Reserve judgements

By Jon

On her Turning Point blog, Susan Royce has posted a short interview she recorded with me a few months ago about reserves and Visual Arts organisations.

I’ts part of her series of posts on financial strategy. I’m never quite as lucid as I’d like to be, but we cover most of the salient points.

Size Matters – Matters of Value

By Dawn

Apples & Pears?

Is it possible that in the current economic environment smaller cultural institutions face the most uncertain futures?

There certainly seem to be a number of smaller arts organisations (turnover under £1m) that will have their public funding significantly or completely cut next financial year.

These tend to be organisations that have limited capacity to generate alternative funding streams. They do not have the tangible assets of their larger counterparts and are often unacknowledged for the research and development role they play.

‘Size Matters,’ the recent report by Common Practice and Sarah Thelwall of MyCake fame, attempts to surface some of these issues. I found it a good read. It is a well-considered and thoughtful piece that genuinely surfaces the concerns I have heard many smaller scale organisations raise. Issues that it seems to me are generally ignored.

There is a lot packed into its 41 pages, probably too much to do it justice in a single blog. It touches on:

• The inability of many of the standard metrics around visitors, costs per head and earned income to capture the true value of these organisations
• The misleading mismatch these metrics create in comparing large with small organisations
• The lack of recognition of intangible assets
• The lack of scope for development and growth
• The poverty trap that many arts-workers in smaller organisations become caught in, and so on

Two things in particular caught my attention:

•  The need to build a more sophisticated understanding of the concept of value
• The notion of lifecycle assessment/investment

In developing a more nuanced understanding of value Size Matters suggests the need to consider: artistic; social; societal; and fiscal value. Opening up notions of value and measurement is something I very much support, as evidenced in my previous blog on Valuing Culture.

I do have a slight concern over the clarity of social as compared to societal value. I would offer sectoral rather than social, as it seems to refer to value created within the arts system itself. The report refers to this as an ecosystem but I find this metaphor can also be problematic, something for a later blog!

A number of examples are offered from Studio Voltaire, Chisenhale Gallery and Mute Publishing that illuminate the four interlinked values in practice.

“What we immediately see from these descriptions is that value accrues over the lifetime of an object or idea and that it does so in the four areas of artistic, social, societal and fiscal value in ways which are hard to separate out; indeed it is the fact that they are intertwined that is key to understanding how value accrues in an artwork.” (Size Matters: 26)

In laying out this approach to attributing value what follows is the challenging proposition (primarily for traditional funding sources) of deferred value. My understanding of this is that the four elements of value may be realised over different timescales, if at all in the case of fiscal value.

This is a particular challenge for the smaller organisations as they often serve as the catalyst for an artist or artwork but it is others in the system that then gain the full range of value. It is suggested that smaller organisations most often ‘forfeit two of the most measurable types of value created – the realisation of social value through the development of audiences and of fiscal value through sales via the art market.’ (Size Matters: 29)

While in some ways this seems obvious it is really refreshing to have it spelt out so clearly at a time when it definitely needs saying. My experience is that many of these smaller organisations need to build their confidence in order to take more control of how they are measured and understood.

The proposition for a move away from annual comparisons towards lifecycle-based assessments and investments carries with it significant challenges but I do find it persuasive. I hope Common Practice will pursue it further.

The wider charitable context

By Tina

This week saw the launch of a new report, commissioned by Barclays Wealth and published by New Philanthropy Capital (NPC). The new report, entitled ”An economic argument for philanthropy” investigates, not just a move away from needs- or even taste-driven giving, but giving on the basis of economic arguments and in a way that will induce not only benefits for society, but also for the economy. A sort of ‘preventative’ philanthropy targeted at the most “expensive” social ills would, in a nut-shell, ensure that less is spent by the government tackling would-be problems and more will be gained by enabling individuals to take better control of their lives to begin with.

This is indicative of what some mega-rich, results-driven individuals (eg Barclays Wealth clients) want to achieve with their giving, namely what they achieve with their financial investments: returns. In this case, it’s not direct gains that they’d be after but social impact, expecting therefore to see their money put to good use, where it’s needed most and where it can make most savings.

And charities are becoming increasingly transparent in proving the difference they make, how many lives they change and with how much money, therefore making a good case for ongoing support. 

But even so, according to another relatively recent study on the motivations of philanthropy, an economic argument to giving is probably not a very strong one for all philanthropists, considering that many of them ultimately give to causes that are close to their hearts. 

