Arts Advocacy Update XCIII: Hedging Havana



The content below is from Americans for the Arts’ Cultural Policy Listserv email blast of July 15, 2009:

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Cuba Invites New York Philharmonic to Perform in Havana
The New York Times Arts Beat Blog, 7/9/2009
“The New York Philharmonic, continuing its travels in the Communist world, is seriously considering an invitation to perform for the first time in Havana. Philharmonic officials plan to travel to Cuba on Friday to look over logistics, the orchestra’s spokesman, Eric Latzky said. The visit would take place in late October, just a few days after the orchestra returns from an Asian tour that will include Vietnam, another first for the Philharmonic. In February 2008, it traveled to the isolated, totalitarian North Korea in a trip that drew wide publicity. In the wake of that visit, several Philharmonic officials had casual conversations with an ABC News official who has contacts with Cuban diplomats in Washington. The ABC official put the two sides together, unofficial contacts ensued, and a formal invitation came last week, Mr. Latzky said. The Cuban visit would last three or four days, he said, and include two concerts.”
Very smart — I hope this happens. The most efficacious way to bring Cuba into the 21st century — heck, the late 20th century — is through culture. Hopefully our State Department won’t stand in the way. It certainly shouldn’t. (Could there be, by the way, a similar cultural exchange between theaters? Here’s the link to the Teatro Nacional de Cuba.You tell me.)

White House Offers Details On New Social Innovations Fund
The Chronicle of Philanthropy, 7/10/2009
“The Social Innovation Fund, created by the Edward M. Kennedy Serve America Act that was signed in April, will provide money to help nonprofit groups expand innovative social projects, or start promising new ones, with a strong emphasis on results. Matching funds must be provided by private sources or state or local governments. The White House fact sheet notes that spending is contingent on congressional approval of the budget for the Corporation for National and Community Service for fiscal year 2010 (which begins October 1). The president said last week that the Social Innovation Fund would provide money to ‘the most promising nonprofits in America’ and that Melody Barnes, his domestic policy adviser, and members of the ‘discover and evaluate the very best programs in our communities.'”
What’s key is this part of the story — that recipients must:

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Propose to use the money in one of the following areas: elementary or secondary education for low-income students, child and youth development, poverty reduction, health, resource conservation, energy efficiency, civic engagement, or crime reduction.

Nice, but won’t help the arts much.

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Michigan: Arts Organizations Waiting on Finalized State Budget
The Detroit News, 7/9/2009
“Gov. Granholm’s plan to eliminate the Department of History, Arts, and Libraries is an example of how difficult it might be to eventually downsize larger departments. Granholm’s budget proposal not only would eliminate the department-which oversees the Michigan Council for Arts and Cultural Affairs, the Michigan Historical Center, the Library of Michigan, and Mackinac State Historic Parks-but would cut about $6 million in grants to local arts and cultural organizations. Responsibilities would be shifted to other departments. The House’s budget proposal would keep the department together and fund the Council on Arts and Cultural Affairs at $6.1 million. The Senate’s budget plan assumes the department will be eliminated and would appropriate $3.4 million to the Council on Arts and Cultural Affairs, about half its current funding level. Granholm’s proposed cuts were met with a flurry of protest from the arts community.”
I think everyone knows that this is stemming from the fiscal mess in Michigan, where according to one Armageddon-declaring Congressman, unemployment could hit 20%. Even fiscal-impact argument can’t hold water under such a scenario. Arts in Michigan had better think about a top-to-bottom rebuilding very soon.

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Indiana: State Budget Cuts Hurt The Arts and Tourism, 7/8/2009
“The budget for the Indiana Arts Commission was cut by nearly $1 million. The Evansville Civic Theatre said that’s on top of an already 15 percent drop in funding based on population. ‘Any kind of decline or shortfall in those revenues are revenues we have to find somewhere else,’ Evansville Civic Theatre’s managing director Lynn Kinkade said. Kinkade said they’re used to operating on a lean budget, and they already cut costs where they can. ‘Keep the air conditioning not running too high or the heat in the winter, except when there’s a paying audience, when the crew’s here working or rehearsing, they kinda shiver in the winter and sweat in the summer,’ Kinkade said…Evansville Civic said they don’t solely rely on state funding, but it does take a cut out of their operating budget. To make up what’s been cut, they’re finding creative ways to attract more people to the theater.”
Like…begging? And where are organizations like Theatre Communications Group in this? Not tending to non-members? There’ll be a lot more shivering to come, alas.

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Survey: Large Nonprofits Forced to Make Investment Changes
The Chronicle of Philanthropy, 7/8/2009
“Seventy-one percent of American nonprofit organizations in a new survey say that they are making changes in how they allocate their invested assets, in the wake of staggering losses brought on by the recession and market volatility, according to SEI’s Institutional Group, an investment manager with headquarters in Oaks, PA. The pool of respondents reported taking big hits in their investments. Eighty-one percent of the organizations surveyed said their invested assets had declined by at least 21 percent last year. Such losses have triggered some hard choices, according to the poll. Forty-five percent of respondents said the recession has forced them to decide between cutting staff positions and trimming programs. The survey included 160 nonprofit organizations with endowments, with the smallest having at least $25 million in invested assets and the largest endowments surveyed having $1 billion or more in assets.”
Am I reading this wrong or does this part of the story suggest that nonprofits are still looking toward hedge funds, potentially of the super-risky, endowment-destroying sort, despite what the economic collapse should have taught them about investing? Read this:

Among those organizations that are making changes in how they allocate their investment funds, the largest share-69 percent-said they are moving into fixed-income investments; nearly as many respondents-67 percent- said they are increasing their holdings in other alternative investments.

By contrast, the groups that are making changes were most likely to be decreasing their holdings in foreign equities (63 percent), and in hedge funds (58 percent).

Hedge funds, which use a wide range of investments to protect, or hedge, against a variety of market conditions, are still the most popular alternative investment among respondents, with 74 percent of groups who invest in alternatives saying they are currently invested in such funds. (Of groups in the survey with more than $300-million in assets, 89 percent said they had hedge funds in their portfolios.)

District of Columbia: Major Theater Company Furloughs Staff
The Washington Post, 7/8/2009
“The Shakespeare Theatre Company will furlough its 100-plus employees, including Artistic Director Michael Kahn, this summer to help the bottom line. The furloughs will be staggered. Although the furlough ‘doesn’t account for a huge amount of money in our budget, it does account for something,’ says Stacy Shaw, the theater company’s director of marketing…’Compared to what other people are going through, [the furlough] feels fairly minor,’ Shaw adds.”
This news seemed absolutely staggering when I read it last week. But I have every reason to believe that the Shakespeare Theatre will pull through and emerge as brilliant as ever. (I’m a big Michael Kahn fan — I admit it. I am!)

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