Creative Data?

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By Tina

It’s heartening to see in short succession the use of hard stats around private investment in culture. However, there is always more that can be done to complement some of the data and to make it more useful, both for the sector and for policy.

To begin with, Arts Quarter’s ongoing reporting of arts professionals’ attitudes about the recession and its impact on income is useful – however, it would benefit from more regular reporting to show the peaks and troughs and the changes through time, to compare more effectively the difference between stability and uncertainty. The wave-on-wave trends, based on only 4 installments of the survey, were quite reactive in nature (considering when and why they were conducted) and thus reflected the volatility of the time in which they were conducted. This could mean that the findings are slightly skewed, as respondents are influenced by the ‘heat of the moment’ and are likely to be affected by media hype surrounding some of the issues they are being questioned on. More positively, the level of detail is useful and provides an interesting backdrop against which to have any considered debate about the likely growth of private investment in the next three years or so. However, other than the summary, which neatly describes the landscape as it currently seems to stand, the data itself is not provided in a very user-friendly way and the pages of tables means that most people are not only likely to skip through them, but are also therefore likely to miss important trends within the data.

Spotting the differences and assessing why they’re taking place, or trying to predict what might happen next should therefore be made easier through data visualization and interpretation. What would make it even more useful, is triangulating with consumer trends and attitudes about likelihood to donate to the arts. And that’s where the data from We Did This for example, would come in handy, as it adds that all-important perspective of the consumer and profiles the behaviours of the very people that the arts professionals are speculating about. More business intelligence into likelihood for investment in the arts would also help – we are seeing some big businesses have a greater presence in this area lately, but at the same time, we don’t have a sense of the businesses that are opting out or playing safe at the moment. Finally some insight from trusts and foundations on how many arts applications they receive a year and how many are successful for example, would also be helpful in mapping the competitive landscape for the arts and understanding how difficult it is.

The issue here is that in terms of research, much can be said about the gap between what people say and what they do – particularly when it’s what people say about what other people are likely to do. Therefore any such attitudinal research should, in most cases, be considered indicative, though that’s not to say not useful. More research on actual behaviour and giving patterns would therefore helping in bridging some of those gaps and creating a more representative picture of what is happening and what might happen in the future.

The annual Arts & Business survey on Private Investment in Culture should help in answering some of these questions. Though the analysis is retrospective, it is useful and interesting in its own right (and much anticipated I should imagine), but again, could be strengthened with more forward-thinking and market-scoping research.

I know there have been many attempts in getting these projects to speak to each other, to save readers and policy makers from adding this all up themselves, but it seems that there are still other more urgent priorities. The risk with undermining the importance of robust and holistic research is basing recommendations on assumptions, many of which might therefore be misleading or even wrong.

KPIs – an Arts Council response

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by Jon

Dawn and I wrote posts last week on the thorny subject of Arts Council KPIs, a theme then picked up over on Thinking Practice by Mark Robinson, former Executive Director at Arts Council NE.

The Arts Council is keen to engage in the debate and has asked us to host a response, which we are delighted to do. Roddy Gauld, the National Portfolio Director sent us the following:

In the current environment where funders and arts organisations alike need to demonstrate clear results in return for public funding, Key Performance Indicators (KPIs) are way of measuring our collective performance.

The Arts Council doesn’t see KPIs as a pass or fail measure, instead we hope arts organisations can use them as a tool for self-improvement, which allows them measure the extent to which they have achieved their ambitions. Demonstrating achievement, rather than just reporting data, is an exceptionally powerful argument for investment in the arts and our discussions with NPOs are helping us learn the extent to which it’s possible to reflect these achievements.

The majority of the Arts Council’s funding for the portfolio comes from the Treasury – so we need to be able to report convincingly on what our investment will achieve. The Arts Council is looking to National Portfolio organisations (NPOs) to be accountable for the funds they receive, with greater self performance management playing an important role in this.

