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.

First cut is the deepest?

The c word is now being spoken out loud on all sides of the political spectrum. There are good cuts and bad cuts, it seems, but the focus is all on cuts in spending. Joe Hallgarten on his arm’s length state blog makes the point that politicians needs to be talk more honestly about the limitations of their power over the world, and thus encourage in us, the ‘public’, a more realistic and probably more forgiving attitude. (He kind of praises Arts Council with one hand, for at least grappling with change, and then digs us in the ribs with the other, which is probably fair enough.) Politicians, he suggests, need to point out they cannot do the impossible - eg keep costs down but make sure no one ever gets hurt. (I'd say the same goes for funders.)

Also this morning someone sent me a link to a report called ‘How to Save £50 billion’, which is at least honest enough to have a clear and relatively unequivocal list of cuts in spending that the Institute of Directors and the Tiny Minority of Tax Payers Alliance think would be a good idea. Read the list and you can see which Tax Payers the Alliance voice might represent: not those like my dad living on the Basic State Pension, or families being helped by Sure Start or Education Maintenance Allowance, or the children being educated in dilapidated buildings. Not to mention the people employed as a result of the things on their little list.

This is not to deny savings are possible or even necessary in some areas. But what needs to be considered is not which expenditure lines should be reduced, but which of the outcomes we want to do without. (We do also need to remember that some of the ‘savings’ also have a direct financial cost, in terms of unemployment, but also indirect social costs – conveniently left out of most of the equations.) I’d happily live without ID cards, but I don’t want the state education system on starvation rations in horrible old buildings. (I know there are some horrible new buildings, but let’s not go there right now.)

In a sense, the public spending cuts debate could then become a part of a wholly necessary discussion about how we are living beyond the means of the planet and our real economies, and what we are prepared to forgo, and how we can reinvent our ways of living and working. That’s obviously also a discussion that is ongoing in culture, and we at Arts Council are constantly making the case as strongly as humanly possible that money spent on culture is well spent and productive. A more mature language for the overall debate can only help us in that.

Self-employment in the visual arts

AIR – Artists Interaction and Representation – have had research done by a-n on employment patterns for visual and applied artists. This was in the context of the Future Jobs Fund and the work done by New Deal of the Mind that I talked about a short while ago. I commented then that the focus on employment by employers, and the exclusion of self-employment, was problematic. The summary of the findings appears to back that up. I quote…

Whilst previous research by a-n, ACE and others over the last ten years suggested at least half of all practising visual and applied artists were self-employed, the new AIR survey reveals that has substantially increased.

72% of artists are self-employed
25% are a mixture of self-employed and employed
2% are unemployed
1% is employed

In terms of status by career stage:

88% of established artists are self-employed
73% of mid career artists are self-employed
67% of emerging artists are self-employed

Significantly, the overall level of self-employment amongst artists is considerably higher than for the creative industries as a whole, where it stands at 41%.

They also note that self-employment is currently excluded by the Office of Statistics when analysing the efficacy of art and design courses in creating employment, which seems perverse, given the career trajectories of those graduates.

Whilst this pattern will not be replicated right across the artforms, it is important that it is taken into full consideration by government and policy makers looking to ‘create jobs’ within the creative industries.

Do It Yourself?

Because I became a chef the week after I left university, I never went on the Enterprise Allowance Scheme, though I had lots of friends who did. (You can listen to some 80’s janglepop from my friend Ally's record label, Sombrero, partly enabled by the EAS, here.) My recollection is a key boon (to both individuals and the government of the time) was getting away from the dole office for a year, but that may just have been my friends, and it did undoubtedly assist some long-lasting businesses, and provide some great experience for people making their way into the world with few resources. (And MySpace and the internet mean those old records, books and magazines in attics and garages might even have a second life.)

