Changes in the Environment for Arts & Culture

Part 2 (Transcript)

Marian Godfrey moderates an open discussion

See also:
A transcript of Changes in the Environment for Arts & Culture: Part 1
A report on Changes in the Environment for Arts & Culture: Part 2

Marian Godfrey:
Good afternoon everybody. I am Marian Godfrey from the Pew Charitable Trusts and I am the moderator of this discussion. This is a follow-up to the session we just had with a conversation between John McGuirk and Adrian Ellis about Adrian's piece about the 501(c)(3) and whither we are going in the face of the stark societal changes that we're all confronting. This is a follow-up conversation about it.

There are three of us who are going to take the lead and try to jump-start the conversation, Rohit Burman from the MetLife Foundation, Myra Millinger from Maricopa Partnership for Arts and Culture, and myself. And Adrian seems to think that he should probably stand in the back, metaphorically speaking, but I know we'll be drawing him in and I've asked him to keep our conversation rigorous and to push us when we start getting a little sloppy in our thinking.

I hope your comments and questions will be to one another and not just to those of us who are in the front of the room.

At the last session, we had a very broad and aerial and philosophical discussion about the changes that are happening in the environment and the threats that are being faced by 501(c)(3)s, and the alternatives to thinking about what a culturally vital community is and what constitutes cultural vitality. It was a wonderful discussion and full of a lot of ideas.

And my goal for this conversation is that we try, to some degree, to bring it to ground, talk about what the implications are for our own work and our own institutions, what it means in terms of potential changes for our grantmaking strategies or our other programmatic strategies, and to share that information with one another and to share concerns, fears, ideas, enthusiasms about that. I actually think it's a very scary time for funders as well as a very scary time for arts organizations, and I find it helpful to be willing to “out” myself about that.

So I'm just going to start by saying, we also have worked with Adrian quite a bit and recently he and Holly Sidford presided over an evaluation of our operating support program where many of these same issues came up. We're still grappling with how we need to think about revising our operating support programs so that we are not supporting “undead” arts organizations but are actually investing in the ones that continue to be relevant, and have a chance to change and survive and thrive in a change to the environment over the next 20 years. And then what else we do with our resources that we're not doing so much of now.

We try to think systematically about the cultural sector in the Philadelphia area, so we do have a program strategy that we think of as integrated and as trying to impact a broad array of different components of the sector. We invest a lot in artists, we invest a lot in what we see as innovative and exciting programming that reaches a broad diversity of audiences. And we are in fact significantly ramping-up our investments in that part of our portfolio, partly just because it's my view that today's artists in a community are making huge contributions to the cultural vitality of the community, and they tend to be the ones who have an instinct about what relevance means. And they may not even think about it that way themselves, but they tend to be the bellwethers for where arts and culture are going.

So we have increased our support of artists and arts programming. It's separate from institutional support. As I say we're rethinking our institutional support, stay tuned on that front.

We're planning to make a big investment in getting a better grasp on audience engagement, what it is now, what it might be, what research tells us in Philadelphia about demographics, technological change and so-forth. And then applying that to helping organizations not only be smarter about marketing, but think differently about who they're trying to reach with their programming and how their programming itself might need to change fairly dramatically in order for them to accomplish their mission. And needless to say, we're getting a lot of pushback on that front already, people are really not ready for you to ask them about how their programming should change. That's, I think, been one of the taboos that we've all had to grapple with. But we feel at this point there's no way but to just hit it head-on.

I worry a lot about whether we should even be that interventionist or whether we should just let Darwin take over and see who thrives and see who fails, and just fund the stuff we like to fund. So that's something that's really on my mind.

And I'm going to stop there and I'll probably have more to say later, but I'm going to pass it to Rohit first.

Rohit Burman:
We were talking earlier this morning about this session and that “changes in the environment” is such a broad topic, and I said that one of the things that I can talk a little bit about for us and MetLife Foundation, a lot of what we do is often driven by just looking at demographics. And one of the things that we expanded quite a bit in our cultural area recently has been in response to the changing demographics in terms of adults, older adults and the Baby Boomer population.

So among a number of things that we're adding in there is partnering with the National Guild on a creative aging program and looking at how community arts organizations can work with adults and older adults and engage them in their work. We have a similar partnership with the Association of Science and Technology Center; many science museums are already plugged into this population.

And we also just launched a program with the Museum of Modern Art on Alzheimers patients and caregivers, and these are all tied cross-programmatically with our health program that focuses quite a lot on this demographic.

Myra Millinger:
Well I'm an anomaly. I wasn't meant to be, on two levels: one is professionally, nobody at my career walks away from the security of philanthropy to take on a high-risk venture, and do so knowing full well the risks, so that's number one.

Number two is that what we are trying to do in Greater Phoenix grew out of work that Adrian had done. And so in trying to piece together some very, very provocative assessments Adrian had made of the Greater Phoenix challenges in the nonprofit sector, relative to the rest of the country, that was very compelling at a time when we were trying to attract and move into the arena of bioscience, and we're thinking, aha! You know, where does arts and culture fit in the competitive luring of bioscience to our region? And we discovered to our shock that other places in the country, Atlanta being one at that time, were using taskforces. Boston Foundation was very involved in research.

We were nowhere, and we were not only not at this table of relevance—sorry to use the word—we weren't even in the room. So we were terribly out of synch, and that led to a taskforce that was created five years ago of business, arts and culture, corporate leaders and public sector leaders, that met for almost a year in a very, very interesting anthropological study of what happens when you put business leaders, arts people and public sector leaders in the room. Because in the beginning it was from the arts' standpoint, we already have the answer, would somebody just raise the question from the standpoint of the business community? It was, why can't you act like we do, from the public sector, the proverbial roads and stuff, and we've gone and we've built all the facilities for you and what more do you want?

And so it took the course of a brilliantly-led process of actually an economic development strategic planning firm, that led us through the effort. And we came away with a very, very comprehensive agenda, and here am I being an anomaly because there isn't anything quite like us yet, and that isn't necessarily something I'm proud about, I'm scared to death.

We operate on four core levels, and one is across all of these, to do something very heretical, certainly to some of our colleagues in the nonprofit community, which is to say, yes we need to work better within the nonprofit sector, but we need to get past our attitude that we are the creative community and we need to connect with architecture, design, all of the people, the individual artists, the gallery owners, everybody who is making and creating that sense of place that will define or not, which cities win in the war for talent.

And that's a message that is resonating in my community. Unlike any other, we can call it instrumental, we can call it anything we like or don't like. But bringing value to other sectors is critical and I'm only going to say one other thing and then I'm going to stop.

One of the things we're seeing, and Adrian raised this earlier, is that we have basic research undertaken, particularly around economic impact, that brings rationale to what we're doing, so that city councils will support local arts agencies. It's not the message that's out there, because if you look at the economic impact of the nonprofit sector against any nonprofit hospital system in any community, it pales.