We do realise the difficulty of standard KPIs, and that putting together one-size-fits-all measures of success for 700 very different organisations is an ambitious and challenging thing to do. Our ongoing conversations with NPOs are revealing areas where the Arts Council knows it will need to be flexible in both the design and the assessment of KPIs.

The finance KPI is a good example. It reflects the Government’s private giving agenda and also challenges NPOs to increase in the proportion of income they generate from non-Arts Council funding. We want these KPIs to be ambitious as we all consider how NPOs can make significant steps towards becoming more resilient. But we know that in some cases organisations will not be able to increase income for other sources, and for others it would be unrealistic to expect a year on year increase. Biennial festivals, for example, would not be expected to increase their non-Arts Council income in the years the festival isn’t running.

That’s why final funding agreements will contain KPIs agreed through discussion and negotiation with NPOs. Final figures should reflect the individual circumstances of organisations and be adapted if these circumstances change during the funding period. This process is based on working with NPOs to reflect our shared goals. It’s the first time the Arts Council has worked in this way and we are learning about how we can best use KPIs for the benefit of both the Arts Council and the organisations we fund.

We will continue to reflect as the process goes on, and we will decide if we need to change or adapt any KPI, or simply improve the explanation and guidance behind it. Whatever we decide, it will be based on the feedback we’re receiving from the discussions we are having with NPOs across the country.

It’ll take more than just a catalyst…

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By Tina

Following on from Jon’s and Dawn’s posts, I have been thinking about growth for smaller arts organisations and the expectation of raising more income from different sources in the next three years, particularly in regards to private investment from businesses, individuals and trusts and foundations.

In theory, encouraging diversifying income sources is a good thing… but in reality smaller arts organisations have three years to achieve some rather difficult targets. Raising £10k or even £5k in a year without any previous experience in, or current budget for, fundraising is not easy to do.

Fundraising takes time and investment, particularly as it requires research, an overarching strategy and plenty of patience, time and perseverance. Results do not happen overnight and relationships have to be cultivated in a sensible and sensitive way. Freelance/ consultant fundraisers can help, but they need to become really involved with the organisation in order to represent it with the conviction and passion required to make the right asks and to the right people.

And boards can and should also help, but how hands on can they be, particularly if their own resources (time, money and networks) are limited? And what about organisations’ audiences? A small touring company, for example, might have numerous loyal fans but not necessarily their contact details, as they come through the venues where they are booked. In which case how will they build a strong database which they can start using for fundraising? And what kind of support can they ask for if these audiences are often the very same underprivileged people they are trying to reach out to and empower through their work? And how will they reach the big sponsors and major philanthropists instead? In most cases, organisations will therefore start by applying to trusts and foundations, which must by now be inundated with applications and which therefore make this a very competitive “market”.

These are amongst the serious challenges which smaller organisations are faced with and which encouragingly the Arts Council seems to recognise. It will therefore in turn, try to address some of these issues by promoting fundraising capacity building through the Catalyst fund. However, I’m not sure how far it will go in equipping organisations in need of support with the appropriate knowledge, skills and expertise to start successfully fundraising from a variety of sources and in a very challenging economic climate.

To begin with, more than half of the money available through the £100m fund (£55m) is ear-marked for large organisations seeking to start or build an endowment. With a maximum of £5m allocated to an individual applicant, there could be a minimum of 11 (large and already successful at fundraising) organisations benefiting from this tier of the fund.

The £30m that will be directed towards fundraising capacity building and matched funding, again is targeted at the more experienced and successful organisations (in terms of fundraising). And though matched funding has proved a useful mechanism to incentivise giving in the past and for other sectors such as education, smaller NPOs with little or no fundraising successes to date (and in many ways those that most urgently need support), will have no access to it. They will only be able to apply for a grant between £15k-£25k in April 2012, and it is not clear if this will be a one-off for one year or if it will be repeated across the three years. I am assuming this would come from a total of £15m (the remainder of the original Catalyst pot), though this is not clear either and therefore it’s hard to estimate how many arts organisations might be able to benefit from this. In the meantime, targets for this financial year need to be met and without any resources or some strategic guidance, this will be hard to do.

