It turns out that Creative Trust’s Working Capital for the Arts program – which has helped participating companies boost their working capital from a negative -2.1% average to a positive 11.3% over the program’s first six years – was just a bit in front of the curve.
The recent financial crisis has caused an upsurge in interest in the US, the UK and Australia in helping arts organizations invest in new approaches to financial viability. Shannon Litzenberger just wrote a great post on the buzz around new business models and changing capitalization strategies on her Blog The Arts Policy Diaries.
The Doris Duke Charitable Foundation’s Leading for the Future, an experimental initiative through the Nonprofit Finance Fund, provides 10 artistically outstanding organizations including Jacob’s Pillow Dance Festival and Steppenwolf Theatre Company with up to $1 million over four or five years to “strengthen their business in a shifting environment.”
In Australia, Arts Queensland is studying how to bring public, private and corporate investors together to support artists’ entrepreneurial activities. Their discussion paper, Arts Plus, New Models New Money, is available here.
Mission Models Money, a UK network that wants to transform the way the arts use their resources to support the creation of art, just released a paper Capital Matters, calling for a new long-term policy to improve the financial resilience of the cultural sector. “Capital matters. It matters because of the close connection between capital held and the ability of an organisation to withstand financial shocks and because access to capital enables organisations to evolve in response to changes in their environment”.
I couldn’t have said it better myself; here at Creative Trust we know that providing our companies with working capital reserves helped them withstand the financial downturn.
Like Creative Trust, these projects are meant to provide examples and models for other arts organizations to learn from and possibly replicate. We are going to have the pleasure of meeting with Margaret Bolton, one of Capital Matters’ authors, later this month, to share our experiences at Creative Trust and explore commonalities. We hope to make this the basis for continued sharing and collaboration, and we hope to do even more of that in communities across this Province over the next year.
Let us know your thoughts on how arts organizations’ business practices can (must?) change over the next few years by commenting on Facebook.