Embracing the Velocity of Change (Part 4)

Posted by Marete Wester On October - 27 - 2011

The Fairmont Hotel's Venetian Room Circa 1950

The historic Fairmont Hotel has sat atop Nob Hill in San Francisco for over 100 years; built and rebuilt after surviving earthquakes, fires, and numerous redecorating efforts for nearly eleven decades.

Pristine marble floors, crystal chandeliers, and towering Corinthian columns trimmed in gold punctuate some fun historical facts: the Cirque Room was the first bar in the city to open after prohibition; the International Conference held there after World War II led to the drafting of the Charter for the United Nations; and the Venetian Room  supper club, which has featured artists from Marlene Dietrich to Vic Damone, was where Tony Bennett first sang “I Left My Heart in San Francisco.”

The Venetian Room seemed an unlikely place to host an early morning discussion that was all about the future. Nevertheless, the “Funding & Changing Business Models” session I facilitated at the recent Grantmakers in the Arts (GIA) conference ended up filled with energetic and motivated funders, including state and local arts agencies, small family foundations, as well as regional and national foundations. As the group swelled two deep around, a cry went out to “Change the Model!” and we started moving tables (mindful of all the crystal). It was clear this was a hot topic.

Ian David Moss and Dianne Debicella of Fractured Atlas, and Dennis Scholl of the Knight Foundation started off the discussion on how different funding strategies and new business models can be employed to support creative ventures, and provide “risk-funding” artists need to launch a new project or artistic enterprise. Fractured Atlas’ programs support arts groups as well as individual artists in all disciplines across the country. Their fiscal sponsorship program serves about 2,500 artists and arts groups nationally.

They also provide management counseling, and invariably the subject of whether to start a nonprofit will come up. Ian’s thoughts on the question is built on the premise that the 501(c)(3) model—with its governance structure, accountability to the mission, and the community and system of checks and balances—is designed for permanence. If you accept that, then the question becomes “if the founder leaves, is there a reason for this organization to exist?”

The Knight Foundation Arts Program’s approach under the leadership of Dennis Scholl is an intriguing blend of swashbuckling venture capital investment, strategically employed to embed the arts into the fabric of the community.

The giving strategy is focused on innovation, and investing in individuals and organizations in the foundation’s resident communities who are finding new ways to reach, engage, and increase audiences for the arts. The foundation has invested more than $66 million in the arts over the last five years, ranging from 1,000 “Random Acts of Culture,” to launching community-wide contests to seek out and fund innovative ideas, whether they belong to individuals or for-profit or nonprofit entities.

The presentations prompted the sharing of other experiments, peppered with a lot of shouting. (In the cavernous ballroom, it was really hard to hear.)

We discovered that some state arts agencies had more flexibility than we might have thought in their ability to support artistic entrepreneurship; that Limited Liability Companies (LLCs) could be viable for supporting individual artists—even without form recognition from the IRS, and with the legal framework existing in a handful of states.

We felt the sense of urgency that now was the time to think through different strategies to increase the flow of dollars to support new ideas, launch creative projects. The discussion evolved to what are the most appropriate, flexible, yet viable investment strategies that we can apply to supporting the artistic community that is facing 21st century challenges, yet is armed primarily with the tools that launched the the nonprofit arts community more than 50 years ago.

In retrospect, the opulent and historically-resonant Venetian Room quite possibly was the best place for the discussion. Fifty years ago, the nonprofit arts model was the innovation—and it served us well over time, seeding access, diversity, and excellence in all artistic forms throughout the country.

Though an hour-long discussion can hardly produce the arts equivalent of the charter for the United Nations, we did adjourn with a charge: to keep the discussion going, to keep exploring new legal frameworks that can open new funding streams—and to share these ideas as broadly and loudly as we can.

We are interested in learning more.

If you have a story to share, or a new model, or legal structure you are experimenting with, either as a funder, service provider, or artist or arts group, please let us know by emailing me at mwester@artsusa.org.

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