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No Bailout for the Arts?

By Michael Kaiser
Monday, December 29, 2008

While government bailouts are being offered or considered for financial institutions, the auto industry, homeowners, and so many other needy and worthy sectors, one group is quickly and rather quietly falling apart: our nation's arts organizations. In the past few months, dozens of opera companies, theater companies, dance organizations, museums and symphonies have either closed or suffered major cash crises.

As someone who has made a career out of fixing troubled organizations, I know that the problems faced by arts groups are often related to poor management and governance. I also know that the difficulty in improving productivity in the arts is a central cause of our financial challenges: It takes as much time to play Beethoven's Fifth Symphony today as it did when the piece was composed, and the same number of actors are required for "Hamlet" as when Shakespeare wrote the play more than 400 years ago. Unlike other industries, the arts cannot cover the cost of inflation by improving worker productivity.

This is why subsidies -- in the form of government grants or private contributions -- have long been required to help arts organizations balance their budgets. Well-managed arts organizations have typically been able to find the money required to operate if they create interesting programs, market them aggressively and build strong donor bases.

But these times are different.

Many organizations that spent years building large endowments to provide more stable sources of support have seen them decimated. A number of our most loyal donors have watched their own investment portfolios be depleted and cannot provide their traditional funding. Our audience members cannot buy as many tickets as they have in the past. And our board members are less able to involve friends and associates in our fundraising galas and other activities.

This perfect storm has already weakened the fabric of our nation's arts ecology. Over the past several months, the Baltimore Opera Company, Santa Clarita Symphony, Opera Pacific, the Los Angeles Museum of Contemporary Art and others have closed or come close to closing. There probably will be a torrent of additional closures, cancellations and crises in the coming months.

We are losing the entertainment and inspiration we need more than ever during this terribly scary time. As we try to rebuild America's image abroad, we are losing our most potent goodwill ambassadors. As we reshape our economy, we are losing the organizations that teach our children to think creatively. And as we celebrate the diversity of our nation, we are losing the voices that have traditionally helped change society's thinking.

The arts have historically received short shrift from our political leaders, who all too often seem happy to offer bland endorsements of our work without backing those words with financial appropriations. But the arts in the United States provide 5.7 million jobs and account for $166 billion in economic activity annually. This sector is at serious risk. Because the arts are so fragmented, no single organization's demise threatens the greater economy and claims headlines. But thousands of organizations, and the state of America's arts ecology, are in danger.

We need an emergency grant for arts organizations in America, and we need legislation that allows unusual access to endowments. Washington must encourage foundations to increase their spending rates during this crisis, and we need immediate tax breaks for corporate giving.

As John F. Kennedy said, "I am certain that after the dust of centuries has passed over our cities, we, too, will be remembered not for our victories or defeats in battle or in politics, but for our contribution to the human spirit." As we print billions of dollars in bailout money, isn't it time to ensure that we are saving our soul as well as our economy?

The writer is president of the John F. Kennedy Center for the Performing Arts. His book "The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations" was published in September.

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