Not to mention the fact that, as Dawn pointed out, the economy is likely to continue to have ongoing spill-over effects on sponsorship budgets, endowment yields and disposable income (and ultimately on philanthropy). So how successful will a fundraising gala be?

The strategy for NPOs? Grow

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By Jon

This is a bit more esoteric than other posts you’ll find on BC. Normal service will be resumed when I post next on the value of books, but prompted by Dawn’s post on KPIs a couple of days ago, I thought I’d write something myself.

FYI ACE NPO KPI

The funding agreements for Arts Council England’s new National Portfolio Organisations (NPO) contain a number of KPIs, and one in particular has been attracting attention:

Achieve an increase in the proportion of your income generated from non-Arts Council funding of x% in 2011/12 to x% in 2012/13, X% in 2013/14 and x% in 2014/15

I think there are two reasons this KPI is attracting attention.

What does it all mean?

First, the exact scope of the KPI isn’t clear, and NPOs want to understand what they are signing up for.

For example, does the % of funding received from ACE over the period have to decrease year on year, or across the period as a whole? This is important to festivals, organisations with cyclical programmes, and anyone whose three-year plans include a period of increased activity, such as an anniversary year.

Does the % refer only to NPO grants or will it apply to all Arts Council funding? NPOs can no longer apply to Gfta, but many orgs are likely to receive large capital awards or strategic funds at some point over the next few years. If these monies are included in Arts Council funding, you’ll see large spikes in the % in some years. If they are excluded, then receiving a non-NPO award from ACE would actually reduce the % in the relevant year, which would be very odd.

There is a related point to make about grants made to orgs working in partnership, which are increasingly common. Dawn blogged a week or so ago about Common Practice, a group of several small London visual arts organisations. Common Practice has been supported by ACE funds in the past couple of years, but for practical and legal purposes, the money is channelled through the Chisenhale Gallery. As I read the KPI, the grant would greatly distort Chisenhale’s %. Perversely, it will probably making it easier for them to achieve the objective, since their % will drop significantly when Common Practice’s current funding runs out.

I’m also interested in how the %s are to be measured. In all other KPIs, ACE has left the basis for calculation to organisations to suggest, and one might assume that is the case here. But with other KPIs the wording is open to negotiation, so with a KPI mandatory ACE may have a fixed basis in mind. Yet nothing is set out, so while the obvious basis is to take a calculator to the financial statements, I think it’s open to interpretation whether management accounts or ACE’s own annual submission can be used.

Bigger is better?

A lack of detail is one thing – it can and probably will be tidied up in discussions and supplementary guidance. But a second and more significant issue is the message that the KPI sends & the potentially distorting incentive it provides. As Dawn hinted, there is only one strategy NPOs can adopt if they want to achieve the KPI – growth.

Its easy to see why with some numbers.

Let’s assume org x gets 100k NPO grant and 100k from non-NPO funds. The following year it receives 105k in NPO funding (a 5% increase). The organisation needs to raise at least 106k (a 6% increase) from non-NPO sources in year 2 in order to achieve the KPI. Overall, the NPO has to grow by 11k (5.5%)

ACE has awarded a significant majority of NPOs year-on-year uplifts, meaning NPOs must adopt a strategy of increasing non-ACE funding sources by a higher % year on year.

Why bother?

By making this and only this KPI mandatory, ACE have signalled that they attach special significance to growth in NPOs over the next 4 years. This is causing comment for several reasons.

First, it marks a policy shift for ACE. I’m happy to be proved wrong, but I think the KPI represents a greater level of direction for funded organisations than at any time in the past. Yet, NPOs are independent from ACE and both sides rightly cherish this about the relationship. An NPO is run (in most cases) by a Boards of Trustees whose role is to set strategy and secure the organisation’s future. These Trustees may well disagree with strategy the KPI requires.