And the real message that seems to be resonating is what is the strength of the creative sector? And how is it imbedded in other sectors?

And therefore we are a community of creative people moving to an innovation economy, and part of my daily task is finding ways to not only build that case and articulate it, but literally build partnerships and relevance with sectors we would never have thought of. Because without that, we are not going to be able to build a base for the future that can pass the business model that isn't working.

One of the things that Adrian mentioned in the session earlier and talked very eloquently about, is that although foundations are a small piece of the overall financial pie for the arts community, we're the ones that have the potential intellectual power to frame useful and functional policy positions about what we're doing and what other supporters of the arts should be, and what should define cultural vitality. And I think what you're doing in Maricopa Arts Partnership is a really great example of that.

So I hope that that's the kind of specific we talk about, how to manage to do in our various communities as well as our own work. And before I open it up to have your questions and comments and discussion about what you're doing, Adrian do you want to add anything?

So here's the mic, who wants it?

Cuong Hoang:
My name is Cuong Hoang, I work with the Linde Family Foundation in Boston, and I guess I wanted to follow up on the point of relevance and what tables the arts sit at. And one of the things I think about is, next year is going to be a watershed year in terms of American identity and its connection to public policy. And there are a number of other issue areas that are mobilizing to capture that moment, when people feel like there might be a sea change in the way we, collectively, as a people, we as politicians, we as government, you can kind of figure out where you want to sit there, think about ourselves.

So like the healthcare industry is going to have a huge campaign, the people who are poverty advocates will have a huge campaign, education advocates will have a huge campaign, the environmental advocates will have a huge campaign. And this is funded by the foundation sector, but there are advocates on the ground who are working with the foundation sector to understand, well how are we going to have these messages out there? How are we going to challenge regular people to talk about these issues, but also have our politicians talk about these issues and begin to create a box in which these conversations live.

And I just wonder, is that something that the art community should be thinking about, because I guess when I think about the character of a person or a nation or a community, I mean we all want the art to be part of that character, and yet we're in a moment when we're talking about the character of the nation, and you know, healthcare is what people are talking about. And that's not to say healthcare isn't important, but we should be talking about other issues that are more about fundamental meaning, which is where art falls.

Russell Taylor:
Russell Taylor from National Arts Strategies. I just recently read a book by a guy named Roger Scruton, I expect you know him, Adrian, called Culture Counts. And it's intellectually conservative with a small “c”. But it has some really interesting language about why culture matters, even if only a very few people participate in it.

And when we were listening to one of the keynote speakers at the plenary, I think it was Mary and I were sitting next to each other, and he said when an old person dies it's like burning a library. And both of us were almost, you know, in tears! I think perhaps because we're older, but anyway…

But there's a very interesting body of language and academic thought about why culture and the continuity that cultural activities provide for us, define how we relate to people who are like us and to people who are not like us. And Roger Scruton I think has done a reasonably good job of summarizing. So if you haven't read it—I'm not trying to up his book sales—you can write to me and I'll loan you my copy.

But it's a very interesting kind of anthropological look at why culture matters.

Alyce Myatt:
I'm Alyce Myatt from Grantmakers for Film and Electronic Media. We're an affinity group with the Council.

And one of the grantees of several of our members is the Scribe Video Center in Philadelphia. And what Scribe has done over the last several years is brought together the anthropologists, the historians, trained young people, to capture these stories so that these stories don't die.

One of the effects of that work has been, as economic development has happened in communities, the long-time residents have been able to tell the history of those communities. And what that's done is bridged the development in those communities so that there is not the traditional hostility, if you will.

And then because it's young people capturing the old people's stories, it bridges the generations as well as the cultures, because they've gone out, they've looked at concepts like dance. And they've gone to all of the people in the community to ask, what does dance mean to you? And then captured that in video so that there is a lasting history of not only the people, but the places, even when those places are transformed.

I have a question, which is maybe for all of you and also for Adrian, on the subject which we were talking about earlier, of the explosive and very exciting expansion of amateur participation, and the way in which that has changed the profile of the cultural sector.

And something that I have not been able to get a grasp on at all, so far, is what is the role of philanthropy in encouraging that, or is there a role for philanthropy in encouraging that? Is it more about some other kind of policy focus rather than subsidies, since it doesn't seem to need, necessarily, our subsidy? Or if it does it's in very specific ways.

And I don't know, Adrian, if you have any suggestions about how you see that playing out, or if others of you are actually working on this, it would be great to hear.

Adrian Ellis:
I don't have any great insights. I think the continuity of amateur participation from childhood and adolescence into early 20s and onwards, is important. And I think there are certain transition points that may be worth looking at, because as I understand it, the structures that support you when you're an amateur in school and in college, then in the early years when you are a professional I think die away. But in the long-term there's enormous lifetime satisfaction. That's one aspect.

The other aspect is, clearly, around music education in schools which is, you know, post-Proposition 13 territory, where, as I understand it the issue is about getting music instruction back in the curriculum.

Another observation, I would say, is to encourage traditional 501(c)(3)s that have traditionally made an incredibly sharp divide between the professional and the amateur, and have spent a lot of time basically kicking the ladder away and trying to emphasize the difference between the professional and the amateur—encourage them to reverse out of that a little and to go back out and to start embracing the relationship between the professional and the amateur. I think that is really important.

Because I think that professionalization, in all its good and bad aspects, has been such a goal of the sector in some ways that it's often meant that they want to draw very, very hard, demarcated lines, where in fact in terms of skills and musicianship those hard, demarcated lines don't necessarily exist.

It's interesting, if I could just follow up on that point. Part of the Maricopa Partnership for Arts and Culture's mission is to link with a second organization called the Maricopa Campaign for Arts and Culture, which is a 501(c)(4). And its goal is to identify a dedicated revenue stream that can bring in about 50 million new dollars a year in operating support for the nonprofit sector in Maricopa County. And there was a reason we got to that amount, but I won't go into that because it would take a long explanation of math and formula and people's leadership skills.

But one of the things we did was a baseline public opinion poll. And I can tell you right now that there were two factors that turned the voter response to support or not.

The first was kids.

The second was community.

And people in the communities, horrific as it may be for a professional symphony, didn't differentiate between the Phoenix Symphony and the Tempe Symphony—it was music! And the point was, it was music that was accessible to them.

And so we have an interesting misalliance within the nonprofit community between the big institutions that consider themselves at the height of their professional class, against everybody else, even within the professional nonprofit community, who may or may not fit on the ladder. Certainly when it gets to allocation of dedicated money, I can tell you that.

And yet we have a public that's saying, my kids…reach my kids with arts experiences, and I want to see it, I want to feel it, and I want it accessible to me.

So we have a lot of challenges of just paradigm shifts within the nonprofit community to get back to the topic of the session in terms of some of the environmental changes. And we're just not listening to what others are telling us.