So where does culture fit into these rather fragmented but interesting arguments on philanthropic motivations and allocations? 

This week I also came across ACE’s updated Audiences Insight report – a cross-section of the English population grouped into detailed segmentations and providing a 360 degree view of their profiles, attitudes and behaviours (and a pleasant, insightful and engaging read I would add). According to this, 27% don’t engage with the arts. But that still leaves 73% of the population that do engage, and more specifically 7% that are highly engaged. So do they give to the arts? The brief exploration into their “arts patronage, charitable giving and volunteering” serves as a good starting point, but only to show that most segments are more likely to give to other charitable causes. This therefore seems to suggest, that contrary to the taste-driven argument, there is still a relatively low correlation between being interested in the arts and giving to the arts (though there is a need for more robust research in this area). 

And this brings us back to the two studies into the decision-making process of giving mentioned earlier – both rigorous in nature, but adopting a slightly different take on how individuals choose or should choose what causes and charities to give to, but neither include culture as major contenders for the increasingly competitive philanthropic pool.

And with local authorities’ culture funding now decreasing by nearly 6%, ever more pressure will be put on philanthropy and private/ charitable giving for the sector. The problem is that though cultural organisations have several strong arguments in their favour, appealing to both needs and taste-driven motivations, they seem to be quite insular and more detached from the wider charitable sector than other causes. This perpetuates a “them vs. us” mentality and differentiates the arts in a way that can sometimes be unfavourable. More efforts therefore need to be made to capitalise on the benefits of a collective with a strong voice, identity and case for support.

Worse culture

By Jon

A fine example of public support for the arts in America via Michael Rushton

He sees no need to add comment. Beyond wondering whether ‘Made in Chelsea’ has any similar arrangements, neither do I.

What are the chances of that happening?

By Jon

Here’s a nice (if long) article making a connection between skepticism and arts funding that hadn’t occurred to me before:

‘…natural skepticism often lets us down, especially when it runs up against another natural human instinct: wishful thinking.The desire to believe what we want to be true is powerful. On the positive side, wishful thinking generates millions for arts fundin via lottery grants. But it can also lead smart people to do very stupid things.’

So, not just casinos and psychics who profit from wishful thinking…

Psychic value?

By Jon

Malcolm Gladwell has written an article about why otherwise sensible business people buy sports teams, and what they get out of it.

Almost in passing, he makes the following remarks:

The best illustration of psychic benefits is the art market. Art collectors buy paintings for two reasons. They are interested in the painting as an investment — the same way they would view buying stock in General Motors. And they are interested in the painting as a painting — as a beautiful object. In a recent paper in Economics Bulletin, the economists Erdal Atukeren and Aylin Seçkin used a variety of clever ways to figure out just how large the second psychic benefit is, and they put it at 28 percent.7 In other words, if you pay $100 million for a Van Gogh, $28 million of that is for the joy of looking at it every morning. If that seems like a lot, it shouldn’t. There aren’t many Van Goghs out there, and they are very beautiful. If you care passionately about art, paying that kind of premium makes perfect sense.

The paper is available here and is interesting throughout.

It reminds me of Bruce Hood’s SuperSense and (the accompanying blog) in which he has written about the physiological and psychological reasons why people come to believe objects have non-physical properties. As a result, the object’s value is often significantly enhanced.

What happens to the vast sums of money spent on online advertising?

Is the Ten Percent Problem getting worse?

Two years ago – September 2009 – UK businesses for the first time spent more on online advertising than TV advertising, or any other advertising media.   And many TV adverts today are simply directing people to visit online services; where, in many cases, they get to view more adverts!

Online advertising was worth £4bn last year in the UK.  In perspective, that’s around £65 for every single person – adult, child or baby – living in the UK.

We all know where the money is coming from… The everyday products we buy, from food to electricity; £65 per person, per year, is creamed-off by online advertisers (£260/year, if considering all forms of advertising).

But where is the money going to? Who’s making money online?  This question has massive implications for anyone attempting to fund any form of online culture from advertising.

We’re continuing to see strong growth amongst online retailers, despite the weak economy; but when it comes to tracing the £4bn online advertising spend I’m interested in the websites and services benefiting from the sale and trade in display advertising, not just businesses who happen to be making money online.

Professional content providers; from newspapers to bloggers, film makers, poets, photographers, novelists, comedians, musicians and internet radio stations; are still struggling to fund online-only services from advertising revenue alone.

