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Robert Hunter's presentation will outline the findings from a recent review of the Department's programs, explore observed trends and discuss how programs at the Department have evolved to ensure their continued relevance.
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Canadian Heritage Perspectives on Trends in the ArtsPresentation by: Robert Hunter, DirectorArts Policy Branch, Department of Canadian Heritage
Arts Consultants Canada/Consultants canadiens en artsOctober 29, 2010
2
SETTING THE STAGE
3
Royal Commission on National Development in the Arts, Letters & Sciences (Massey-Lévesque)
Massey-Lévesque Commission Report
Canada Council for the Arts
First Secretary of State – responsible for the development of arts in Canada
NAC officially opens
First national forum on cultural policy & Department of Communications Act
Cultural Statistics Program and Capital Assistance Program administered by the Secretary of State’s Arts & Culture Branch
• Canada Council Art Bank – investing in visual artists
• Local Initiatives Program
Canada Council Touring Office & Explorations Program
Federal government’s arts & culture programs transferred from the Secretary of State to the Department of Communications
Canadian Arts Council, (Canadian Conference of the Arts)
Broadcasting Act
National Arts Centre Act
• National Museums of Canada Act
• Canadian Film Development Corporation Act
Council for Business & the Arts in Canada
1950 20011960 19801955 1975 19851965 1970 1990 1995
Federal Cultural Policy Review Committee (Applebaum-Hébert)
Federal White Paper on the Copyright Act
Arts representatives at the National Economic Conference
Status of the Artist Act
Cultural Initiatives Program, Department of Communications
Major increase in federal funding for the arts
4
SUPPORTINGTHE ARTS
The Department of Canadian Heritage, along with Canada’s major national cultural
institutions, plays a vital role in the cultural, civic and economic life of
Canadians.
We work together to promote culture, the arts, heritage, official languages, citizenship and
participation, Aboriginal, youth, and sport initiatives.
5
The Government of Canada, like other national governments, focuses its investments on professional not-for-profit artistic activity, mainly through:
Parliament (policies, tax measures & financial investment)
Canada Council for the Arts
Artistic creation & artistic production
Canadian Heritage Arts Policy Branch
Professional arts training, artistic
experiences, arts spaces, community engagement,
responsible & professional management practices
To encourage: excellence in the arts, the creation of original Canadian content, the development of the right skills and capabilities, and competitiveness for a thriving arts sector… …so that Canadians access original Canadian artistic content.
6
The Arts Policy Branch and the Canada Council are two primary federal funding bodies that support the arts sector in complementary but distinct ways
Eligible Recipients Arts Disciplines Ensuring
Canada has artists
Ensuring Canadians have access to arts
& artists have spaces to create
Ensuring arts are sustained over the years
N
ot-
for-
Pro
fit A
rts
Org
ani
zatio
ns
(P
roje
ct &
pro
gra
mm
ing)
No
t-fo
r-P
rofit
Art
s O
rga
niza
tions
(O
pera
tiona
l)
Ind
ivid
ual A
rtis
ts
Mu
nici
palit
ies
Oth
er (
i.e. u
nive
rsiti
es)
Pe
rfor
min
g
Vis
ual
Me
dia
Lite
rary
Pro
fess
iona
l Art
s T
rain
ing
Inst
itutio
ns
to t
rain
art
ists
fo
r na
tiona
l & in
tern
atio
nal
car
eer
s
Pro
fess
iona
l de
velo
pm
ent f
or
indi
vid
ual a
rtis
ts a
t d
iffer
en
t sta
ges
of t
heir
care
ers
Fes
tival
s &
ser
ies
pres
ent
ers
that
offe
r a
var
iety
of
pro
fess
ion
al a
rtis
tic e
xper
ienc
es a
cros
s C
ana
da
Infr
astr
uctu
re p
roje
cts
for
art
s or
gan
izat
ions
(b
uild
ings
, so
und,
ligh
ting,
etc
.
