Why is Iowa's Creative Arts Academy's Organizational Model Particularly Cool?

As communities across the county grapple with whether to reinstate funding to arts education wherever possible, it's important to realize that this challenge isn't a zero-sum game.

Let me explain.

A zero-sum game, of course, describes a situation in which one person's gain is equivalent to another's loss, so the net change in wealth or benefit is zero. It's easy to view the issue of arts funding through this simplistic prism. The logic follows that arts funding eliminated by school administrators or politicians will be restored by private foundations. As a result, arts funding survives, but the burden has been transferred from the schools to the private foundations.

In a sense, states and schools know foundations won't let arts education disappear entirely, so they have the leverage. For example, after a landmark year in 2014, in which the California Arts Council (CAC) saw its budget jump by $5 million, Governor Jerry Brown's proposed budget for 2015-2016 allocated just $1.1 million to the organization. As a result, the CAC's total budget for 2015 will be $4.9 million, just under half of its $10 million budget for 2014. Will deep-pocketed foundations allow California's school kids to go without arts education? We highly doubt it.

But there's another way forward, beyond the zero-sum game mentality, and it's evident in Iowa, among other places, where the Creative Arts Academy (CAA) of the Quad Cities is growing, thanks in part to a $750,000, three-year grant from the Davenport-based Bechtel Trusts. What makes the news so interesting is the composition and organizational model of the CAA, which was launched last fall and is based at the Davenport Public Library downtown.

The only program of its kind in Iowa, and the only one between Chicago and Omaha, the Davenport school district launched CAA in partnership with arts organizations such as River Music Experience, Figge Art Museum, Quad City Arts, Circa '21, and local photography, video, and communications companies. It offers classes to 54 sixth graders in the morning and 33 high school juniors and seniors in the afternoon, with lessons in communications and media arts, dance, music, theater and visual arts.

In short, the CAA isn't wholly reliant on private foundation dollars (which, as we all know, can be a risky proposition). Similarly, even though it was formed by the Davenport school district, it isn't wholly reliant on taxpayer dollars. This approach can be replicated elsewhere. For all you arts nonprofits out there, be proactive and approach schools that are struggling to maintain arts funding.

Ultimately, CAA's model pools its resources and taps the expertise of trusted educational partners in the area. The broader the CAA's exposure, the less risk it assumes and the more offerings it can provide. In a way, the model leverages another fancy business school term — "economies of scale" — describing the advantages that organizations obtain by expanding their operations so fixed costs are spread out over larger areas.

As for next week's lesson, we'll look at the long-run average cost (LRAC) curve, whereby an organization would minimize its average cost for each respective long-run quantity of output. (Spoiler alert: the LRMC = LRAC at the minimum LRAC and associated output.)

Until then...