A professional digital marketing specialist told me I could expect around £200/year from my own blog, slighltyrightofcentre.com, if I was smart regarding my advertising.  That would give me a return from advertising of approximately 80p/hour for the amount of time I spend blogging on digital rights issues!

That’s all my hacky little blog is worth, right?! Looking at a complex array of statistics puts my blog in the top 150,000 of websites visited by UK internet users (hey, Mum, look what I did!).  Taking into account page views, unique visitors and total content (number of articles) gives me an estimated 0.00006% audience share for UK-generated content.

Whilst the figures are minuscule – by one measure I have an estimated share of 0.6 millionth of the UK web audience – my share of the annual UK online advertising spend of £4bn should be around £2,400/year.  A £10/hour return puts blogging into the [lower end of the] category of a living wage.

But is this just a problem of scale? Do large national newspapers fair any better?

Seemingly not.  UK national newspaper websites have a healthy global share of audience, yet many are struggling to turn a profit.  The UK’s second-largest newspaper website by ABC (Audit Bureau of Circulation), The Guardian, posted a £59m loss in 2010.

Associated Newspapers, the national newspaper publisher of The Daily Mail (currently number 1 UK newspaper website by ABC) reported in May this year that only 1.8% – £8m from its 6-month revenues of £438m – came from “digital”.

According to website traffic monitoring company Alexa, dailymail.co.uk is the world’s 129th most popular website by traffic.   DoubleClick puts the Daily Mail website 22nd most-visited in the UK.

If the UK’s number 1 newspaper website and 22nd most-visited website overall can only muster £16m/year – 0.4% of the £4bn annual UK online advertising spend: (i) where does all the money go; and, (ii) what hope is there for online content creators generally?

Four years ago this was described as the Ten Percent Problem: only 10% of readers came through print publication, yet only 10% of revenues came from online.  At 1.8% for Associated Newspapers, is the problem getting worse?

Looking the scale of the problem another way, more money is spent on online advertising than TV advertising; yet TV advertising funds the entire output of ITV, Channel 4, Channel 5 and the host of digital-only free-to-air TV stations.

Or, consider the sheer number of free print publications and newspapers funded entirely through advertising.  From regional rags like Metro and Evening Standard to local “advertisers” and hyper-local “directories”.

Show me the websites funding free-to-view culture of any description purely from advertising revenues? And no, I don’t mean user-generated content; but content that the creators and artists actually got a living wage from producing.

@JamesFirth

An Interview with John Kreidler – Part I

By Jon

2010 saw the launch of the beautifully named Medici’s lever – a web based tool designed to model the dynamics of cultural policy in an urban environment.

John Kreidler (and not Lorenzo de Medici)

Medici’s lever is not the brainchild of any one person, but John Kreidler, who introduced it with a guest blog at Grantmakers in the Arts, was its principal architect. John was heavily involved in the San Francisco arts funding scene for two decades before becoming Executive Director of Cultural Initiatives Silicon Valley. Medici’s lever emerged from that project.

Pressures on cultural budgets in the USA and UK meant that the launch was timely, as did the announcement that Londonderry would be the UK’s first City of Culture. If anything, changing circumstances have made the model more relevant.

An earlier incarnation of Bad Culture featured an interview with John at the time, which is reproduced below. We will be catching up with him again in the next few days to find out what’s happened since.

Bad Culture (BC)- John, thank you very much for agreeing to this interview. Perhaps you could start by telling me about your time working for the Cultural Initiatives Silicon Valley? It was, on the face of it, a unique venture and opportunity to develop a regional and urban cultural policy from the top down.

John Kreidler (JK) – Cultural Initiatives was unusual in several respects, most especially because it was founded with the idea of implementing the key features of a ten-year cultural plan for Silicon Valley, and then expiring.  The inspiration for this plan came from an exceptionally popular and talented political figure, Susan Hammer, the Mayor of the City of San Jose (population just under one million).  Although Mayor Hammer provided the initial leadership for the “20-21 Regional Cultural Plan”, most of the content for the plan was bottoms up, coming from hundreds of arts leaders, artists, educators, community leaders, business leaders, and via polling of the public at large.  The plan was completed in 1997, when Silicon Valley was reaching its apogee of world leadership in technology, and it was widely believed that an era of cultural ascendancy could soon follow.

