Themes: Our Creativy Diversity
A new global ethics
A commitment to pluralism
Challenges of a media-rich world
recasting cultural policies

Mobilizing Resources for Cultural Activities

Michihiro Watanabe

summary

Background

The World Commission on Culture and Development, in its report, pointed out the need to encourage Member States to adopt policies for cultural funding which reflect the particular and necessary roles of public, private and market sources. In doing so, the Commission stressed the need for innovative ways of pooling resources between government, the private sector and civil society. This paper will seek to respond to that approach. It will therefore evaluate the current policy measures to fund cultural activities, identify emerging trends, propose innovations and explore new and alternative resources as well as original ways of pooling resources. The author is especially indebted to the following three publications:

- In from the Margins, A Contribution to the Debate on Culture and Development in Europe, Report prepared for the Council of Europe by the European Task Force on Culture and Development, Culture Committee, Strasbourg, 1996

- Models of Financing Development in Cultural Policy and the Arts, cc/csp/op/06 prepared for UNESCO by Andreas Johannes WIESAND, October 1986, especially chapter C, Supplementary Financial Support to Cultural Activities - Challenges to Public Policy

- Report on the United States/Japan Comparative Cultural Policy Project, UCLA, Co-directed by Archie Kleingartner and Michihiro Watanabe to be published soon by Alta Mirra Publishing Company, New York

I Public Resources

Stagnation in Government Spending

The question of financing expanding creative activities is the most urgent issue confronting cultural policy today, as the funds available cannot keep up with the growing demand among people for more culture. Public spending for culture increased noticeably in many of the high income countries in the 1970's and 80's. General prosperity in many parts of the world allowed society to support the allocation of resources for cultural matters. In the developing countries, culture was given a place in the public budget and assigned a place in the development process. However, these golden years are over. Most governments are now experiencing stagnation or even a decrease in their cultural budget which has to compete with other economic and social sectors in an ever worsening budgetary situation. The problem is far more serious in the former socialist countries of Eastern Europe and the Central Asia, where the cultural infrastructure, regulatory frameworks and funding mechanisms have collapsed and alternative systems have not yet been found. In poorer countries in Asia, Africa and Latin America, gross under-funding of the cultural sector remains chronic.

The spreading of the Jeffersonian notion of "limited government", which emphasizes the shifting of decision making powers and resources from central government to local authorities and the private sector, has made it even more difficult for governments to increase their cultural budgeting. Governments have lowered their spending not only in culture but in welfare and education which were until recently considered to be holy precincts in welfare state principles . Under the circumstances, it is unrealistic to expect a substantial increase in government spending for culture in the years to come. As a result, cultural policy planners and practitioners are pessimistic about finding resources in the public sector to promote creative activities to satisfy the growing demands of people everywhere for more culture.

Need for More Cogent Public Policy

In order to prevent further decline of public funding for culture, renewed efforts should be made to develop a new climate of understanding. Instead of pleading for culture by emphasizing its specific nature and values that have nothing in common with other social and economic factors, cultural policy makers and administrators must make it an integral part of the objectives of governance. Unfortunately, cultural policy everywhere seems to suffer from ambiguity and inconsistency. As Colin Mercer put it, "Our biggest problem in cultural policy is not, I would suggest, lack of resources, lack of will, lack of commitment or even lack of policy co-ordination to date. It is, rather, a misconstrued or only partial formulation and recognition of the policy object itself: culture."(1) This is particularly true of policies for cultural funding.

There needs to be a rationale for public support that is more acceptable, not only to artists and arts organizations but to the public in general. Democratization and access to arts and culture have often been used as the justification to use tax money in the arts. However, it has become apparent that the objective of making the arts available to all is not being attained convincingly. One alternative argument is that arts and culture are good for you and for the society, or as former National Endowment for the Humanities Chairman Ronald Berman wrote, that the arts and humanities are socially useful and a possible cure-all for crime, inner-city tension and economic malaise(2). Other arguments identify the contribution of the arts to national identity and prestige, export receipts, economic growth, particularly of local community, urban regeneration and the improvement of quality of life, to name just a few. Economic impacts arguments have been used for some years now by advocates of cultural spending, particularly in the developing countries. The fact that arts and culture are economically important, however, does not automatically support greater public spending for the cultural sector because of the principle accepted in many countries that intervention in the dynamics of the market economy should be discouraged.

Political liberalization is possible only in an environment in which freedom of expression and creation is guaranteed and creative aspiration is given a free hand to challenge existing values. This is an argument for public support for the arts. By examining and internationally comparing the validity of rationales such as these, government may clarify the role of culture for the betterment of community, which in turn will strengthen it's position in mobilizing support for cultural spending.

Although such rationales are essential to obtain public support for cultural spending, too much emphasis on external and mostly utilitarian reasons may subjugate creative value to external values. On the other hand, the assertion that arts and culture, by themselves, are an incontestable public good, is not enough to convince people. It is difficult to prove that subsidized arts and culture will do better than unsubsidized ones. We all know that some of the best artists in world history thrived without any public support. Pressed to justify governmental involvement for creative activity, proponents of arts subsidy often try to demonstrate that publicly supported arts would produce better results than unaided ones. And here is the problem. In order to prove this point, publicly supported arts and their proponents often repudiate or belittle unaided creative activities such as popular, commercial and folk arts, as vulgar and low in quality, or accuse them of being narrowly commercial. This is one of the common and often fatal tactical errors committed by artists and policy planners. Such unaided creations usually represent the culture of the majority of people, and especially young people, and making slight of them is the surest way to alienate the public from the creative cause. No politician in any democratic society would ever permit himself to express such a dismissive attitude toward the culture of the people at large and expect to survive in an election. The only way to make cultural policy the mainstream of national strategy is to demonstrate the capacity and willingness on the side of the publicly supported arts to cooperate with the creative activities of people at large, be it popular, commercial or folk arts.

Need to Develop Data Basis and Research

One reason that cultural policy everywhere has failed to produce a more cogent rationale for cultural funding is the lack of enough data and research for cultural policy making . For example, we all know that cultural industries are becoming one of the largest economic segments in many countries, but we have neither statistics nor studies on the exact size of the industries, nor a common methodology to be applied to such studies. There is an urgent need to develop a more coherent and coordinated way to collect data and analyze them. It is only with the help of these data and research findings that we can make cultural policy more relevant and more effective.

