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Man: This podcast is a project of the Massachusetts Cultural Council, a state agency committed to building creative communities and inspiring creative minds.
Julie Koo: You know, a little more funding and a little more kind of sustained funding would allow an artist to think primarily about the artistic side rather than just kind of surviving till the next day.
Anita Walker: Hello, I’m Anita Walker at the Massachusetts Cultural Council. Welcome to Creative Minds Out Loud. And our guest today is Julie Koo, Vice President of TDC. Welcome to the program.
Julie Koo: Thanks, Anita.
Anita Walker: You have created quite a bit of conversation here in Massachusetts with a recent study that was just done by the Boston Foundation talking about how we pay for the arts in Boston. We are so rich with world class organizations. You trip over the arts and culture here in the City of Boston, but how do we pay for it? I think that was kind of the subject of your study.
Julie Koo: Yes. Yes, it was. We were asked by the Boston Foundation to take a look again and in the context of a city that’s looking at the wider landscape of its arts and the role for the arts in the city. Looking at the money, following the money, seemed like an important thing to see if it’s working, if it’s not working. And so we did that. And one thing that I really loved about doing this report is that we got to not just look at the funding, but kind of develop some hypotheses for what that funding bought. So, that was also exciting. So, looking at, you know, outcomes in a sense almost.
Anita Walker: So, for you–
Julie Koo: Yes.
Anita Walker: –biggest surprise out of the study. Your takeaway that– when you walked away from this study it was just the one thing that you just kept saying over and over.
Julie Koo: Well, I mean, I guess there’s two sides of that coin. So, one side of that is now everybody knows that the big organizations dominate in any environment. But the extent to which they dominate here in Boston was surprising to me. I think the number was– they’re maybe forty percent of the whole ecosystem, forty-five percent. So, that was one piece. The other piece was the struggle, but also the success that smaller organizations have been able to foster for themselves in spite of the kind of funding that we have here was impressive. And, so, we see many organizations that struggle to make connections with donors and I think from looking at the data in Boston, small organizations have just done a bang up, tremendous job at doing that. And that was impressive to me.
Anita Walker: So, in terms of sort of the hierarchy of funders, you looked at Boston, and then you looked at other comparable cities across America.
Julie Koo: Yeah.
Anita Walker: And you looked at where the money comes from. Does it come from the federal government, from the state, from the cities? Does it come from individual donors? From foundations? How are we alike and how are we different from our contemporaries?
Julie Koo: Sure. So, in terms of the kinds of funding I guess the image that was in my head about Boston was it’s dominated by these kind of blind economic forces of Adam Smith’s “invisible hand”. So, individual donors and ticket buyers making decisions through their own preferences. So, that’s what dominates the market here. Earned revenue from ticket sales and individual donors. The foundations and government, on the other hand, are a lot smaller of a factor, particularly for smaller organizations. In other cities we saw smaller organizations getting a much larger percentage of their budgets from government and foundation sources and less so from individual sources. And it kind of makes sense, I mean, for– you see a lot of organizations that are run by a single person, a couple of staff people, and it’s a lot easier for that person to write that one big grant proposal and get that nice big check from the foundation or from a government agency and not go through just the blood, sweat of [sic] tears of cultivating individual after individual for those funds. And, in fact, I ran an organization like that. In New York City we got a lion’s share of our funding from the New York State Council on the Arts and that was just our life blood. And, I mean, this goes at kind of a scale, but that is a lot different from other states, but it kept us going. And organizations here in Boston don’t have that.
Anita Walker: So, it’s gonna be interesting sort of to continue the conversation now. I kind of want to bifurcate it into what we know based on your study–
Julie Koo: Yeah.
Anita Walker: But going back to your sweet spot is helping organizations be financially healthy–
Julie Koo: Yes.
Anita Walker: –and strong. So, what does this knowledge that we’ve linked– okay, so here is the landscape of funding. Here’s what it looks like in Boston. So, how does an organization take this information and how does that advise their strategies? Mass Cultural Council, of course, you know, we have one goal in mind: Head north in terms of having more funding that we can invest in the arts in Massachusetts.
Julie Koo: Yes. That’s my message to you, too. Yes.
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Anita Walker: And we are totally on board. Although, interestingly enough, we make more grants than just about any other state arts agency in America. So, while where we rank is approximately usually about in the top ten per capita, but we fund a lot more organizations.
Julie Koo: Yeah.
Anita Walker: We have four hundred organizations getting unrestricted operating support, which is more than well over what most other states do in terms of their level of funding. So, while we’re not maybe as big on a grant-by-grant basis–
Julie Koo: Yep.
