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Leverage Lost

The Nonprofit Arts in the Post-Ford Era

"Awake, arise, or be forever fallen!"
-- John Milton, Paradise Lost

by John Kreidler
San Francisco, California
John Kreidler is Senior Program Executive at the San Francisco Foundation and oversees distribution of 100 grants a year valued at $2 million in a five county area around San Francisco.

As the Twentieth Century approaches a finale, the arts in America exist in a vast array of styles, disciplines and organizational structures. The purpose here is to examine one major organizational component of the American arts scene, the nonprofit sector, as an organic system that has progressed through three distinct stages over the past century. Although the nonprofit arts world contains thousands of organizations populated by tens of thousands of artists, administrators, technicians, trustees and donors, few are aware of its systemic features, nor are there many knowledgeable about its origins and the influences that have shaped its evolution.

As with participants in most large organizational systems, the citizens of the nonprofit arts world find it difficult to perceive changes, even massive developments, that occur gradually. The natural tendency is to assume that the arts firmament is a fixed tableau, marked by an occasional meteor that leaves a momentary trace. It is widely believed within the arts community that nonprofit organizations are experiencing extreme financial pressure due to governmental funding reductions and a downturn in the American economy. These pressures are often described as temporary hardships that will soon fade, thereby enabling arts organizations to return to more normal conditions. Current government funding patterns and economic trends are certainly of consequence to nonprofit arts organizations, but by themselves these pressures do not fully account for the deep changes that are now becoming discernible in the nonprofit arts ecosystem.

Early in the twentieth century, astrophysicists learned that the universe is not static, but rather is expanding in every direction and subject to the interplay of immense forces. The nonprofit arts are also a complex and changing system, and as this system has gradually evolved, the defining trends and influences, like planets in a solar system, have occasionally aligned in ways that have produced striking new directions. The onset of the industrial revolution in the nineteenth century, and the Ford Foundation's major arts initiatives, beginning in the late 1950s, will be cited in this essay as decisive moments in the subsequent progression of the arts.

In any complex system, many plausible interpretations are possible of the most potent influences and the precise moments when major new directions have emerged. In the analysis that follows, just one interpretation, the author's, is offered of the evolution of the arts ecosystem over the past century. While this interpretation is sometimes supported by factual and anecdotal evidence, no effort is made to back every assertion with data. The point is to demonstrate that the unique history of American nonprofit arts organizations is due to the distinct American social, political and economic system, and that an appreciation of this broader system will be useful in any discourse on future evolution.

Part 1 -- The Pre-Ford Era: Industrial Revolution to 1957

Classic economic theory predicts that, at a given price, consumers will demand a set amount of a good or service, which will be supplied by producers. The marketplace, then, is an ecosystem constantly seeking an equilibrium that embraces prices, supply, demand, and a host of other influences. Throughout the past century, the dynamics of the marketplace have had a fundamental influence on the development of commercial and nonprofit organizations that produce art in the United States.

Today, in part due to a movement that was set in motion by the Ford Foundation, the great majority of arts organizations operate as nonprofit corporations. As a result, it is easy to forget that the earlier prevalent model for arts organizations in the U.S. was that of the individual proprietorship. In the nineteenth century, many theaters, orchestras, opera companies, performing arts impresarios, and even some museums, operated as for-profit enterprises managed by individual owners. As with other commercial ventures, these proprietorships had to meet the test of the marketplace: to provide services responsive to market demand at a competitive price, or cease to exist. This seemingly straightforward and endlessly studied relationship of marketplace influences has always been complicated in the arts, however, by the willingness of American artists and other arts workers to accept deeply discounted compensation for their labor.

An illustration of this point is provided by Horace Lewis, a journeyman actor of the late nineteenth century. Horace's father, the assistant tax assessor for the City of Boston, did his best to dissuade his son from a career in theater, and even sent him to Europe for a year to find a higher calling. Upon his return, however, Horace took to acting as a full time profession. At this juncture, the elder Lewis legally disinherited his son, but Horace nevertheless remained an actor for the rest of his life.

Lewis' specialty was pantomime and character roles. In the early years of his career, he often appeared in touring productions with Edwin Booth, one of the leading actors of that time, though Booth's popular appeal had been tarnished by his brother's assassination of President Lincoln. In 1878, Lewis played Rosencrantz to Booth's Hamlet, and the Drunken Porter to Booth's MacBeth at the Pittsburgh Opera House.

