Winter is Coming: What the Culture Sector Needs to Worry About Now

By     Dec 13, 2016

I. Predicting the Unpredictable

The former NEA Chair Rocco Landesman says he doesn’t see anything “apocalyptic” for the arts in a Trump presidency. Robert Lynch, the President of Americans for the Arts and a top advocate for the nonprofit arts sector, is more cautious and says Trump’s election “brings some uncertainty in terms of federal support for the arts.” Van Jones, the CNN pundit is blunt: Trump, he says, “is going to start a war.”

If nothing else the recent election cycle has taught us to be very skeptical of those who say they can predict the future. But I have worked to build and strengthen cultural organizations and support artists in America for nearly 20 years and I’ve studied and been engaged in politics too. So while we could wait to see what Trump and an emboldened Republican Congress does before considering our response I agree with Van Jones that now is the time to “hope for the best and plan for the worst.” So, with regard to Trump and the damage his administration and a Republican Congress could do to the arts in America, let’s understand what the “worst’ could plausibly look like.

II. Direct Hits

In 1965 Lyndon Johnson signed federal legislation creating the National Endowment for the Arts (NEA) and the National Endowment for the Humanities (NEH). In the 1990s Republicans in Congress, upset about NEA funding for art they considered obscene, whacked nearly 50% off the Endowment’s annual appropriation. Over the past 20 years the NEA has gradually come back to life with a $146 million annual budget to support arts organizations, arts education programs and arts-related community building work in all 50 states. Now it is very likely Republicans in Congress will finish the job their predecessors began in the 1990s and eliminate the NEA and the NEH completely.
This is not a certainty, but the agenda of fiscal conservatives in Congress is no secret. Paul Ryan, as Chair of the Budget Committee in 2014 called for abolishing these two pillars of arts funding because:

The activities and content funded by these agencies go beyond the core mission of the federal government.

And candidates who campaign on promises of shrinking government and abolishing entire federal departments (like the Department of Education and EPA to name two that were targeted by Trump in 2016 Republican primary debates) in the name of trimming the federal budget can be reasonably expected to zero out tiny agencies without major lobbying muscle to protect them.
Most federal support for the arts and culture is not actually provided by the NEA or the NEH, but instead is nestled in State Department budgets for cultural exchange programs, in support for the Smithsonian museums on the Mall in Washington, the Corporation for Public Broadcasting, the Institute of Museum and Library Services and in allocations for arts elements of programs embedded in the Departments of Education, Housing and Urban Development, Transportation and even Agriculture. All told the total expenditures amount to less than $2 billion (a trivial amount for those really concerned with taming a $4 trillion dollar federal budget) and we can’t be shocked if these support systems are gone by this time next year. Unlike previous defunding efforts in the 1980s there is no Democratic majority in the House to protect the arts and unlike the 1990s there is no Democrat in the White House to prevent this fatal action.

Of course there are lots of government programs beyond the arts that will be cut and the effects will be devastating to many direct and indirect beneficiaries of them. For the cultural sector, however, the real value of recent federal support has never been the money itself (with average NEA grants of $10,000 it just hasn’t been that much). Instead it’s been about the symbolic value of what an NEA grant signifies to donors, funders, patrons and supporters and to artists themselves. With NEA support state arts agencies and local arts councils have secured matching funding from state and local government. With the imprimatur of an NEA award arts organizations have won support from private foundations. The staff at the NEA has long acknowledged that in a $30 billion sector their clout is a function of their convening power, the research they provide to the field, and the unique ability to endorse art with the seal of the United States Government. Cut off the river at the source and the downstream costs to the cultural sector of eliminating the NEA are multiples of the actual grant monies they give out.

But that’s not the worst of it for a non-profit cultural sector that has assumed that federal government support was always going to be in the mix.

III. Collateral Damage

The ripple effects of the Republicans dismantling, or even threatening federal funding for education, the environment, health insurance, reproductive services, foreign aid and scientific research will put tremendous pressure on the philanthropic sector to staunch the bleeding where it can. Legal protections will need to be enforced in court and public support will need to be mobilized and this requires philanthropic attention and financial support. And the need to fund these defensive strategies will be on top of an acute need for philanthropy to shore up protections to civil liberties and human rights as a Trump administration implements promised policies to deport millions and increase surveillance, harassment, prosecution and incarceration of millions in the name of law and order. This will put tremendous pressure on arts, culture and humanities to remain on the funding priority list of many grantmakers large and small.