Do it yourself: cultural and creative self-employment in hard times is a new report by New Deal of the Mind for Arts Council England, just published. It provides research and analysis to inform thinking about opportunities for young self-employed creative people and the potential implications of the government’s Future Jobs Fund, and amongst other things suggests creating a 21st century version of the EAS. (It has interviews with people who benefited such as Louise Wilson.)

I feel there are also lessons to be learnt from more recent small grants schemes to support creative industries, such as the North East’s Cultural Business Venture. Investment in technology and marketing in the early days of a business, enabled by access to ‘micro-finance’ may have more impact than the same amount spread across a year to subsidise living. The requirement to talk to a Business Link adviser and work on a business plan was often of real benefit to people, they told us – though usually only afterwards! We have been working with Business and Enterprise North East to make sure artists get a good service: see here for a press story about the new MOU we’ve signed. Such an approach would also encourage an approach to the support of artist businesses based on building a business - or 'just' a living - though investment of funds rather than simply a weekly subsidy. Probably a mixture is required to help people out of unemployment.

Where I think the report hits the bull’s-eye is in drawing attention to the lack of focus on self-employment in the government’s approach to recession and job creation. The Future Jobs Fund is based on having employers and employees, and self-employment hardly features. This has to be self-defeating as an approach, particularly in a sector with such high freelance and self-employment figures as the arts.

How do we grasp uncertainty and save the economy?

Been a little quiet on here over the last fortnight - no apologies, I've just been unusually occupied at home and work - so today I will fearlessly attempt to link (to) three things in one post...

I'm quoted in MMM's latest 'communique' (great word for a Wednesday!) about their collaborative pilots, three of which are in North East England, as wanting to encourage 'resilience not reliance'. This is my new mantra, so be warned.

Resilient Nation is a new publication from Demos. It has a focus on emergencies and civic defence, but not exclusively so. It proposes 'we need to rethink the concept of resilience in a way that resists the temptation to think only in terms of the ability of an individual or society to 'bounce back' but suggests a greater focus on learning and adaptation. In a new definition of this concept, responsibility for resilience must rest on individuals not only on institutions.' It concludes by putting forward a focus not on intervention bu on building 'the four Es of community resilience: engagement, education, empowerment and encouragement'. It's an interesting read, if not slightly worrying as a citizen to hear about police refusing to sound flood sirens even during floods 'in case it spreads panic'.

There is a very powerful quote from a farmer, in the aftermath of the foot and mouth crisis: 'Everything is the same, but nothing is the same. Part of you is trying to find where you fit in the new reality, part of you wants to the safety of the old ways. Slightly dislocated from your surroundings, but the physical surroundings are the same, but I suppose you have changed, and the old certainties, that were not certain but seemed it, have made way for new changeable ways that are not certain, and you know that they are not certain.'

This resonated throughout my reading of Lifting People, Lifting Places, a new paper from the DCMS. This sets out the contribution culture, media and sport can make to economic recovery. Much is a summary of things already underway, but it brings them together so one can get a sense of the big picture. There are some aspirations set out, and a useful annex of data on how the sectors are being affected by the downturn. (I don't know whether it's irony or paradox or something worse that those organsations who've most diversified their income streams who may be worst hit, and those who were arguably 'simply reliant on public funding' who for the moment are most stable.)

It could have done with an edit by someone with a strong aversion to cliches, but perhaps that's quibbling. (I gave the Creative Business Award out recently at the North East Business Awards, and swear I was the only person not to say 'in these difficult times' - it's true, but then it's always true for some people.) In the foreword Andy Burnham writes: 'Rather than sitting on the fringes, culture, sport and the creative industries are part of the core script for recovery and prospoerity.' Noting budgets were 'slashed' in the 80s and 90s, he says 'That mistake will not be repeated.' Others will also quote him on that, I'm sure. (I guess the £4m lost from next year's Arts Council England grant-in-aid needs to be seen as not a slash but a flesh wound?)

