23 gree to which public demand for cultural services of all kinds exceeds the supply now being provided. Because of their limited budgets, arts organizations often provide services that are both less complete than their resources would normally permit, and less than their audiences demonstrably desire. To examine the actual costs and types of these programs, the Committee made a separate case study of 10 arts organizations ranging in annual expenditures from over $106,000 to over $1.8 million, and representing nine states in different regions of the country. They include one opera association, two theaters, three orchestras, two museums, one arts center, and one community arts council. Some of the programs not undertaken for lack of funds were: ■ Performances for senior citizens, for Headstart children, and for prison inmates (Texas) ■ A regional program that took an orchestra to people outside its immediate urban area (Texas) ■ An educational museum program for young children (Florida) ■ An arts program for poor neighborhoods (Arkansas) ■Concerts in high schools (Ohio) ■ A series of special concerts for students after school and on weekends (New York) The estimated cost for the 10 organizations to have produced these programs came to 6.1 percent of their combined gross expenditures. However, to allow for a reasonable margin for error, the Committee cut this estimate in half and used 3 percent as a minimum estimate of the costs of programs not undertaken because of lack of funding. In summary, then, the total additional funding requirements of the arts organizations in the Committee's overall survey are estimated to be as follows: Average annual failure of revenue to cover costs over the last four years 5.0% 6.0% To follow up the Committee's investigation of dropped programs and programs not undertaken, a research report directed by the 24 National Research Center of the Arts was commissioned to examine, on a case study basis, the concept of "essential services budgeting❞— the amount of money needed by arts organizations if their full existing resources are to be properly utilized. Preliminary findings reveal that the additional amounts required by the five organizations studied, over and above their current levels of operating expenditures, ranged from approximately 4 percent to almost 40 percent of their present budgets, apart from any deficit they may already be incurring. This provides a clear indication that aggregate figures derived from deficits or income gaps of arts organizations-the present practice nationwide-seriously understate the true financial needs and result in the public's being deprived of essential services from arts organizations in this country.' Reassessment of Arts Support Policies Needed The evidence, including the Committee's study, corresponds with what the members of the Committee know from their personal experience with arts organizations in all parts of the country. The evidence includes that provided in Museums USA, published by the National Endowment for the Arts. Two-thirds of the directors of museums (1,821 museums with total income of $513.3 million in 197172) report that their operating budgets do not permit full utilization of museum resources, and estimate that a median budget increase of 45 percent was needed in the next two to three years. We may add information on the performing arts provided in the Ford Foundation Report that deficits in 165 of the performing arts companies it studied could reach $180 million by 1980-81. And finally, there is the growing number of studies of the arts by cities, states and research groups which corroborate these conclusions. Taken together, this evidence clearly calls for a reassessment of the support policies for the arts being followed in this country. IX. THE CASE FOR GOVERNMENT AID All that has gone before indicates that this report is written against a background of increasing state and Federal involvement in support of the arts. Since it recommends a further increase in governmental support, however, it is necessary to examine the public policy issues that are inherent in the concept of subsidy. Governmental support for the arts is, in fact, clearly established public policy today. Nowhere is this more explicit than in the Declaration of Purpose of the National Foundation on the Arts and the Humanities Act of 1965. 'The complete report details the procedures followed to formulate the "essential service budgets" to enable other arts organizations to analyze their own operations and to determine the financial level necessary for them to provide full service to the public. The complete "essential service budget" report will be published separately later this year by the National Committee for Cultural Resources. In that Act, "The Congress hereby finds and declares... that it is necessary and appropriate for the Federal Government to complement, assist, and add to programs for the advancement of the humanities and the arts by local, State, regional, and private agencies and their organizations [and that] it is necessary and appropriate for the Federal Government to help create and sustain... the material conditions facilitating the release of... creative talent." Now, ten years later, we may look back with much satisfaction on the rapid and responsible growth of the National Endowment for the Arts and its equal companion, the National Endowment for the Humanities. While local private support continues to provide the vast bulk of earned and contributed resources, the entrance of Federal and state subsidy into the already diversified support pattern of the arts organizations in this country has been a vital factor in the dramatic growth of audiences and of the accessibility of the arts to them in the last decade. Without public subsidy, few of the arts can be widely offered except at prices that would be prohibitive to large numbers of the public. The cost barrier is already high, particularly to the young, the elderly, and minority groups. At the same time, the demand for the arts, as the Committee's study clearly demonstrates, is now widespread among Americans at all economic levels. This fact strongly reinforces the argument that