Deborah Obalil:
I'm Deborah Obalil with the Alliance of Artist Communities but I'm also the board chairman of an organization in Providence, Rhode Island called New Urban Arts, whose mission is to instill both the value and ability in youth to have a lifelong creative practice. It's not about becoming a professional artist. And it's specifically for Providence Public High School students, which means 80% of them live below the poverty line.

And I think that this issue of amateur to professional is really critical, because one of the struggles that New Urban Arts faced when it was initially created is that it couldn't get funding from the traditional structures, because it wasn't about creating professional artists. And yet, these are the people who are going to, you know, value creativity and art forms of all varying kinds into their 20s and 30s where that gap happened, where if you don't make the choice to become a professional artist, suddenly you're left in the areas of being an amateur and the kind of negativity that I think our sector has very much created around that.

And there's also a new book out, just to add to all the books, called Ren-Gen by Patricia Martin, and it's speaking to this issue of being on the verge of a renaissance and how this Golden Age of the amateur is a big piece of that. And if our cultural organizations, the 501(c)(3)s can't make a connection to this increasing demand for cultural opportunities and creativity, it's going to be the loss of the 501(c)(3)s. It's not going to be the loss of the communities and it's definitely not going to be the loss of the individuals, because they're going to find other ways to be creative and to connect in.

Hoong Yee Lee Krakauer:
Hi, I'm Hoong Yee Lee Krakauer with the Queens Council on the Arts, and I wanted to address another paradigm that I think is often overlooked. There is the amateur and then there's the professional, which is a very valid divide.

But there's also, on the other end, the patron and the audience. And I think that when you start to blur the line, especially in a community as diverse as Queens, with the cultural overlays, people that are invited to create, or become part of the creative process as a commissioner, or somebody…a baseball team that commissions Americana for the opening day, you know, Memorial Day first pitch-out… Or a community that is aware that there are organizations, 501(c)(3)s with the ability to connect to a creative group that can create work…that also creates audience. So that whether you are a professional or you are an amateur, there is a place, and that place is created locally. So just as I believe in eating locally, I also believe in creating art locally, and this whole idea of creating work or having the community at large become part of the creative process that creates a body of work that can have some sort of civic and creative legacy to it, is a very strong motivation.

Many of the community in Queens, and they number about 149, they come with a very different sense of where they are in the picture. It is not as categorical as professional or semi-professional or dilettante watercolorist, nothing like that. They are very, very different.

So if we as responsive 501(c)(3)s to our communities can understand how we can engage all of those different factors, we can actually recreate a paradigm where there is a place for everyone, no matter what you are.

Diane Ragsdale:
Diane Ragsdale. Clayton Christianson wrote a book called The Innovator's Dilemma which maybe a lot of you have read. And in it he talks about the reason that large companies failed to innovate—in this case he talks specifically about the disk-drive industry—and why they were taken over by smaller companies. And in part it's because large companies would only innovate incrementally in response to their capital markets. And they would fail to innovate to what they saw as unimportant markets, people who couldn't afford to pay a lot of money for computers, and so they were taken over by small guys who decided to make laptops and things like that for this market, but at the time was very uninteresting.

And I think that we might need to acknowledge that foundations may play a role in constraining innovation, because we may incentivize this sort of incremental adaptation, as opposed to allowing for the paradigmatic shift that needs to happen. You know, individual donors probably also play the same role, subscribers play the same role.

So in some ways—to your points—the pro/am revolution, you know in some ways it may be simply allowing it to happen by not continuing to incent these small evolutionary tweaks.

Ruby Lerner at Creative Capital recently told me she heard someone I think from Google speak, and he stood up and said, “Our number one rule is, avoid incrementalism.” So I don't know, whatever that means.

I think this is something that Adrian touched on in the last session. Part of the problem with avoiding incrementalism is, it's hard to support wholesale innovation, discontinuous innovation, without an enormous investment of capital and resources. And for foundations to be willing and able to do that means they would really have to work together, they would have to aggregate a lot of resources, and that's something also that we've been resistant to doing.

And we don't know how to find the right investment.

…What are the models of best practice? And in the midsized organizations and the small organizations, it's relatively…it's much easier to find examples of highly innovative organizations.

In the larger organizations it's really tough! But I find when looking at poster children that you can hold up as being radical change, it's very difficult to find larger scale organizations that you can point to. And therefore, when it comes to making intelligent, non-incremental investments, I think it's pretty tough to know where to put your bucks. (inaudible)

I was going to say, it's interesting hearing Diane speak, because I think the Mellon Foundation's investment in the orchestra field has had a huge impact on the question of innovation. And you know the culture inside the big institutions is so averse to innovation, so averse to even a discussion happening. And it took the seven years so far of Mellon's investment and however many years of the Knight Foundation to bring musicians and trustees and staff together to even have the question about what would change really look like and what would it take.

And you know, I think there are signs of it beginning to happen, some really wonderful ones, but even there, I don't think we even know why success is occurring. And you know, one dramatic example that strikes me is the Los Angeles Philharmonic, where they're about to start five youth orchestras in east LA, totally out of their own pockets, they're partnering with a whole range of community organizations.

And if I had to make a guess as to what one might attribute that kind of a change and perspective about what an orchestra's role was, and I think the LA Phil would probably say this too, it basically starts with the art, and it starts with the appointment of the music director from Venezuela. And that he…in part, he's connected to a system that has a whole different approach to what music is about, what its role is in society. And so it's not a coincidence that LA is adopting this strategy, it's starting with what their beliefs and values are around artists and art.

Lorenzo Lebrija:
Hi, I'm Lorenzo Lebrija, I'm with the Knight Foundation, actually, and the program that you mentioned from Venezuela, actually 250,000 kids now go through it annually, they spend four hours a day practicing music… There are 12,000 teachers right now, and they're teaching all these kids how to play Brahms, Beethoven, all the classics. And it's just amazing what a difference it's made in their lives, so I'm glad that he's actually going to do that also in Los Angeles.

I think it's something worth mentioning about the business model, and we'll stick with orchestras. Before I joined the Foundation, only five months ago, I'm a total newbie to this whole foundation world, I was with the New World Symphony in Miami, Michael Tilson Thomas, but before that I was in business. I come from the financial sector, I have an MBA, and so I look at things differently. And I know that in your article you talked about the market perhaps not being always perfect and deciphering, but in Miami we lost the Florida Philharmonic, about four years ago, it went under. People cried for about a week and then that was that.

And in the five months that I've been at the Foundation I've seen no fewer than seven proposals to form a new orchestra. And I always ask them, well…why? Why do we need one? “Well, because we don't have one that has our name on it” seems to be the going reason why we need an orchestra in Miami.