Better Budgetary Practices

Another issue is the improvement of financial management in the public sector. Regular funding often encourages complacency and inefficiency as there is less incentive to seek either more funds or an increased audience. Particularly, administrators in many governments tend to concentrate on increasing budget and maintaining the volume of spending while paying scant attention to the effective use of the money thus distributed. In fact, financial successes are often penalized by a cut in subsidy while failures are rewarded by additional public assistance. The tendency to spend funds in spectacular prestige projects also deprives creative activities of much needed funds. Such economically questionable practices were permissible while one could expect steady increases in the budget. But they are no longer so when budgets are more likely to be cut than increased. One way of improving the situation is to give more independence to art organizations so that they are free to operate their budgets in most efficient way. When they earn additional funds either from increased income or from successful fund-raising they should not be penalised by a reduction in subsidy.

Proposed Actions by UNESCO

1 Strengthen further the clearing house function of UNESCO for public cultural policy in Member States so that they may benefit from the experiences in other countries in developing more cogent cultural policies.

2 Network universities, research institutes, academic societies and cultural policy sections of the governments throughout the world for information exchanges.

3 Experts meetings to examine the ways to mobilize and pool public resources for cultural activities in Member States.

4 Prepare guidelines for Member States to improve research and data compatibility with an aim to support policy planning.

5 Organize workshops and provide fellowships for cultural administrators to allow them to acquire better administrative practices.

II Pooling of Government Funds

Mixing the Budgets of Different Government Branches

In the face of diminishing government funds, there is a worldwide need to diversify the sources of public funding. The first example is the mixing of funds of various ministries and agencies within government, and different sectors within the cultural agencies. It is a well known fact that the budgets of the ministries of culture may represent only a part of government spending on culture as there are many hidden cultural budgets in other sectors. International exchange budgets in ministries of foreign affairs, regional development money in development agencies, budgets for arts education and training of artists and audiences in ministries of education, social security and welfare budgets for artists in ministries of welfare, construction budgets in ministries of construction, and funds to promote cultural tourism in tourism authorities, are some examples of such hidden cultural budgets. Further, the interfaces between the arts and culture and other areas like communications, industry, town planning, education and social welfare expand the scope of cultural policy. Thus, inter-ministerial cooperation becomes increasingly important. It is desirable that governments establish comprehensive cultural strategies linking all the culture related programmes. In the developing countries, it is particularly important to link cultural policy with overall development policy with regard to employment, tourism, media and audiovisual industries and etc.. Once such coordination is achieved, it is likely that governments will find the resources available for cultural development far larger than they previously envisaged.

Such coordination is also crucial to bring culture into the heart of overall public administration. It may end the isolation of cultural policy by establishing permanent networks among the different agencies and would enable governments to make the most of the multiple interactions between culture and aspects of social and economic development.

Mobilizing the Funds of Regional and Local Governments

A second approach is the mobilization of funds from regional and local governments. Even in countries where central or national government has played a pivotal role in cultural development, governmental budgets are diminishing or at least not increasing as fast. In order to make up this budget stagnation, central governments everywhere are attempting to shift spending on arts and culture to regional and municipal authorities. Regional and local governments have good reasons to increase their involvement in culture. Urban landscapes and architectures need the involvement of the arts and artists who design them. The arts and heritage contribute significantly to the local economy through increased employment, cultural tourism and crafts industries. More importantly, arts and culture give the local community its identity and foster pride among its inhabitants and may reduce the exodus, especially of young people, to urban environments. They also set the stage for outside industry to move in by making the area more attractive to workers and their families.

This shifting of financing from national to regional and local governments, requires the shifting of more responsibility and decision making powers to lower levels of government. Thus, there has been a gradual but steady movement towards decentralization and localization even in countries with strong central administrations. This increased spending by lower levels of governments is one of the most encouraging developments in recent years and should be accelerated further. Aside from utilizing untapped resources for cultural development, decentralization makes it possible to use the funds in a manner as close to the people's needs as possible. It also helps to achieve diversity in cultural development in contrast to the one dimensional "national culture", encourage more participation, lessen the danger of misuse of culture for political purposes, and foster grassroots activities. Unfortunately, this localization of funding cannot be a panacea for the financing of culture because most of the lower levels of government are facing similar financial difficulties themselves...

Proposed Actions by UNESCO

1 Case studies on the successful pooling of government funds, both among federal agencies as well as among the different levels of government.

2 Encourage the decentralization of cultural policy and decision making power to regional, local and municipal governments.

3 Ask Member States to designate model municipalities that successfully incorporate creative activities in their over-all development plans.

III Private Funds

Raising Private Funds

It is becoming apparent that even combined efforts by different levels of government are not sufficient to meet the growing demand for cultural activities. Some claim that the current situation is temporary, until economies emerge from recession. Nevertheless, it is a widely known fact that the arts in today's world serve only a fraction of the population while democratization demands popular participation. This means that far larger amounts of money will be needed to sustain burgeoning artistic activities, requiring a more fundamental shift away from the exclusive dependence on the public exchequer. Hence, there is a widespread tendency to look for additional sources of funding in the private sector. In order to encourage private giving, many countries follow the example of the United States, where special privileges are accorded to non-profit organizations, including tax deductibility of charitable donations and other benefits like reduced postal rates and income taxes. As a result, cultural expenditures by independent non-governmental funders such as corporate sponsors, foundations, voluntary associations and other entities, and individual supports for the arts, appear to be increasing steadily everywhere.

In view of the importance of private funding, the World Commission on Culture and Development recommends a world -wide initiative to promote the role of independent funding and building of links with such bodies in the world.(3)

Increased business, foundation and individual supports is proving to be the most promising new development in funding of culture in recent years. Nevertheless, increased private giving has given rise to false hopes in some cases. In the United Kingdom and the United States, private funding actually led to marked reductions in state spending. One way of avoiding this trade-off of public and private fund is the introduction of a matching fund system whereby private donations are matched by public funds. It is apparent, however, that the matching system contributes to a net increase of finding only when the public sector is willing to maintain the level of financing for the arts.

There are five main sources of funding in the private sector, namely, corporations, foundations, individuals, other organizations and traditional patrons. The support usually takes the form of money, manpower, help in kind and use of free space and facilities.

