Life, etc

The cash flow conundrum: Free the arts!

By J Brooks Spector 10 November 2014

J. BROOKS SPECTOR looks at a current imbroglio in South Africa’s arts and culture world and suggests two measures that might well help strengthen democracy – even as they make it easier for the arts to raise money.

Long ago, during the heyday of the late, unlamented Apartheid state, the government lavishly funded four provincial arts councils for the Transvaal, the Cape, the Orange Free State and Natal. And in Johannesburg, the municipally funded Civic Theatre (now the Joburg Theatre) largely followed that pattern as well. Now, while these arts councils extravagantly sponsored and underwrote extensive opera, ballet and theatre seasons with their trademark, over-the-top sets and well-trained professionals on stage and in the wings (in part to prove that South Africa, despite its geographical location, was a hotbed of European culture), they were not particularly concerned with indigenous culture or works or performers from most of the country.

That’s not really fair. It is more accurate to say they were almost entirely uninterested in indigenous culture, and they were even less interested in supporting the kinds of works and artists challenging the old regime’s malignant orthodoxies.

Instead, the country’s cultural “revolution” went on virtually unnoticed by the four official provincial arts councils, and without access to its budgets, workshops, costume libraries and other resources. There was some encouragement for revolutionary works from within a couple of the nation’s universities; but, throughout the 1970s and on into the early 90s, this assertive, angry, and very often imaginative and energetic cultural explosion of “struggle theatre” and related dance and music flourished with the support of international donors, the occasional local private funder who felt so impelled to help – and, often, the willingness of performers, producers and venues like the Market Theatre to operate on the proverbial shoestring or even less. On occasion, performers gave their talents virtually for free, as was the case with many musicians at anti-Apartheid rallies throughout the 1980s.

By the time the Apartheid regime fell politically, the old regimes in arts funding were on the chopping block as well. The old provincial arts councils were turned into nationally subsidised cultural institutions (eventually along with the Market Theatre and the Windybrow Centre for the Performing Arts) and given significantly more inclusive social mandates. In addition, a new national department of arts and culture was eventually created, and a separate body, the National Arts Council, was created and funded (patterned after international models) as well. This NAC was designed to be a grant-giving institution that would assist the country’s large roster of smaller, struggling cultural organisations and performing groups with funds for their activities.

As things turned out, the NAC had nowhere near the money needed to do more than support a small minority of claimants for funds. And through mismanagement or worse, the old provincial theatres were pushed to the wall or shuttered for periods as various programmes within them, such as the dance companies in the State Theatre in Pretoria, were closed down. Even the SABC Symphony (previously sponsored by the national broadcaster) was forced to cease operations until it was resuscitated as a separately established NPO.

When the national lottery was created more than a decade ago, one of the key decisions was that a significant chunk of the revenues disbursed (beyond the pay-outs to winners) would go to the arts and culture sector – set at around 30%. While lottery disbursements in the sector have not been without their critics – such as that rather large grant to a seemingly commercial body that sent African dancers and drummers to regional trade fairs in Central and Eastern Europe and was rumoured to have familial connections to a senior person within the lottery administration – the lottery’s grants have become crucial to arts funding in South Africa. At the present, in fact, around 86% of all SA government funding for the arts and culture sector comes from lottery distributions – much larger, obviously, than all funding from the Department of Arts and Culture or the NAC combined.

This funding has become crucial because door revenues – even with the most commercial of programmes – generally do not cover the costs of programming – unless tickets would be sold at ridiculous prices well beyond the reach of nearly every event goer in the country. Even popular, sold-out works like War Horse, The Phantom of the Opera or The Lion King would not reach the stage in South Africa, except for significant underwriting from major banks or a utility like Telkom. However, these commercial organisations make their funding decisions on whether support for a project makes sense as an effective marketing decision or from their community social responsibility budgets, generally rather than on experimental artistic or aesthetic grounds.

As a result, a pending decision by the Department of Trade and Industry (the department that supervises the lottery) to revise disbursement regulations by cutting the arts, culture, heritage share from 30% to 22% of the lottery’s total distribution, and give this slice of the pie to the sports sector instead, has generated panic among arts and culture organisations across the country. While that shift of 8% among the categories might seem relatively small and manageable with a little judicious belt-tightening, it actually represents around 30% of all lottery disbursements to the arts/culture/heritage sector throughout the country. And the resulting cutbacks could easily be life-threatening to many groups that have come to depend over the years on grants from the lottery to help underwrite their programs and projects.

Right about now, some readers might be starting to mutter something like “These groups must learn to be self-sustaining and find funds elsewhere, besides their unhealthy dependence on a hard-pressed government.” This is great theory, but is almost impossible to achieve in practice; the reason why the lottery distribution was established in the first place. A small, inner-city dance group dedicated to the idea that dance is not just the preserve of rich suburban kids whose parents can pay for lessons is never going to be able to assemble the revenue to pay for its hard-done-by operations, let alone find corporate sponsors ready and able to pick up its programme and teaching costs either.

