have proven problematic.

While arts leaders all favor more Portlanders paying the tax, some worry the city’s zeal to collect is counterproductive. “You get pinged with a letter, you get pinged with a postcard, you get an email saying time to pay the arts tax,” says Portland Center Stage’s Fuhrman. “That’s where I think the bad PR comes in.”

Andrew Proctor, executive director of Literary Arts, which produces the Portland Book Festival, says the public’s ill feeling has a cost. “Even the name ‘arts tax’ sounds punitive,” he says, “and it misleads citizens that in paying the tax they have supported arts institutions. They haven’t. It can damage our fundraising efforts and can polarize the conversation.”

[…]

Hawthorne, the former RACC official, says he fears the public may believe the tax works. “Ten to 12 million is a lot of money,” Hawthorne says. “People may perceive the arts have had their influx and now it’s time to focus on more pressing needs.”

The whole article provides a lesson for those considering advocating for an arts tax of some sort. The basic idea isn’t bad, but the way it is structured and executed needs to be thought out. The example of Portland points to things people want to avoid. The name; the way in which it is collected, structured and discussed; all call negative attention to it.

It is worth reading the whole article because it also mentions the Regional Arts and Cultural Council’s (RACC) initiative to provide more equitable funding for smaller arts organizations. Back in 2012, RACC was starting to require more diversity on the boards, staff and eventually audiences of Portland’s arts organizations. In January, I had written about how the Arts Council of England was instituting similar requirements, forgetting that Portland had been working toward that goal for nearly a decade now.

Last year, RACC shifted their funding model to better align with this philosophy which includes size and economic diversity among its criteria. As a result, the larger organizations in town receive less of the art tax money than they once did.

Donate For The Tote Bag

I don’t know how I missed it on Vox.com, but Non-Profit Quarterly recently pointed out an article the site about the effectiveness of swag in non-profit fundraising.

The TL:DR version is, other than instances when it reinforces your identity (i.e. NPR or New Yorker tote bags), it isn’t really effective in terms of raising more than the cost of the gift and processing. This is especially true in regard to the unsolicited gifts like mailing labels and Christmas cards some charities send you around the holidays in the hopes you will feel guilty enough to donate.

For the more detailed version: There are definitely times when those gifts can actually increase donations because they are tied to people’s identity:

Simran Sethi, a journalist who hops between North Carolina, Mexico, and Italy, told me she nudged up her donation from $50 to $75 once just to get the WNYC tote bag. “I just wanted to show my NPR pride!” she says. Lindsay Diamond, who works for the University of Colorado Boulder, admitted to ponying up more so she could snag a Tiny Desk Concerts hoodie.

…. Like Sethi, people may want them to show off their contribution or affiliation, or perhaps connect with other like-minded folks. Donation levels that feature increasingly valuable gifts do indeed promote “bump-up spending,” Yarrow says. “Even when we’re donating, we consider value pricing.”

I feel like I just read a conversation on Twitter this week where people were questioning whether an organization was saying they were committed to spending $8 million a year to raise $20 million (or something similar). If any readers saw that exchange, point me to it. (My recollection was that it was in regard to Boston Symphony, but I can’t find any such article so don’t quote me on that.) But practices like that are pertinent to this conversation.

But a bad design of the donor reward scheme can be problematic:

A man from Chicago — name redacted to protect the guilty — for instance, confessed to donating a dollar to NPR just for the socks. “It was a gift-of-any-size campaign, and I knew I was probably costing them money,” he says. (He redeemed himself by shelling out later on.)

For some donors, there may be a perception that the non-profit is wasting money on swag they could be spending on their cause:

If donors do end up contributing, they may chip in less than they can afford because the premium casts a pall over the organization’s financial efficacy. Or they might knock the charity off their lists entirely. Younger donors, especially, are becoming more strategic with their largesse.

Research bears this out. A 2012 study by Yale psychologists found that the offer of a gift reduced feelings of altruism regardless of whether the gift was “desirable or undesirable, the charity was familiar or unfamiliar, or the gift was more or less valuable.” The authors attributed this to a “crowding-out effect,” one that may create ambiguity about the donor’s perhaps-less-than-unselfish motivations for giving.

There was a mention in both the Vox and NPQ pieces that often the calculus being used is the long term value of a donor versus what you spend today on a gift for them. In other words, you may lose $5 sending them a donor premium today, but if they give $1000 over the next five years, it is worthwhile.

A 2018 study posted on The Conversation looked into that assumption:

Fans of using premiums to raise money for causes believe that they are worth it even if they simply get donors in the door but do not raise more money than giving them away costs charities. That’s because, at least theoretically, they can form a habit of giving. But some researchers have found that donors who are lured into giving by donor premiums are unlikely to give again when asked without an incentive.

What should nonprofits and donors take away from our study? We conducted this experiment with just one organization, but the preponderance of the evidence from our work and the findings of others suggests that unconditional premiums are not worth it.

Most interesting to me was a personal observation made by Niduk D’Souza at the end of her NPQ that donor rewards are used regardless of their efficacy due to the way development offices are evaluated:

However, it is this fundraiser’s experience that the metric most often measured, and presumably without coincidence, is one that is most easily aligned with nonprofit budgets and often a fundraiser’s own job performance metrics: how many donors were brought in this quarter, this year, by your portfolio, and how much did your portfolio raise, or is it worth, overall?

So, is it any wonder why nonprofits continue to give away crap?

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