Ind
ivid
ual a
rtis
ts &
art
s or
gani
zatio
ns fo
r re
sea
rch,
cr
eat
ion
, pro
duct
ion
& to
urin
g
Ass
essm
ent
of a
rts
org
aniz
atio
ns in
pa
rt b
ased
on
th
e s
tre
ngth
of b
usin
ess
pra
ctic
es
Fun
ds a
rts
org
ani
zatio
ns th
roug
h in
itiat
ive
s d
esig
ned
to in
cre
ase
org
ani
zatio
nal
& fi
nan
cia
l sup
por
t with
in
Ca
nad
ian
co
mm
uniti
es
Su
ppo
rts
arts
org
aniz
atio
ns in
ad
dres
sing
o
rgan
izat
iona
l cha
lleng
es
Inte
rve
ne q
uic
kly
whe
n pr
ob
lem
s ar
ise
in
org
aniz
atio
ns w
ith h
igh
pote
ntia
l but
low
a
dmin
istr
ativ
e s
kills
Arts Policy Branch Programs
Canada Council for the Arts
Key Policy Areas
7
CULTURE MATTERS
8
3,923 Performing Arts Companies in Canada• 2,915 for-profit
• 1,008 not-for-profit
86% of Canadians attend at least one type of arts or cultural event per year
Canadians spend twice as much on live performing arts as on live sporting events
In 2003, artists and arts organizations contributed $2.51 billion to Canadian GDP
There are 141,000 artists in Canada
Canadians volunteered 74,000,000 hours for arts and cultural organizations
9
THE DESIGN
10
The Arts Policy Branch Key Roles and Responsibilities
• 6 programs with annual budgets ranging from $390,000 to $33.8 million with a total budget of $122.7 M
• Guide policy research on the arts
• Legislative issues related to arts
• Designate National Arts Service Organizations
• Work with the National Arts Centre and the Canada Council for the Arts to realize their legislated mandates
11
Three pillars for a competitive arts sector
CreationTraining + Excellence
Primarily the responsibility of the Canada Council, which unlike the Arts Policy Branch regularly assesses artistic merit – is the art good art?
The Arts Policy Branch also supports excellence and diversity through one of its programs, the Canada Arts Training Fund.
Our goal is that Canada’s most promisingartists receive excellent training for nationaland international careers in the arts.
• Funding for arts training organizations• Annual budget: $24.1 million• 36 training programs in disciplines such as
theatre, music, and circus arts• Diverse range of training programs, from
Korean dance to Inuit sculpture to classical European opera
• Funding ranges from $25,000 a year for an Afro-Caribbean dance program to $3.3 million a year for the National Theatre School
AccessPlaces + People
The Arts Policy Branch helps connect peopleand the arts – helps Canadians access the arts– through two of its programs:
Canada Arts Presentation Fund:• Funding for festivals and series presenters• Our goal is that Canadians have more
opportunities to access a wider variety of the arts
• Annual budget: $33.4 million• Over 600 clients presenting festivals and
artistic series in disciplines such as theatre, music, film, dance, and literature
• Over 220 communities reached across Canada, from Toronto and Vancouver to Minnedosa, Manitoba and Dawson City, Yukon
• Funding ranges from $5,000 for smaller festivals to $1 million for the Montreal International Jazz Festival
Canada Cultural Spaces Fund:• Funding for infrastructure: renovating existing
arts buildings, constructing new ones, buying specialized equipment like sound systems or lighting boards, and conducting feasibility studies for proposed projects
• Our goals are that Canadians have greater access to the arts (and to heritage) and that artistic creativity has space within which to flourish
• Annual budget: $30 million• 728 projects in over 250 communities since 2001• Support for theatres, concert halls, art galleries,
museums, heritage parks, arts centres, etc.• Funding ranges from $2,000 to $3,000 for smaller
purchases up to $2-3 million for major building projects.
