Department of Cultural Affairs, 1

Table of Contents Executive Summary 2 Introduction 4 Overview of Current Department of Cultural Affairs Funding Policies.. 7 Alternative Solutions Alternative Solution 1. 10 Alternative Solution 2. 13 Additional Solutions 14 Final Recommendations 16 Appendix 1. 18 Appendix 2. 20 Bibliography 21

Department of Cultural Affairs, 2 Executive Summary As commercial Broadway theatre becomes increasingly unaffordable and touristoriented, non-profit theatres throughout the city strive to present affordable and artistically satisfying theatrical productions. Although the Department of Cultural Affairs of the City of New York (DCA) ought to take on its role as a funder as an opportunity to be an agent, catalyst, and convener; to expand the quality and quantity of support it makes available, and there has been a significant revamping of its funding system, DCA does not allocate its resources in a manner that allows universal access among the theatres in New York City (New York Foundation for the Arts, 28.) Live theatre is an essential part of the cultural and economic vitality of the theatre, and it is becoming increasingly apparent that more support for all of the arts is necessary. The Department of Cultural Affairs has redesigned its funding patterns to include more cultural institutions outside of Manhattan, yet the funding continues to be overwhelmingly allocated there. As most of the citys residents reside outside of Manhattan, this makes it difficult for those residents to afford and access many theatrical events. Even working within the confines of its $27.1 million budget, DCA should be able to reallocate funding to allow more equal access among the smaller theatres in the outer boroughs. Lessening the dominance of those institutions in the Cultural Institutions Group, for example, ought to free up some money for smaller theatres that have not be able to secure DCA funding in the past. By considering a rotating pattern of funding for those in the Cultural Institutions Group, DCA could continue their relationship with these landmark institutions while being able to support more of the smaller theatres. Additionally, DCA should put more emphasis on supporting new playwrights and composers; they are the reason theatre is able to grow and evolve. Commercial producers have begun to see mounting new works as a financial risk and it

Department of Cultural Affairs, 3 appears to be left to organizations like the DCA, as well as private foundations, to keep the tradition of American theatre alive. Further ways to reallocate funds and support the theatres in New York could be to partner with the many corporations and commercial producers working in the city. However, as benevolent as Disney has been to Broadway, and as important as their funding is, some smaller non-profits may be reluctant to be caught up in the world of commercialization, especially as Times Square appears to be overrun with them. The benefits of reworking the allocation of money by DCA are numerous. Broadway alone represents a billion dollar industry in New York City, not even taking other tourist activities into consideration. Additionally, expanding support to theatres in the outer boroughs not only means that more New Yorkers will be able to partake in high-quality theatre, but the Business Improvement Districts (BIDs) and commercial districts surrounding venues will see marked improvement. The Brooklyn Academy of Music, which has hosted numerous wellreceived productions in partnership with theatres in London, has transformed its neighborhood in Brooklyn. Other groups that receive support from DCA would be able to have a similar effect on their neighborhoods.

Department of Cultural Affairs, 4 Introduction As commercial Broadway theatre becomes increasingly unaffordable and touristoriented, non-profit theatres throughout the city strive to present affordable and artistically satisfying theatrical productions. These theatres rely on funding from both private donors and the government to mount works that are a stimulating alternative to commercial fare. A city such as New York, therefore, must draw up a comprehensive cultural policy, as it has become increasingly popular to keep the government small and outsource as many programs and duties as possible into non-government institutions (Renner, 22). Theatre is a vital part of New York Citys cultural history and economic survival, and its ability to stimulate economic development, at both regional and neighborhood scales highlight the importance of examining and analyzing funding policies in place by the Department of Cultural Affairs (Markusen, 9). According to the Broadway League, during the 2009-2010 season, the shows on Broadway, and Broadway alone, grossed over $1 billion (The Broadway League). In addition to the economic stimulation provided by theatre, there are two important facts: intrinsic benefits [] the principle reason individuals participate in the arts, and the intrinsic effects [which] produce public benefits of their own (K. F. McCarthy, E. H. Ondaatje and L. Zakaras, 68). The benefits of analyzing and possibly reworking the Department of Cultural Affairs policies move beyond the economics to the deeply personal reasons people attend theatre in the first place. The Department of Cultural Affairs of the City of New York does not allocate its resources in a manner that allows universal access among the theatres in New York City. According to a fiscal brief by the New York City Independent Budget Office, in 2009, 882 organizations received funding from the Department, up from 780 in 2007 (New York City Independent Budget Office, 2). Although there has been an increase in the number of