Given Silicon Valley’s extraordinary concentration of technology and wealth, one might expect that its cultural plan would focus on the crown jewels of high culture: World class performing arts and museums.  Instead, the plan’s highest ambition was to restore “standards-based sequential arts education” in the region’s public schools.  In large part, this objective was derived from public opinion polling, which found that quality arts education had, by far, the broadest public support of any cultural objective in Silicon Valley.  The original poll in 1997 found that 90% of the adult population of the region supported this objective, and near-identical results were found in two later polls.  In addition to arts education, Cultural Initiatives also invested considerable work in the founding of an arts and technology festival, in researching the cultural dynamics of the region (including artists, professional cultural institutions, amateur groups and public demand for cultural goods and services), and in popularizing the notion that cultural policy could be relevant to the region’s quality of life.

My tenure at Cultural Initiatives began in 2000, three years after its founding, and continued until December 31, 2006, when operations ceased at the ten-year mark.  At this point, arts education programs had been upgraded in 75% of the region’s elementary schools by providing the schools with funds, which were raised from nongovernmental sources, teacher training and curriculum development.  When Cultural Initiatives terminated at the end of 2006, our arts education staff was transferred to a governmental agency, the Santa Clara County Office of Education, along with $700,000 to continue operations in 2007.  All of the research generated by Cultural Initiatives, including two books written by cultural anthropologists on the region’s amateur cultural groups, continues to be available at http://www.ci-sv.org/

BC - How did the experience at CI-SV differ from your previous (and extensive) experience at the San Francisco Foundation?

JK – The two decades I spent at the San Francisco Foundation were similar in many ways to my seven years at Cultural Initiatives.  My work at the Foundation involved making grants to nonprofit cultural organizations in five counties of the San Francisco Bay Area, but also allowed time for research and writing.  In 1985, the Foundation embarked on an effort to train its staff in the techniques of systems thinking as a means for better understanding the intended and unintended consequences resulting from its funding policies.  This training set me on a course of building computer simulations of cultural organizations, then constructing simulations of the cultural dynamics of entire regions.  While these simulations were helpful for advancing the Foundation’s policies, they proved to be weak vehicles for communicating to an outside audience of arts leaders, funders and policy leaders.  Accordingly, I began a period of research and writing that sought to express, in more conventional ways, the insights that I had gained from systems modeling.  The result was an article, entitled Leverage Lost: The Nonprofit Arts in the Post-Ford Era, which was published in 1997 (http://www.inmotionmagazine.com/lost.html).

The work at Cultural Initiatives also entailed the processes of making grants, researching and writing.  The chief differences were that as the director of Cultural Initiatives I was expected to be a public leader, and also expected to raise the funds used to make grants and cover operational expenses.  Fortunately, Silicon Valley’s two iconic foundations, the David and Lucile Packard Foundation and the William and Flora Hewlett Foundation, made the task of fundraising relatively easy.

BC -How would you describe the Medici’s lever project?

JK – Upon joining Cultural Initiatives, I saw an opportunity to use systems modeling in a way that had never been possible at the Foundation.  Given Silicon Valley’s prowess in technology, its fascination with rational numbers-based thinking, and its leading position in video games, why not produce a computer game that provided a platform for thinking about the region’s cultural future?  Partially inspired by Sir Peter Hall’s great book, Cities in Civilization, Cultural Initiatives set out to produce a simulation model that combined culture with the social and economic dimensions of Silicon Valley’s destiny.  The result was packaged as a game in which the player attempts to implement a suite of policies to achieve an optimal future.  This game/simulation, entitled  “Great Cities”, was released in CD format and distributed for the next six years throughout Silicon Valley and beyond.  Along with Cultural Initiatives’ other research and publications, “Great Cities” helped to advance the view that cultural policy had relevance to the region’s success, on par with the more accepted domains of economic and social policy.

Despite its utility, “Great Cities” had the disadvantage of not being presentable on the web.  Although Cultural Initiatives had funds available to produce a new and hopefully more captivating version of “Great Cities” at the time we ceased operations at the end of 2006, the technology was still not available for a web version.  Nevertheless, independent work proceeded from 2007 to early 2009 on an entirely new logic model, now named “Medici’s Lever”, with the expectation that in-development software soon would become available to make a web version possible.  This expectation was realized when isee systems, a company based in Lebanon, New Hampshire, published its “NetSim” software in 2008.

