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Thursday, October 14, 2004


There was a strange consensus among the many arts professionals and keynote speakers at my recent alumni/student conference in Madison. The consensus surrounded this point: the nonprofit arts industry is overbuilt. Speakers pointed to the massive growth in the nonprofit arts over the past 30 years...due in part perhaps to the leveraging power of matching grants. They pointed to the general contraction in most revenue streams and economic indicators over the past five to ten years. They pointed to symptoms of thin capitalization and organizational stress that often accompany an overbuilt marketplace: risk-averse management, strains on wages, lack of investment in existing infrastructure or staff training, and so on.

I even felt my own head nodding in agreement at the idea. Perhaps what we have built together has outstripped the capacity of all combined sources to support it. Perhaps we are entering an era of contraction, merger, bankruptcy, and market adjustment.

But the question still festers in my head: 'overbuilt' by what measure? Are there too many nonprofit arts organizations? Do they generate too much product? Are the organizations too large or rigid in their construction? Or is it an imbalance in the various sizes, types, styles, and structures of creative production, preservation, and engagement (nonprofit, for-profit, amateur, government, etc.)?

Adrian Ellis has framed the issue this way:

There is a structural imbalance between the number and scale of non-profit cultural organizations that there is the available cash to support and the number and scale of organizations that exist. Because the sector is, for compelling reasons, protected from the full force of the market, supply and demand are not brought into balance in the same way as in a free market. The adjustments back to some sort of equilibrium between supply and demand are slower, more awkward and more politicized than in a situation where there is a market in capital resources. The non-profit cultural market can sustain prolonged periods of adjustment in which relatively inefficient and, perhaps more important, artistically questionable organizations continue to absorb resources that might be better deployed elsewhere in the sector, despite their inability to serve their missions effectively.

Any industry driven by passion, vision, and the compulsion to create will necessarily be insulated from traditional market forces. The producers will produce regardless of demand, and sometimes because there is no demand. Such a production incentive will necessarily lead to an industry with more organizations, more productions, more creations than can be supported by all markets (commercial, philanthropic, human subsidy, etc.). But that's, in part, the point of it. How else can you create complex creative works that may take decades to connect to an audience? How can we know now what will be the seminal works of our century, and how can we leave such selection to the whims of the commercial market?

And even if it's true that we are now chronically overbuilt, what's to be done? No doubt, many artists and arts organization would support the dissolution of other competitive organizations in their market, but few would support the dissolution of their own. There's no 'cultural high court' to determine which organizations should remain and which should return their assets to the ecology. And even if there were, I can't imagine an organization or policy body with the stomache to try.

So, I'm left with this thought: perhaps 'overbuilt' is another word for 'mis-aligned.' Perhaps it's not that we have too many organizations or artists or creative works or available experiences. Perhaps it's that we've created a system with inelegant options and incentives for those who create and those who consume. Perhaps too many have chosen an overly structured and insulated nonprofit corporate form, because they have few other functional options. And perhaps if we provided better choices outside the full-blown 501c3 corporate form -- fiscal sponsorships, collaboratives, cooperatives, etc. -- the system could find its way to a better balance.

What do you all think? Tell me.

posted on Thursday, October 14, 2004 | permalink