National Arts Stabilization
Volume 2, Issue No.
A Conversation with Stanley
Woodrow Wilson School
Center for Arts and Cultural
The following conversation is a follow-up to
"Criticism of Foundations," an article by Stanley N.
Katz that appeared in Grantmakers in the Arts, Volume 9,
Number 2, Fall 1998.
The relationships in arts funding donít exist in a vacuum.
How did we get to the present funding environment?
The nonprofit arts world has changed enormously. I think the
starting point is thirty years ago. You have on one hand the federal
government, and on the other hand, the Ford Foundation. Ford spent
something like $80 million on the arts in those early days under
the leadership of Mac Lowry. They learned a great deal; it was
a wise expenditure of money, and it launched subsidiary organizations
like National Arts Stabilization. But these funding initiatives
also stimulated the growth of infrastructure in the arts. You
needed infrastructure in order to achieve the aims of the funders
and the aims that they wanted to be the aims of the organizations.
Then came the origin of the two national endowments. Not only
the sudden availability (although it was very small at first)
of central federal funding for the arts, but at the same time,
there was what amounted to encouragement to set up or expand national
service organizations in the arts. Most of these didnít exist
or exist fully at the time. The endowments and the service organizations
began to develop a national system for recipient organizations
that became important for a kind of pooling effect. The pooling
occurred according to arbitrary lines, according to disciplines.
One of the effects was to segment arts fields.
The service organizations and their memberships along discipline
lines had a tremendous impact as they began to focus on Washington.
It enhanced a turn toward politics. By politics, I mean the politics
of the arts in a way that was quite destructive in the long run.
And I think it was in part a response to the new federal funding.
At the same time, there was an equal and opposite effect in the
emergence of corporate funding. It existed prior to that time,
but not on a large scale. The emergence in the 1960s and 1970s
of corporations as major players in the funding world, especially
in the arts, for a small but important number of them, was enormously
important. On the one hand, there was more money in the system.
On the other hand, those kinds of funders had agendas and had
strong preferences about the possible uses of their funds. Some
of them pushed in the direction of large-scale events or shows
because public relations was their goal. The best way to achieve
that end was to attach your name to something that lots of people
came to or observed. That wasnít all that was going on in corporate
funding, but it was one of the most dramatic factors that conduces
toward production of the blockbuster show and other comparable
The third major element is the emergence of television as a major
factor in everything and certainly in the arts. That in itself
created both funding needs and artistic opportunities that were
to shape what was produced.
In an altogether crude way I point out these three factors as
creating what I think of as arts funding Act I. I would start
there and say that what happened next, Act II, continues up to
the present. That is, it turned out that this new system was not
as stable as many of us had thought.
The current dynamic between arts organizations and grantmakers
can be traced to the enormous expansion of funding that started
in the 1960s. The common thread among the expansion of arts funding,
the political organization of the arts, and the impact of television
is the optimism, creativity, and the energy that led to the enactment
of the legislation for NEA and NEH. This spirit made itself felt
in a different way in places like the Ford Foundation. These are
expressions of what I would call Johnsonian cultural exuberance.
I consider 1965 to be the one year in American history, up to
this point, when the Endowments could have been passed. It was
just luck that there was a convergence of political and cultural
instincts at that moment. A year later we had the Vietnam War
and Johnson was in deep trouble. A year earlier we were focused
on civil rights. So, 1965 turned out to be the unique moment.
To a considerable extent, creation of these agencies was a product
of the cultural ethos of the 1960s, but that was always in conjunction
with what I would call the social planning instincts of the sixties
which reached their high point in the Johnson administration.
On the private side, it was in the Ford Foundation of McGeorge
Bundy. Those are two sides of the same coin.
Ford invested enormous sums of money and not in a random way.
It wasnít just that the leadership had a set of ideas, but the
whole policy side of the Ford Foundation had a set of ideas about
how cultural and social development were linked. It is one of
the great examples of private social planning in American history,
and weíre still living with the consequences of it. What most
people havenít recognized is that on the whole, the private sector
has always been more important than the public sector. Thatís
obvious now, but one could only tell that about the 1960s and
the 1970s by looking back. It didnít feel that way at the time.