Lewis married the actress Portia Albee in 1880, and thereafter formed a proprietary theater company, The Lewis Dramatic Party of Professional Artists, which toured New England, the upper Midwest, and the maritime provinces of Canada. Their three children, Walter, Harriet and Elise, grew up on stage. Life for the Lewis family was arduous. Theater touring entailed true hardships, and the pay and occupational status were low. Whereas an actor of Booth's renown made a comfortable living, the Lewis family had to be exceptionally resourceful to get by. On their small town touring circuit, urbane intellectual plays did not sell tickets, so many of their productions were melodramas and morality plays performed in churches, union halls, and other makeshift venues. Besides acting, they had to conduct much of their own publicity, backstage technical work and financial management. Ultimately, if audiences failed to materialize, there was no income.

In 1889, Lewis' son Walter, then a five year old child actor, fell into a canal in Redmond, Michigan and was rescued by a local bypasser, Mr. Carey. The next day, the Lewis company's production of The Count of Monte Cristo was dedicated to Mr. Carey, and much of the town attended the performance to pay homage to their home town hero. Little Walter Lewis began the evening by reciting the "Fouyar" scene from this play, which he had never before performed in public, in gratitude for his deliverance from certain death. Although there is no definitive evidence, subsequent legend has it that Horace Lewis staged his son's mishap as a publicity stunt to assure a full house.

At the core of Horace Lewis' life as an actor is a characteristic persistence, often bordering on compulsion, shared by many American artists and other arts workers, up to current times. Few artists, working in either the commercial or nonprofit arts sectors, achieve compensation or social status commensurate with their skills and levels of educational attainment. In many respects, the training and practice required of a professional musician, painter or actor are comparable to those of a physician, engineer or banker, and yet the disparity in income and status is enormous. Granted, some artists do attain high levels of income and prestige, but these are a very small fraction of the total profession. Throughout American history, most artistic occupations have been viewed with suspicion, and even in current times, art is often regarded as a form of self-indulgent recreation rather than real work.

In their pioneering 1966 book, The Performing Arts: The Economic Dilemma, economists William Baumol and William Bowen noted, "At the first recorded theatrical performance in the American colonies, the performers were arrested." With regard to the position of the American performing artist in the mid-1960s, they went on to say,

In many ways...the working conditions of the performer fall below what might be considered reasonable standards. His exhausting tours, high professional expenses, frequent unemployment with its accompanying uncertainty, the rarity of paid vacations and the frequent lack of provision for retirement all add up to what most of us would consider a nightmare world were we suddenly plunged into it. This applies with special force to those associated with the dance, where earnings are lower and economic insecurity far greater than in the other performing arts.

Most performing artists are unlikely to starve, but society has not been overly generous in the compensation it has provided the artist in exchange for his contribution to the living arts. We have relied heavily on the willingness of the performer to perform, no matter what it costs him.

During his time, Horace Lewis, a religiously sincere man, understood his second class status. In 1879, he founded the "Church and Stage" movement, which sought to demonstrate that religion and drama were "...not antagonistic to each other, but working harmoniously together for the public welfare and moral improvement." The Lewis company mounted a touring production of The Village Blacksmith by W.S. Gilbert, which was designed to illustrate this new harmony. The production was widely endorsed by Boston's leading clerics and opened at the Union Hall on Boylston Street, following an address by a minister. A review of this play noted, "The pecuniary results were not encouraging, but if Mr. Lewis takes this company on the road, the public will be sure of a good performance, well mounted, of a play both pure and lively."

Given Horace Lewis' good fortune to have been born into a fairly prominent Boston family, he could have easily chosen a profession that would have maintained his social and economic standing. Lewis, along with many thousands of artists throughout U.S. history, elected to become an actor in full knowledge of the likely sacrifices, but his choice was not illogical. Surely he sensed that the combined monetary and intangible rewards of acting were, from his perspective, adequate compensation. He must have believed that acting yielded greater financial and personal rewards than a career in tax assessing, or whatever line of work his father might have preferred.

