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.

In a right steady state?

MMM and ERA21 held one of their peer-to-peer events in Newcastle this week, in the trendy new offices of Northern Film and Media in the Hoult’s Yard development. The theme was whether the sector is now ‘overbuilt’, underachieving, at ‘steady state’ or in a perilous condition. Or indeed none of the above.

The conversation demonstrated, for me, that we are at the point when innovative solutions start to pop up – ie that bit where you think you have a series of irreconcilable ‘truths’, and an intractable problem the current tools can’t fix. These clashing factors mentioned include:

- a renewed infrastructure – notably capital, but also organisational – that needs time and support to develop and have greater impact
- the sector can’t stand still and may need further infrastructure investment (capital of all sorts perhaps, including into digital technology)
- buildings and their physical assets are not always used to best effect to create cultural impact, and our business models (eg greater reliance on ‘commercial hires’ leads to less artist use of space for r&d, leading to diminished quality or quantity of new work). This suggest building in some ‘downtime’ to budgets.
- the public sector as a whole faces big cuts, whilst optimising service to the public – delayering of management, more efficient back offices. This suggests tightening of budgets
- the cultural sector is not meeting the needs of significant parts of the population
- but demand for the arts and culture is high, and thus far not significantly hit by the recession
the increased emphasis on the knowledge economy is an opportunity for the cultural sector, in helping the country out of recession
- we need to think broader than the commercial and subsidised sectors, and consider the role of amateur and voluntary activity
- non-arts agendas offer great opportunity for development but we lack compelling evidence (at least according to those judging matters)
- it’s unclear whether the base of the cultural sector pyramid (people enjoying the arts, say) is broad enough to give us enough people at the top of the pyramid (highly skilled, knowledge-based earners)
- there are lessons to be learned from creative industries and third sector experience
- persistence should not be mistaken for real, productive, resilience.

There were some local points, as well, but that will do as a summary for now. My own conclusion from the afternoon was that a more concerted ‘looking out’ would really help us disrupt our own patterns of thinking – from region into world, from artform into sector, from sector into economy or community or globe.

There are still a few spaces on MMM’s next series of events, if you can get to Edinburgh, London or Newcastle. Clare and Rohan have put a great panel of speakers together, including, in Newcastle, Clara Miller, President and CEO of the USA's Nonprofit Finance Fund, Ben Cameron, Arts Programme Director of the USA's Doris Duke Foundation,David Carrington, Member of the Supervisory Board of Triodos Bank, Erica Whyman, CEO and Artistic Director of Northern Stage. Oh, and me...

Are you ready for the future?

That's the question Mission Models Money want you to consider. They are exploring the competencies, qualities and attributes necessary for coping with the complexity and flux of the 21st Century, and are asking as many people as possible to complete their survey. You can even get a personalised report comparing your answers to the survey results.

Being able to make time to fill in online surveys might be a new competency, given their prevalence, but fortunately the MMM survey is at a slightly more elevated level than that, so I do urge you to get clicking.