Second, again as Dawn suggests, growth is very difficult for nations, supermarkets and investment banks at the moment, let alone arts organsiations. Standing still is a significant achievement in the current economic climate, and a contraction may be an organisation’s best strategy. So, it seems odd to include a requirement for all NPOs to grow at this time.

Third, while the KPI reflects the Secretary of State’s priorities and the goals set out in ACE’s 10 year strategy, the wording used means this is not simply a case of ACE passing on requirements from DCMS. The wording of DCMS’s own indicator (see #2) shows this, as it clearly refers only to charitable giving. The assumption is, therefore, that the KPI reflects ACE’s own focus or policy.

Finally, if you play with the numbers a bit more (which I won’t try to do here), it is likely to be harder to achieve for organisations who depend on income from a limited number of sources. Small organisations more often fall into this category, and a drop in (say) local authority funding will require a disproportionately high increase in funding from other sources in order to hit the target.

So, all in all, it’s hard to know what conclusions to draw.

Where once I would have asked for answers on a postcard, do write any thoughts you have in the comments. We have received some private correspondence from readers since Dawn’s post, but it would be nice to share them more widely.

What Fresh Hell…or KPI Madness?

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By Dawn

“Poetry is indispensable…if only I knew what for.” (Cocteau, in Fisher, 1986:1)

Key Performance Inidcators

What fresh hell...

It is true that I am quite exercised at the moment and not in a heart strengthening, fat burning sense. All because of those three little letters – KPI. For those not familiar with Key Performance Indicators they are intended to be measures that enable you to judge organisational performance in the medium and longer term.

If developed appropriately and properly monitored they should be a valuable part of any organisational performance toolkit. Nothing contentious there, in fact, it seems terribly sensible. Is it not right that people should know what they are working towards, what success might look like?

Unfortunately, the term has become widely used and abused and often now relates to anything that can be measured. The Advance Performance Institute talks about the growth of what it calls the ‘ICE’ approach:

  • Identify everything that is easy to measure and count
  • Collect and report the data on everything that is easy to measure and count
  • End up scratching your head thinking “What the heck are we going to do with all this performance data stuff?”

Not only are KPIs often misunderstood, there are darker forces at work, and some funding bodies are currently minded to hand out KPIs to their beneficiaries. In my view the recent mandatory KPI distributed by a certain arts funding body that shows its overall contribution to an organisation’s funding declining over three years seems curiously out of step with the context in which the arts now operate. Not that I don’t respect its right to set expectations around future funding levels by why, oh why, wrap it up as a KPI? Particularly one rooted in financial growth.

Recent retail figures show Tesco is facing its worst returns in 20 years, ONS and the OECD have both downgraded the UK’s economic growth, and George Osborne has made it clear that cuts are the bedrock of the Coalition’s Plan A. Greece is currently held up as the basket case but the UK economy is incredibly fragile and the US has had its credit rating downgraded. Moodys and Standard & Poors, who arguably played their own role in a lot of this mess, are still presiding over rating the world’s economies, need I go on…

Yet it appears that certain agencies believe that the arts (and I can also see it happening in the wider nonprofit sector) can valiantly cast aside these obstacles and look to growth. In trying to unravel this confusion I am struck by Cohen & Pate’s phrase ‘precarious armistice’ in terms of the relationship between government and the arts.

Attempts by government to evaluate arts organisations have not been hugely successful to date and this most recent phase does little to suggest this will change. Just where do people think the growth is going to come from? Apart from this question about practicalities it also seems to me to create further confusion about what could otherwise be a valuable method for understanding organisational performance.

