ARTSblog

Tara Aesquivel

Thinking about the economy can be rather depressing. For many people, it can seem like a volatile god: a mysterious force that affects everything and we mere mortals have no control over its whims.

Let’s start with a basic idea of what I mean when I write about “the economy.”

Economic analysis is often an attempt to make the complex world of interconnectedness more comprehensible by quantifying everything, usually through monetization. In other words, the world is complicated so we make charts.

The “economy” is everything that happens. Economics is a (left-brained) method of analyzing everything that happens, and it’s mostly focused on measuring everything in dollars and euros.

This focus on monetization is problematic for the arts because the value of artistic products is not always calculable by how much it cost to make them or by how much people are willing to pay for them. In fact, we often strive for the opposite—to give away the arts for free and know that they are priceless.

The subversive tack accepts economics for the way it is and uses the system to our advantage. In order to do that, we need to know the basic principles and be able to speak the lingo: quantification.

The arts sector is getting much better at quantifying the value and impact of the arts. Here are three great examples:

• National Endowment for the Arts report on arts education
• The Otis Report on the Creative Economy of the Los Angeles Region
• The Cultural Data Project

I took my first economics class in graduate school. I had no idea what to expect. As it turns out, the heart of economics can be summed up in a phrase: “supply and demand.” This is something we already understand in the arts. Read the rest of this entry »

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. Read the rest of this entry »

Adam Huttler

The L3C (low-profit limited liability company) construct has been getting a ton of virtual ink lately. As a way of establishing my dubious credentials, I’ll note that I was among the first in our field to note the arrival of the L3C, and I’ve written and debated about it quite a bit since then. Fractured Atlas formed an L3C subsidiary for our insurance program back in 2008.

All of that is just to establish why I’m having trouble thinking of something new and inspiring to say about the L3C. I suppose it also explains why I’m interviewed on the subject frequently enough that I can confidently lump the questioners into two categories: (1) big thinkers – often grad students or consultants – who see tremendous potential in the L3C but have only a vague concept of its real legal and financial contours, and (2) jaded skeptics – often professors or attorneys – who know just enough about the L3C to have serious doubts about its applicability to the arts.  Read the rest of this entry »

James Undercofler

Perhaps the most significant and radical departure from the traditional 501(c)(3) (NFP) are the direct to consumer internet businesses, such as artistShare , Etsy, etc. In addition, philanthropy/investor sites such as Kickstarter are revolutionizing giving.

The direct to consumer businesses are organized either as limited liability corporations (LLCs) or individually-organized entities (individuals file IRS, Section C, 1040). Assessment of risk determines whether to form an LLC or not. What’s particularly interesting about these sites is their range: from those that involve “audience” in the artistic process, to those that aggregate artistic products in an almost social network sort of way. From my limited knowledge of their net revenue, I do know that some of these sites are producing significant profits to their owners/creators.

Some assert that the “new investors/donors” resulted from Hurricane Katrina and the massive earthquake in Haiti, that technology that made it easy to give small amounts through one’s cell phone.  Read the rest of this entry »