Anita Walker: –we have our fingerprints in a lot of organizations.
Julie Koo: Well, I mean, I think that’s huge. So, giving advice to a funder–
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Julie Koo: –I think one of the things that we found from looking at government funding across all these different communities was sometimes the pots of money weren’t that big, but I think a part of the power is, you know, setting the agenda of it. So, if a funder– especially a public funder makes a decision that “This is important to us and you must fill out this question on the form and care about this.” I mean, one example was in just thinking about communities and serving your communities– asking organizations to answer the question “How do you serve your communities?” and “what are your communities?” I think that drives a different mindset in organizations. So, no matter what the money is I think that that makes a difference and impact out there.
Anita Walker: And the leveraging power. We hear that so much.
Julie Koo: Yes.
Anita Walker: As much as we wish we were a bigger percentage of anybody’s budget, the mere having of a Mass. Cultural Council grant–
Julie Koo: Yep.
Anita Walker: –helps give confidence to other donors that this is an organization worthy of investing in. And, actually, to your original point, we actually changed our operating support program about five or six years ago from one where the priority was artistic excellence and now it’s public values. So, that goes to that very question you just raised: How are you serving your community?
Julie Koo: Yep.
Anita Walker: I think some of the new trend in advice that we’re seeing, our organizations listen to, rather than saying, “I’m gonna put all my muscle into building a big endowment of which I can draw maybe four or five percent a year, there might be another way to help with financial sustainability.” What are you advising?
Julie Koo: Oh! Well, we definitely see that kind of amassing of cash in higher– in a strict hierarchy of needs. And, so, before you jump all the way into endowment, think about those immediate needs first. So, we’ve done other studies on capitalization in the arts and that’s kind of the clear message there, where if you can’t pay the bills today it’s not time to start thinking about an endowment and serving the needs of today over tomorrow. If you can’t serve the needs of today, let’s not think about tomorrow yet. Definitely.
Anita Walker: Going back to what we’re understanding about the funding landscape here in Boston, one of the things we hear from a lot of our organizations is, you know, “The corporate opportunity has passed us by. The headquarters aren’t here anymore.”
Julie Koo: Yep.
Anita Walker: Or “They’re re-prioritizing where their giving priorities are and they’re not in the arts anymore.”
Julie Koo: Mm-hm.
Anita Walker: So, there’s more and more of a dependency on individual giving. Is that what you’re seeing and how does that relate to what you’re finding in the study?
Julie Koo: Oh, well, we definitely saw, I think, corporate giving across the board– it was down in most of the communities that we looked at. Maybe it was in Minneapolis and perhaps Cleveland where it wasn’t so bad. So, I think that is part of just thinking of where corporate philanthropy has gone. So, it’s more kind of about marketing rather than about a philanthropic motive. So, we saw that a lot of the dollars that were going out were going to large organizations that were having more eyeballs, that were kind of serving those needs for a corporation. Here in Boston we definitely saw the kind of live bodies out there that might give corporate funding are less and less. Looking at the top ten employers in Boston, you know, half of them are non-profits themselves and, so, they’re not really good prospects for corporate giving in that way. But I think there is– I mean, in a way they’re almost acting like individuals I think. So, having those relationships, fostering relationships with the executive level people and kind of, you know, becoming that organization that they care the most about perhaps that’s a way that organizations can think about them using the same techniques that you might use for an individual donor.
Anita Walker: Who came out as the shining star in terms of the mix of funding of the other cities?
Julie Koo: Uh!
Anita Walker: It’s okay. We can talk about it.
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Julie Koo: Well, I guess San Francisco has always set kind of the high bar, ‘cause it’s– there’s a lot of analogs with Boston. I think we both have very highly educated populations, which usually goes along with culturally engaged. We both have economies that are kind of on the uptick, although I think maybe San Francisco is outpacing us a little bit there. And they’ve got a lot of funding. They’ve had strong municipal funding for a very, very long time in San Francisco.
Anita Walker: What do you mean by strong? What kind of municipal funding? How much?
Julie Koo: Oh. I don’t know.
Anita Walker: Or maybe you’re not into private–
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Julie Koo: I don’t have that number of the top of my head, but it’s a good number. And it’s– so, it’s funding that they got that is being derived from a hotel tax.
Anita Walker: So, they have a dedicated revenue stream, built into the city.
Julie Koo: Yes. And they have a couple of different ways. They’ve got this– a “grants for the arts” program that comes partly from the hotel tax, partly from the city general fund and then an arts commission itself. And they also have a bunch of organizations that are getting funding from city line items. So, all together this is amounting to– it looks like sixty– over sixty million dollars in 2012.