If you are grappling with your KPIs at the moment can I suggest:

  • Setting KPIs for your organisation first then consider wider stakeholder requirements
  • Beware the promises you are making both internally and externally
  • Make sure everyone understands the KPIs (and really make them ‘key’) and that you have systems in place to collect the data you need
  • Then make sure you have the systems and processes to turn that data into knowledge and wisdom
  • Negotiate clearly with your stakeholders about the KPIs that are right for your organisation

“The arts world … is both fickle and self-regarding, and it is difficult to predict the reaction of that world to initiatives which seek to control it.” Cohen & Pate, 1999

If you are undertaking a KPI process at the moment we would really appreciate hearing your experiences.

Size Matters – Matters of Value

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By Dawn

Cropped view of a pear and an apple side by side

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.

Psychic value?

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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.

An Interview with John Kreidler – Part I

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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.

Valuing Culture

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By Dawn

“…as a discussion in Clarke (2006:62) exemplifies, the need to fit the cultural sector’s understanding of value into central government’s standard framework for evaluating decisions is simply unavoidable. It is especially unavoidable given the increasing demands on decreasing resources expected across the public sector for the foreseeable future (Selwood 2010).”

I have wrestled with ‘Measuring the value of Culture: a report to the Department for Culture Media and Sport’ for several weeks now and I confess almost any distraction has taken me elsewhere. Having hit the above paragraph at the end of Chapter 3 ‘Values and Valuation’ I remained stuck there, initially too depressed to stroll any further. That is not to say it is a bad report. I think it is exactly what it set out to be a rigorous, multi-disciplinary literature review of methods for measuring the value of culture set within the context of HMT’s Green Book.

This probably locates it within a relatively specific readership, which is a shame because the challenge of measuring the value of culture really ought to be a sector wide debate. There is recognition that ‘culture is an intangible good that is hard to define’ but the report goes on to suggest that economic techniques have been applied to other intangibles such as environmental and transport policy making. Still I fight to get past the notion that this kind of measurement is unavoidable.

 I should probably show my hand at this point, if you haven’t already guessed it. I am a qualitative researcher and evaluator, issues of meaning making and experience are important to me. There is no doubt I, like others, apply a particular lens in looking at the matter of value and I recognise it has an impact. It does not mean, however, that I do not appreciate there are other approaches, many of which involve particular forms of measurement. I hope it makes me a constructive critic rather than an outright detractor.

 There is no doubt that Dave O’Brien has done his legwork, there are probably enough references here to feed my blogging for months to come. I find it a bit of a shame that the consultees don’t include any of the culture SMEs or micros that any development in this field is most likely to have an effect on, if nothing else to bring them into the debate. I am not suggesting it should have been a representative sample, let’s not get hung up on that one, just that I know of many good smaller culture organisations who are wrestling with these issues right now. And they too might have a view on why the cultural sector ‘is hindered by its failure to clearly articulate its value in a cohesive and meaningful way.’ (Scott, 2009: 198)

 At the moment, and this may change with further readings, the bit I find most perplexing comes on the second page of the introduction. I was encouraged when I started to read that while techniques from economics are the most useful for government decision makers who have to make judgements about cultural value, i.e. distribution of scarce resources (probably fair comment), ‘they must not be used in isolation’ (great, couldn’t agree more). The next sentence starts robustly, ‘first’, I am now primed for a valuable list of reasons why mixed methods are relevant here. However, only two emerge.

1.       There is a need to gain the support of the cultural sector

2.       The debate over economic valuation techniques being able to capture all dimensions of cultural value is on-going

 It seems to me these two issues are the crux of the matter, and they have been around for some time, it is good that they have been highlighted in the report though. It would have been even better to have them drawn out more in the recommendations.

 Overall, it is hard not to hear a message that suggests, ‘we’ve given you lot plenty of time to come up with your own methods and measures and you’ve failed to convince anybody, now let the grown-ups who can count take over.’ Or am I being too harsh/paranoid/cross/fluffy…?

Where is the wisdom?

