Impacts of the financial crisis on the cultural sector: How can the cultural sector survive the financial crisis?

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How can the cultural sector survive the financial crisis?

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Impacts of the financial crisis on the cultural sector

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Timothée Guicherd Joined: 09 Jul 2008	Tuesday 20 January 2009 4:20:50 pm How can the cultural sector survive the financial crisis? Start by reading Helmut Anheier's article (see below) on the impacts of the financial crisis, and share your thoughts with the community. http://www.labforculture.org/en/content/view/full/39830
Lidia Varbanova Joined: 15 Nov 2005	Saturday 24 January 2009 7:30:18 pm Thinking and acting strategically in a time of financial crisis Financial crisis affecting cultural organisations and projects is not something new in the world history. Cultural and artistic organisations in almost all countries have always been in a position of scarcity of funding, constant lobbying for a higher political attention, ongoing process of applying for institutional and individual funding from foundations, donors and sponsors; seeking alternative financing from banks and other financial institutions. The very essence of cultural and artistic processes and activities requires to constantly looking for outside support from governments, sponsors, foundations and individual donors. This is because of the basic economic nature of cultural activities containing unique elements (especially in the performing arts) where there is always an increasing gap between the self-generated incomes and the costs, and this gap increases in time. Cultural and creative industries function differently, relying mainly on incomes from their core, peripheral and additional activities. But nevertheless, a vast majority of these organisations receives outside support as well (mainly from sponsors), due to the creative nature of their products, unpredictability of the creative processes, and the unique and innovative characteristics of the products/services, which in some cases can’t rely on mass sales. As Helmut Anheier states in his article: “Non-profits can engage in strategic planning and visioning by asking tough questions about their very existence, functioning and impact.” Developing and implementing of strategic plans in the cultural field (for all types of organisations-nonprofits, but also-state organisation and businesses) becomes more important than ever. Strategic thinking helps to: - Define clearly an agreed organisation’s mission, vision and goals and communicate them to all involved. - See the “big picture” beyond the daily problems. - Prioritise and focus their programs and activities. - Choose the optimum way to balance the creative programming, management actions, marketing approach and fundraising methods within a specific cultural policy model. - Prepare to solve major long-term problems. - Predict (to a certain extend) unexpected circumstances and risk factors. - Increase the overall organisational efficiency and productivity Strategic planning in culture is a unique process, with its own characteristics. Some of them are: - The desired resources for the functioning of a cultural organisation in a long period might not be very clear. In a situation of a need to fundraise from variety of resources (nonprofits), the results from applying to foundations, sponsors, organising charity events and donors’ campaigns, can’t be fully predictable. - In case of business organisations in culture (private galleries, recording studios, private theatres), it is indeed difficult to predict clients’ interest and involvement, the level of desired spending, the success of the cultural products when placed on the market, especially in a long-term period, and especially in cases when it appears on the “primary markets” (unknown authors, emerging artists, etc.). - Cultural activities contain a huge degree of risk and uncertainty. Even the best analysis and prognosis can not entirely estimate the success of a theatre play, an exhibition, or a new music CD. - More and more cultural and artistic creation and engagement happens online, and many of the elements in the relations between the offers (online products) and the users are not researched, nor we have a clearer picture of ownership, implementation of the digital copyright laws, and the outcomes. - The final results of cultural and artistic activities (both on and offline) can’t be fully measurable, especially by using quantitative indicators. Quality indicators are also difficult in many cases, as what is a “quality art” and what is not, is difficult to evaluate precisely. For one and the same artistic product, there could be different opinions, given by journalists, curators, audiences, artists and funding institutions engaged in the process. - In some cases, obtaining and analysing information for a long term