Corporations

Corporate expenditures in the arts are made , not only in the form of donations, but also of promotion, sales and advertisement. Nevertheless, it is the donations with no strings attached that the cultural sector most appreciates. Corporations have long been patrons of arts and culture. But it is with the spread of notions such as "good corporate citizenship", that corporate giving has increased steadily in many countries. The creation of the Business Committee for the Arts (BCA) in the United States and similar organizations in many other countries has helped a sustained increase in corporate giving. It is encouraging that these organizations are forming an international network to co-ordinate their efforts. Some point out certain drawbacks of corporate support and caution artists against too much reliance on business donations. They observe that corporations often avoid supporting controversial or unpopular programmes that do not provide them with visibility and image-building, and that this may compromise the quality and the pioneering aspects of the arts. Corporate contributions also fluctuate according to economic conditions, making it difficult for arts organizations to count on a specific fixed level of support over time. Nevertheless, such drawbacks are not unique to corporate contributions. Public funds also carry similar dangers. These problems can be mitigated if the associations of corporate funders establish codes of conduct for their members, or initiate educational programmes for business leaders who are interested in arts support. On the other hand, arts organizations can work more effectively with businesses if they understand the company's funding guidelines and its business goals and objectives that are ultimately associated with profit making. The arts sector also should understand that corporations today are public institutions accountable to stock holders and employees and that accountability is crucial for any programmes they support. This can be done by reporting back to the companies on the effectiveness with which those goals are being met and what they were able to accomplish because of the support.

Foundations

Foundations are organizations established for the express purpose of giving money to worthwhile causes. In the United States, they are the second largest source of giving to arts and culture next to individual giving. There are four kinds of foundations. Family foundations are set up by wealthy individuals to support a limited number of activities of interest to the founders. General foundations are set up to support a wide range of activities and are usually managed by professional staff. Some of them can be quite large such as the Lila Wallace Reader's Digest Fund, which is the largest private donor to the arts in the United States, making annual gifts in excess of $30 million(4). Corporate foundations are set up by corporations, the giving policies of which are usually consistent with the corporations' interests. Community foundations are set up as a vehicle for pooling bequests from many private sources, including individuals, corporations, foundations and others, and are governed by a board of community representatives. While corporate giving and, to a certain extent, individual donation, may fluctuate sharply in accordance with economic conditions and financial performance, foundations can minimize the negative effects of external conditions, such as low interest rates and stagnation in the stock market. In order to make foundations useful for arts and culture, carefully drafted legislation is needed at national or local level. It must grant the foundations tax deductible status and other privilege and in exchange require that the endowment is used for non-profit, public purposes, its distribution more open and fair and free from the arbitrary will of the founders, and that it is run by a publicly appointed board of trustees.

Individuals

Individuals are the major source of charitable giving in the United States, representing nearly 83 percent of all giving. In 1992, individuals contributed $8.81 billion for arts, culture and humanities.(5) In most other countries, this is still a yet-to-be-developed source of funds, partly because of the fact that people tend to forget that fund-raising is a form of marketing. To have a good product or good cause does not guarantee support, as many people in the cultural sector tend to believe. Only expert fund raisers with special skills can effectively appeal to individual donors. There also is misunderstanding on the part of artists and cultural organizations about why individuals give. Altruistic reasons such as sense of community responsibility and genuine love for the arts and culture are often considered erroneously to be the major motives. This tends to masks more complex reasons, which are seldom discussed openly, such as the need for self-esteem, desire to be recognized by others, personal favours, pride of association and financial considerations, i.e., tax savings. All these motivations should be carefully studied in establishing strategies for fund raising.

Individual giving, in particular, small donations from people at large, can be the most important of all four sources of private funding not only because it could be the largest in volume, as the United States, but also because it signifies involvement and commitment of individuals. It is thus a form of people's participation which is essential in bringing arts and culture into the mainstream. Apart from cash, individuals can also contribute through volunteering, that is any activity whereby individuals or groups help arts organization, run a programme or assist creative activities, all with no payment, and giving money.

Other Organizations and Groups

There are other organizations and groups that may contribute to arts and culture, e.g. social clubs, professional groups, alumni groups, trade unions, and amateur groups. The role of higher education institutions in promoting creative activities has been unduly neglected by policy makers. Association between artists, arts organizations and these organizations and groups may provide for the former, new audiences and possible donations, and to the latter entertainment, special events and educational opportunities to its members.

Traditional Patrons

Cultural activities in many parts of the world have been sustained by individual and group patrons who traditionally held special status in the community. Religious institutions, leading families, village communities, fraternities, professional guilds and associations are some examples. The Gambia reports that "Until recently, the arts and crafts received patronage from the ruling houses, the established trading families and village communities, and were acknowledged economic, religious, educational and leisure activities". (6) Linking of cultural activities to some of these traditional patrons may have the danger of associating culture with the traditional political system and should be handled with caution where the latter is in conflict with the modernization processes. Nevertheless, they have been instrumental in developing arts and culture in many countries, as was the case of religious institutions, and some of them can still play a significant and constructive role in support of cultural activities.

Privatization of Creative Activity

Governments attempting to shift a larger share of spending on arts and culture to the private sector, in particular, businesses have discovered that the latter are not easily persuaded to make up for reduced public sector spending. This is understandable in countries where creative activities are managed mainly by the public sector which seeks money, but neither participation nor initiative, from the private sector. Businesses and individuals cannot be expected to contribute so long as their role is limited to supplementary support of programmes that continue to be controlled by a cultural bureaucracy. The privatization of facilities and institutions, and the transfer of their management to private hands may be the best way to attract larger amounts of private support for culture.

It is doubtful, however, that such shifting of public responsibility to the private sector can be accepted without resistance in countries where government has traditionally played a pivotal role in arts and culture. It will be opposed by the bureaucracy and by politicians who want to retain their influence on creative activity, and by artists, arts organizations and cultural institutions who fear the loss of financial stability. They will argue against privatization, claiming that it may lead to the encouragement of arts that are less demanding, less risky and more commercially driven, while discouraging less popular, and less commercially viable and more creation oriented programmes.

It is true that economic forces seek out the highest financial returns and quantitative outputs. It is also true that new or difficult works do not immediately set off a public response, nor do they attract large enough audiences, and as such, are less attractive to private investors. But this does not preclude the possibility of introducing private management in some aspects of cultural endeavours. Private management usually does better than public administration in running cultural programmes and facilities. As it means the acceptance of conscious and unconscious opposition to the state-endorsed, subsidized mainstream arts and socially accepted life style, privatization of at least certain aspects of cultural activities, from this viewpoint, appears to be a precondition to the democratization of cultural policy. It is unrealistic to believe that, in today's privatized economy, arts and culture alone can remain to be exclusively planned and administered by government.