But if you were a classical music fan in Miami, and I think this is where the model is going, I think this is my point, is that we need to look beyond our own communities, we need to look into the future to see this. I think we're going to end up with major orchestras that tour. We won't necessarily end up with major orchestras in each community. We might end up with smaller orchestras, more nimble orchestras that can innovate.

So for example in south Florida we have the Concert Association that brings in the Atlanta Philharmonic, the Philadelphia Orchestra, they bring in about six a year. The New World Symphony performs, in total, about 71 performances. We have the opera, we have everything, and so… And of course we now have a residency from the Cleveland Orchestra that spends three weeks out of their ten weeks that they tour a year, in Miami.

So if you're a classical music fan, you can find classical music in south Florida. The market has provided. The market filled in. People are paying $150 to go see it, whereas they weren't doing it before. And some would even say that the quality, perhaps, is a little bit better. I'll leave that for them.

I think for us as funders to go out there, when we're out there and we look at this, we just made a grant to an organization, and for those of you that just heard me in the other one, I'm sorry, I'm going to repeat it, but we just gave a grant to an organization called Seraphic Fire to create a chamber-style orchestra that will perform four concerts per year. And here's what's cool about this small organization with three people on staff, by the way—they will perform these four concerts, they are 75 minutes, they are aimed at a younger audience and they prove it, because anyone under 30 gets in for free. There is no intermission. There are no program notes. The conductor actually goes out and interacts with people and turns around and talks to them, tells them what they're about to hear, and then turns around and conducts the piece, and then turns around, talks about it, and then talks about the next one coming up. That's how the program notes are done. And then after the whole performance of 75 minutes, they head to a Happy Hour, right there at the Carnival Center.

So this is an orchestra that has gone… If you had brought this up in any other market, if you bring it up to a major orchestra, ‘This is how you should do it’, they'll laugh you out of the place.

And this takes us to the Search for Shining Eyes, which was a study that was commissioned by the Knight Foundation that listed so many things that orchestras could and should do, in order to attract the audiences in order to find those people who are those Shining Eyes when you're looking out.

And I don't know if you read the follow-up to that report that was in Symphony magazine, but many of the participants were like, “Well no, it was unrealistic that we could ever do this.” “No, we can't actually expect that we would make those changes.” “No, we don't keep any of the things they actually paid us to do because they weren't sustainable.”

Well I think that they missed the point. This was basically the equivalent of research and development dollars that were given out there, and they weren't taken as such, they were just gobbled up by large organizations that just gobble up money that comes in there.

And so I think we need to look at how we're making those investments, to go to your question. We need to look at the future and say, it's okay if this organization dies. It's not the end of the world. The market will go on. And guess what, if there is a demand for classical music here, it will be met by another source.

So I think we need to look at that and let some of the market sort of fill that gap and let it… We can't continue forever to step in and sustain an organization that is unsustainable.

Sam Miller:
Sam Miller from LINC, Leveraging Investments in Creativity. Some of the points, Adrian, and then Marian, you just made about investment strategies, allocation of resources, talk about individual artists and small arts organizations: it seems to me that what's sometimes missing or a notion of vitality is acknowledging the sector which both of you talked about.

But also, how with relatively small dollars you can get to that sector. I don't think it's necessarily a large dollar play, I think what we need to imagine is more of a micro finance, micro investment, micro enterprise approach which says, it's not just that we want to recognize innovation in those small organizations and individual artists, we want to alter their capacity to innovate permanently.

And I think sometimes what's…you know, you were talking about how easy it is to get to 501(c)(3)s, I think in the business community there are lots of models of how you get to entrepreneurs, and not just not do you get to them, but how you give them capital and knowledge and skills and tools, when they need it, through the whole arc of development. And I think that for funders, what they need you to develop or look to are ways that you can with, again, relatively small dollars, balance your investment in 501(c)(3) organizations with investment in cultural entrepreneurs. And I don't mean that simply in terms of generating a return, you know, an economic return, it really is a creative return.

Which goes quickly to my second point, which is, someone in the earlier session said that we're getting into post-relevance? But I do think that there are lots of artists and small arts organizations out there who do want to be relevant. Who do want to speak to how we understand the other. Who do want to speak to, you know, how do we make our communities healthy?

So I don't think innovation is purely a content issue free from the issues of the day, you know, which is that I think artists care about healthcare, not just for themselves but others. And so again, I think we need to understand the artist in the small arts organization as relevant, as dynamic, and as capable of benefiting from relatively small investment. That really sees the whole arc of this economy in the same way that I think the for-profit sector does, in investing in and stimulating entrepreneurial activity.

I would say the other thing is that we need to embrace the idea of the management of risk. In other words, that we are innately very conservative, often, in the way we spent money. And our risk-aversion, our fear that basically there won't be a return on this particular investment can often prejudice the entire portfolio. In other words, you have to take an approach, which says, if we want rewards, we're also going to take risks, and we are aware of that. These need to be informed risks, we're not doing that throwing money at things, but we are talking about the possibility that this investment will not pay off, and that we have got the political coverage, if you like, with our boards, etcetera, to have a portfolio in which we are prepared to make speculative bets in organizations that might not realize the investment. It doesn't mean that we're throwing money at them, it means that we are taking informed risks.

And to take an informed risk means that you need to have the support of your organization. That is not to say it's not going to go bonkers as it were, when it sees some of that return wasted. And that's often a problem in my experience with foundations that actually their threshold for risk is so low, and it's so sad, because actually foundations are better able to take risk than any other institutions, and yet have less of an appetite for it.

Just to add a sentence to that, I think that there are two things philanthropy can do. I've always felt this and I've been in the field too long…a long time. And one is take leadership around issues of intellectual dialogue and leadership around galvanizing any others to take risk. Because we have no constituency, we're not going to be voted out of office. Yes, we have our board of directors, and yes we have, if we have them, the ghosts of those departed past who might have launched the foundation with a vision that needs to change and adapt over time.

But who else but us can do this with such ease? And shame on us if we don't.

And I think a lot of that is about…for those of us who are just program officers, figuring out how to lead from below and keep our boards engaged and often knowledgeable enough that they are willing to develop some risk-taking.

I think some of us might lose our jobs in trying to lead, because some of these organizations have powerful boards and powerful connections. And so when you ask them these questions, it's not very easy.

So I don't have any suggestions for the field but I'll share an experience with you from the Bay Area. I work with the William and Flora Hewlett Foundation, and I reviewed film festivals several months ago, and I noticed that two or three people in each of these film festivals were making programmatic decisions for ethnic communities that didn't necessarily see themselves in the films that they chose for these communities.

So I posed a question, you know, why not use Web tools to engage the community in programs? That was, you know, a question that was not a well-received question.

But what I am noticing is, my colleague, Kathy Kasserly, who is in the Education program, she is moving the field forward much faster than we can ever do in our program, because her strategy is open education resources, so she is engaging with creative (?) comments, she's working with grantees who are using these Web tools to engage the community. And these amateur performances or engagements that we are seeing now, it's not new, it's always been there, it's just the Web is a mirror that is showing us what life really is.