It was never true that policy and funding were coming primarily
from centralized public sources if you looked at the numbers.
It took a long time to get NEA up to a significant number, and
when it happened, it didnít stay at that level for very long.
NEA was having an apparent impact in substantial disproportion
to the amount of dollars it had to give away. That led people
to ignore what was going on in the private sector and at the state
and local level. In my judgment those have always been more important.
Now weíre forced to confront that fact.
What assumptions about arts funding must we now abandon?
By the mid 1970s one would have thought that the public sector
was going to grow and the private sector was probably going to
decline or not increase very much because there would be disincentives
to private investment if the federal government continued to grow
at a rapid rate. We didnít anticipate that there were going to
be peaks or cyclical behaviors of the federal government and of
corporations with respect to the arts. We would have been optimistic
in the 1970s that corporate spending was going to continue to
go up and was going to continue to be an opportunity. But, we
know that didnít happen, it declined. Itís coming back a little
bit now, but we know the federal government is just the opposite.
There has been a dramatic decline. Itís quite possible that weíll
see some increase now, but I donít think itís going to be a large
increase. I wouldnít look to recover where we were in 1993 in
the foreseeable future.
Everyone has concluded that we have to look elsewhere now. When
we look elsewhere we find tremendous expansion in two places.
One is on the public side at the state and local level, and the
other is in private philanthropy. I think instead of trying to
get a new program at NEA to fund local chamber orchestras, for
example, arts organizations try to find funds either all in the
local community or at the state level, whether or not this comes
through an arts council or a local arts agency. Sometimes itís
line items in state budgets. Itís part of what I would call normal
politics, and perhaps thatís where it ought to be. I think the
action is now at the state and local level, at the level of private
philanthropic foundations particularly larger ones, and also with
individual donors. The major fact of the 1980s and into the 1990s
is the unbelievable creation of individual wealth, and foundations
of pools of wealth in this country. Weíve never seen so much,
and that creates all kinds of possibilities for funding. But,
the source of funding always has a dramatic impact on what arts
organizations of any kind do, because certain kinds of activities
appeal more to certain donors than others. What is happening now
is that organizations are trying to figure out in this new environment,
no longer relying on central funding, how they can best support
what theyíre doing and really plan what they are going to do.
How would you define the fundamental challenge to the arts
in this changed environment?
Whatís fascinating to me is that in an attempt to save the institutions
weíre selling out not to the wrong people but to the wrong ideas.
I think that marketing NEA as an economic development agency is
not a good long-term strategy. I seem to be more or less alone
in thinking that. But the challenge is clear. Organizations have
to decide what their true mission really is. If the mission is
not only to stay alive but to keep growing, then theyíll do whatever
they must, and other considerations wonít be so important. If
their mission is to provide a certain kind of art or to serve
a certain kind of audience, then theyíre going to have a much
harder time. The interesting thing to observe right now is whether
we get the kind of leadership, both arts managers and boards,
that are tough enough and thoughtful enough and explicit enough
to identify their missions and to stick to them and to do the
hard work of developing funding Ė not going where itís easiest
to get the money; but raising a banner and seeing if they canít
get funders to respond to that. Thatís much harder to do. Some
organization wonít be able to do it. But, it seems to me that
thatís the fundamental challenge in the current funding atmosphere.
At certain levels of funders, for instance, some of the large
foundations, there is so much money that they donít know what
to do with it, and they canít give it away very efficiently. Theyíre
making larger and larger grants because theyíve got to move money
out the door. On one level thatís great. But this too isnít going
to go on forever. What we donít know is what happens after the
longest economic boom in American history. What goes up comes
down. Itís not going to go on forever, although the end certainly
isnít in sight yet. What are organizations gong to do to adjust?
Theyíll adjust when the change comes. Are they planning to adjust?
Not many, I think.
I believe that organization that have good finance committees,
people who are genuinely knowledgeable about whatís going on,
not just with money but with economic conditions generally, ought
to be able to make intelligent decisions. After all, arts organizations
are businesses too, cultural businesses, not-for-profit businesses.