The point of “Medici’s Lever” was to provide a parting gift from Cultural Initiatives to the field of cultural policy.  “Medici” contains three modules, two of which are games designed to assist with the education of cultural policy students, while the third is presented as an online laboratory that allows the user to simulate conditions in a real or imagined region.  The first game, “SJ Renaissance”, picks up where “Great Cities” left off, and is populated with characters and plot lines commonly found in Silicon Valley. The plot and characters for the second game, “Viamare Culture” were created by Amy Kweskin, a San Francisco-based arts consultant who spent several years living in the U.K.  The point of this module was to reach a more global audience.

BC – Was it always the intention that something like ‘Medici’s lever’ would form the final project of CI-SV, or did the need for such a project arise from your the experiences?

JK – As Cultural Initiatives’ closing date approached, the major imperative was to complete work on the tasks specified in the regional cultural plan, especially the transfer of the organization’s arts education reform program to the auspices of a permanent governmental agency.  “Medici’s Lever” became the last project by default, mostly due to the unavailability of software for web-based simulations prior to 2006.

BC – Medici’s lever is described as an attempt to “develop a more comprehensive understanding of the dynamics of arts and culture in a regional setting”. Is it your experience that cultural policy dialog underestimate the complex interactions involved?

JK – On the basis of my experience in the U.S., I have long believed that cultural policy is overly simplified.  In the formative years from 1965-1975, it was the position of the U.S. government and several leading private foundations that increasing the supply of high quality arts would result in a commensurate increase in public demand.  Coincidentally, a similar view seems to have been adopted in the Netherlands, where the government eventually concluded that the supply of subsidized arts was substantially exceeding public demand.  In various places and at various times, I have also observed policies based on the notions that arts developments in decayed cities will achieve broad economic renewal, that the intensity of regional cultural expression will stimulate business creativity, or that arts activities for youth will reduce crime.  While all of these policy perspectives probably contain elements of real causality, I would like to believe that there is a more fundamental way of understanding the dynamics of culture, ideally a model capable of aspiring to the subtlety of Einstein’s quest for a unified theory of physics.  At the heart of the logic model of “Medici’s Lever” is a causal paradigm that may edge toward a “unified theory” of cultural dynamics:

1. Cultural learning begets cultural knowledge;

2. Cultural knowledge is the basis for personal and communal          forms of cultural expression and passion;

3. Cultural expression and passion form the basis for the consumption of professionally produced cultural goods and services.

While my experience, research, and the research of others tends to support this view of a progression from cultural learning to cultural consumption, I would also acknowledge that the model can flow in the opposite direction, that sometimes supply can promote demand and ultimately stimulate the desire for new forms of cultural knowledge.  The more powerful dynamic, however, is from learning to consumption, and this dynamic is not only valid for the arts, but also for other forms of cultural activity, notably athletics, and probably for religion as well.

BC – You are very frank about the imperfections of the modeling in Medici’s lever. You state in your Grantmakers in the Arts blog that ‘We make no pretense that simulations can be predictive or free of the biases of their authors’ and in the model itself that ‘no model of an organic system can be fully comprehensive, much less predictive’. Given these limitations, do you think it can still be of use to policy makers?

JK – An economist at the Rand Corporation, the famous American think tank, once said to me that cultural policy will never be taken seriously in the U.S. until it can advance serious comprehensive models.  Such models, he said, have come to be commonplace for economic, environmental, labor, agricultural and defense policies.  Fields of public policy lacking in models, he said, tend to be marginalized in the hierarchy of governmental policies.  He was also quick to point out that no model is ever right, meaning that no model can ever be truly predictive.

Unreliable predictability, however, does not mean that policy makers should avoid simulation models.  To the contrary, models can often provide productive ways to experiment with alternative policies, to assess possible risks and unintended consequences, and to identify gaps in research.

The time and resources spent on “Medici’s Lever” are vastly short of those invested in, for example, a typical geopolitical simulation crafted by the Rand Corporation, but I hope that “Medici’s Lever” will serve to illustrate a way forward, and also help to guide a new generation of cultural policy research.

BC – One of the game modules is based on the award of European City of Culture to the fictional city of Viamare. In a fortuitous turn of events, Londonderry has just been named the first UK City of Culture. At this quite early stage, what steps would you advise the organisers to take? How do you think they could use Medici’s lever?