In comparison to most occupations, artists and other arts workers (technical and management personnel) tend to accept a high measure of non-monetary rewards, that is, the gratification of producing art, as compensation for their work. By accepting these non-monetary rewards, artistic workers, in effect, discount the cash price of their labor. One way to conceive of the value of this discount is to estimate it as the difference between the wages that artists typically earn and the wages earned by workers with comparable skill levels.

In any attempt to understand the artistic ecosystem of the United States, it is of paramount importance to grasp the significance of discounted labor. Market prices and consumer demand have never fully accounted for the output of artistic goods and services produced by American artists and arts organizations. Indeed, artists and arts organizations often give little consideration to market demand and prices in their determinations of how much and what kinds of art they produce. Even chronic indifference of the market may not induce an artist to change the amount or character of the produced art. This behavior usually would be catastrophic for a farmer or manufacturer, but it is commonplace among artists and arts organizations.

In addition to discounted labor, several other factors were significant in the evolution of the arts in the pre-Ford era:

Education: Many recent studies of arts attendance at performances and exhibitions have found a high correlation between individual educational attainment and engagement in the arts. Indeed, educational attainment may be the strongest predictor of an individual's likelihood of becoming an arts consumer or an artist, and this correlation was probably as forceful in the pre-Ford era as it is today. The rise of public education during the industrial revolution surely contributed much to the development of both artistic labor and arts consumerism during that time.

The studies that link education to arts participation usually use grade levels as the measure of educational attainment. Thus, college graduates are far more likely to attend museums or become poets than high school dropouts. It is quite likely, however, that nonformal educational attainment also correlates closely with arts participation. For example, children who are encouraged to sing in the home are probably more inclined to sing or attend choral concerts as adults . In the 19th century, amateur and church-based choral ensembles flourished, and it is likely that this movement helped to stimulate public demand for the services of professional orchestras that were beginning to form in the latter decades of the nineteenth century.

Prosperity: Next to educational attainment, personal income may be the most potent predictor of arts participation. The transition of the United States from an agrarian to an industrial economy greatly increased the number of wealthy and middle class people. A larger proportion of the population became arts consumers, and some of the new wealth was used to amass unprecedented collections of art, which later became the basis for many American museums.

Societal Values: The values embedded in any society have much to do with the nature of artistic expression and the manner in which art is presented in public settings. The transition from an agrarian to an industrial society, coupled with new waves of immigration, opened the United States to broader world influences that moderated the tight strictures against public expressiveness characteristic of 17-18th century American society. Although at least some artistic professions remained on the edge of social respectability (dancing and acting remained notorious into the 20th century), artists gradually improved their standing over the course of the pre-Ford epoch. By the end of the 19th century, for example, Horace Lewis' theater company was performing plays in Protestant churches in New England, a venue that would have been off-limits in the early 1800's.

Demographic Change: As the U.S. population increased as a result of fertility and immigration during the industrial revolution, it was predictable that the number of artists and arts consumers would also increase; but demographic changes had other consequences as well. The massing of populations of artists and arts consumers in emerging metropolitan areas supported an intensity and quality of creative expression that could not have been sustained in the nation's more agrarian past. By the end of the 19th century, Philadelphia, for example, had well-established fine arts academies, music conservatories, a lively theater district and a prominent community of writers, whereas at the beginning of the century, the spectrum of artistic production had been narrower. A gradual concentration of artistic resources in metropolitan areas occurred throughout the pre-Ford era, and many would argue that the most populous city, New York, attained a critical mass of an altogether higher order. Throughout history, the emergence of urban areas has always been associated with significant qualitative developments in literature, architecture, visual arts and performing arts. Periclean Athens, Mayan Mexico, Elizabethan London, and Ming Dynasty China are examples of this phenomenon.

Leisure Time: Participation in the arts tends to vary, in some measure, according to the availability of leisure time. Progressively shorter work weeks were a pattern throughout the pre-Ford era and contributed to the founding of libraries, parks, museums, music halls, professional athletic leagues and a host of similar leisure time resources. According to economist Juliet Schor, shorter work weeks became almost as important as higher wages during the heyday of the American labor movement.