Department of Cultural Affairs, 5 organizations throughout the city receiving funding, the funding pattern is skewed towards institutions in Manhattan and those institutions large enough to qualify for multiyear grants (New York City Independent Budget Office, 3-5). Of the DCAs $26.9 million budget in 2009, nineteen percent, or $5.2 million, was allocated to theatre groups; this amount is second only to funding that went towards multidisciplinary groups (New York City Independent Budget Office, 5). Given that DCA targets such a large portion of its funding towards theatre in New York, it is essential that as many groups as possible are able to gain access to funding. In this report, I will expand on the current DCA policy and offer six alternative solutions to the problem. Respondents to New York Foundation for the Arts (NYFA) survey cited cost and distance as barriers to participation in cultural events (New York Foundation for the Arts, 41). More than 70 percent of New Yorkers said they would go to musical performances and the theater more often if tickets were cheaper (New York Foundation for the Arts, 41). Additionally, sixty percent of respondents said that they would attend the theatre more frequently if the locations were closer to home or work (New York Foundation for the Arts, 41). Although it is perhaps unavoidable that so much of DCAs funding is targeted towards institutions in Manhattan, there are many residents of the four other boroughs who cannot afford to attend events there. According to the American Community Survey of 2009, the median income of households in the Bronx was $32,893, compared to a citywide median household income of $50,033. According to NYFAs survey, only 35% of children from families with an income under $50,000 attended the theatre during the year, as opposed to 71% of children from families with an income over $50,000. Further, many of those living in the Bronx or the other outer boroughs would not be able to afford making a regular habit of going to the theatre, as was shown in NYFAs question about how often respondents over 18 attended cultural events. Of

Department of Cultural Affairs, 6 respondents, over half did not attend a theatrical performance in the past year, and 12% went four or more times (New York Foundation for the Arts, 40). Aided by city funding, more theatres would be able to offer affordable programming, helping to encourage a regular habit of theatre going among New York residents (See Appendix 1 for charts from NYFAs report). We recommend that the Department of Cultural Affairs reevaluate its funding policies, working within the confines of the current budget. Our first recommendation is to rotate funding for the six organizations in the Cultural Institutions Group biennially, funneling remaining funding towards smaller theatres. Our second recommendation is to target funding to new playwrights and composers, and theatres hoping to commission work. We will expand on these recommendations, including strategies for implementation, later in the report. In conducting research for this paper, we analyzed the Department of Cultural Affairs Fiscal 2012 Application Guidelines for the Cultural Development Fund, along with a Fiscal Brief from the Independent Budget Office. In order to better understand the context of the issue of cultural funding and arts policy, we looked into reports and research on cultural policy. Finally, to understand the relationship theatres have historically had with private and public funders, we consulted essays on arts philanthropy, to gather anecdotal evidence for some of the issues raised in the area of funding for the theatre. In this report, we have already outlined the problem and given a brief summary of our recommendations. As the report follows, we will offer and overview on current Department of Cultural Affairs funding policy, which was overhauled in fiscal year 2008. Following this overview, we will identify the six institutions in the Cultural Institutions Group that offer theatrical programming, and will briefly explain their relationship with the city. Following this explanation of the status quo, we will outline our two major recommendations, including

Department of Cultural Affairs, 7 possible implementation strategies. Following, we have identified three more alternatives that we believe the Department of Cultural Affairs should take into consideration. We will make our final recommendations and avenues for further exploration at the conclusion of the report. Overview of Current Department of Cultural Affairs Funding Policies In fiscal year 2008, the Department of Cultural Affairs revamped the way it allocates funds through its Program Services Unit to most of the citys nonprofit arts and cultural groups (New York City Independent Budget Office, 1). This new funding strategy was adopted with the goals of making the funds available to more groups, to adopt a peer-panel review system that would award grants on a competitive basis, and to increase the level of fiscal stability among larger organizations by providing them with multiyear awards (New York City Independent Budget Office, 1). According to an analysis conducted by the New York City Independent Budget Office, over one hundred more groups received funding from the city in 2009 than had in 2007 (New York City Independent Budget Office, 1). Additionally, with the removal of line and member items, the allocation of funds to other groups had more than doubled to $14.3 million in 2009 from $6.3 million in 2007 (New York City Independent Budget Office, 1). Organizations with operating incomes over $250,000 for fiscal year 2009 are eligible for multiyear support; the Independent Budget Office reports that half of the organizations funded by the Cultural Development Fund had received multiyear grants (New York City Department of Cultural Affairs, 5; New York City Independent Budget Office, 1). Through this new funding system, DCA looks to fund services such as programs for culturally underserved populations, maintenance and subsidies of low admission prices and creation of new work and/or restoration of existing work, for public presentation within the fiscal year (New York City Department of Cultural Affairs, 1).