period, related to factors from the outside environment, is rather difficult, especially in countries in transition, countries with turbulent economic and political situation. Strategic planning and thinking always requires positioning of the organistaion within its environment in a long term. - The overall strategic planning process requires patience, time, resources, and efforts. Many cultural organisations are much preoccupied by daily matters, emerging issues, urgent decisions, that they might never find time to elaborate a long-term plan. In some cases cultural managers do not see the need for strategic planning in culture, arguing that the plan is just a paper, and creativity anyway can’t be planned. Such a psychological resistance could be a serious burden, increasing the inability of creative and managerial teams to think and act strategically. ---- Image credit (attachment): Oleg Dergachov: "The hungry art" derg_cartoon_69.jpg, 38.77 kB
Ana Zuvela Joined: 09 Oct 2006	Friday 30 January 2009 12:36:33 pm Re:How can the cultural sector survive the financial crisis? On the topic of cultural sector surviving the financial crisis, I could not agree more with Lidia - the crisis of funds in the cultural sector is not, by any means, a novelty. Well, maybe, the current situation is briging somewhat darker perspectives to cultural sectors in countires where the investment in culture was on higher leveles....seeming that those who have something to lose are threatened with the loss. On the other hand, those who have nothing to lose from the outset are less concerned with the concept of loss and financial crisis. It is a very simplistic approach to the topic, but as the situation unravels, it proves to be right.
Lidia Varbanova Joined: 15 Nov 2005	Tuesday 03 February 2009 4:31:23 pm Global philanthropy and fundraising in a recession time: few useful resources Fundraising Recession Watch is an online space for ideas, articles and research based on whether the recession is having an impact on fundraising in different countries. Everyone can participate and share: http://www.recessionwatch.blogspot.com/ It is sponsored by Pareto Fundraising (http://www.paretofundraising.com/), which mission is “to make the world a better place, by expanding the not-for-profit sector's capacity worldwide to ensure as many beneficiaries are helped as possible.“ An interesting recent viewpoint, written by Sean Triner can be downloaded from the website: 'Ten Steps to managing fundraising in a recession': http://www.paretofundraising.com Here are few useful online newsletters on fundraising who feature the global philanthropy methods, tools and trends in the situation of a global financial crisis: • Resource Alliance produce a bi-monthly e-mail newsletter “Global Connections”, providing case studies, information and sector news on cross-regional local resource mobilisation: http://www.resource-alliance.org/resources/enewsletter/266.asp • 'Successful Fundraising Online' is a free monthly e-mail newsletter on direct mail, telephone, and online fundraising, issued by , by Mal Warwick: http://ga1.org/malwarwick/join.tcl • European Fundraising Association distributes a monthly newsletter“Fundraising Europe”: http://www.efa-net.eu/english/dropdown_menue/fundeurope.htm. • Free online Fundraising Guide: http://www.fundraising123.org/ • 'Non-Profit Times' Resource Shelf a free weekly e-mail newsletter: http://www.resourceshelf.com/newsletter/subscribe/ • 'Professional Fundraising' PF Online e-newsletter featuring the latest fundraising updates and voluntary sector news: http://www.professionalfundraising.co.uk/home/info.php?id=37
Albertine Lefebvre Joined: 08 Jan 2009	Thursday 19 March 2009 12:55:15 pm Re:How can the cultural sector survive the financial crisis? Yesterday I visited the TEFAF in Maastricht. And my impression is that true quality is still rewarded. It can be argued that the art market is a world which is different from 'the cultural sector', but my opinion is that the economic trends in commercial and public art and cultura scnes run parallel. So on trhe one hand the large auction houses Christie's and Sotheby's report sales in Modern and Contemporary art to be drastically down, and Damine Hirst had to let 25% of his work force go. At the same time the Yves Saint Laurent sale in Paris did fabulously and all dealers (both old master paintings and contemporary arts) were pleased by better than expected sales results so far. Perhaps the cultural sector is an economic sector like any other where hard times just press the hot air out of 'the market', letting Darwin's laws do their work. As such I am carefully optimistic that the current crisis will force us to be more creative and focussed.
Gottfried Wagner Joined: 14 May 2007	Thursday 19 March 2009 5:09:34 pm The TEFAF comment - Darwin in the arts market? You may also say that the highest end market in real estate is doing well, while others lose their homes because of the financial crisis. Darwin?