The document does set out DCMS's stall in an encouraging way, and from everything I hear they are fighting their corner strongly, and posing a healthly and correct challenge to the sector. We need to respond to this opportunity with new and fresh thinking for this changed, uncertain world, not simply protecting what's been built, or wanting to play nicely in the corner. Building resilience not reliance...

What comes after the crunch?

The end of last week was all about ‘the crunch’. Arts Council England announced a number of steps to help organisations weather the recession – you can read about that here . (This includes our reaction to the Budget announcements – well, I say announcements, but as some people have said it to me it wasn’t exactly very visible in the budget, so perhaps I should say detail – of a £4M reduction in next year's budgets. We will not pass this on to any RFOs.) CCSkills and British Council also published ‘After The Crunch’ a helpful book about the role of creative industries in responding to the recession.

This is a really stimulating collection of short essays, illustrations and cartoons about how the creative industries need to look after the recession – if not sooner. Contributors ranging from Charles Leadbetter to Chris Smith via Dave Moutrey, CultureLabel and many others, give short, sharp thoughts on the current situation. If there is a consensus emerging, it’s that we shouldn’t look to keep ‘business as usual’. (This is of course a challenge to anyone, like Arts Council, helping organisations meet the challenge of the crunch – how to help and support continuity whilst encouraging suitable change.)

Editors John Holden, John Kieffer, John Newbigin and Shelagh Wright draw out 12 big issues for consideration if we are to close what they call ‘the gap between today’s reality and the possibility of a creative, fulfilling, greener and more equal society.’ These include issues to do with global competition, intellectual property and open source sharing, administrative and policy coherence, data collection and analysis and metrocentrism (the need to see policy thinking flowing upwards from communities and regions to Whitehall) .Underneath those runs the threat of short-termism. Linking back to my posts about resilience: we need to act now to enhance rather than diminish long-term strength. Anyway, give ‘After The Crunch’ a read: if, like me, you get tired at times of the design speak, I'm sure you'll find the cartoons entertaining!

Could we persuade a nurse to fund the arts?

I mentioned recently the debate that's been taking place in the States about additional funding to the National Endowment for the Arts as part of the stimulus package. (I've already had emails using the phrase shovel-ready, by the way.) It seems this has been in, then out as a Senator tried to make it illegal to fund theatres and 'that sort of thing' through such a bill (I paraphrase broadly), then finally back in. Good news, but indicative of the issue. It's set out really well by Greg Sandow in the Wall Street Journal here.

I think he's right in many ways. Precision in our arguments is going to be important. We need to be positive as well as protective - the arts have a role in job creation as well as economic stimulus. We need to draw on every bit of evidence we have, look more closely at what we do and what it actually involves, and avoid special pleading. The kind of data Arts Council collects could be better used, I'm sure, and colleagues are working on it. The work done by Arts and Business and CCSkills is also helpful for local arguments. As a sector, it sometimes seems there's an instinctive nervousness about numbers part in telling a story, but they can very powerful.

We should, for instance, remind ourselves and politicians that jobs in the arts are proper jobs. Perhaps not well-paid at times, perhaps not standard, but real jobs. But many people who work 'in the arts' are not the obvious 'artytypes' but cleaners, administrators, craftsmen, accountants and so on. You can't make major public art works without major construction skills and building companies. When, say, local authorities are making choices it's worth reminding them of that. But everyone, even the luvviest of luvvies or most unusually bespectacled of installation artists, pays their taxes and spends their wages. Unfortunately (or so it feels to me, as I think it was at least partly what got us in this mess in the first place) that consumption-driven view is what's driving thinking around economic stimulus, so we have to make the case in a way it will be heard.