While we may think of arts organizations as large and well-resourced institutions like major museums, symphony orchestras and performing art centers in reality seventy-five percent of all cultural non-profits have budgets under $250,000. The smaller budget organizations are also, typically, the ones without income-generating endowments or deep benches of major individual gift-givers.

Taken together, these facts and the very real prospect of a reduction in public funding and shifting priorities for private funders bode very ominously for many, if not most, arts non-profits – especially for artists and arts sector leaders who are not able to convincingly link their work to the evolving agendas of their key stakeholders.

But wait, it could get worse.

I very much hope that my nightmare scenario for the crippling of the cultural sector is just that, a dark spell from which we’ll wake up to find it’s not really as bad as all that.

IV. Tax Policy is Arts Policy

Non-commercial cultural production in the United States is primarily funded by individuals. Contributions to 501c3 non-profit arts organizations (of which there are nearly 50,000 in America with budgets over $25,000) can be claimed as tax deductions. Typically the larger the budget of an arts organization the larger the proportion of its revenue comes from individuals. The SFMOMA for example, recently raised $600 million to expand its facility and triple its endowment – almost of all that money came directly from individuals, their donor advised funds or personal foundations (like the one Donald Trump has).

Trump and Republican leaders have promised to cut the tax rate for high-income earners and, if you believe in trickle-down economics, that could lead wealthier individuals to give away more of the money they’re no longer paying in taxes. However, if you don’t believe in trickle-down, then the more likely scenario is that donors will give less as their tax burdens fall because the motivation to claim deductions will fall too.

And the apocalyptic scenario for nonprofit cultural institutions is that Republicans in Congress target them in a revision of the tax code that removes or drastically constrains the tax deductibility of giving to nonprofits altogether – an idea championed by former Ways and Means Committee Chair Dave Camp (R-MI) as recently as 2014.

And why would they do this now?

Partially because they can.

But mostly because they know it won’t really cost them politically.

The sober fact is that the map depicting the location and service-area of the vast majority of cultural organizations looks a lot like the map of Clinton supporters. Museums, theaters, orchestras, dance companies, performing arts centers and music schools are concentrated in urban areas and the densest concentrations are in the most liberal cities: New York, Los Angeles, San Francisco, Washington, D.C., Chicago, Minneapolis, Boston, Seattle.

But leaders, fundraisers and allies of non-profit arts organizations must steel themselves for radical change in the way their work is supported.

There are remarkable exceptions of major institutions in Red states and there are hundreds of small-budget and community-based arts non-profits working in rural and ex-urban America. But in a moment of national rage, when the enemy for change-hungry Trump supporters is elite, establishment leaders and institutions, the cultural sector is extremely vulnerable.

I very much hope that my nightmare scenario for the crippling of the cultural sector is just that, a dark spell from which we’ll wake up to find it’s not really as bad as all that. It could be that Congressional Republicans have bigger fish to fry than the NEA when they cook up their first budget for Trump to sign. It could be that funders recognize the indispensable role the arts have to play in advancing their educational, community-development, and democracy-protecting agendas and include them in their new strategic plans. It could be that the very wealthy board members of major cultural institutions (like David Koch who wrote a $100m check to underwrite the American Ballet Theatre at Lincoln Center) exert their influence as political donors to preserve the tax deduction for themselves and everyone else. In the most hopeful scenario arts advocacy groups, artists and the millions of people who visit museums, attend performances and whose children participate in arts activities mobilize and make their case effectively to legislators and funders whose minds may not yet be totally made up.

But leaders, fundraisers and allies of non-profit arts organizations must steel themselves for radical change in the way their work is supported. Ultimately, the consequences of the election may be viewed as accelerating a shift favoring more entrepreneurial and less infrastructure-heavy cultural organizations that has already been creeping along. A recent report from the NEA itself makes clear that artists are already harnessing new technologies to work very differently than they did even 10 years ago and in greater collaboration with partners far beyond the traditional arts sector. But in the short term it is hard to imagine that this is going to be anything but a very rough ride.