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Zero-based budgeting, on steroids

by Andrew Taylor Friday, November 4, 2011

There are many who wonder weather our current funding and support systems for the arts are equitable, or even aligned with what we would decide together we want in the world. Like all complex systems, the ecology of individual, government, business, and related contributions to artistic endeavor evolved in fits and pockets over hundreds of years. The system doesn't have a central nervous system or an oversight authority, so you wouldn't expect it to show coordination at a system scale. But still, it's worth wondering what you might see if we wiped the slate and designed a funding/support ecology from scratch.

In business, this approach is called zero-based budgeting, where instead of making incremental adjustments to departments and programs, you require every unit to build its budget from zero, and justify each dollar not by its tradition in the firm, but by its current need. It's a fairly brutal and exhausting form of budgeting, and it can generate more competition and defensiveness than collaboration and reflective practice. But sometimes, the times require it.

An arts writer in in Australia took a shot at this approach for the arts funding ecology in that country, when the suggestion arose during a conference (thanks to Thomas Cott for the link). Her letter from the future (2021) looks back on the implications for Australian arts funding after a fictitional effort to pool all of its resources and realign them with the public good.

The result is a bit utopian (no crime there), but compelling. It's not built on the assumption this could ever happen at a system scale, but on the question of what might happen if it did. One favorite passage:

"When we stopped believing that, firstly, audiences were a homogenous group who could only be engaged by marketing (rather than programming), and secondly, that audiences and artists are different, we started to realise that, actually, artists and audiences are equal parts of the equation."

The rest is well worth a reading.

Another recent report suggested a similar theme -- that at least part of the arts funding system, in this case organized philanthropy, was misaligned with the greater good. Fusing Arts, Culture and Social Change: High Impact Strategies for Philanthropy, written by Holly Sidford and published by the National Committee for Responsive Philanthropy (download the PDF), points to the seemingly disproportionate investment among foundations. In language that eerily resonates (and, in fact, predates) the Occupy Wall Street movement, the report says: 

"...the majority of arts funding supports large organizations with budgets greater than $5 million. Such organizations, which comprise less than 2 percent of the universe of arts and cultural nonprofits, receive more than half of the sector's total revenue. These institutions focus primarily on Western European art forms, and their programs serve audiences that are pre-dominantly white and upper income."

You'll find comment and reflection on the report online from Nina Simon, Diane Ragsdale, and Michael Kaiser, among others. But I'd also encourage you to read it for yourself to form your own conclusions.

Whether in Australia or in U.S. philanthropy circles, there are many reasons that larger, established Western-European-influenced organizations get the larger portion of funding and support. Some of the reasons are obvious (they're much bigger, they're designed and aligned to attract and retain such funding, they're familiar to the funders, they're 'proven' by funding standards, and so on). But those same reasons make funding systems resistant to change, and slow to respond.

We can't press a 'reset' button and design a funding system from scratch (funding resources aren't fungible, anyway). But we can wonder together about what outcomes we might want if we did. With those goals, we can at least gather segments of the system to talk it through (are you listening, Grantmakers in the Arts, or United States Conference of Mayors?), and decide where we can make adjustments.

It's not zero-based budgeting. We're not even all in the same ship. But since we all have a hand on some rudder or another, we can at least talk about which way we'd like to steer the armada.