SustainabilityPartnerships + Business Models + Skills Development + Awards
The Arts Policy Branch helps sustain the arts in Canada through two approaches:
Legislation
Status of the Artist Act, 1992The importance of artists in Canadian society self-employed artists’ right to collective bargaining
Income Tax Act In partnership with the Canada Revenue Agencydesignate national arts service organizations
Program
Our main program for sustaining the arts sector is the Canada Cultural Investment Fund…
THIS PROGRAM WILL BE DISCUSSED IN GREATER DETAIL, BUT FIRST…..
12
WHY SUSTAINABILITY?
13
Arts organizations require management capacity, outreach capability, financial stability and community roots to support their chosen artistic vision.
This can be challenging – because the Arts have the highest personnel costs of all the Cultural Industries, despite the relatively low earnings of artists.
Percent of expenditures on personnel (salaries, benefits, contract workers, freelance payments):
Source: Statistics Canada, various cultural industries surveys.
Not
-for
-pro
fit P
erfo
rmin
g A
rts
Her
itage
Boo
k P
ublis
hin
g
Film
& V
ide
o P
ost-
prod
uctio
n
Per
iodi
cal
Pub
lish
ing
Sou
nd
Rec
ord
-ing
Mov
ie
The
atre
s
57%53%
38%33% 28%
14% 14%
14
Doing business in the arts
The Arts Industries are characterized by a mix of tangible and intangible products, and these products are generally unique, i.e. not mass-produced or mass-distributed.
The commercial model of doing business, where the goal is to make a profit, works best when the cultural product in question can be mass-produced and mass-distributed (Written Media, Film and Video, Sound Recording, Broadcasting). This model is however generally less successful, though not impossible, when the cultural product is unique, cannot be mass-produced, and requires the consumer to come to the product (Heritage, Arts Industries, notably the Performing Arts).
Performing Arts & Festivals
Focus on Production
Consumer comes to the product (the recital, play, or opera)
Revenues in part from ticket sales
Visual Arts & Media Arts
Focus on Creation
Specialized outlets (galleries, artist-run centres)
Revenues from sales to customers
15
The Performing Arts in Canada – Revenue Trends
In 2010, Canada was home to 1,008 professional, not-for-profit performing arts companies. They operate using three types of revenues: earned, public and private. From 1991 to 2006, the following was observed:
• Earned revenue has historically hovered around 50% of total revenue
• Over the15 years observed, the overall proportion of funding from all level of governments has decreased from 34% to 26%
• Private funding has increased from 16% to 23%
Revenue Breakdown
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
1991 1993 1995 1997 1999 2001 2003 2006
earned govt private
Source: Statistics Canada Performing Arts Surveys.
16
Good news – an indicator of financial health
Between 1991 and 2007, the financial health of Canadian arts organizations generally improved:
•Average deficits got smaller•More Canadian arts organizations accumulated surpluses•Fewer arts organizations posted accumulated deficits
-$200,000
-$150,000
-$100,000
-$50,000
$0
$50,000
$100,000
1991
1992
1993
1994
1995
1996
1997
/199
8
1998
/199
9
1999
/200
0
2000
/200
1
2001
/200
2
2002
/200
3
2003
/200
4
2004
/200
5
2005
/200
6
2006
/200
7
Major Investments in Arts
Source: Business for the Arts, Performing Arts Surveys.
17
Impact of the recession on the arts sector
According to Summer 2009 survey data from the Performing Arts Alliance, several detrimental effects were felt by Canadian arts organizations during the recession:
• A majority of arts organizations reported diminished revenue in 2008-2009 from a variety of sources: year-end fundraising, corporate contributions, foundation support, and ticket sales.
• Many organizations are forecasting a year-end deficit and have had to adjust their operations.
From Departmental monitoring and analysis, several trends emerged during the recession:• Subscription sales declined;• Endowment investments provided organizations with little or no return;• Corporate sponsors reduced or withdrew contributions; and• Some arts organizations avoided risky or unproven programming in favour of ‘sure hits’.