Division of Responsibility between the Public and Private Sector

It goes without saying that not all cultural activities are suited for private sponsorship nor can they be expected to survive without protection in a market economy. It is true that the free market mechanism does appear to be meeting a whole range of needs better than any other system yet invented. Nevertheless, culture concerns not only the material but also the spiritual, intellectual and emotional aspects of human life. The out-moded welfare state approach to culture where government assumed the safeguarding of the quality and diversity of cultural life no longer seems palatable to many governments. But non-market initiatives such as democratization of the arts, maintenance of the minimum level of access to culture, encouragement of experiment and preservation of cultural heritage, both tangible and intangible, still require government support. Public expenditure also provides effective seed money to stimulate private sector investment. Cultural subsidies for these objectives are socially and economically useful and spending levels should rise, or at least be maintained regardless of increases in private funding. What is needed is to identify the respective roles of both the public and private sectors in cultural development and come to a clear understanding about how to divide responsibility among the sectors. Otherwise, overlapping of efforts and unnecessary wasting of resources will be inevitable.

Proposed Actions by UNESCO

1 Prepare guidelines for administrators and managers about the ways and means to mobilize private funds for culture and creative activities.

2 Establish world-wide networks of independent funding agencies.

3 Encourage networking of the organizations that promote corporate supports for the arts.

4 Establish a worldwide mechanism whereby individuals and corporations may contribute to creative activities internationally.

5 Case studies on privatization of cultural activities to identify its merits and drawbacks and the difficulties it would encounter.

6 Experts meetings to discuss the division of responsibilities between the public and private sectors in cultural activities.

IV Alternative Resources

The need for additional sources of funding has led many to look for supplementary means of financing and ways to stretch the available funds. Some examples of such measures are illustrated below.

Introduction of Public Endowments

The introduction of public funds or foundations endowed with a permanent fund, the proceeds of which are used to support the arts, is an option that merits serious consideration. Such agencies have an advantage over a direct subsidy by government branch, particularly if the latter adopts what is known as "the arm's length" principle, giving the agency a high degree of autonomy and its own decision making body independent of government control. Such a system can minimize the danger of political and bureaucratic intervention in the distribution of subsidy, which is inevitable even in the most democratic system of governance. Further, it will secure a stable source of income to arts and cultural organizations free from oscillations of annual government budgeting.

Nevertheless, such endowments have become less attractive in recent years. Firstly, few governments will find themselves in a position to invest enough funds in the current budgetary conditions. And an inadequate endowment that cannot generate enough revenues can have only a limited impact on cultural development. Further, interest rates are at an historical low in many countries. Hard-pressed arts and cultural organizations may demand the money to be spent immediately rather than laid aside as income generating endowment.

Such arrangements have definite merit if additional funding is made by local governments and the private sector to supplement the funds provided by central governments . One such example is the Japan Arts Fund established in 1990. The Government of Japan allocated 50 billion Yen to its endowment while corporations donated 12 billion Yen. The proceeds of this Fund, totalling approximately 3 billion yen a year, are used to finance creative activities. Stimulated by this initiative by the government, prefectural governments established 57 similar endowments and municipal governments 86 by 1993. The total amount of these local endowments exceeded 117 billion Yen as of 1992(8). In Argentina, the National Arts Fund was established in 1958 to finance cultural development. The Fund is financed by an initial government contribution which is supplemented by the charge on the revenues of radio and television Stations, admission tickets and pools for sporting events. (9)

Raising Admission Fees

One of the simplest ways to stretch funds is to increase entrance fees of cultural institutions and facilities such as museums and theatres. As more people become interested in arts and culture, there are some signs that they are willing to pay more, particularly when "special events" and "popular shows" are presented. However, recent research on performing arts suggest that admission prices in cultural events can hardly cope with rising costs as the growth of productivity is very limited in the arts. This indicates that admission fees alone cannot cover costs of production unless the price is set at an astronomical amount, which would make many events inaccessible to the majority. Some may argue that the purpose of cultural activities and facilities is not to raise the highest amount of money from visitors but rather to provide to the public an opportunity to learn about and enjoy arts and culture. One way out of this argument is to wide the gap between lower and higher admission prices. In some American museums for example, each visitor is asked to pay an admission fee but its amount is left to his/her discretion. Such systems of voluntary contribution can raise income without offending audiences.

Creating New Sources of Revenue for Institutions

As the public sector can no longer support all aspects of cultural activities cultural institutions, in particular, in former socialist countries of Eastern Europe and Central Asia, are being privatized, while those still owned by the State are being encouraged to be more financially independent. In order to deal with the situation, many cultural institutions in these countries are introducing measures to raise their own revenues. In Poland, such actions include "leasing part of institution premises to shops, offices, cafes, galleries; letting them for different types of events and parties; letting the advertising space on the building's walls, undertaking economic activities or creating foundations which conduct such activities on behalf of the institution. The institutions create travel agencies, paid parking lots, commercial agencies and provide printing and copying services." (10) The up-grading and expansion of museum and theatre shops, that have been remarkably successful in raising additional funds in some countries, is another promising source of revenue.

Until recently, there was little incentive for cultural institutions to launch such revenue producing activities. Not only were such endeavours unnecessary when all running costs were met by government, but, in many cases, all the earned income including that from the sale of ticket, cards, and catalogues went straight into the national coffers. Under the circumstances, it mattered little for the administrators to earn additional money as it created no extra resources for them. The situation is different now where cultural institutions are encouraged to be independent both administratively and financially.

Introduction of Special Levies

A special levy for cultural purposes takes the form of "cultural tax" or "earmarked revenues" for culture in which funds from a specific source are to be explicitly dedicated to a specific use. Levies can take many forms:

  • Levies on construction costs like "Arts for Public Places" scheme adopted by many countries or the "Federal Art Project" (FAP) of the United States that connect the construction of public buildings with the commissioning or purchasing of works of arts.
  • Levies on films in some countries like Denmark, France, Germany and Italy where film makers get the funds from tickets sales. Sometimes, this is complemented by additional levies from other beneficiaries of film works such as the video industry.
  • Levies on television (e.g. Australia, Canada, France and Switzerland) where newly introduced pay TV has to give a part of its profit for new production of feature films, special television and radio programmes, music production, etc.
  • Levies on sales of works of arts like the Norwegian system, whereby 3 percent of every sale of a works of art is collected into a fund for Norwegian artists.
  • Levies on tickets in theatres, concerts, museums and exhibitions from which general cultural funds are financed Germany, Italy, Switzerland. In Ghana, percentage contributions from entertainment tax charged for performances and presentations are used to finance artistic creation. (11) In some cases, the funds are also used to supplement pensions for artists.