So the Web is mimicking life, life is not mimicking the Web.

Lisa Wilson:
Hi, I'm Lisa Wilson, I'm with the Fulton County Arts Council in Atlanta, and just wanted to follow on what you said about funders being able to take risk.

The Fulton County Arts Council is part of county government, so even more so than foundations, you know we've got a ton of restrictions. I mean I tell people it takes eight different signatures if you need to sneeze. And I wonder when you talk about that…I don't know if this is a question or just a thought of what, but what does that mean for public funders when you've got that level of accountability? And if you are able to open up and say, we encourage innovation, you know, go out and do something new, we may support that, but what about other funders? I mean do you start setting organizations up for creating things and trying things that can't be sustained because there's only one funder out of the five that supports it.

(inaudible) …and I speak with the privilege of not really being a funder, but… And I think in a lot of ways it is a privilege, but it's frustrating to me, it seems almost like our field has become more about preserving our cultural heritage than welcoming in any kind of new cultural anything. And in so doing, I mean we've done that by becoming funders of things that are needing to reinvent themselves, such as your point about orchestras. And I'm not aware of a 501(c)(3) funder who has funded leading-edge cultural practice. You know what I mean? We've left that to the market, we've given that to the market because the market will take care of it. I think that's kind of the behavior of our field and it makes me wonder, you know, is there something the market's not taking care of that's actually 50 years out instead of 10, that we could actually be welcoming in. Is there a role for us in innovation that's not about preserving things that people won't pay enough to go to, you know?

And getting back to Adrian's question earlier: what do we need to learn to be able to identify those opportunities?

I was just going to jump in, not to belabor the point around innovation and risk-taking, but I mean also representing a corporate foundation, I can speak for my foundation, I think risk-taking is a little challenging, and the last thing a corporation wants is a front-page story about something that's exploded or…

So an example I wanted to use was, we just formed a partnership with Theater Communications Group, and it's really been a series of conversations with them around where the needs are in the field. And the number one thing that we heard back from TCG was that the hearing from the field was the lack of funding for risk-taking and innovation, and no one is funding that.

So it was a series of conversations and also conversations with my board around what our current portfolio looked like and how some of our programs are more… I would say, not on the risk-taking front, and how about carving out a small piece and trying this? And there will be things that are going to fail, and some things that are probably going to be quite successful, hopefully.

And what we've structured it as a two-phase project where it's going to be research and development funding as well as an implementation. So there is initial funding going into developing a concept, a new idea, trying something new, and then maybe trying the implementation part of it. And that's…framing it for my board that way was very helpful, but again, you know, was very challenging to go back and forth on the idea of even encouraging a corporate foundation to provide funding for something that may not actually go anywhere.

Casey Baltes:
My name's Casey Baltes, I'm from Theater Communications Group. And yeah, this is a really new and exciting grant program for us because it's a crying need in the field. Theater Communications Group started as a reaction to the for-profit sector and encouraged the 501(c)(3) model in the regional theater movement. And now we're seeing that the theaters say, this is not very smart and we need to find other models. And this is one of the ways that we're trying to promote risk-taking and seeking out other models.

But I think the most important aspect to this is actually the risk-taking and the failure, and that we are saying that it's okay to fail, and that what we learn from our failures is just as important as what we learn from the successes. And the documentation of the failures…allowing the field to see what is going on is, I think, the most important part of this.

June Wilson:
Hi, I'm June Wilson with the National Performance Network. The National Performance Network has a network of presenting partners across the country, some large, some small, mid-sized. But what's troubling me about our own partners is that we're seeing the organizations of color most at risk, we're seeing them go away. They're the ones having the greatest impact at a community level, and there's no way to sustain those institutions.

And so how are we also having this conversation? I mean we have the large ones, you know, we have the independent artists, and we're talking about innovation, but we're also seeming to be missing the point of the organizations that are also going away that have real relevance in a community, but they can't sustain themselves, because their community doesn't have enough resources to also give back.

So I'm interested in how to have that conversation.

That's a conversation that we always dance around, and I don't know why, but maybe we need to have it in the sense of thinking about what a very different business model would be for those organizations, so that they could be sustainable.

The part we forget in the conversation about risk is how much of the work doesn't work in the traditional organizations, I mean that we support all the time. We don't talk about the percentage of a season in a traditional theater company that you'd rather be dead than have to sit through all the performances. But you have some faith in some leadership, in some artists, and you know that some of the work will work and some of it won't work. And we don't seem to mind that in the traditional organizations.

And so I think it's not such a leap to go to the, quote, riskier or smaller, more creative groups, it's the same idea, you find people you believe in, and you hope they have the resources to develop and idea. It's the same thing the Metropolitan Opera is doing.

So I'm not sure why it seems to be a kind of timid discussion about risk, as if there's the rest of the world that we're funding that's not risky. Anyway…

Just to interpolate my question about that is, how can you tell something about risk and failure that's failing forward in some way, and how do you distinguish that from the un-dead theater organization, you know? That's maybe a conversation we need to have.

John McGuirk:
John McGuirk at the James Irvine Foundation. We started a fund two years ago called the Innovation Fund. And instead of doing the block grants to the major arts organizations in the state of California for general operating support, we instead chose just a handful of organizations each year, and asked them to make significant changes to the way that they are either presenting or creating their work, their audiences, the way their organization is structured. It could be innovation in any area of the organization.

And we defined innovation with three pieces. First, it had to be not business as usual. Second of all, it could not be incremental. And third, it had to be a new pathway to fulfilling the organization's mission.

And L.A. Phil, SF MOMA, all these organizations that intrinsically thought they were innovative, all of a sudden had to think very differently to get major grants—600 to 900,000 dollars over three years—in order to try these very highly financially risky things.

Our board was very supportive of that, because they saw it was a way to test new models, and if something failed, there was a learning opportunity. And the learning opportunity was as important as a successful model. And it was conveyed to the organizations that if they failed, what's the learning experience that we all had? The innovation could happen within their organization, within their arts discipline, and hopefully then impact the arts field and sector more broadly.

Any results yet?

We're only two years in, the first cohort coming out of 2006 had some really amazing work. LA Music Center is doing “Arts Alive,” which is all about amateur participation in the arts. Every Friday night there's something free going on in their venues. It has nothing to do with selling tickets, it has nothing to do with trying to get donations, it has everything to do with making this venue a civic center for creativity, and bringing people in from wherever to learn how to tango one week, next week it's a flute choir with 600 amateur flutists, the next week it's African drumming, the next week it's something completely different. So some really, really interesting models.

A Museum is trying wireless technology that actually follows the museum patrons through the museum and sees which paintings they stop at, which paintings they ignore, how do you use that as a curator to set up an exhibit? How do you use that to determine take-home experience for a patron, so that if the patron wants to learn more about work after they go home, it's already been tracked, what their interest levels are. So we've got some interesting projects in the works but no results yet.