Despite these challenges, there is no evidence of closures of professional Canadian arts organizations due to the recession.
Arts organizations could be facing a situation where their endowments and donations continue to be reduced in the short-term. Nevertheless, endowment investments have begun a cautious recovery towards the beginning of 2010.
All cultural industries have been affected at different points of the value chain, to varying degrees of severity.
• Some arts organizations reduced the number of performances or the number of different productions, planned to tour less, or opted for safe programming.
18
A MODEL FOR SUSTAINABILITY
19
Financial & Organizational
Health
ArtisticVision
Opportunity for sustainability…requires a balance
between:
20
Canadian Arts & Heritage Sustainability Program (2001-2009)
Objective: Strengthen organizational effectiveness, build operational and financial capacity of organizations in the arts and heritage sectors, and celebrating and supporting Canadian communities’ achievements in the arts and
culture.
The program pursued the fulfilment of its mandate mainly through the following components:
Stabilization Projects – Award contributions to private, sector-led, multi-year stabilization projects, whose role is to provide technical assistance, deficit reduction assistance and working capital to arts and heritage organizations.
Capacity Building – Support individual arts and heritage organizations to produce strategic or business plans, develop revenue generation strategies, improve management tools and conduct market studies.
Cultural Capitals of Canada – Communities that have made arts, heritage and culture integral elements of community life are designated Cultural Capitals of Canada.
Endowment Incentives – Match funding from private donors to arts organizations’ endowment funds to a maximum ratio of 1:1.
21
IMPACT
22
Stabilization Projects Component
Engaging community support – a shared investment Comprehensive, multi-year stabilization projects in 10 geographic areas supported to increase working
capital and shore up business skills of eligible arts and heritage organizations. Over 200 participating organizations. Community leaders contributed time and expertise as trustees on boards of directors as well as invaluable
insight from private sector. Interviews have demonstrated that stabilization create synergies between general manager, the artistic
director and the Board, thereby enabling the arts or heritage organization to move its vision forward.
Success Story
The Creative TrustProject Goal: To support and strengthen Toronto’s mid-size, creation-based performing arts companies by assisting them in developing their planning and financial skills, achieving organizational and financial balance, and acquiring and maintaining a fund of working capital.Duration: 2002-2008
Results after year 1:• 7 companies receiving matching deficit reduction grants or their first working capital awards.• Total revenues of all 11 participating companies increased by 6.3%, from
$14.9 million to $15.9 million.• Of the 6 companies that entered the program with accumulated deficits, total revenues increased by
15%. These same companies reduced their combined deficits by 47%.• All companies combined increased their private sector funding by 14.8% to $3.9 million.
Source: “The Canadian Arts and Heritage Stabilization Experience”, WME Consulting Associates, May 2006.
23
Cultural Capitals of Canada
Building sustainability at the local level
Since 2002-2003, there has been a total of 141 eligible applications from communities
of all sizes, and 37 designations have been awarded for a total of $26.2 million in
approved contributions. In recipient communities, many activities
undertaken in the year of designation have
been sustained even after federal support is no longer present.
Municipalities increase involvement in cultural policy development and further
integrate culture in municipal planning.
“You can do an awful lot with $2 million of federal money.
You're not going to build stadiums with that kind of money but you can
build relationships, said John Mahon, executive director of the Edmonton
Arts Council, adding one of the lasting legacies from this city’s
2007 award is the commitment toconnect newcomers to Edmonton's
artists and art institutions.”
Winnipeg Free Press28 August 2009
24
Endowment Incentives Component
How it works:
Encourages arts organizations to strengthen their organizational and governance resources
Helps arts organizations build and diversify their financial resources
The resulting ripple effect gives arts organizations the opportunity to focus on their human and physical resources
+
“The Canadian Arts and Heritage Sustainability Program
is enabling us to build on the generosity of our donors to
Increase our endowment to a level which is now substantiallyimpacting the Citadel Theatre’s
operating budget and helping usto remain a strong, vital
organization. We greatly appreciate the opportunity to participate in the Program...”