Such earmarked revenues exploit a previously untapped source of financing. They also eliminate the uncertainties involving the parliamentary scrutiny associated with the appropriation of public money and give more independence to the competent cultural authorities. Nevertheless, this goes contrary to the general practice of taxation prevailing in many countries in which the raising of tax and the spending of it are kept separate. Actually, such levies are based on mistrust about the strength and reliability of the government's support for the arts and culture and on the assumption that, in the competition for annual appropriations in parliament, the cultural sector will be superseded by other sectors. It may be difficult to obtain the support of legislators and financial officers for such levies, for they put cultural budgets beyond their reach. The scheme would be applicable only in special circumstances, i.e., where the revenue is used to remedy the damage caused by a certain activity on which the levy is charged.

Levies on Lotteries and Gambling

Many countries use revenues from lotteries and/or gambling to support arts organizations, museums, etc. In Ontario (Canada), blank lottery tickets receive a cash value of half their purchase price in buying Canadian book, record, movie tickets and others. Such efforts should be encouraged as they help strengthen the financial basis of creative activity. Aside from the question of the link to gambling, however, such schemes raise sensitive and very basic political questions. More often than not, it is largely the low income population that plays lotteries and gambles, whereas many of those who appreciate the arts come from the more affluent strata of society. Thus, there is a real danger of using the poor man's money to support the pleasure of the rich unless these monies are used primarily to support the cultural activities of people at large.

Copyright Royalty

Another possible levy is more or less directly connected with copyright legislation. According to the normal procedures of copyright distribution, the copyright revenues are distributed to the individual authors who created the works. However, there are cases where the authors cannot be traced at all, or the direct compensation creates unacceptable social inequalities. Even within the current copyright provisions, there has been a growing tendency in recent years to use copyright incomes for special funds for the social benefit of the members of collecting societies and for other cultural or social purposes. In Scandinavian countries, special funds are established within the framework of copyright collecting societies that may be used to finance certain projects. Also, some copyright collecting societies are experimenting with minimum royalty systems, giving to each right holder a basic sum to which an additional amount is added according to the actual royalty for his work. In France, Italy and Poland, there is the so-called "domain public payant" system according to which public compensations are levied on works of arts after their copyright protection has expired.

Another possible levy related to copyright is the public use of compensation that consumers pay to copyright collecting societies for the use of blank tapes and videos to make up the potential loss of royalty through private copying of the original tapes and videos. In many countries, such levies are used for public purposes to be decided by the collecting societies.

These systems all go against the principle of direct compensation under the current international copyright practices and need the full consent of the members of copyright collecting societies. They have a considerable potential, as the development of new media will dramatically increase the amount of copyright royalty and more copyright holders may be susceptible to such measures in the future.

Loans and Advances

Another way to finance cultural activities is through loans and advances. The need for a credit program is obvious for artistic endeavour in countries where the major part of creative activity is run by private bodies independent of public institutions or public financing. It is necessary, in the case of a long term project that requires some time before it produces income, or a project that require a large outlay of funds, such as some performing arts events or large-scale exhibitions. In many countries, unfortunately, loan systems are quite unfavourable to artists and small cultural enterprises as their "securities" are, in most cases, not considered valid. There are some interesting examples of credit and loan assistance for artists and cultural projects. In The Netherlands and Great Britain, credit or advance is provided by public arts agencies on eventual income at the box office or the sale of works of arts. The National Fund for the Arts in Argentina, an autonomous body established in 1958, acts as "bank of culture" by financing a wide range of cultural programmes on the condition that responsibility for the program is shared by the borrowers and other "genuine sources of finance".

Such loans and advances have a definite advantage over subsidy or donation in a market economy. They encourage borrowers to be more self-reliant, thus helping them to be financially independent, whereas subsidies tend to develop reliance on such assistance on the part of the recipient. An adequate loan system for creative activities may help artists and arts organizations function better in the predominantly market economy system in today's world. It goes without saying that loans and advances involve certain risks for borrowers. It is essential therefore that loans and advance be introduced together with complete information for the borrowers on the market situation, accounting and general management techniques.

Proposed Actions by UNESCO

1 Case studies on alternative resources for creative activities in order to help member governments and arts organizations to explore the possibility of mobilizing additional funds.

2 Consultations with WIPO and collecting societies to explore the possibility of utilizing copyright royalty to further creative activities.

V Tourism as a Source of Funding

This ever growing field of industry heavily relies on culture for its development. Arts and arts facilities such as theatres, opera house and museums, and cultural heritage both tangible (such as cultural remains, historical buildings, artifacts and etc.) and intangible(such as traditional music and dance, festivals, foods, life-style and etc.) are increasingly attractive to tourists. It is therefore in the interest of the tourism industry to invest in them. Hence the idea of a levy on tourists, or alternatively on hotels and retailers. Tourists may also be asked to make voluntary contribution, for the protection and restoration of the cultural heritage they see or for the reproduction of the creative works they enjoy. Such schemes would be more acceptable to the industry if they are linked to international preservation efforts such as the World Heritage activities of UNESCO.

Proposed Action by UNESCO

1 Experimental projects to develop cultural tourism using local assets such as monuments, folk music and dance and crafts, festivals and etc. to attract more tourists and make them stay longer.

2 Introduce, in consultation with the World Heritage Committee, a system to encourage donations from visitors sites on the World Heritage List.

VI International Funds

In the developing countries whose economies can ill afford to sustain funding for culture, special efforts to mobilize foreign resources may be advisable to secure a minimum level of cultural funding, although too much dependence on this source may risk compromising the cultural integrity of the nation.

