An Oversupply of Art? (Janet's Blog)

(11-8-2010) At the GIA annual conference in Chicago, we rolled out the work we’ve done so far on capitalization. Capitalization is defined as financial, human and physical resources that lead to the fulfillment of an organization’s mission. This has been a yearlong journey that started initially as a discussion between national foundations. It quickly became evident that Grantmakers in the Arts had a responsibility to share the research, literature review and thoughtful conversations about the financial stability of the nonprofit arts sector.

Basically, this conversation is so relevant because I have yet to talk to an arts manager or a funder who says, “There is no problem with the financial stability and sustainability of the nonprofit arts sector.” We know there is a problem and it has been growing due to behaviors of both funders and nonprofit arts groups. In its National Capitalization Project Summary, GIA is making a recommendation that funders adopt the set of common practices identified by the work group who spent endless hours reading and discussing this issue with support from leading capitalization experts.

In very brief, the set of common practices are:

  • Encourage surpluses and operating reserves.
  • Take the long view and embed capitalization principles.
  • Offer general operating support.
  • Project support should be targeted to core mission and fully funded.
  • Be clear about the structure and timeline of grants.

These are pretty simple and basic concepts. The common practices do not suggest that certain sizes or types of organizations should be funded and others should not. Nor do they suggest how funders determine whom and what they fund. They outline ways that funders can help grantees become better capitalized and more sustainable over time. The document from which this simple list comes includes greater detail on these practices.. If you really want to understand that GIA is saying here, please read it.

One of the statements from the summary that caused some stir at the conference was this, “…there is an oversupply of product in some marketplaces and current funding practices do not address this issue.” Over supply of art? Sounds like blasphemy to me. I realized that the negative reaction to this statement, which I had myself when I first read it, comes from the fact that we are continually living in two worlds. We are people torn between divine passion and mundane practice. This makes us conflicted and sometimes blind to the reality around us.

“Over supply” is an economic term (mundane practice). Great artists, high emotion and enthusiastic patrons inspire us to continue our work (divine passion). We are, at times, blinded by our love for our product that we don’t see ourselves in the practical world of supply and demand, consumer education, hard-sell marketing and assets and liabilities. Sometimes we can’t even talk about “business” because it means admitting we live in a world driven by a marketplace. By admitting this, we are denying the fact that the arts should just be there, indefinitely and in all abundance. That’s what I’d do if I were Queen. But…

The reality is that many of our institutions are losing market share and have not altered their behavior to adjust to that loss. Business as usual is no longer a viable strategy. As employers, they continually need to find ways to decrease pay to the artists that are the creators of the product. And the nonprofit business model allows them to be “rescued” by a large gift from a passionate donor. Unfortunately, this gift doesn’t fill the real need, which is to fully capitalize the organization so that it can pay artists, administrators properly and go about its business without debt. They get the gift and the cycle begins anew.

This is exactly the right times to be having this capitalization discussion. It is not just the economy but also the changing behaviors of society. How can we have a more sustainable and financially healthy nonprofit sector representing the full eco-system of arts groups that serve our diverse communities? It’s going to take new conversations and changes in behavior from both funders and nonprofits but our communities and the artists who live in them will be better off for it.

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The language around this subject

Rather than discussing "oversupply" we should think about this as a "mismatch between supply and demand". To whit: in the city of Philadelphia where the portion of the population that is white is shrinking we may have too many arts events based on European traditions. In the outer suburban and rural areas where white populations are growing, there may not be enough. And although the city's Latino population is the fastest growing immigrant group, there is very little in the way of programming in the non-profit culture community that might appeal to them. And there is probably no part of Southeastern Pennsylvania that has an adequate supply of arts education.

At least in this particular urban environment, such "mismatch" could result in a withering of the creative capacity of the entire cultural community, and continued shrinking of audiences. Rather than throwing up our hands in despair, we would be better off thinking of creative ways of creating demand or adjusting supply. Where are those happy hour performances for busy commuting adults? Why, in a recent survey done by the Greater Philadelphia Cultural Alliance, did a 61% of parents not consider arts institutions to be family friendly? Instead of talking about hospice care for failing institutions, let's start by helping them really assess their place in the market. How are they distinguished from other institutions, are they located where they should be, etc. Finally, we should constantly remind ourselves that this is not a rich vs. poor issue. Much of the real vigor in the performing arts here is happening in small organizations, in commercial venues and among independent artists. Likewise, we have several "best of bred" large institutions here. Funding priorities need to be able to accommodate both.