Wednesday Word of the Week: ‘shovel-ready’

Bit different from other words I’ve looked at, this one, but I can’t resist. The debate about Obama’s financial stimulus – which includes $50M extra for the National Endowment for the Arts – has brought me a new word – ‘shovel-ready’. It means something – usually a capital or construction project – which is ready to start, and therefore (in this context) provide immediate activity, expenditure and general stimulus to the economy. (See this definition on the entertaining Word Spy site.) I shall be making every effort to use it as I go about my business. ‘Do we have any shovel-ready projects?’ ‘Is this work really shovel-ready?’ ‘I’ve got something shovel-ready for you.’ I apologise to everyone in the office in advance!

An article in Atlantic Monthly suggest the arts, especially public art, are a worthy part of a stimulus package because the arts are shovel-ready. It has a slightly naïve view of how artists work, and in particular how large public art projects work – in my experience they are rarely shovel-ready until relatively late in the day. And major arts capital projects including public art rarely run to the originally discussed timetable – even before they get on site. That said, it’s basically right: the arts can be both an immediate stimulus, and help improve both the physical and ‘mood’ environment, in a way that’s definitely worth 1/600th of the package.

There’s clearly an interesting debate going on the States about this. I picked up on it through Artful Manager. It’s an argument we’ve made – and often won – many times before, since the 80s. Given pressures on Regional Development Agencies, and public spending generally, we will need to revisit and sharpen our arguments once more.

How much will the recession crunch culture?

Sorry it's been a bit quite on here. Regular readers will know I was off in Bulgaria helping some friends of mine translate 10 of my poems in to Bulgarian - in just five long days, alongside 30 others by three other poets. You can see them here. My first few days back at work simply got too, too full.

One of the things I did was attend a really interesting seminar organised by the Sponsors Club for Arts & Business on Culture and the Credit Crunch. Speakers from the Chamber of Commerce, the CBI and Waitrose made the audience respectively feel

• optimistic (because there's more good stuff than bad going on really)
• nervous (because the recession may be even harder than predicted)
• jealous (because we're not partners in the wonderful sounding John Lewis/Waitrose.)

There was also a presentation on the latest Arts & Business research into private investment into the arts and culture. This shows a record high, but predicts a sharp frost a-coming. In North East England, as the research suggests, we've already experienced something of that with the difficulties Northern Rock hit having a knock on to the fantastic investment of the Northern Rock Foundation into culture. This was withdrawn and then brought back by the trustees, which has had a very positive impact on the sector. It did underline the fragility of private sector investment, however. The Arts & Business research is well worth close attention as it draws on figures going back several dips and recessions. As such it should help inform planning of organisations that work closely with private sector sponsors and foundations.

One of the points I made from the floor was that we should not slip into thinking of 'business' and 'the arts' as separate: arts organisations are businesses and employers too and should make full use of the things being put in place to help businesses of all kinds, though things like Business Link. I also supported the point that mood or confidence will shape reality. We must not talk ourselves into defeat, be it around the economy or around public spending and the arts. The next spending round will need to be strongly argued by us all, but we must not give anyone any excuses or alibis by talking as if cuts to the arts are inevitable or sensible.

Should venues give free tickets to the newly laid off?

I've been a little slow getting going here since returning to work - a combination of pressing work to do and some technical issues. Anyway: Happy New Year.

I'll start with what I think is a cheering story of the arts responding to the economic doom and gloom, in Maryland, USA. Maryland Citizen's for the Arts and arts organisations in the state are providing free and subsidised tickets for state employees who are being forced to take unpaid leave to balance the state government's books. You can read the details here .

The McMaster-inspired scheme to give free theatre tickets to young people has not been uncontroversial. Some have said it could undermine long-term audience development, others have embraced it as a chance to break into new areas. We will see how those successful in the recent bids fare. But the Maryland scheme seems unequivocally a positive, community-spirited gesture. It's a fortnight too late to come over all George Bailey on you, but it'd be interesting to see whether some arts organisations could do something similar in the UK, not just for 'state employees', especially in places hit especially hard by lay offs. (Acknowledging that many venues work hard already on inclusion projects, of course.)