Author

Message

Timothée Guicherd

Joined:
09 Jul 2008

Tuesday 20 January 2009 4:20:50 pm

How can the cultural sector survive the financial crisis?

Start by reading Helmut Anheier's article (see below) on the impacts of the financial crisis, and share your thoughts with the community.

http://www.labforculture.org/en/content/view/full/39830

Lidia Varbanova

Joined:
15 Nov 2005

Saturday 24 January 2009 7:30:18 pm

Thinking and acting strategically in a time of financial crisis

Financial crisis affecting cultural organisations and projects is not something new in the world history. Cultural and artistic organisations in almost all countries have always been in a position of scarcity of funding, constant lobbying for a higher political attention, ongoing process of applying for institutional and individual funding from foundations, donors and sponsors; seeking alternative financing from banks and other financial institutions.

The very essence of cultural and artistic processes and activities requires to constantly looking for outside support from governments, sponsors, foundations and individual donors. This is because of the basic economic nature of cultural activities containing unique elements (especially in the performing arts) where there is always an increasing gap between the self-generated incomes and the costs, and this gap increases in time. Cultural and creative industries function differently, relying mainly on incomes from their core, peripheral and additional activities. But nevertheless, a vast majority of these organisations receives outside support as well (mainly from sponsors), due to the creative nature of their products, unpredictability of the creative processes, and the unique and innovative characteristics of the products/services, which in some cases can’t rely on mass sales.

As Helmut Anheier states in his article: “Non-profits can engage in strategic planning and visioning by asking tough questions about their very existence, functioning and impact.” Developing and implementing of strategic plans in the cultural field (for all types of organisations-nonprofits, but also-state organisation and businesses) becomes more important than ever. Strategic thinking helps to:
- Define clearly an agreed organisation’s mission, vision and goals and communicate them to all involved.
- See the “big picture” beyond the daily problems.
- Prioritise and focus their programs and activities.
- Choose the optimum way to balance the creative programming, management actions, marketing approach and fundraising methods within a specific cultural policy model.
- Prepare to solve major long-term problems.
- Predict (to a certain extend) unexpected circumstances and risk factors.
- Increase the overall organisational efficiency and productivity

Strategic planning in culture is a unique process, with its own characteristics. Some of them are:

- The desired resources for the functioning of a cultural organisation in a long period might not be very clear. In a situation of a need to fundraise from variety of resources (nonprofits), the results from applying to foundations, sponsors, organising charity events and donors’ campaigns, can’t be fully predictable.
- In case of business organisations in culture (private galleries, recording studios, private theatres), it is indeed difficult to predict clients’ interest and involvement, the level of desired spending, the success of the cultural products when placed on the market, especially in a long-term period, and especially in cases when it appears on the “primary markets” (unknown authors, emerging artists, etc.).

- Cultural activities contain a huge degree of risk and uncertainty. Even the best analysis and prognosis can not entirely estimate the success of a theatre play, an exhibition, or a new music CD.

- More and more cultural and artistic creation and engagement happens online, and many of the elements in the relations between the offers (online products) and the users are not researched, nor we have a clearer picture of ownership, implementation of the digital copyright laws, and the outcomes.

- The final results of cultural and artistic activities (both on and offline) can’t be fully measurable, especially by using quantitative indicators. Quality indicators are also difficult in many cases, as what is a “quality art” and what is not, is difficult to evaluate precisely. For one and the same artistic product, there could be different opinions, given by journalists, curators, audiences, artists and funding institutions engaged in the process.

- In some cases, obtaining and analysing information for a long term period, related to factors from the outside environment, is rather difficult, especially in countries in transition, countries with turbulent economic and political situation. Strategic planning and thinking always requires positioning of the organistaion within its environment in a long term.