Penny RitcoExecutive Director,
The Citadel TheatreEdmonton, Alberta
Cultural Affairs Sector2007-2008 Annual Report
25
Sources of Endowment Donations from 2004-2005 to 2009-2010
$55 680 921
$22 686 457$20 664 082
$15 094 412
$5 947 429$4 112 211
$0
$10 000 000
$20 000 000
$30 000 000
$40 000 000
$50 000 000
$60 000 000
Individuals Corporations Non-GovernmentalFoundations
Beneficiary ArtsOrganization
Publicly ListedSecurities
Other
Sources of Donation
To
tal A
mo
un
t
A Powerful Partnership
Since 2001-2002, $149 million have been donated by Canadians to arts organizations’ endowment funds*
From 2004-2005**, individuals alone have contributed $55.7 million (34% of total donations)
* Based on eligible applicants
** The program started capturing the information in 2004-2005.
26
In 2009-2010, 66 applications received funding totalling $14.9 million from the program, matching $0.71 for every dollar donated by the private sector.
Despite the global economic recession, the private sector donated close to $21 million to arts applicant organizations’ endowment funds, only 1% less from the previous year.
Nearly half (46% or $9.6 million) was donated by individuals while corporations and non-government foundations donated 23% each ($4.9 million and $4.7 million respectively) – the remainder came from other sources.
This significant financial commitment is a clear indication that Canadians and arts organizations continue to believe in the value of endowments.
Endowment Incentives – coming together even in difficult times
27
Capacity Building Component
Strengthening Business Skills
From 2002-2003, close to 1,300 individual capacity building projects supported improved governance, financial self-sufficiency, marketing and fundraising activities.
Over 70% of these projects were for governance and fundraising. A survey showed that once organizations addressed core areas such as governance or management
practices, they felt better equipped to improve other areas such as financial self-sufficiency and audience development. For “one-off” projects, after working on just one competency, 90% of organizations felt ready to work on another.
The 2009-2010 fiscal year marked the final year of Capacity Building individual project support, with a reduced grants and contributions budget. In 2009-2010, the following was observed:
93 requests for projects were submitted of which 66 were supported. 35 projects for arts organizations and 31 for heritage organizations approved to improve management
practices. Over 41% of supported projects were related to improved governance, 29% to audience and membership
development, 15% to management practices and 15% to financial self-sufficiency. The federal investment in the capacity building of arts and heritage organizations totalled $1,688,286. This
represents 42% of the total project costs. For every $1 invested by CAHSP, $1.40 was invested by the recipient organizations and partners within
their community to undertake organizational capacity building projects.
28
Capacity Building Component Number of requests
0
100
200
300
400
2002
-20
03
2003
-20
04
2004
-20
05
2005
-20
06
2006
-20
07
2007
-20
08
2008
-20
09
2009
-20
10
Total Number of Requests
PEAK
Capacity Building Projects – Decrease in Demand
29
Moving Forward – Building on Past Accomplishments
The Summative Evaluation of the Canadian Arts and Heritage Sustainability Program concluded that:
The program has successfully stimulated a cross-Canada focus on issues of sustainability and leveraged funds from other levels of government and the private sector.
There is a continuing need for such a program to strengthen the effectiveness, management and financing of arts and heritage organizations, and help them face new challenges.
The vast majority of organizations that were interested and eligible to participate and benefit from the Stabilization Projects component have already done so, as no new projects have appeared in the last four years. There is a general consensus that Stabilization Projects have completed their objectives and are naturally winding down.
The Department should build on the accomplishments of the program and develop a strategy to foster an environment for sustainable arts and heritage organizations collectively.
Source: “Evaluation of Canadian Arts and Heritage Sustainability Program (CAHSP)”, Office of the Chief Audit and Evaluation Executive, Evaluation Services Directorate, February 2009.
