Mr. Gary P. Steuer
Is Support for the Arts NOT Philanthropy?
Posted by Oct 04, 2007 1 comment
Mr. Gary P. Steuer
A recent opinion article by Robert Reich, former Secretary of Labor under Clinton, in the LA Times, echoing opinions he has expressed earlier and elsewhere, has stirred up quite a debate. The various threads include an article in The New York Times about a month ago that touched on similar themes, and an article in the Washington Post. These are all referenced on The Chronicle of Philanthropy website, including some reader postings. In a nutshell, what Reich (and some others) contend is that the wealthiest Americans are self-serving in their philanthropy, and are not sufficiently generous is helping the truly needy. Reich specifically singles out arts organizations as nonprofits that essentially serve as playgrounds for the rich. Major universities like Harvard with its multibillion dollar endowment are also cited. Reich's solution: advocating a change in the federal tax code that favors charities that provide direct services to needy people, suggesting, If the donation goes to an institution or agency set up to help the poor, the donor gets a full deduction. If the donation goes somewhere else to an art palace, a university, a symphony, or any other nonprofit, the donor gets to deduct only half of the contribution.
Americans for the Arts President and CEO Bob Lynch has already submitted a response to the LA Times which we hope they will publish, but I could not resist blogging about this hot button topic myself. First of all, and I may be tarred and feathered by my arts colleagues for this, I think there is a kernel of truth in Reich's hypothesis. The gala business (which is not just for the arts, though arts groups seem to especially rely on them) is so heavily focused on social climbing, exchange of business and social favors, seeing and being seen, with a big chunk of the revenue going to support caterers, florists, and printers, rather than the arts, let alone the "needy." And it is a demographic fact that our larger, most established arts organizations serve an audience that is disproportionately richer, older, and whiter than the general population. And, yes, I am sure that many of these patrons donate to these institutions out of self-interest. As for the universities, many of the most elite have huge endowments, so expertly managed that their returns are beating Wall Street by a wide margin, yet college tuition is rising at a dizzying pace, access to scholarships and loans is widely short of meeting the need, and donations by parents or grandparents of college applicants remains a factor in admission (full disclosure: spoken as a parent of a child in college, and one about to enter!).
But here is where Reich goes way off track”he equates "the arts" with not serving a social value. Virtually every major arts institution I know of has an array of educational programs, audience outreach initiatives, and other activities that should meet Reich's standard. And of course, the arts are not just the "culture palaces" he denigrates, but an enormous diverse ecosystem strengthening, enlightening, and building communities all over the country. Or is he saying that even arts for at risk youth or arts education not worthy, because it is not directly helping to feed, clothe, or house a young person in need?
How does Reich propose we police "direct services to needy people?" If arts services for needy people ARE allowed, such as free admission for impovrished youth at the local museum, does he not accept that somehow the museum must be kept open, lit, and populated with art in order to serve the goal of serving the needy? And how is that to be paid for? Are enough donors willing to support the arts, or higher education, if they get only partial tax deductibility? On what basis does Reich assume if they lose the tax deduction or some of it, that they will switch their giving to other causes he deems more worthy? And if he considers art even for the needy to not rate full tax-deductibility in his world, then his world, one where the poor would not have art because they cannot pay for it is not one I think most people would want to live in. How to treat health care philanthropy in Reich's universe, much of which is also driven by an "edifice complex"or by wealthy people donating to hospitals to secure VIP treatment for themselves or family? The fact that this argument can even be made, however, and get play in three of our country's leading newspapers (LA Times, NY Times, and Washington Post) means that the arts and universities have to do a much better job of serving society, and especially of communicating how we already do provide such service”since I contend that the social value of the arts is well-enough documented to satisfy this concern. Seems like we just have to keep working harder to justify our value, but how does this challenge tie into the instrumental vs. intrinsic value question? Is Reich walking through the opening we created by focusing so much on instrumental value, or is a stronger instrumental value argument the most effective response? And finally, the entire premise that the arts are sapping enormous wealth from more "important" causes is undercut by the fact that the arts get only about 5% of all private philanthropy and that this share has been declining for ten years. Although maybe if Reich got his way, and then the government put the additional tax revenue into federal arts funding, we would actually be better off...
A lot of food for thought! Look forward to responses from all you Americans for the Arts bloggers out there. What do you think?
Comments
Someone needs to send Reich a link to the AFTA economic impact study that shows that support for the arts gives the government a 7:1 return on investment.
Seriously, I understand the kernel of truth, as you refer to it, in Reich's arguments. On the surface, offering a deduction to wealthy patrons who write checks so they can see and be seen at the social galas makes no more sense than offering deductions for corporations who "donate" to college sports programs and receive skyboxes in return. However, philosophy aside, how on earth would you manage a sliding scale deduction system? I can imagine that such a system would actually end up hurting the needy that Reich wants to help, as it would cause nonprofits to have to spend so much additional time administrating development that programs would suffer. Prior to the current tax code, arts institutions (particularly large ones) relied almost exclusively on wealthy patrons. Now, they manage a soup of major donors, memberships, special events, grants to government and foundation sources and individual donors.
Ultimately, this just is an opportunity to continue to point out to the public the many benefits of the arts to individuals (needy and otherwise), and communities...benefits that are well documented and universal.