International Assistance

International economic and technical assistance, both governmental and non-governmental, directly or through international organizations, has become a permanent feature of the international system today. Indonesia reports for example that "Besides national funding sources, there are also foreign agencies cooperating with the Indonesian government. They provide technical cooperation, fellowships, equipment and financial contributions. Particular projects and financial subsidies has been established with the UNDP, UNESCO, SPAFA and ASEAN." The ASEAN Cultural Fund was established in 1978 for the implementation of cultural activities with donations by Japan and European and North American countries. "Foreign aid for cultural activities have also been obtained under bilateral agreements with such institutions like the Asian Foundation, the British Council, the East West Center, the Ford Foundation, the Fulbright Fellowship Programmes, the Ministry of Technical Assistance and the Ministry of Education and Science of the Netherlands." (12)

International Investment

With the prevalence of free trade relationships and trans-national corporations, international investment has become common throughout the world. The funds may be provided by private individuals, corporations, banks, governments or international organizations, differing from international assistance as gains are expected from the capital invested. China reports that "Making use of foreign capital is one of the main ways of raising money (for culture)" and mentions the case of Shanghai radio and television broadcasting stations that would make use of foreign loans to build a 450 meter tall TV tower. It also quotes the example of a puppet show troupe that gained benefit through joint operation for exporting puppets. (13)

Proposed Actions by UNESCO

1 Experts meetings to explore the possibility of increasing the use of international assistance and foreign investment for the development of cultural activities including cultural tourism

2 Consultation with international development agencies in the UN family of organizations to explore the increased investment in the cultural sector.

VII Diversification of Funding Sources

What we have seen in the above is the diversification of funding sources for cultural activities. One good example of such diversification of resources is provided by Ghana, which reports that its cultural activities are today funded from the various sources that include:

  • government budget;
  • non-government (commercial, financial, industrial, and other) organizations;
  • national endowment fund to which government, organizations and individuals should contribute;
  • percentage contributions from entertainment tax;
  • special funding of endowment of specific research project- oriented institutions and other private sector organizations in commerce and industry;
  • compulsory percentage contributions from building budgets for landscaping and environmental planning;
  • public earning from cultural activities. (14)

There still are people who recollect with nostalgia the cultural policies of the past under which government support alone provided financial stability for cultural activities. Yet, we must realize that today even countries with a tradition of public support are forced to seek alternative funding. Furthermore, mixed systems of funding are the surest way to guarantee freedom of cultural creation, as they leave choice on the side of the creators and people rather than that of funders. Experience has shown that cultural development that relies heavily on one single source of funds, be it governmental or non-governmental, runs the risk of being influenced by that source, either intentionally or unintentionally, possibly hindering cultural freedom.

VIII From Support to Investment

Expanding Investment in Creation

An unprecedented amount of money will be needed to finance arts and culture if the creative needs, not of the few as is the case in many societies today, but of all people, are to be met. Only investment, both public and private, can supply enough capital. In this regard, there are signs that the hope of attracting large investment to creative activities is far greater than we previously assumed. This is because arts and culture are becoming one of the largest industries in many societies. They contribute to economic wellbeing through job creation in addition to gate money, every dollar spent on the arts generate more dollars through restaurant, hotel, retail, transportation and etc. In the United States, the entertainment industry has been identified as the largest export item after aerospace(15). With the advent of multi-media and its increased demand for arts and entertainment programmes, the arts and entertainment industry is expected to be a large, and rapidly expanding one everywhere.

Some point out that these economic arguments often depend on very broad definitions of culture and overoptimistic assumptions about multiplier effects. Nevertheless, there seem to be good reasons to believe that the role of arts and culture in economic development will become far more important in the future. There is an increasing demand for more refined, distinctive, high-value added products and services. Wherever basic needs are being met, consumer preference has become more diversified and discriminating. In such economies, it is quality backed by high degree of sensibility that makes it possible to produce saleable commodities, for which artistic creation is just as indispensable as science and technology.

Greater investment in culture not only provides an additional source of income for creators, but also encourages the cultural sector to learn business culture and, in turn, induces the economic sector to appreciate the creative skills of the cultural sector. This may bring about some attitude change on both sides. The cultural sector may become more effective and market minded while businesses may become more sensitive to creative needs. Such interaction will benefit both sectors enormously.

The Thinning Line between For-profit and Non-profit Arts

It is generally accepted that investment in arts and culture is expensive. Non-profit arts organizations, no matter how successful artistically, usually lose money because of what Baumol and Bowen call the inevitable " cost disease" : an ever widening gap between income and expenditure(16). It is because of this that the arts are usually left in the hands of public or non-profit organizations.

Before accepting this theory, we must look into the reasons why entertainment, e.g. pop music and American style musicals, attracts huge audiences with high commercial success while non-profit arts attract only small audiences and lose money. Can we assume that the popular arts are not arts simply because they are mass-produced by entrepreneurs for profits ? Are we to conclude that arts should not be too accessible nor commercially successful and that the fewer people like a culture product and the more its producers lose financially, the better it must be?

Actually, the difference between these two approaches to the arts is often a matter of the social status of the audiences rather than that of the intrinsic nature of the art itself. Consider the fact that Kabuki, which is today considered to be a very refined form of arts, started as for-profit entertainment for the humble, low class people in Japan. Similarly, Mozart' s opera The Magic Flute which today is performed for elite audiences, was originally commissioned by a music hall as a for-profit enterprise to entertain ordinary people. Entertainment too has potential to achieve creative and aesthetic excellence.

If we pursue this line, the time will come sooner or later when the forms of arts that up to this day are the monopoly of non-profit efforts, may be open to for-profit organizations and enterprises. For example, some experiment may be made to have corporations and for-profit organizations produce works of art. Larger theatres, longer seasons, and more performances of each production may enable artists to serve larger audiences without significant increases in spending and without harming the quality of production. The use of computers, and the attainment of entrepreneurial skills by managers increase their cost-effect performance. The use of the media will open a new area where production will be more accessible and thus bring in more income. And above all, more attention to consumer preference will attract larger audiences.

We cannot tell how successful the application of the for-profit system to creative activity can be, or whether it will damage the artistic quality of productions or not. Entertainment and for-profit artistic endeavours have been remarkably successful in providing satisfaction to audiences while making the endeavour profitable. It is time that non-profit organizations learn more from for-profit organizations how to be more successful commercially. In turn, for-profit organizations can learn from non-profit arts how to be more refined and profound.

Proposed Actions by UNESCO

1 Experimental projects to develop creative and leisure industries in the developing countries that utilize existing cultural assets, both tangible and intangible, such as local or traditional crafts, design pattern and skill, recording of local dance and music and their sale, and etc.

