Closing the Gap: The History of Arts Funding and Where It's Heading Next

photo: a katz/shutterstock — photo: a katz/shutterstock

To commemorate the 25th anniversary of the "first-ever benchmark study of institutional philanthropic support for arts and culture," Grantmakers in the Arts (GIA) asked Steven Lawrence, senior research affiliate at the New York-based TCC Group, to analyze trends in arts funding across the past quarter-century.

His robust and illuminating report, Arts Funding at Twenty-Five: What Data and Analysis Continue to Tell Funders about the Field, can be read in its entirety here.

I'll focus on his key takeaways for the sector moving forward in a moment. But before I do, a quick summary of how arts funding has evolved over the last 25 years is in order.

Lawrence starts by looking at how the field of arts funding research came together in the 1980s. By the end of the decade, Lawrence writes, "the number of arts organizations in the country had grown, foundation and government support for the arts had risen at a double-digit pace." In the 1990s, the funding community found its voice, making the case for "why arts and culture matter," especially in the aftermath of the "culture wars" of the previous decade.

But the early 2000s saw arts organizations contending with the dot-com bust, the 9/11 terrorist attacks, and the Great Recession. Many never fully recovered. Lawrence concludes that "while the nominal value of support for arts and culture in the United States remains impressive, relative to changes in support for other priorities, the arts have unquestionably lost ground."

The sector lost ground during this period at least partly due to waning support from foundations and corporations.

Data from the Conference Board for 2000 to 2010 suggest that corporate funding for the arts dropped by half after inflation over this period. On the bright side, "subsequent research suggests an upturn in corporate support for the arts beginning in 2013."

Anecdotal evidence corroborates this analysis. A recent study by CECP, a CEO-led coalition founded by actor Paul Newman, analyzed 2016 corporate philanthropy and found that cash giving to culture and arts programs grew by 48 percent between 2014 and 2016, the most among all program areas. Arts proponents have done a better job of articulating the tangible value of the arts experience for the community and employees.

The prognosis a bit more complicated for foundations.

"Estimated U.S. foundation giving for the arts totaled $4.9 billion in 2014, up from $3.7 billion in 2000," Lawrence wrote. "Yet after accounting for inflation, the value of foundation support for the arts declined by 3 percent during this period. In contrast, foundation funding overall climbed 59 percent after inflation between 2000 and 2014."

As a result, "arts and culture accounted for an estimated 8 percent of total U.S. foundation giving in 2014, down from well over 13 percent in the early years of the 2000s."

What explains this drop in arts and culture giving from foundations? The short answer: effective altruism.

"Many funders," Lawrence writes, "especially corporate and community foundation officers, report that making the case for arts support is getting harder in the face of pressure to address mounting human service and social service needs."

No surprise, here. While organizations have always struggled with "making the case" for the arts, this challenge has become all the more vexing given the urgent causes demanding donor attention—rising inequality, failing schools, climate change and mass incarceration, just to name a few.

Now, for some good news.

Despite the fact that support from corporations, foundations and the federal government has lagged, the larger arts community, relatively speaking, is doing well. And here's why:

While foundation funding and government grants represented slightly smaller shares of overall arts nonprofit revenue in 2013 (14 percent and 10 percent, respectively), other sources of public support, including individual giving and corporate direct and indirect contributions (but excluding corporate foundation giving), increased as a share of revenue from 25 percent to 30 percent.

Again, anecdotal evidence suggests that patrons have been willing to step up and fill gaps across various sectors. For a recent example, consider the Educational Theatre Association's methodical donor outreach efforts. Of course, we've extensively reported on the influx of new private donors to the arts—a trend that reflects larger trends as the great fortunes amassed during a second Gilded Age of the past few decades are harnessed to philanthropy in a more systematic fashion. Los Angeles is one place where this new giving is playing out in dramatic ways, but we've covered the growth of regional arts giving, too, which has boosted the fortunes of heartland museums and other cultural institutions.

Related:

Meanwhile, the arts sector has done more to align itself with the impulse of funders to address what Lawrence calls "human service and social service needs."

Creative placemaking has rapidly matured as a field in recent years, producing an ever-richer body of examples and evidence of how the arts can strengthen the economic and social fabric of communities. More artists and art groups are making the case that the arts experience needn't be static and transactional, but a mechanism to drive new forms of civic engagement and social change. More foundations are backing activist art, making this the hottest trend in arts philanthropy right now.

While the field has enjoyed support from institutional funders like Ford, Robert Rauschenberg, and the Shelly & Donald Rubin Foundation over the past few years, we're also seeing burgeoning interest along similar lines from individual patrons like Agnes Gund, an uptick in university giving for art that advances social goals, and legacy institutions like symphonies rolling out new programs that reach diverse audiences.

Lawrence writes about the need to "better articulate the ways that the arts need to speak to the challenges of poverty, educational disparities, and other factors." He's right about that. But it's also true that the arts sector has made enormous progress on this front in recent years.

The more pressing question, as always, comes down to sheer numbers. Will the funding—from foundations in particular—be sufficient to close the gap that emerged after the Great Recession and, according to Lawrence, has yet to close? Stay tuned.