public policy should recognize the expectation that our cultural and artistic heritage be broadly available, and not restricted to the small proportion of the population that can afford admission prices high enough to meet costs. Although the arts are nationwide in scope, and although even small communities have their own arts organizations, there is a strong tendency toward centralization of the arts in the larger cities. This makes some of the arts inaccessible, both geographically and economically, to large numbers of people. Indeed, surveys show that economic inaccessibility is a principal barrier to the enjoyment of the arts. The Economic Logic of Public Subsidy Subsidy that would increase access to the arts, particularly through the public service activities of arts organizations, makes both economic and social sense. Public subsidy of arts organizations is the most certain way to insure cultural continuity and the people's access to the creative products of their own and earlier ages. The direct and indirect educational impact of the artistic experience provides as strong an argument for public support as did the arguments that led to the historic 26 development of universal public education in this country. The positive economic side-effects of the performing arts alone are estimated to equal one and one-half times the ticket costs. For example, the arts attract tourism. They cause people to move about in their own and other communities, and to spend-for transportation, hotels, restaurants, retail purchases and many other people-related services. Increasingly, cities advertise their arts activities and cultural resources as an inducement to attract new businesses and to hold the ones they have. Thus thriving arts activity adds to the economic health of a community and to its gross product. X. WHAT MUST BE DONE Clearly, increased support is necessary if arts organizations throughout the country are to continue their remarkable growth-a growth that is taking place in response to people's needs. A new policy should be sought for support of arts organizations. This policy should include additional support from all sectors. But most importantly, it should be built on a broad base of local support, in which all those interested in, involved in or committed to the arts pull together in the common interest of the arts. Local support should continue to grow, in such forms as new sources of earned income, increased giving by individuals, corporations and foundations, and more aid from city and county governments. Beyond local aid, however, more state support is needed and more Federal support should be forthcoming through a larger appropriation to the National Endowment for the Arts. The Basis-Local Support As the research study undertaken by the Committee has reaffirmed, the health and strength of arts organizations is largely based on local supportive activity-attendance; purchase of tickets and admissions to arts events; individual, corporate and foundation support, and city and county financial support. The study demonstrated, in fact, that over 80 percent of the funds for the support of arts organizations comes from these local sources. This local community interest and financial support is the very foundation of the arts organizations of this country. And it should remain so. If more than 80 percent of the funds for arts organizations is to continue to come from local sources, however, there must be a year-byyear increase in such funds to pay for the rising expectations for culture and the rising costs of our time. This can be accomplished only if there is a wider understanding of what arts organizations mean to a community, of what they do for its economy, and of the amount of financial support needed for such cultural services. Arts organizations should work together to gain public understanding of what they do for a community. This calls for clearer and standardized accounting, more gathering of economic facts, the use of the "essential service budget," and more effective communication with all segments of the community. Such cooperation in the community-everyone pulling together in the community cause of the arts-will help the separate and independent development of each of the community's arts activities. The strength of the case being made for the arts by the American people points the way for more individual, corporate and foundation support for arts organizations. City/County Aid Testimony to the social and economic importance of arts organizations to the community is shown in the resolution passed at the 1974 Annual Conference of Mayors. RESOLUTION Passed at the Forty-Second Annual Conference of Mayors, 1974 The Quality of Life in Our Cities WHEREAS, surveys, public demand and increasing private support and participation indicate that citizen involvement with the arts is strong and growing; and WHEREAS, continued growth of the arts in quantitative and qualitative ways can no longer be sustained by traditional support resources; and WHEREAS, the arts are an essential element in providing the opportunity for a quality urban environment, NOW, THEREFORE, BE IT RESOLVED that the United States Conference of Mayors adopts the following principles as guidelines for city action; 1. That city governments recognize the arts as an essential service, equal in importance to other essential services, and help to make the arts available to all their citizens. 2. That every city be encouraged to establish a public agency specifically concerned with the arts. 3. That the physical appearance of the city, its architectural heritage and its amenities, be acknowledged as a resource to be nurtured. 4. That cities should be encouraged to establish a percentage of the total cost of every municipal construction budget to be set aside for the purchase or commission of works of art. 5. That city governments working together with the public at large shall help to effect a new national goal; "That no American shall be deprived of the opportunity to experience (or to respond artistically to) the beauty in life by barrier of circumstance, income, background, remoteness or race."' 'A quote from Culture & Company by Alvin H. Reiss. |