2 International studies on the impact of creative activities on economical and social development and their contribution to new media, to encourage more investment in creative activities.

3 Consultation with other UN agencies responsible for industrial development to develop strategies for creative industries in the world.

4 Encourage member countries to improve their managerial, financial and marketing acumen to make the creative sector more adaptive to the market economy.

 

IX Media Produces Money

There is general agreement among planners and practitioners that development in media and other new technologies represents an unprecedented new frontier for arts and culture. This development will fundamentally reshape the application of technology to creation and its consumption. For example, recent developments in television broadcasting and recording, such as CD and Video, have provided an infrastructure that enables creativity to enlarge its scope and sphere by making creative products more accessible to the public.

Now, multi-media technology will make 500 channels, interactive communication between audiences and broadcasters, and between audiences themselves increasingly a reality. Aside from accelerating the dissemination of information and culture, the sheer amount of money that is required to produce media programmes to fill up these multi-channels, will open up new opportunities for all forms of creative expression. Multi-media sales are expected to increase rapidly and some predict that their sector will produce almost half of the GNP in some countries in the near future. Further, many predict that the major part of these sales will be produced by software rather than by hardware. And it is arts and entertainment that constitutes a major part of TV programming, far more than reporting, sports and education programmes combined(17).

There are some who consider development in media as detrimental to the creative cause because of the uniformity it brings about, and because of the low and vulgar tastes it appears to represent. Nevertheless, to resist the new media reality does not seem to be a viable option. The choice is either to let the market rule and accept investment by the media industry to develop creative activity, or resist the media money at the risk of being left behind the times. The answer seems to be apparent if we are to bring creative activities into the mainstream. But it is not only for money that arts and culture should actively participate in media development, but for the maintenance of the quality of the content of media. There are serious questions about the level of media programmes everywhere. Gratuitous violence, pornography and vulgar programmes are pervasive. And it is only arts and culture that could up-grade the level of the programmes. The fear of " homogenization" of world culture seems be excessive, as the diversification of tastes and values are essential for media as well to fill up the multi-channels and keep viewers attracted. Again it is arts and culture that can generate diversity in media programmes. As creativity and the media industry are bound together by common interests, there is no reason for them not to cooperate with each other for their mutual benefit.

Proposed Actions by UNESCO

1 Formulation of a task force to study the impact of multi-media on creative activities in particular, on

  1. Role of multi media in furthering creative activities ;
  2. Securing of free access to multi-media ;
  3. Protection of cultural rights of the people in multi-media environment ;
  4. Use of media capitals to further creative activities.

2 Experimental projects to produce multi media software in developing countries to encourage their participation in the global cultural dialogue through multi- media.

3 Forming of regional consultation groups to deal with the multi media situation collectively.

X Better Management of Creative Industry

In order for the cultural sector to attract more investment, however, it must become more efficient. There are still many artists in the world who see the spread of economic values as a threat to their dignity. Yet we must realize that art had its commercial aspects ever since it appeared in human history and that the market economy is accepted by most countries in the world today. The arts cannot remain aloof : it would be strange indeed to insist that creators should not earn their own livelihood as a rightful gain for their service to humanity. There is an urgent need for the cultural sector to train arts managers who, like managers in other businesses, are capable of defining their goals and objectives more precisely, marketing their products more effectively, and making their endeavours more accountable by introducing methods of performance measurement and efficiency evaluation. Today, many creative activities are still run by artists who are not necessarily the best managers. As good management is essential in the development of any industry, the training of arts management personnel and the entrusting of artistic endeavours to them, seems to be a sine qua non for the development of the arts in the prevailing market economy.

Proposed Actions by UNESCO

1 Develop guidelines for Member States countries to help them train cultural administrators and managers.

2     Expand fellowship programmes to train cultural administrators and managers in the developing countries and Eastern European and Central Asian countries

3 Network institutions concerned with the education and training of administrators and managers in the field of arts and culture

XI Mobilizing the People

Failure to Mobilize Creative Resources

We must bear in mind that no amount of material resources can make society fully creative without the full participation of people from all walks of life. Unfortunately, however, the enthusiasm and talents of people have not been fully mobilized to develop culture. Cultural policy everywhere is mainly concerned with creation by professional artists while dismissing the contribution of people at large. This runs contrary to the fact that, today, there is an undeniable craving among the many people who seek to act in community theatres, partake in amateur choirs, daub at a canvas on a holiday and revive traditional songs and dances of their community long neglected by culturally dominant groups. Creation is in no way a monopoly of the professionals. On the contrary, it is a dimension of life to be found in Man' s estate everywhere. Everybody has a striving for creativity that is only waiting to be awakened. There are many people who no longer want to be passive consumers of creative works but prefer to be creative players. Developments in media and technology are multiplying forms of creative expression, e.g. graphic design, computer assisted music composition, etc that, in turn, blur the boundaries between professionals and amateurs. It is true that professional artists represent the highest forms of creative talent. Their leadership in the arts and their role in inspiring others should of course be recognized. Nevertheless, this does not justify social closure of creative activity. Creation should be the endeavour for all, of all and by all.

To push the argument further, psychologists have argued that people have a need to express their grasp of the world of the senses" be this expressed through song, dance, drama, music, painting, or whether this expression is conducted individually or collectively, whether it is called arts or ritual, it is something that everyone needs to join in, not simply have served up by the " professional" (18). If this is the case, this basic need of all people is not only a grave injustice, but the surest way to lose public support for the creative cause.

Eliminating Exclusion from Creative Activity

Cultural policy often excludes whole sections of the community from cultural activities. Among such groups are elderly people, minorities, urban and rural population marginalized by poverty the and handicapped. But more serious is the exclusion of women and young people who constitute the majority group in any society. In a democratic society, any activity that fails to gain majority support majority has no chance of becoming mainstream. It is therefore not surprising that arts and culture, which are not being convincingly democratized are still marginal in national development policy. In order to remedy this situation, government and arts organizations should adopt policies and practices aimed at eliminating exclusion, and introducing cultural democracy where creative opportunity is extended to all on an equal basis. In a democratic society, it is the responsibility of the government to respond, as far as it does not endanger the cultural integrity of the nation, to the full range of cultural activities in their societies.