Public appetite for the arts vs. abundance/diversity of products

Janet, thanks for your extra words on the topic of "oversupply." I appreciate further thinking about this issue, which I feel is better discussed as multiple forces rather than one overall concept. Several forces are suggested in your 11/8/10 posting: 1)production assets and liabilities, 2)product awareness (marketing), 3) general consumer confidence (education), and 4) local market competition. Would it be helpful for GIA members to develop this list and treat the diagnose in pieces?

How can we better understand type(s) of arts sector imbalance? Should we be looking at restaurant ecologies as a comparision? Putting aside that we are "unique", what is our next best comparison?

What other tools (besides Capitalization) would be helpful to mitigate our "oversupply"? For example, should we be encouraging the graceful twilighting-and-archiving of project-based organizations (that were never destined for longevity) at the same time?

Survival of the fitest is an evolutionary theory that we enlightened apes have already interrupted, on both the grand scale and in our field. Shouldn't we be categorizing and assessing the types and purposes of various arts organizations/products as we determine who will receive differing types of advice and/or intervention?

Lastly, can other GIA members direct me to any quantitative analyses that recount specific (time-place) arts supply-demand situations? I feel more study would really help me test my qualitative impressions. Please post references on this blog --and also send them direct to, as I am not (yet) a consistently good blogger.

economics is handmade

How does your study's conclusions reconcile with the article by Anne Markusen published a year ago?

"Orthodox micro-economists dismiss concern for artists’ relatively low earnings given their high educational attainment as simply a case of market over-supply. The logic goes thus: artists love their work, and so they crowd into this “market,” earning lower returns. There are plenty of them, so we don’t really need to fund them. In contrast, scientists who are highly subsidized both in higher education and through government research funding, are assumed to be scarce and valued because they enjoy high salaries and low unemployment rates. However, large percentages of scientists work on government projects, from defense to medical research to climate change, so the analogy is inappropriate. Their skills are simply more highly valued in our political system at present."

Also, in choosing the phrase "eco-system of arts groups," doesn't it make sense to recognize how capitalism fails to compensate environmental, human and cultural resources at a fair level? I'm not sure that the difference between "mundane practice" and "divine passion" is the core of the problem, but rather the willful disregard for living systems that is built into our current economic system. One solution might be for arts organizations to actively assist in moving our economy away from reliance on the consumption of material resources and towards the creation of cultural resources (cultural resources being defined as those resources based in experience, relationships and meaning.) Unlike earth-based sciences, economics is a human-based system. We can change the rules to better serve our diverse audiences.

Cheryl dos Remedios

Interesting Cheryl. I do agree...

Interesting Cheryl. I do agree that we have a value issue with regards to the value of artists. They fall into the same pot as care providers. People doing some of the most important work but their value by society for one reason or another seems to be unappreciated. But, I think more importantly is that the systems of economy that support the arts and education do not provide the kind of potential for revenue that one successful scientist can either for the government (mostly defense) or medicine. The return on investment is, however, evident in the for-profit arts world where a film actor, for example, makes $20 million for one movie while a huge percentage of the screen actor's guild goes unemployed. It's a complicated society with values that are out of whack in many ways.


I've written a bit about this, but my issue with the "oversupply" label has to do less with recognizing business realities (which, I suspect, most artists do in the end) and more with what I see as a misreading of the nature of content generation and creativity in an age of information overload. To diagnose the economic issue of oversupply is one thing, but to frame it as a problem to be solved is wishful thinking, in my opinion. The arts ARE going to "just be there, in all their abundance" whether we want them to be or not. The human call to create is simply too powerful to be discouraged by mere economics. We see this over and over again as the increased availability of tools for creation and distribution renders artmaking further within reach and yet less and less lucrative for millions of people all over the world. Oversupply is an immutable reality, indeed the inevitable result of putting our money where our mouths are with regard to "active participation" (especially by adults) in the arts. We need to start shifting the conversation away from the demand to consume art and toward the demand to create art, which, as far as I can see, is hardly being satiated at the moment.

Love this Ian. Thanks

Love this Ian. Thanks

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