JK – My guess would be that the organizers of the European City of Culture in Londonderry have mental models of what they expect to achieve.  Oftentimes, individual organizers have varying or conflicting models, so it can be useful to capture these in some explicit fashion, perhaps in writing or in a graphic format (a full-blown computer simulation would not be needed).  The point would be to improve the extent of consensus on what is expected, to achieve a unified model, and to minimize unforeseen/negative outcomes.  For example, we the organizers, as a result of the European City of Culture, will be delighted if tourism increases, creative industries will move to Londonderry, and longstanding tensions between Catholics and Protestants are further eased.  In Silicon Valley, we would be especially pleased if each of these objectives was connected to a numeric measure.  The value of this exercise could be enhanced by describing as explicitly as possible the mechanisms by which each of these objectives would be implemented.  Tourism, for example, might a function of marketing, transportation, security and accommodations.  On the downside, tourism might also generate traffic congestion, drains on public services, and even a long-term decline in tourism if expectations of the European City of Culture are not realized.  I confess that I have been associated with a few festivals that would have been better left undone.

Of course, for all I know the Londonderry leadership is thoroughly united in their mental models.  If so, they might still find value or amusement in playing the “Viamare Culture” module of “Medici’s Lever”.  Within this module, five characters are vying to become the director of Viamare’s European City of Culture, each with a distinctly different mental model.

BC – Could you give me some more details about how you went about building the model? How heavily did you rely on cultural policy research and/or the views of practitioners?

JK – “Medici’s Lever” came about through the intersection of several influences.  Under the auspices of the University of Wisconsin, National Arts Strategies and Cultural Initiatives, a dozen American cultural policy practitioners were convened in 2003 to contribute to a “map” of how culture operates in both the commercial and noncommercial sectors.  Largely through the work of Andrew Taylor, Director of the Bolz Center for Arts Administration at the University of Wisconsin, this map was assembled, published and distributed around the U.S.  Separately, Cultural Initiatives was conducting research within Silicon Valley on the cultural habits and tastes of the adult population, on the condition of artists and nonprofit cultural organizations, on the amateur arts sector (with special emphasis on the region’s massive immigrant population), and on the cultural views of leaders from business, academia, religion and civic affairs.

All of these ingredients were distilled, beginning in 2005, into the logic model underlying “Medici’s Lever” by Steve Peterson, an expert teacher and consultant in systems engineering, and by me, a veteran of cultural policy thinking since graduate school.  We are happy to provide a complete diagram of this logic model, and the accompanying programming, to anyone who requests it, at no cost.  Nothing is hidden, toujours full transparency.  In the interests of promoting cultural policy modeling, we are also supportive of anyone who wants to devise alternative models based on “Medici’s Lever”, as long as Cultural Initiatives receives due recognition as the originator.

The logic model is common to all three modules of “Medici’s Lever”, two of which involve plots and characters.  This dramatic content, or “game interface” in the parlance of video gamers, was added after the logic model was in place and can be easily modified to suit different audiences or languages.  In addition, we wanted to enliven “Medici’s Lever” with video, music, spoken language and more graphic content, all of which were embedded in the original “Great Cities” CD, published by Cultural Initiatives in 2000.  The tradeoff would have been greatly reduced response times through our new platform, the web.

BC - I’m interested in the detailed assumptions that are built into the logic model, and how accurately they reflect real life. Specifically, can you explain how the following aspects work:

• the multipliers

JK – Multipliers (or levers) are elements of a model that can provide a net result of greater magnitude than the sum of the inputs.  A simple example of a multiplier is an interest rate: An investment of one pound can yield one pound five pence in one year.  When using the modules of “Medici’s Lever”, it will become apparent that policies yielding short-term returns may yield substantially diminished returns in future years.  The obverse is also true: Low initial yields may lead to more substantial returns in future decades.  Policy makers in all fields often have trouble envisioning long-term gains and risks.

• the two-way, interactive flows between the parts of the pyramid

JK - In the parlance of systems dynamics, an action may have a one-way linear effect, or the relationship may be “bidirectional”.  In the core of the logic model, people who are culturally active and passionate in their individual and social lives will stimulate producers to generate appropriate cultural goods and services, but at times, extraordinary and novel cultural goods and services may stimulate demand from consumers.  The history of arts, athletics, religion and fashion is littered with the carcasses of producers that fell out of favor with consumers, and so it goes today.

• the market makers

JK – In the middle ground between producers and consumers are the market makers, practitioners or agencies seeking to establish efficient markets for the delivery of cultural goods and services.  Festival organizers, performing arts presenters, literary agents, and art dealers are all examples of market makers.  Although market makers may be influential multipliers in the dynamics of regional culture, they are often ignored by policy makers and funding agencies.  “Medici’s Lever” provides an opportunity to experiment with this lever.