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By Dawn

It may seem curious to start a blog on cultural policy by considering wisdom but it is for me a concept that is often neglected in current discussions about organisational change, sustainability, agility, resilience, call it what you will. So much of the focus has now shifted to knowledge that you could be forgiven for thinking that wisdom had gone out of favour, confined perhaps to religion and folklore, something a little ‘cranky’ even. As has been so eloquently said elsewhere, ‘wisdom has lost credibility and prestige relative to science, rationalism and method in modern times.’ (Wisdom in Organisations: Whence and Wither?)

Where wisdom is raised, it is often in the knowledge management sector in relation to theDIKW (data, information, knowledge, wisdom) hierarchy.

There has, however, been increasing criticism of this model based on the view that it is an oversimplification ( Knowledge Jolt) but it is useful reminder of the possibility of there being a spotlight on something other than knowledge. Accepting that all models are in some ways wanting, for me DIKW has been useful because it has encouraged me to consider anew the concept of wisdom and what it might mean in relation to organisations in the arts and culture sector.

The concept of wisdom has a long history in philosophy, psychology, religion and literature and more recently it has been considered in terms of organisations and knowledge management. Definitions of wisdom vary but tend to focus on core characteristics related to exceptional understanding (based on common sense; learning from experience; awareness of context) and/or judgement (able to consider all points of view and offer sound advice).

Drawing on the Aristotelian philosophical tradition and empirical psychological research it has been proposed that wisdom comprises a number of elements (McKenna, 2008):

  • It is a spiritual and metaphysical quality that takes it beyond pure reason
  • Wisdom includes the non-rational and subjective elements of human experience in relation to decision making
  • Its purpose is virtuous action
  • It is prudent and practical and provides the capacity to see the world as others see it
  • Wisdom understands the circumstance and constructedness of phenomena in and is therefore not reducible to method
  • It is articulate, aesthetic and intrinsically rewarding
  • It is tolerant, born of natural affection for humanity

Wisdom is therefore a combination of both knowledge and judgement but is also firmly rooted in the pragmatics of life it does not exist in rarefied isolation but is contextually based. To my mind these elements point to wisdom being particularly important in contexts of uncertainty. Wise people are aware that there may be multiple aspects to a given problem and accept that while they make reasonable judgements based on available information at the time this view might change as events unfold.

In considering issues of organisational survival, something that is occupying many of us at the moment, the ability to act wisely becomes paramount. However, in the arts and the wider nonprofit sector the capacity of organisations to have the freedom to act on such wisdom is generally governed by the power structures in which they operate. In order to achieve wise outcomes wisdom is therefore required by both the organisation concerned and the other actors in their system. We now have policies that encourage entrepreneurialism but inhibit risk taking based on accountability, promote quality (high cost) and access (low price), encourage innovation but are still intolerant of failure, it is a context rife with paradox.

The experience of many of the arts organisations I have worked with shows that the extent to which they can access the wisdom of their members and act upon it is linked closely to their embedded nature as they are heavily resource dependent on external bodies and any action has to be negotiated both internally and externally. The double bind of accountability and freedom to act needs a wise leadership and management to be able to respond.

This is what takes wisdom beyond being a purely cognitive attribute and why I think it is important to consider; it requires social, ethical and discursive abilities. Managing multiple stakeholders and keeping abreast of current policies takes nimbleness, flexibility, and political awareness, what I would now describe as wisdom. Capabilities that can ebb and flow throughout an arts organisation’s lifecycle and are increasingly difficult to maintain when an organisation is on the edge of non-routine change or financial crisis.

No amount of data, information, knowledge, good judgement, intuition, planning, or decision making is sufficient if it is done without acknowledgment of context and the value of wisdom. This is particularly pertinent in relation to many of the discussions that are being had around change and learning much of which does not seem to take account of such wisdom and is based in a technocratic rationality which privileges cognitive knowledge.

I will close with two lines that are frequently quoted in the knowledge management sector for they provide food for thought…

“Where is the wisdom we have lost in knowledge?

Where is the knowledge we have lost in information?”

T.S.Eliot, The Rock, 1934

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