30
ADAPTING THE MODEL
31
Canada Cultural Investment Fund
The Canada Cultural Investment Fund builds on the success of the earlier program by continuing to help improve the sustainability of the environment in which arts and heritage organizations operate.
The program objectives are to: Help arts and heritage organizations build and diversify their revenue streams; Strengthen their organizational capacity, business skills and competitiveness; Assist them in being better rooted and recognized in their communities.
This will be accomplished through the following main components: Cultural Capitals of Canada Strategic Initiatives (new) Endowment Incentives
32
Capacity Building for individual organizations
Organization A
A
D
C
PCH
B
Organization A
Organization A proposes project X
Various partners involved so that organization A
undertakes project X
Organization A benefits from developing a business
competency thanks to project X
33
Various funding partners involved so that project X is
undertaken
Strategic Initiatives = broader impacts
A
Organizations (a min. of 3) get together to propose
project X
Project X is completed and shared with many organizations
A
D
C
PCH
B
B
C
Project X
34
Community involvement
• Provincial & municipal governments; private/business sectors; community arts organizations; citizens
Cultural Capitals of Canada
Moving to Strategic Initiatives
StabilizationProjects
CapacityBuilding
Business communitycommitment
• Private sector – business leaders
Individual Projects
• Arts & Heritage organizations
Endowment Incentives
Matching grants
• Individuals; corporations; foundations; beneficiary organizations
Cultural Capitals of Canada
StrategicInitiatives
Collective initiatives with
broad impacts
Private sector; public sector;
not-for-profit sector; academia
Multiple partners to undertake
initiatives to strengthen
effectiveness, management and
financing of arts & heritage
organizations, and advance
cultural development at the
local level.
NetworkingInitiatives
Local cultural involvement
• Provincial & municipal organizations; elected officials; municipal professionals
Endowment Incentives
Community involvement
• Provincial & municipal governments; private/business sectors; community arts organizations; citizens
Matching grants
• Individuals; corporations; foundations; beneficiary organizations
35
WHY?
36
BECAUSE THE WORLD IS CHANGING FAST
37
Renewal of major arts funding
Renewal of major federal arts funding – a new approach
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Start of the global economic crisis
Canada on the way to economic recovery
The new millennium – Choices are abundant, audiences are diversifying, the marketplace offers more platforms to reach out to the world, collaborate and further develop relationships.
Canada’s Economic Action Plan
Major new federal funding for the arts
38
96% of Canadians
aged 12 to 17use the internet
87% of Canadian
Internet users connect to
Social networking sites
13 million Canadians
use Facebook
39
Strategic Initiatives Requests - What we have noticed already
2010-2011
45% of eligible projects are to streamline processes and use technology to improve efficiency
2011-2012
25% of eligible projects are to streamline processes and use technology to improve efficiency
40
THE WEEKEND CULTUREOPENED ITS DOORS TO ALL
41
Culture Days 2010
In September 2010, thanks to Culture Days, Canadians across Canada were invited to take part in arts and culture activities in their communities.
Over 1,100 organizations and/or partners worked together to open their doors to Canada. Hundreds of thousands of Canadians across Canada celebrated arts and culture in their communities during this first annual edition.
More than 700 Canadian cities and towns opened their doors and offered 4,500 free Culture Days hands-on classes, excursions, tours, demonstrations, seminars, panels and behind-the-scenes experiences, for free.
For the first time, the Department had to means to participate in this innovative, collaborative success. Through Strategic Initiatives, funding was provided to assist the development of a Learning Network, a marketing, communications and public relations campaign, a digital strategy and research on the impact of the initiative.
42
Culture Days – Connections A Mari usque ad Mare
43
‘Thinking’ arts enterprises
deserve
‘thinking’ arts funders
The Arts Policy Branch’s key challenge:
How do we continue to respond to the ongoing challenges of the sector?
Source: Lynn duFort and Kathleen Speakman, “Sustainability & The ‘Thinking’ Organization,”
VAST/APASF Presentation, 4 Nov. 2003