- The overall strategic planning process requires patience, time, resources, and efforts. Many cultural organisations are much preoccupied by daily matters, emerging issues, urgent decisions, that they might never find time to elaborate a long-term plan. In some cases cultural managers do not see the need for strategic planning in culture, arguing that the plan is just a paper, and creativity anyway can’t be planned. Such a psychological resistance could be a serious burden, increasing the inability of creative and managerial teams to think and act strategically.

----
Image credit (attachment): Oleg Dergachov: "The hungry art"

derg_cartoon_69.jpg, 38.77 kB

Ana Zuvela

Joined:
09 Oct 2006

Friday 30 January 2009 12:36:33 pm

Re:How can the cultural sector survive the financial crisis?

On the topic of cultural sector surviving the financial crisis, I could not agree more with Lidia - the crisis of funds in the cultural sector is not, by any means, a novelty. Well, maybe, the current situation is briging somewhat darker perspectives to cultural sectors in countires where the investment in culture was on higher leveles....seeming that those who have something to lose are threatened with the loss. On the other hand, those who have nothing to lose from the outset are less concerned with the concept of loss and financial crisis. It is a very simplistic approach to the topic, but as the situation unravels, it proves to be right.

Lidia Varbanova

Joined:
15 Nov 2005

Tuesday 03 February 2009 4:31:23 pm

Global philanthropy and fundraising in a recession time: few useful resources

Fundraising Recession Watch is an online space for ideas, articles and research based on whether the recession is having an impact on fundraising in different countries. Everyone can participate and share:
http://www.recessionwatch.blogspot.com/
It is sponsored by Pareto Fundraising (http://www.paretofundraising.com/), which mission is “to make the world a better place, by expanding the not-for-profit sector's capacity worldwide to ensure as many beneficiaries are helped as possible.“ An interesting recent viewpoint, written by Sean Triner can be downloaded from the website: 'Ten Steps to managing fundraising in a recession':
http://www.paretofundraising.com

Here are few useful online newsletters on fundraising who feature the global philanthropy methods, tools and trends in the situation of a global financial crisis:

• Resource Alliance produce a bi-monthly e-mail newsletter “Global Connections”, providing case studies, information and sector news on cross-regional local resource mobilisation: http://www.resource-alliance.org/resources/enewsletter/266.asp

• 'Successful Fundraising Online' is a free monthly e-mail newsletter on direct mail, telephone, and online fundraising, issued by , by Mal Warwick: http://ga1.org/malwarwick/join.tcl

• European Fundraising Association distributes a monthly newsletter“Fundraising Europe”: http://www.efa-net.eu/english/dropdown_menue/fundeurope.htm.

• Free online Fundraising Guide: http://www.fundraising123.org/

• 'Non-Profit Times' Resource Shelf a free weekly e-mail newsletter: http://www.resourceshelf.com/newsletter/subscribe/

• 'Professional Fundraising' PF Online e-newsletter featuring the latest fundraising updates and voluntary sector news: http://www.professionalfundraising.co.uk/home/info.php?id=37

Albertine Lefebvre

Joined:
08 Jan 2009

Thursday 19 March 2009 12:55:15 pm

Re:How can the cultural sector survive the financial crisis?

Yesterday I visited the TEFAF in Maastricht. And my impression is that true quality is still rewarded. It can be argued that the art market is a world which is different from 'the cultural sector', but my opinion is that the economic trends in commercial and public art and cultura scnes run parallel. So on trhe one hand the large auction houses Christie's and Sotheby's report sales in Modern and Contemporary art to be drastically down, and Damine Hirst had to let 25% of his work force go. At the same time the Yves Saint Laurent sale in Paris did fabulously and all dealers (both old master paintings and contemporary arts) were pleased by better than expected sales results so far.
Perhaps the cultural sector is an economic sector like any other where hard times just press the hot air out of 'the market', letting Darwin's laws do their work. As such I am carefully optimistic that the current crisis will force us to be more creative and focussed.

Gottfried Wagner