Broadening Support for Arts and Culture

Should we succeed in mobilizing more people to the creative cause, governments will find it far easier to spend more tax money on arts and culture. Corporations will find it more attractive to invest in creative activity, and citizens will be more willing to give moral support and donate both their time and money to the arts. The media, which are always conscious of the number of viewers, will show more interest in creative activity and the politician, whose major concern is the number of votes, will be more ready to support the arts. And most important of all, creative activities fully participated in by the majority will be a large industry in itself that merits more investment.

Arts and cultural festivals at local, national and regional levels, are instrumental in making people aware of the power of culture and in stilling among them pride in their culture. No one contests the crucial role of the Olympic Games in popularizing sports and physical education. The organization of such events in the field of arts and culture may produce similar effects, which in turn may help to mobilize popular supports for the creative cause. It will also help to introduce the arts of lesser known people and areas to the world. UNESCO may explore the possibility of organizing such events at international level, or alternatively, designating a world cultural capital, as the European Union does.

Proposed Actions by UNESCO

1 Organize forums to examine the ways to eliminate exclusion of certain categories, especially, youth, women, aged, handicapped, urban poor and minority groups from creative activities.

2 Sponsor world-wide cultural events similar to the Olympic Games where creative activities and traditional arts are be presented.

3 Encourage Member States to organize similar events at regional, national and local levels.

XII Arts Policy vs. Artists Policy

This question of mobilizing the majority of the people in creative activities leads us to the need to distinguish arts policy to promote creative activity in general, from policy which pertains to the direct improvement of the artist's economic and social lots. According to the UNESCO Recommendation Concerning the Status of the Artist, the latter should " benefit, taking account of the particular condition of his artistic profession, from the legal, social and economic advantages pertaining to the status of workers." It also affirms the need to " improve the social security, labour and tax conditions of the artists, where employed or self-employed, taking into account the contribution to cultural development which the artist makes."

It is no doubt essential to protect and further the status of artists who represent artistic excellence. Nevertheless, there must always be a balance between arts policy and a policy for the artist. Creative development requires both supply, represented by artists, and demand, represented by consumers who want more participation and satisfaction. If one or the other predominates, damage will be done to artistic development. This does not imply that standards should be abandoned, as some artists insist. It means that there are many kinds of arts with many kinds of purposes. Actually, most artists who make a living out of their creative work are in popular fields or in media where the state' s financial involvement is usually minimal. Investing only in professional artists in the state supported arts therefore runs the risk of devaluing more accessible artists, entertainers, regional or local artists, commercial artists and amateurs who are involved in the life of their communities more closely, without whom we may never achieve the full involvement of the population. As the report of the World Commission on Culture and Development states, " the prestige attached to the arts should not lead to the neglect of countless, modest imaginative undertakings that inject a vital substance into the social fabric." (19)

We note the very limited support for the arts in our communities reflected in the level of resources accorded, and the small audiences that the products of professional artists usually attract. The challenge of reconciling artist policy which has been at the core of some European cultural policies, and the arts policy that democratization demands, lies at the heart of any cultural policy. There is no easy answer that satisfies everyone. Nevertheless, the principle of equality demands strategies which do not favour particular forms of expression and particular kinds of creators but respond to the full range of cultural activities and demands. Policies for artists that emphasize excellence should be augmented by arts policies, designed to widen access and reach social groups that have been excluded from the pursuit of excellence so far.

Proposed Actions by UNESCO

1 Strengthen UNESCO programmes to enhance creative activities of people at large , including amateur and community activities.

2 Encourage Member States to strengthen arts education for people at large to develop their creativity.

3 Case studies on the role of creative activities to enhance the quality of life.

XIII Reunification of Divided Arts

The question of the mobilization of people for the creative cause mentioned above leads us to another crucial issue. How to reunite creative activities that have been divided in recent years into so-called " high" or "pure" arts that are more refined form of arts closely related to the life-style of culturally dominant groups in the big cities and other, more humble forms of creation such as entertainment, local and community arts and commercial arts like designing and crafts? This artificial line of demarcation between the two has done serious damage to the creative cause by isolating the high arts from the energy of the masses while depriving more popular forms of art of the opportunity to attain excellence.

Unfortunately, there still is an undeniable tendency in many countries to give priority to high arts while denying or belittling the creative values of more humble forms of creative activity. Even democratization measures taken by many governments appear to continue concentrating on mass distribution of the works of creation representing the high arts, ignoring the fact that people at large have a rich tapestry of community based culture of their own. It comes into an especially sharp focus in relation to youth culture - a potent fusion of popular music, underground theatres, casual fashions, video games, CDs and animation, Internet and American movies that give them a strong sense of identity. Young people who rush to these often foreign born cultures may do so because there is no indigenous culture that corresponds to their value and feeling as well. It may be because young people are not satisfied with the state endorsed or adult orientated arts and culture that they rush to these mostly foreign oriented cultures. To deny the value of this youth culture, and that of other marginal groups, be it minority or local people, is to deny the cultural rights of these people to create their own values and lifestyles. There is a real danger that people, in particular, youth, minority groups and local populations, who are becoming increasingly aware of the values of their own indigenous creations, will develop hostile feelings against such impositions of culture external to their life style and values.

In order to mobilize all the resources of society to achieve a creative rebirth, we must reinstate all forms of creation, including not only the high arts but also entertainment, crafts, community arts and minority arts, and last but not least, commercial arts including architecture, design and production of all high quality merchandise. This re-convergence of all forms of creation, will enable us to mobilize major resources in the march towards a creative society.


Michihiro Watanabe is Dean of the Department of Music and Arts Administration, Showa University of Music, Japan. He has been in public service for 33 years. His last position in government was as Director-General of the Department of Culture of the Agency for Cultural Affairs of Japan in charge of the overall development of national cultural policies, which he held until 1991. He co-directed the US-Japan Comparative Cultural policy Study at UCLA as visiting scholar before he took up his present position in 1996. His major works include the philosophical trilogy Striving for Eternity.


"Recasting cultural policies"
Introduction
Jean Barthélemy
Bennett & Mercer
Néstor García Canclini
Cliche, Mitchell & Wiesand
Jérôme Huet
Britt Isaksson
Lofti Maherzi
Sally Jane Norman
Michiro Watanabe
pijltje.gif (895 bytes) A new globlal ethics
pijltje.gif (895 bytes) A commitment to pluralism
pijltje.gif (895 bytes) Challenges of a media-rich world
pijltje.gif (895 bytes) Recasting cultural policies
General introduction
recasting cultural policies