How do you fund for resilience?

This week I was part of the panel at MMM/ERA21’s latest Peer-to-Peer event in Newcastle, the topic being ‘funding transition’. Chaired by David Carrington, the panel was myself, Penny Vowles from the Northern Rock Foundation and two leading American thinkers on funding and philanthropy, Clara Miller of the Non-Profit Finance Fund and Ben Cameron of the Doris Duke Foundation. (The audience was pretty stellar too, of course.)

It was a really stimulating conversation, encouraging and daunting in equal measure. Encouraging because it showed potential ways through the issues which seemed to face arts organisations on both sides of the Atlantic. Daunting because those issues are so deeply ingrained in the mental models of both funders and funded, and because of the political pressures we face in this country, given our public sector-leaning funding model. (Although, as Jim Beirne from Live Theatre pointed out, the issues of under-capitalisation, lack of focus on business growth and fluctuating revenue streams seem common to the UK and the US, where government funding is a very small percentage of income.)

Both Clara and Ben have a great turn of phrase. Clara described how NPFF had realised it could ‘either nurse the malaria patients one by one or drain the swamps’ and decided to try and deal with the underlying issues. She also introduced us to ‘the four horsemen of the non-profit financial apocalypse’ – Overbuilt, Over-endebted, Labour Economics and Disappearing Revenue.

If there was a single idea to take away and pass on from the very rich discussion it was this:

Both funded and funders need to acknowledge the difference between capital fund and revenue funds, and use them well. Capital is not just about buildings, but about building enterprises (organisations if you don’t like that word, though Clara also suggested we ‘learn to love our inner enterprise’.) The best definition I heard was ‘investment that builds capacity to attract reliable income'. Revenue funding is about ‘buying’ – of cultural value, or activity, or ability to take risks, depending on the funder. This is not an either or: for a resilient organisation and cultural sector, building and buying are necessary. Doing one without the other is the biggest risk of all for funders. Mistaking one for the other is unhealthy for organisations. It’s often – maybe always? – about survival and transformation. The task of being flexible and responsive enough is shared – and goes all the way through the system, which in the case of the UK, takes it right up to central government.

Video and recordings of the conversation will be available on the MMM site very soon. You can also catch up on the Steady State discussions last month.

Plus ça change?

The Calouste Gulbenkian Foundation have done an interesting thing and republished a seminal report from 1959, Help for the Arts. The aim is to stimulate debate about how we meet today’s questions of how best to support the arts. It’s a fascinating read. Many things are different – and not just the ‘surface’ signs such as language. (I’m pretty sure I don’t want to bring ‘patronage’ and ‘provinces’ back into regular usage for instance, let alone phrases such as ‘men of means’.) The post-Austerity landscape does look free of agency ‘clutter’, and the text has a refreshing directness – though that may simply by style of the report, unafraid to be patrician where necessary.

There are also many things that are oddly similar through the differences –sometimes in an ‘eternal question’ way. What’s the best balance between support for individuals and institutions? Is it simplistic to say that ‘artists not institutions create art’ – where do ‘producers’ fit in, let alone commissioning ‘bodies’ public and private? If institutions endure, in a way individuals (as opposed to their artwork, of course) may not, is that a good or a bad thing?

Funding interventions are the key theme of the report – which led to the Gulbenkian’s crucial work in developing arts in the regions, and some key 'arts spaces'. I’ve been involved in some discussions in the North East about ‘intelligent funding’ (as opposed to stupid funding, you might say!) and was struck by this paragraph:

The reluctance of the State to help new needs in the arts has been emphasised by the tendency for State grants to take the form of meeting deficits (and to some extent the same criticism applies to local authority grants). No doubt grants on this basis are more easily justified where public money is concerned. Nevertheless the deficit basis of finance has a crippling effect on creative work. Moreover, since bodies which receive deficit grants cannot build up reserves, they are prevented from putting their finances on a sound basis: in the long run this system is therefore uneconomical. This criticism is not, however, valid where guarantees of fixed amounts are made to new and adventurous enterprises.

This is something Arts Councils and both local and national politicians grapple with today, further complicated at times by lottery regulations - well, either grapple with or studiously ignore. (It applies across the voluntary sector as a whole.)

The report posits four key things that need to be addressed, and again, whilst acknowledging how much progress has been made, it’s startling to see how unchanged they are from the list many would draw up today. I’ll end simply by quoting them:

The first is that far greater support is needed for the arts than in the past. Nor is this a temporary need. Once high standards of artistic creation and performance have been established, an increasing sum is required to maintain these new standards. This means
that over the years public authorities will have to find more money for the arts.

The second is that far more needs to be done today to render the arts accessible, particularly in the provinces.

The third point is that there should be more scope for experiment in order to invigorate the arts.

The fourth point is that we think that more should be done to foster appreciation of the arts among the young. The introduction of music and drawing into primary schools has been of the highest importance. But in grammar and secondary modern schools, the practice and appreciation of the arts is apt to be crowded out after the age of 14; while little incentive or encouragement is given to boys and girls after leaving school to develop whatever interest in the arts they have acquired. The best means of doing this is something which would well repay enquiry.

How far up the ladder dare we go?

Came across some interesting ideas from Tom Atlee in an article about 'crisis and evolutionary leverage for philanthropy'. (I'm talking about the creative uses of crisis at the Theatre Forum Ireland conference next month.) He describes an interesting 'ladder of intervention', suggesting 'the higher on the ladder that activism or philanthropy can intervene, the more leverage for evolutionary transformation it can have.' The word leverage inspires a bit of a twinge these days, but at least he's using it as a noun not a verb.

The ladder relates to previous topics about resilience and systems. Some of the terms may be a little opaque at first glance, and you could argue these things are not strictly sequential but the general idea is helpful, I think, for funders to think about. It might also be useful for peer-to-peer review or support and collaboration to think about. Here it is:

8. EVOLUTIONARY CATALYTIC ACTION: Tweaking the evolutionary process in a system, especially at crisis points, especially through enhancing its collective intelligence and wisdom
7. SOCIAL SHAMANISM: Working the context, culture, story, paradigm, goal, field, etc., within which a system operates
6. SOCIAL SYSTEMS DESIGN: Designing and reworking overall systems and feedback dynamics
5. SERVANT LEADERSHIP: Designing and empowering networks and communities; building capacity for self-organization in specific realms
4. PROCESS ARTISTRY: Hosting generative interactions among a system's diverse players, stakeholders, leaders, etc.
3. ACTIVISM: Mobilizing concerned citizens and victims for causes and candidates to change conditions
2. EDUCATION: Giving people the information/training they need to help themselves as individuals and groups
1. CHARITY: Helping individuals and groups directly
0. SYMPATHY: Knowing and resonating with another's suffering, and letting others know.