Implications of the Pre-Ford Era:

The cumulative result of the changes in education, prosperity, demographics, societal values and leisure time that occurred in the latter half of the 19th century was an overall increase in the output, variety and quality of artistic goods and services. America began to produce more of its own art, and proportionally imported less. The economic model for producing this art, however, was quite distinct from the pattern that was prevalent in Europe during this period. Unlike Europe, there was very little governmental support of the arts, and little tradition of upper-class patronage. So for professional artists, there was usually no choice but to work for a profit and to accept deeply discounted wages.

The experience of American symphony orchestras provides one illustration of the evolution of arts organizations during the pre-Ford era. By the mid 19th century, musical literacy was relatively high among Americans. Children learned to sing and play instruments at an early age, and performance within families was a popular form of entertainment. Amateur choruses began to form, and some of these hired musicians for accompaniment. The musicians, in turn, formed themselves into orchestras, hired conductors and began to produce public concerts as proprietary organizations independent of the choral societies. Many orchestras continued to operate in this manner until the end of the 19th and early 20th century when a transition gradually was made to nonprofit organizations as the primary organizational model. In the nonprofit model, the orchestra came under the control of a lay board of directors, usually prominent citizens, which employed a professional conductor and manager. The conductors were given responsibility for hiring the musicians in the nonprofit orchestras, whereas the musicians had often controlled the proprietary orchestras in the early pre-Ford era. Whether operating as proprietary or nonprofit organizations, however, all orchestras remained heavily dependent on ticket sales in the marketplace for much of their income.

With the arrival of the twentieth century, proprietary arts organizations began to wane. According to Baumol and Bowen, the number of touring theater companies stood at 327 at the turn of the century, but declined to less than 100 by 1915. After 1932, the number never rose above 25. The traditional commercial forms of theater, vaudeville and circus declined or vanished in the face of the new medium of movies. Other performing arts forms were also affected by the new technologies of recorded music and radio, and ultimately by television. Some observers viewed these developments as the death of the live performing arts, and while it is evident that many proprietary performing arts organizations dissolved, it is not so clear that the overall output of arts goods and services was declining at all.

The fertile trends in education, prosperity, leisure, societal acceptance and demographics continued in the early 20th century, all of which favored strong demand for artistic goods and services, and growth in the number of artists. The new technologies of film, audio recording, radio and television, however, began to strip away from the old proprietary arts world the most popular and lucrative forms of production. Vaudeville became The Ed Sullivan Show and the custom easel painting became the mass produced offset print. Whereas broad-based audiences, comprised of both commoners and educated, well-to-do elites had once attended proprietary productions of Shakespeare, even in small towns and mining camps across the nation, in the twentieth century the commoners began to gravitate toward the movie houses and other new technologies, leaving only the elite to patronize an assortment of proprietary high art.

Given this substantially smaller base of customers, the laws of supply and demand would allow only one outcome: the high art sector had to diminish substantially in rough proportion to the diversion of demand toward the popularized new forms of art and entertainment, and the remaining high art consumers had to accept increased prices to maintain their favored art forms. In large measure, these increased prices took the form of organizational subsidies (donations), rather than user fees. Prior to the arrival of the new technologies, the basic model of the proprietary arts organization had served reasonably well. At this juncture in history, however, popular art continued to follow the proprietary pattern, while high art, cut off from much of its consumer base, started to adopt a new model: the subsidized nonprofit organization.

The nonprofit model remained at its core, however, a money-making enterprise. To this day, American nonprofit arts organizations derive, on average, about half of their income from sales revenues. The remainder of the necessary income, however, began to come from individual contributors, the majority of whom were well-educated, upper income connoisseurs who had an artistic, familial or social stake in the continuation of particular arts organizations. Also during the early 20th century, a few foundations, starting with the Carnegie Foundation, began to award a scattering of grants to nonprofit arts organizations, and local governments directed increasing support to publicly operated museums and performing arts halls.

By the end of the pre-Ford epoch (the late 1950s), the American arts ecosystem was characterized by a significantly reduced and still declining cadre of high art proprietorships, a small but steadily growing group of nonprofit and civic arts organizations, and a booming popular arts and entertainment sector operating commercially and reaping the advantages of a variety of technologies. More consumers were being served by these commercial and nonprofit systems of arts delivery than at any previous time in American history. In some artistic disciplines, notably the abstract expressionist painting movement that began in the late 1940s , the United States was at the forefront of international high art.

Published in In Motion Magazine February 16, 1996.

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