A couple of years ago I was asked to do a review for a large foundation that funded in a particular community across arts disciplines in a city that had just top-notch orchestra, dance, you know, the whole thing. And the foundation had required of them to do planning, and these were renewals. And so you got to review the plans that they had had from three or five years prior, where they thought they were going.

And because we have had an overall cultural shift in this country, and an overall economic shift, all of these companies were in trouble. They were in terrible, terrible trouble. And they again were at the very top! And it didn't make sense to me as I was reviewing these proposals, why everything, absolutely everything was in such bad shape.

And then I went and did some research and found out that now, the median income of this community is about $25,000. So you can't support the orchestra, you can't support the dance company, you can't support the galleries.

And so I guess the question is, do we really need a larger cultural shift in thinking about this work?

For example, Charles Lewis a couple of weeks ago did a piece in the Columbia Journalism Review asking, do newspapers need to become nonprofits? Think about it. You know, does The New York Times, The Washington Post, you know, the large newspapers, need to become nonprofits? Do we really need to think about a completely different structure? Because it's unsupportable in the economy and in the culture we currently have. It's all unsupportable.

Thanks, that would suggest that we need to make a stronger argument for the public good of supporting these organizations and communities where there isn't the resource.

Susan Feder:
Susan Feder, Mellon Foundation. Since we've been talking about innovative grants for a while, I can just offer a pilot program that we've been working on as an outgrowth of our orchestra program which is called The New Strategies Lab. And just a couple of observations to make about it.

The orchestras are encouraged in their application to discuss past failures and to present ideas that they know to be half-baked. That they are not expected to present a completed plan. The purpose of the program is to allow them to travel that path, and to travel it in a collaborative way which involves a group of their members coming together in an intensive week where they're often meeting with other orchestras in the group.

We've had very low uptake on this program. We've gone through three rounds. And whereas I would have hoped there would be a gradual growing in it, round three has had fewer applications than round two.

And I think that the institutions are afraid to make the application. The most successful applications do read very differently than the ones that we see normally.

And the other interesting thing for me to be observing is that we've had…the group of orchestras that have participated in our ten-year forum initiative, and non-participants applying, the non-participants tend to write the more effective applications.

The other observation I wanted to make is, another program just to encourage risk taking, we're fortunate enough at Mellon to have a program called Officer's Grants, where we can make small grants with a very fast turnaround that don't even go to our trustees. The decisions are made by the officers of the foundation, so for us they're small grants, though by most definitions they are generous and large grants. But they allow us to think about innovation, about risk-taking, about failure, and about future partners.

So if any of you at other institutions would have the opportunity to make the case to your trustees that perhaps 1% of your grantmaking might go to these smaller kinds of grants, it certainly has been a wonderful learning opportunity for me as I get into this world.

Jeffrey Rosen:
Jeffrey Rosen from the American Symphony Orchestra League. I think one of the biggest lessons from the Mellon investment in the orchestra field has been how long it takes for change to happen. And the kinds of barriers to change in the orchestra field are very, very intense, particularly in the large institutions, as Adrian was describing in the earlier session about just working harder and just keep doing more, doing better as a sustaining strategy. And the history is that actually it has worked, and orchestras have succeeded at raising more money, they have more contributed income than earned income, but they're still going. And there are many things that get in the way of change, and I think that the act of bringing people together to ask the really tough questions is probably one of the most beneficial things that can happen.

I'm really interested in this idea of foundations and their intellectual role in bringing change about, and this will be a self-serving comment, but I think the role of service organizations with foundations to help frame some of those questions can be an incredibly important lever in getting the field to pay attention.

At our conference last June, with support from the Wilde Foundation we introduced a book from Steve Tepper and Bill Ivy on engaging art, all the new ways that Americans are changing how they participate in the arts. And what was fascinating about it was we had three leaders in our field respond to it, and they came from three institutions that are very much in the forefront of change in orchestras and classical music. Nonetheless, when asked to speak formally about what was going on in American arts participation, they all retreated to a position of saying, concerts are great, people love them, we've just got to keep doing them, and if we do them well, everything's going to be fine. Which is very contrary to the institutional behavior of the organizations they came from. And they're still, at least in the orchestra world, if you're for change somehow you are in opposition to quality and excellence. And there hasn't been a way to create a frame that allows change, participation, relevance, and excellence to live in the same world. It's a huge barrier for us.

The stories we've heard today have suggested that sometimes the change comes from a really dynamic artistic leader more than anyplace else.

We've just heard a number of funders talking about almost trying to coerce institutions, 501(c)(3)s, to innovate. And I just wonder, you know again, going back to economic theory, where does innovation and relevance exist in your community? And actually I think this is a soft dichotomy, I think you can do both.

But I think larger businesses are often not funded externally to innovate. It's up to them to innovate internally. While capital says, how can we recognize smaller enterprises that have demonstrated innovation but need resources to grow or to be more successful, more competitive in markets.

And I think that, as investors, foundations aren't concerned with the health of large institutions, you're concerned with the health of your community, the vitality of your communities. And I do think you need to look at where innovation exists in your communities, especially in the light of changing demographics. And acknowledge those communities.

We were doing some work with the First People's Fund, and there were 500 small businesses that had been started in South Dakota and that part of the world. I think over half of them were culturally driven. But they were suffering from lack of capital, lack of expertise, lack of infrastructure that would allow them to succeed not to innovate, but as innovators, to succeed.

And I think there needs to be a more balanced investment strategy on the part of funders, investors that recognizing not just that you have to convince institutions that you have a prior investment in to innovate, but to go where innovation exists in communities where you have not made a historic investment.

I'm from Rockefeller Philanthropy Advisors and I've been working on the New York State Music Fund. And that is money from the Payola investigations that Elliott Spitzer did.

So since we launched in March of '06 we gave out 35 million in New York State, just for music grants. We were so busy trying to get it out, and we were trying to figure out all the different things we could do to make sure we could get it out as equitably as possible, because we were working with the Attorney General's office. We had certain mandates, we had to give it out much more broadly around New York State, we had to try to fund more popular music, which is not found in 501(c)(3) organizations, yet we had to fund 501(c)(3)s.

It was challenging, but I think there were certain key decisions that were made that made it a very interesting program, and now the reports are starting to come back and it's very interesting what's coming in.

One is that we did as much full funding as possible for projects. That made a huge difference for organizations. And what they're coming back and saying in the reports is, even though it was a one-time grant, it's not an ongoing thing, just the fact that they could have almost full funding, if not complete full funding for a project, made a huge difference for them in being able to really focus on the project.