Anita Walker: Wow.
Julie Koo: Which is astounding. Astounding. And at a scale that’s– I don’t know– kind of orders of magnitude higher than what we have in Boston here. So, they’ve got that. They also have a strong cadre of private foundations that are arts leaders there and I think nationwide some of the foundations are making their impact all over the country. And they’ve got that booming economy and individuals who are supporting a lot of these organizations. They kind of have all the boxes checked off.
Anita Walker: When we hear about other places like Denver or Minneapo– Minnesota or San Francisco that do have robust funding, resources.
Julie Koo: Yes.
Anita Walker: It feels like we hear a lot about a dedicated funding stream.
Julie Koo: Mm-hm.
Anita Walker: Is that your observation? Is that generally the secret weapon to get–
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Julie Koo: Well, I mean, it’s interesting because in the course of my research for this report I talked to someone in the L.A. cultural commission and his thought was, “You know, you kinda want this to be in the general budget. You want the city to make a commitment and have it not tied to a particular funding stream.” I mean, sometimes that can have unintended consequences when it’s tied to something. So, for example, the hotel-motel tax in Houston. They interpreted that to mean “Since it’s tied to a hotel-motel tax, it must be about tourism. And, so, we’re only gonna support organizations with this money that drive tourism.” That’s not small and mid-sized organizations.
Anita Walker: Or youth development or that kind– yeah.
Julie Koo: Right. Or the funding stream in Minneapolis was tied to this legacy fund and, I mean, this is a funny thing where who’s the ultimate beneficiary? Is it the citizens or is it the organizations? And in Minnesota they decided it’s citizens and “This legacy that we’re leaving for our children.” And, so, some good chunk of the funding in Minnesota is going to non-arts organizations. So, either directly to artists who are working with communities or to other non-profits, non-arts non-profits, that are doing arts programming. So, sometimes you get these kind of funny, I guess, unintended consequences from the formal funding.
Anita Walker: So, as we look at the funding landscape, which is– as I talked to some people after hearing the presentation it was illuminating, but at the same time they don’t really feel the needle has moved that far in the last ten years. Would that be your observation as well, that it’s a bit static in terms of the funding environment here?
Julie Koo: I think so. I mean, we looked back in 2002. We had different tools at our disposal, so I think it was harder to get at some of the more precise numbers we were able to put on the table this time. But the takeaway is we’re the same, meaning that individuals are driving the system that we have, not at present foundation and government funding. That’s all still there, that large organizations dominate. That was the case then.
Anita Walker: So, that brings us to now what? Now what do we do?
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Anita Walker: So, this is the landscape: ten years ago this is the landscape. Today, in looking at ten years of funding environment in Boston, did this trigger to you some changes that we can make either in the way we talk about it, in the way we advocate. Certainly, having this information in front of us is a nice platform on which to have a conversation. But should we be saying something different?
Julie Koo: Well, I mean, I think at the end of this it’s kind of up to the community and to say, “Do we want this to change?” ‘Cause, I mean, in a certain respect– in some ways things are fine. I mean, we have a bunch of wonderful organizations; they’re doing their work. And they have some amount of cash to be able to see them to the next day. And if that’s good enough for the city, then that’s good enough. But if not, if– I mean, we observed some gaps in those outcomes that I talked about at the beginning of our conversation, like in the ability to innovate artistically. Like, in certain disciplines. Like, performing arts. We saw some gaps. And, so, if those are things that people in the community want to see changed then I think having a conversation with the donor’s and the funders with the heft and the wherewithal to target their funding in a certain way is a conversation that has to be had. I mean, there’s this kind of long part in the report where we talk about externally funded giving– funded revenue streams, and internally funded ones. And I think my thought about all of that is that organizations are doing the best they can. They are out there busting their butts, selling their tickets, and–
Anita Walker: Raising money.
Julie Koo: –winning over individuals. And, so, they have done as much as they can. And that’s kind of up to other folks who can kind of rally the resources around some of these potential priorities that the city might have for its arts ecosystem. So, maybe it’s about targeting, is my advice. So, if you want to see change, I think it’s gonna have to be targeted and it’s gonna be– and organizations are gonna need help beyond what they can do themselves.
Anita Walker: We are so fortunate to live in a place that has so much in terms of the arts and culture, but we know we can be better.
Julie Koo: Mm-hm.
Anita Walker: And if there’s one thing we hear every single day here at the Mass. Cultural Council it’s, “We could do more if we had more resources.”
Julie Koo: Yes.
Anita Walker: And this report helps us understand where they’re coming from now and perhaps where we could accelerate the resource development so that we can be even better than we are already.
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