There was, for a time, despair. Because no other entity could provide the sort of broad-based support that local, regional and national governments could. But a white knight in the form of crowd-funding may be riding to the rescue.
The impact has not yet matched the potential. Arts funding is a $32 billion a year enterprise and with government support evaporating there is a huge hole to fill. The good news is that contrary to initial concerns, crowd-funding sources are discerning and demanding, not lowest-common-denominator merchants of mediocrity. Nor does the money appear to simply diverting sources from one channel to another.
While the potential remains uncertain, at least there is opportunity where not too long in the past, none was thought to exist. JL
Patricia Cohen reports in the New York Times:
In the last year alone, money troubles have pushed the New Mexico Symphony to close, New York City Opera to slash its budget by two-thirds and the State of Kansas to eliminate all public financing for the arts.
As formerly reliable employers and patrons struggle to pay their own bills, artists have been forced to intensify their hunt for new fund-raising strategies. Even fictional artists have been affected. On the new NBC series “Smash,” the Broadway producer Eileen Rand (Anjelica Huston) tries to sell her beloved Degas just to finance a workshop.
Which is why the prospect of financial crowd-sourcing on the Internet has been enthusiastically embraced by some as an important new model for the future of arts financing.
The question is, how important?
Kickstarter, a Brooklyn company that serves as a conduit for artists, industrial designers and others to solicit donations, recently boasted that it expected to raise $150 million in contributions in 2012. By comparison, the National Endowment for the Arts, noted Yancey Strickler, one of Kickstarter’s founders, has a budget of $146 million.
Online financial crowd-sourcing of artists still represents only a smidgen of the more than $8 billion that private individuals donate to the arts each year. Nonetheless, the speedy proliferation of such Web sites has attracted notice.
“Everybody right now is looking for ways to exploit technology to maximize and customize the ways people engage with the arts,” said Sunil Iyengar, research director at the National Endowment for the Arts. Recently United States Artists in Los Angeles, a nonprofit that supports American artists, began USA Projects, and New York Foundation for the Arts started Artspire, two nonprofit variations of online crowd-funding devoted solely to artists or fledgling cultural groups.
“This mass microphilanthropy is a really interesting phenomenon,” said Ruby Lerner, president of Creative Capital, a nonprofit that offers artists financial and career support. “We advise all our artists to do it.”
Personal contributions — whether from the Medicis, village parishioners or passers-by who toss money into a busker’s hat — have always been the primary way artists have supported their work.
In the United States donations from private individuals account for more than a quarter of the estimated $32 billion spent annually on the arts, more than foundation, corporate and government contributions put together, Mr. Iyengar said. Of the $32 billion, $4.1 billion comes from foundations, and part of that goes toward grants to individual artists, but Mr. Iyengar said there were no reliable estimates of how much.
The federal government has never been a major source of direct grants to artists. As both Mr. Strickler and the National Endowment for the Arts have noted, that agency largely stopped distributing artist grants in the mid-1990s. It focuses instead on financing cultural organizations and programs that offer increased access to the arts.
What enterprises like Kickstarter and Artspire do is use technology to build on the sizable support that individuals already throw behind the arts, in order to give artists a more efficient way to reach greater numbers of potential contributors. The performance artist Dan Froot has called these sites “a logical extension of the ‘personal appeal’ letter that many artists send out in November/December of most years.”
But is crowd-funding bringing in new dollars or simply diverting those that would have been donated anyway?
Arts experts say it is way too soon for any meaningful statistics or analysis. Kickstarter began just three years ago. A similar site, indiegogo.com, supports such a wide range of activities that isolating artists’ appeals is difficult.
Still, artists and professionals in the field agree that the early returns indicate that crowd-sourcing is widening the pool of contributors to include people who might not have previously considered giving to the arts.
John Spokes, director of development for USA Projects, said the crowd-sourced contributors “are particularly interested in supporting the artist; that’s different from those who support the arts generally.”
Although nearly all successful projects begin with a strong core of supporters who already have a connection to the artist, they also frequently attract new donors. Michael Royce, executive director of New York Foundation for the Arts, recently received an e-mail from an artist that said: “I was pleasantly surprised and pleased that the Hudson Music Festival received a $100 donation today through Artspire, and I do not know this individual, but generously accepted, with humility, their donation!”
The ease and flexibility of donating as little as a dollar online also entices people who might otherwise feel that such small change is too insignificant to be worth giving. Mr. Strickler said Kickstarter’s most common pledge is $30; USA Projects’ is $120, Mr. Spokes said.
There are more significant differences between the two models, however. Kickstarter is not a charity, and donations are not tax deductible. Advertising itself as “a new form of commerce and patronage,” this company charges a 5 percent fee to anyone who lists with it. Donors often get a small gift, early access or other rewards in exchange for their dollars.
In the past three years 19,000 Kickstarter projects and business ventures — 44 percent of the total — reached their financing goals and collected $130 million, Mr. Strickler said. The rest did not lure in enough money before an agreed-upon deadline, which meant that $20 million worth of pledges were not collected. (No money is acquired unless the total goal is reached.)
The nonprofit variations are newer and smaller. USA Projects, which formally began in December 2010, has listed 387 projects. Seventy-five percent hit their financing target, collecting $2 million — all of it tax deductible.
As Mr. Iyengar notes, providing tax exemption for donations plays a “central role” in financing the arts.
United States Artists uses a “shared fund-raising model” that gives artists 81 cents out of every dollar, with the rest going to support training and education programs, fees and grants to other artists.
Artspire, the New York Foundation’s version, allows contributors to donate to fledgling cultural organizations as well as to artists, and has not yet put any time limits on the fund-raising. Over all, some $4.5 million has been raised for its projects. It collects an 8 percent fee to pay for technology and a staff.
Does mass-financing result in popularity-driven, lowbrow art? Probably just the opposite, say those involved, since individuals who have trouble finding dollars are often niche artists outside the mainstream. Mr. Strickler noted that several creative projects that Kickstarter has helped finance were worthy of display at the Whitney Biennial and the Sundance Film Festival. But both nonprofits have review panels that evaluate every proposal before listing it, rather than leave potential contributors to figure out for themselves whether a project is sublime or ridiculous.
In the short term, the crowd-funding model is working for Tiffany Bartok, a filmmaker. She and her husband, Jayce Bartok, are among the 500 artists and 70 organizations that Artspire is hosting. Ms. Bartok has used both indiegogo.com and Artspire in an effort to raise $50,000 to complete “Tiny Dancer,” a feature film about a former dancer whose career was cut short when she became pregnant.
In the past 18 months they have raised a total of $21,596, or 41 percent of their goal, from 247 donors. Most people gave $50, Ms. Bartok said; the smallest was $10, and the largest was $1,500. Ms. Bartok had previously tried crowd-sourcing the old-fashioned way, through letters and live events, but she said going through Artspire was superior. “People would come up to me and ask if the money was going to my rent or the movie,” she said. “They feel a lot better writing a check to an organization, and they get the tax deduction.”
Patrick Morris, a New York investment adviser who pledged $500 to the film, knew of the Bartoks’ previous work. He said the money he gave was an additional commitment to the arts, not money he would have typically given to another cultural venture.
“In film financing, people are usually asking for $50,000, $100,000 or a million dollars,” Mr. Morris explained. “This is predicated on the idea that you can give money to things you find interesting without it being such a huge commitment.”
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