We also allowed them to at any point in their project, change their project, come in with a change request, change their budget. And we were very genuine and sincere about that and they got that, and I think understanding that, they were much less timid about coming back to us and saying, “We need to change this.” And for a few people, there were very minor changes, artist lineups, whatever, but for some people there were major changes, and instead of us going, “Oh, it's a failure,” we just said, “Okay, what do you want to do. Give us a proposal.” And I think that made a huge difference for them as well. They then were able to be much more creative.

And then also, one of the things we did was that we had the luxury of having a lot of money to give out really fast, so we really looked at the whole spectrum of arts organizations. So, you know, as most of the country is, geography is a huge issue. So even if there are two towns right next to each other, sometimes people won't go to something that's just a half an hour away because it's in a different town, in the middle of New York state.

So we tried to fund as many things outside New York City as possible, in the small towns, small organizations. And for those small organizations, getting a $10,000 grant, which was our smallest grant, was a humongous thing for them and made a huge difference. And what they've come back and said is that this one grant has revitalized the whole community! And so it's been really amazing, some of the things we've learned.

Actually as someone who's married to someone who received Payola money to make a CD, thank you very much! That was a career-changer! Comes out in January.

At the risk of sounding a little bit like a Debbie Downer, hearing these two amazing things from you and also from Sam, as a former funder, now grant seeker, I'm a little bit discomforted by the word “failure.” I think it's a real opportunity to question our language, because the word failure can mean “underscores an assumption about an endgame” kind of paradigm.

What are you going to achieve? If you don't achieve it, that's a failure. How are you going to behave? You can't fail at how you are going to behave. Are you going to be serious? Are you going to be rigorous? In what ways are you going to innovate? It just seems to me that it's worth questioning.

And I know that I use the word failure often as shorthand with someone that I know so that I can indicate to that person that it's not as spectacular as we may have thought it was going to be at the outset. But the word “failure” has a real kind of heaviness that to me as a seeker implies that there is a right and there is a wrong, and that's not really what art is about to me.

So just an encouragement to always think about language.

Thank you for saying that. The idea of being given permission to fail has always driven me totally crazy, because I think that to people outside the arts it sounds like we're giving people permission to be sloppy and not rigorous. And it's not really about failing, it's about changing your pathway to get to where you're trying to go, as often as not. Or learning something from one experiment and then applying it to the next.

So I would really agree we need to find other language.

Just two things to throw out of the box, and one is that most nonprofit arts organizations, as we all know, certainly in my region where we're pitifully undercapitalized, are so concerned with today, maybe next month, at best next year, that the luxury of spending the time and the resources to understand truly their environment against the totality of the ecology is very rare.

And one of the things foundations can do that's really low-cost, is to help provide a context for sharing what is out there across sectors of our own.

So for example, in my area, which is a very rapidly growing and demographically shifting environment, how do you know and project for audience beyond this current season, when there are communities that are moving in ten years to be major population centers? And there are other entities within our community that are already doing that work for other reasons. So everybody who is involved in transportation is going to look at where population is moving. That has implications for where audience is moving, and what kinds of people and what kinds of socioeconomic status are going to be in those communities.

And so maybe one of the things we can do, and we're starting to look at how to do, is how do we bring in a very easily transmitted way, peer-to-peer, not a venture-capitalist coming in, to come for awhile and leave, but to build relationships across sectors that are open and meaningful and that build a sense of mutual dialogue.

Because what's happening at the Translational Genomics Research Institute in Phoenix in terms of attracting world-class scientists, is impacted by the vitality of the downtown arts and culture community.

So how do we begin to get some dialogues across sectors and provide some information that is out there, and is readily there? So that what others are doing and ways in which they are dealing with failure or lack, or innovation, can be part of the dialogue, and to build a real sense of a creative and vibrant community.

And I think foundations can take that role and easily do that. And it's something I just advocate for, and feel very, very passionately about.

Jeanne Butler:
I'm Jeanne Butler, I'm with the American Architectural Foundation. I wanted to tell you about a forum that a group of funders and owners of historic sites had last spring. It was jointly sponsored by the National Endowment for the Arts, our foundation, the National Trust for Historic Preservation, and the American Association of State and Local History.

And we brought together funders and owners to look at 21st century stewardship of historic sites. And the fact is that we have thousands upon thousands of historic house museums and historic sites that have been created in the last few decades, many of us have them in our own hometowns.

And what we realized was that we created all these historic sites, but we never gave them permission to declare success and then move on and be something else. Not that they had to admit that they failed as a historic site or a historic house museum, but to declare success over what they had done and how they have changed the community, or had changed our lives. But to give them permission to become something else! And to reinvent themselves.

And so it was I think a remarkable opportunity to get together with owners and funders to talk very candidly. Marian was part of the discussion and there were some people from Getty and other sources, but it was a really wonderful gathering.

And the results of that are starting to be reported out at AAM, AASLH, the National Trust, and other meetings, so you'll be hearing about that. But it really was a remarkable gathering.

Diane Ragsdale:
Diane Ragsdale. One of the things that really struck me in the Knight report on orchestras—and correct me if I'm wrong on this—was the idea that organizations that are desperate for resources really cannot innovate. I mean when you can't make payroll every other week and this is your primary concern, it's really difficult to change your paradigm.

And we recently at Mellon had a gathering of artistic directors from theaters, and managing directors from theaters in New York, and were really moved by an artistic director that spoke of a particular grant program in which first they were given core support, like just, you know, core that you need to just fulfill your mission on some basic level. And then they could come back and access what he called “blue sky money.” And he said it was the first time in years that he remembered as an artistic director being able to put an idea on the table that he wanted to fulfill, where he didn't have to think, “Oh wait! There are more than five characters, we probably can't do it. Oh wait! We'd have to put live music, we probably can't do it.” That the artistic directors in this country are constrained by the economics in the marketplace that they're increasingly driven to program toward.

And you know one role I think that we can play is assessing to what degree their core is taken care of and then maybe providing “blue sky money” which is innovative to these guys. I mean we can't assume that they don't want to be relevant. Maybe part of what's keeping them from adapting is simply, you know, the lack of capacity. Was that your program? Yeah, so… Great program!

There's only so much money to go around. So one question I've got is, within your respective funding geographies, do you think you would have a more vital cultural community if you, on average, funded half the number of organizations twice as well? And if that is true, why don't you do it?

Our trustees have actively asked us to make larger, fewer grants. And the implications for that are very frightening to many of our grantees. And also one of the things we'll be looking at is developing some re-grant programs so that we can still continue to fund the ankle-biters while fulfilling the mission of making fewer, larger grants. But you know, we could too easily become the funder of the Metropolitan Opera and the New York Philharmonic and give all our money to Lincoln Center.

But the foundation ten years ago in its higher education program, established a liberal arts program so that the Stanfords and Harvards and Yales and Berkeleys are not competing with the Pomonas and the Amhersts and the Williams's. And I think that was a brilliant decision on their part and I think we will also be looking, as part of our re-thinking, on how we might replicate something on that level for the performing arts.