And, while it takes a lot of fun out of it, thatís the era weíve
moved in to, and many funders are insistent upon businesslike
behavior. Again, NAS is an example of the phenomenon. The Ford
Foundation wanted organizations run efficiently and on business
lines. They rewarded that and punished other kinds of behavior.
What is the place for strategy in giving plans?
I distinguish philanthropy from charity, and this analysis goes
back to the early twentieth century. What people like Carnegie
and Rockefeller were doing when they invented what we call "philanthropy"
was trying not just to give away money to people who needed money,
but to change the world to make it better. If your goal is to
change the world to make it better in the way they wanted to,
that meant you needed action strategies. The philanthropists were
mainly interested in problems of health and poverty. They thought
that the way you address those problems was not by giving money
to people who were starving or by building hospitals for people
who were sick, but by doing research to find out what the causes
of disease were, or to find out how the economy worked. Then,
they developed strategies and created means to try to effectuate
what they had learned. Thatís what modern philanthropy is all
about. The Ford Foundation just modernized this conception under
McGeorge Bundy and now all the large-scale philanthropists are
following along in one way or another. I think the distinction
between good foundations and bad foundations is that the good
ones have really thoughtful programs and carry them out in a systematic
way. Almost all the big foundations do, though not at all, and
there are certainly better and worse examples.
Should philanthropists concentrate on direct support for artists?
I agree with the notion that grantmakers need to learn how to
trust the artists, but I think itís a misplaced point of view.
Let me start with the proposition that nobody owes an artist a
If artists want to take money outside the market for their art,
theyíre certainly entitled to do that, but they shouldnít complain
that people who give them the money want them to do something.
There are good and sufficient reasons why funders have been giving
them the money in the first place. One example would be the academy.
If artists take jobs in universities, they shouldnít bitch about
the limitations of being academics. Itís too bad; itís probably
bad for their art; maybe theyíll produce a different kind of art
if they do it, but they didnít have to make that choice. Itís
the same with other kinds of funders. I very often donít like
particular funder agendas, but I feel the same way about Pew or
Rockefeller or Lila Wallace that I feel about Phillip Morris.
In our system, funders are entitled to their own funding strategies.
In this sense, large foundations are no different from corporate
funders like Philip Morris. Itís their money and theyíve got a
right to spend it the way they want to spend it. If you donít
like that, you shouldnít take it. You shouldnít apply for it.
If you make yourself beholden to someone else, then you shouldnít
complain about the constraints that person places upon you.
What changes in wealth might have a significant impact on
Rather than concern ourselves with the much-discussed "intergenerational
transfer of wealth," we should be studying the phenomenon
of what I personally consider the obscene creation of individual
wealth in this country over the last twenty years. There is an
incredible amount of newly created wealth washing around this
country, and we have set up a tax system that encourages giving
it away. Nobody has made big fortunes these days in the old fashioned
way. Itís come very fast and in huge quantities. It comes out
of the commodities futures business in Chicago. Thatís a place
where some kid 22 years of age becomes a multi-millionaire on
the Chicago Mercantile Exchange every day.
The question is, how long is it going to take to develop in these
nouveaux riches the sense of stewardship of wealth that
those who painfully built businesses (like Rockefeller and Carnegie)
acquired over a long period of time, over generations? The issue
may not be the transfer so much as the rapidity of the creation
of wealth and the lack of training in how to be a wealthy person.
We need to create a culture of philanthropy among the newly wealthy.
What could the relationships of the new donors and the arts
Youíre not going to change the Mellon Foundation or the Pew Charitable
Trusts, but if you find old Alice Jones or Jimmie Smith who just
made a big bundle and can get to her and convince him that supporting
artists directly is the thing to do, I think thatís quite feasible.
I think that will happen. Patronage is different now because there
arenít perquisites in the kind of patronage that weíre talking
about now. Itís one thing if Michaelangelo is your house painter,
but if you set up a foundation to make grants to individual artists
you will probably not have the same sort of relationship with
"your" artists as did Lorenzo de Medici.
We require a different kind of donor these days, someone who
gets the idea that making art is in itself a sufficient and wonderful
activity. We need donors to support individual and organizational
creativity directly, not more purchasers of the Gates Codex.