But bigger, much better established groups have much the same problem as well. The Market Theatre has been around for nearly 40 years; its history as the home for “struggle theatre” is secure; its efforts to take contemporary South African theatre around the world are highly regarded – just as is its reputation for delivering a wide mix of South African and international works in quality professional productions in its home theatres. But the reality is that its annual government grant as a national cultural institution almost exactly matches its overall (rather Spartan) administrative and operational overhead – with almost nothing left for actual works on stage. As a result, the theatre races on an unending treadmill to raise funds for its theatrical program, as well as its two teaching arts for drama and photography.

A key problem seems to be the implicit idea with the DAC and the lottery both that arts groups should use those lottery grants as way-stations on their respective roads to some near-mythic place called “self-sustaining status.” That is the idea that with just a little creativity and a bit of help from the lottery, arts organisations would magically transform themselves into thriving, self-funding institutions. This would seem to stand in direct contradiction to the idea that lottery funding is a key part of the building of sustainability for arts and cultural groups in that it would provide a limited-time-only floor for continuing operations that assiduous fundraising and income generating activities can come to supplement.

Making matters worse is yet another proposed regulatory change to limit grants in the arts for non-renewable, one-year periods. This would effectively force organisations gaining lottery funding for a program to gear up to run that programme, only to have to release their staff, performers and instructors after a year, just as the organisation was developing competence in their new effort and just as it is trying to develop support for their projects from the broader community.

This, of course, flies in the face of the government’s own commitment to job growth. By their nature as being largely independent from massive investments in expensive new technology, arts and cultural organisations can be much more efficient in job creation than, say, a new, loss-making high tech steel plant – at something on the order of one-fifth the cost for a full-time equivalent man-year employee.

Finally, it also seems the proposed regulations would ban any lottery fund disbursements to organisations that already receive government support. This would seem to eliminate a body like the Market Theatre (and others) from even applying in the future, regardless of whether or not its government grant goes to productions or training.

Taken together, this nearly 30% cut in government support for the arts might well be the death-knell for the many organisations that no longer fit through the funding gate. Alternatively, it could also deter other groups from even applying for funding, what with the realisation that funding would not be forthcoming for them in subsequent years, after that first year. That one-year provision was apparently added just to make grant adjudication and review by the lottery managers simpler to achieve, rather than for any deeper, more logical programmatic reasons.

Now, are there any ways around these dangers? Aside from rejecting these dangerous proposals and keeping the funding percentages as they have been, there are, in fact, two other ideas that have received virtually no discussion so far that might well actually enhance funding for the arts – as well as improve sustainability in funding sources.

The first of these would be to transfer a large block of the lottery funding dedicated to the arts to the NAC to be disbursed from that organisation.  The NAC has developed a sophisticated mechanism for evaluating projects, drawing upon a cadre of knowledgeable professionals. This would allow that staff to be used more intensively, would relieve the burden on the lottery mechanism of all those adjudications – especially since there are frequent complaints about the very long lead times (sometimes well over a year) before a grant is finally approved, and then further delays before it is finally disbursed. Such a process could also take the grant-giving process one step further from political interference and any possible attempts to influence funding decisions on other than artistic and cultural grounds. It would also allow lottery-funded grants to be disbursed in tandem with other regular NAC funding, eliminating the need for applicants to make time-consuming, duplicate applications – especially important for groups with limited administrative staffs.

The second idea would be much more radical. In common with practices in countries like the US and the UK, the Departments of Arts and Culture and Trade and Industry could jointly push for the establishment of an appropriate level of tax deductibility (from gross income) for individual and corporate giving in the arts to all bodies that have dutifully registered as Section 21 companies or similar status.

Rather than always relying upon a company’s complex decisions about the utility of a grant to an arts group (or a sports group for that matter) to make its contribution when being funded by the company’s marketing budget or its limited CSR donations, tax benefits would mean that givers could be more adventurous beyond simply measuring how much exposure its product would have before the eyes of x number of potential clients. Aside from the social goodwill generated by such grants, it would have that real bottom-line benefit that even a corporate CFO would love.

And it could encourage experimentation in raising matching funds between corporations and individuals in support of arts and cultural programmes – especially since that all-important tax benefit was out there as a lure. Moreover, it could ensure that such giving was even further away from political interference than ever.

But perhaps there is the rub. Maybe the powers that be don’t actually want the arts to have the independence that goes with finding ways to raise funds outside the close embrace of government. Maybe someone thinks the arts are too dangerous to be totally free hold. But surely, now twenty years into democratic government, it is time to go out into the sunlight and let everyone find a way to gain some benefit by doing good – even if it means some groups that don’t like something about today’s government also get a crack at raising funds from society. Why not? DM

Photo: A scene from ‘War Horse’.

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