One thing that this conversation brings to mind is this idea of what is the funder accountability? I mean, we talked about who we're accountable for, and in some ways we aren't accountable to anybody other than our board. But in a very philosophical aspect we're accountable to everybody! I mean we are public institutions, and how do we actually as a foundation, operationalize our practice so that we become accountable to the public? I mean do we listen to the public. Do we listen to the people that we're funding?

And I bring this up because there was that issue of organizations that are serving primarily communities of color, served by the foundation world writ large, and I think the data really says they're not very well served at all. And they haven't become very much better served over the course of time.

And I just propose that other than changing the 501(c)(3) structure in which our foundations all live, thinking about mutual accountability mechanisms that are more than information sharing and best-practice sharing, how do we actually move from sharing what we're doing well, to being accountable to our peers around, well what aren't you doing very well? Why are you funding these sets of organizations, given your theories of change or given your mission? It's not about making all of us cookie-cutters of one idea, but actually having us challenge each other on our practices and who we're funding and how we're doing our work on a day-to-day basis. Because at least our peers probably will actually understand why we're doing things much better than the Elliott Spitzers of the world may, or the public.

That's not to say that not everything we do is totally transparent, I don't know if that can be changed for a family foundation. But I think that our peers understand that and can help move us through that to be in a better space.

I think you've said one of the magic phrases, “theories of change” and I think this gets back to what Adrian was saying in the earlier session, which is that I think one reason we fall down on the job with certain sub-sectors of the cultural sector is because we often don't actually have a comprehensive, systematic ability to identify what we're doing in a community in a holistic way, and why. And therefore it's easy for things to fall off the table and be invisible. It's easier for things to be invisible when there isn't a sectoral strategy.

And I think if we had a sectoral strategy we'd have to probably fess up to our failures in implementing it a little bit more transparently than we necessarily always do.

Just two points. One is… I'm with JP Morgan Chase, and I've been there about six years, and when I first joined I noticed we had four little re-grant partners, and now we have about 15. And I always find myself as the lone funder, you know, with our re-grant funders, we're the only ones doing re-granting. I began to question myself … the motivator for me was always, every good idea does not need to be a 501(c)(3). I can't fund that cultural entrepreneur directly. One of the advantages of the arts field, and my colleagues in community development and education are very envious of it, is that we have art service organizations. That we have local arts councils. They don't necessarily have that.

And I don't think people take advantage of the role that they play. I mean some of them are stale, some of them insist that their little re-grant groups have a 501(c)(3), which always…you know, we always get into a little war about that. But I do think that we haven't really put a lot of trust and faith in our service organizations, in our local arts council, because they are, in fact, much more attuned than we are, especially if you're working in a huge geography.

And then to Adrian's point about doing more in fewer communities, that's exactly our new strategy, we're working in eight key communities, picking eight neighborhoods that we didn't necessarily pick, actually. It was more a community process that identified what community needed this.

And the beauty of it is that these are communities that are definitely low to moderate income, which speaks to the whole question that you raised earlier of institutions of color, which of our total grantmaking in this country, 5% goes to them, and that's if you count only the ones that have budgets over 300,000. But this strategy allows us to work in these communities with these community-based organizations, which by miracles have been around more than 20, 30, 40 years.

And it's a big challenge! But unless you make a concerted effort that, you know, you're going to be with them for X amount of years, and you're not going to be the sole funder, and we're working in collaboration with other funders because there's no other way to get it done. The problem is just too…it's huge!

Lawrence Thoo:
Hi, I'm Lawrence Thoo with the San Jose Office of Cultural Affairs, and Adrian's question is a great one, but of course it presents a particular dilemma for those of us that are public sector funders, where the historic thrust has been to fund as many as possible. And in San Jose we're grappling with the very question of how to change funding priorities in the face of extant political realities, and shifting political realities as well. It's a question we don't have the answer to yet, but it is one that's caught our attention.

And at the moment we're on a path that's taking a look at trying to retain the essence of what we've been doing while we branch out into new areas, and gradually shift the emphasis from what we've been doing to the new areas, and the allocation of resources from what we've been doing to the new areas. But in a way, that's hinged on resource growth, so that we minimize the impact of the shift on those entities that have essentially built an entire existence on the character of the way that we fund, while we enable new things to happen within the community, and hopefully enable the arts provider sector to shift along with a demographic change that is way ahead of them.

In San Jose, about half of our population, close to, is not born in this country. So that impact is enormous and of course the 501(c)(3) sector has been fairly slow, at least on the arts side, to shift with that adjustment.

We're also grappling with how to fund innovation. As a public-sector funder, we are not concerned about funding non-501(c)(3) entities, so we do that and we do that on a regular basis now. But one of the things that we've realized is that one of the challenges of making grants that are small as a thousand dollars to annual grants that are over 300,000 dollars, is that the strain on our internal resources of doing all that is huge!

So we're reexamining the question of whether in fact if we're going to maintain some of those pieces, we need to find outsourcing partners and actually shift out some of that work, as well. So there are a lot of areas that we're looking across, but that fundamental question of change is really a challenge. As well, grappling with organizations in crisis, since we seem to be the last stop on the trail.

I want to go back to Janet's comments about re-granting. Having worked with a lot of re-grant programs and a lot of community-based organizations, especially of color, I think they tend to fall out because they don't have infrastructures in place. They haven't been in existence long enough.

And the ones that exist tend to be also smaller, newer, and they're harder to fund. And I think re-granting programs can help reach those organizations. Service organizations, community-based organizations, have those connections and those networks to be able to find them and reach them, and to get the resources to them in a way that sometimes funders can't do in a more formal way.

But I also think that re-granting is a very powerful tool for strengthening the community-based organizations themselves that are doing the re-granting, and then they become a means of becoming a focal point. To help the community, the whole community, rise up.

So I think re-granting can be very powerful.

I'd like to turn the room into…all you grantmakers into grant-seekers. Part of my responsibility in coming to the Wallace Foundation was to develop the next arts strategy for the Wallace Foundation. If you unbundled that, that means we don't know what to do next.

So what I would like to invite of you is to partner with me. We are a national foundation that is looking to have a national impact, and you know this country better than we do, particularly those of you who exist in local communities or in regional communities as funders.

We will, I think, be able to succeed in what the board wants me to design with my colleagues, Rory and Catherine, if we know what's in your head. So I invite you to let me know what it is that you are funding that you would want to have a national funder come in. Those of you who are in service organizations and grant-seekers, we'll get to you another way. Grant…makers. Grant…makers.

On the other side, if there is something you really cannot do but wish you could do, would you let us know? Because you're all constrained, so for the moment we are going to be unconstrained. But you are, because you have these wonderful initiatives.

So if you do in fact have something that you wish you could do or could have done, let me know that. In fact it might be something that we could get done.

One last word, please sign the sheet. Thank you all very much.