Department of Cultural Affairs, 8 Although DCA implemented a peer-review panel that focused on arts at the borough level, program funding still shifted towards Manhattan.

Figure 1 Figure 1, from the Independent Budget Office, depicts the funding patterns for all organizations receiving funding from DCA. It is surmised, however, that a similar pattern would emerge when looking at the funding patterns of theatre groups throughout the city. It is, perhaps, unavoidable that organizations in Manhattan would receive such a large share of the funding allocated by DCA, but it is essential to strike a balance and assure that cultural organizations throughout the city are able to access funding from DCA.

Department of Cultural Affairs, 9 Theatre also received a small boost in funding due to the revamped pattern of allocation, and is currently the single discipline receiving the most funding.

Figure 2 As seen in Figure 2, from the Independent Budget Office, of DCAs total budget of $26.9 million, theatre institutions received $5.2 million, or 19.3% of total funds. Multidisciplinary institutions, which could include theatre, received $7.1 million, or 26.5% of DCAs funding. As we will explain below, many of these institutions also offer theatrical programs, which means that theatrical programming receives even more than the 19.3% listed in this chart. Throughout New York City are thirty-three institutions located on city-owned property; collectively, these groups are often referred to as the Cultural Institutions Group (New York City

Department of Cultural Affairs, 10 Independent Budget Office, 2). Of these thirty-three groups, we have identified six as institutions which, including those that would be categorized as multidisciplinary by the Department of Cultural Affairs. The six institutions are Lincoln Center for the Performing Arts, New York City Center, The Public Theater/New York Shakespeare Festival (all located in Manhattan), the Brooklyn Academy of Music, the Jamaica Center for Arts and Learning and Queens Theatre in the Park (both located in Queens). These six institutions, like the other twenty-seven in the Cultural Institutions Group (CIG), receive operating subsidies and funding for heat, light, and power. In addition, the city provides assistance to arts groups through funding for capital construction projects (New York City Independent Budget Office, 2). Given the size of these institutions and their dominance in the cultural landscape of New York City (deservedly so), the first of our alternatives deals specifically with their funding. More information about the Department of Cultural Affairs grants can be found in Appendix 2. Alternative Solution 1: Rotate Funding of Cultural Institution Group Members The six institutions in CIG are larger and, in theory, are better able to garner foundation and individual support for their programs. Bearing this in mind, we recommend rotating their funding, while funneling remaining money toward smaller theatres. The Department of Cultural Affairs would arrange the institutions into either two or three groups, dependent on the operating budget and historical support of each organization. In order to keep the remaining funds the same, the institutions should be combined so the groups use approximately the same proportion of city funds. In the same vein of stability, the funds directed towards each theatre should remain the same, so theatres are able to effectively predict and budget for their funding. We will make a further recommendation to work with the city-owned institutions and determine the best patterns

Department of Cultural Affairs, 11 of funding, including whether funding for maintenance and capital support should be separated from programmatic funding. According to 990s filed by the institutions in 2009, their operating budgets range from $1.2 million to $246.4 million. Institution Operating Budget (Dollars in millions) $38.9 $1.2 $246.4 $20.2 $22.3 $3.5

Brooklyn Academy of Music Jamaica Center for Arts and Learning Lincoln Center for the Performing Arts New York City Center The Public Theater/New York Shakespeare Festival Queens Theatre in the Park Figure 3

By rotating the monetary support for city-owned institutions, DCA would alleviate their dominance in the funding patterns of the city. As previously stated, we believe that the largest of these institutions are able to build more support among foundations and corporate and individual donors. Grouping the institutions in such a way as to keep the remaining funds as steady as possible throughout the funding cycle allows for sustainability among the theatre groups and institutions being funded. In a city with as large and varied an arts landscape as New Yorks, the competition among theatre groups for government and foundation support is so fierce as to make sustainable programming a challenge for many groups (McCarthy, Ondaatje and Novak, 17). Just as keeping the funds to the city-owned institutions steady during their funding period aids the groups in predicting and budgeting effectively, keeping the remaining funds steady allows other groups to predict and prepare for submitting requests for DCA funds. With more of DCAs money available to groups outside of the Cultural Institutions Group, theatres in the outer

Department of Cultural Affairs, 12 boroughs would be able to continue providing high-quality, low-cost programming to area residents. Group A (Brooklyn Academy of Music, Jamaica Center for Arts and Learning, Queens Theatre in the Park) B (Lincoln Center for the Performing Arts) C (New York City Center, The Public Theater) Figure 4 FY2012-14 ON FY2014-16 OFF FY2018-20 OFF

OFF OFF

ON OFF

OFF ON

Figure 4 represents a possible arrangement for grouping and rotating the six CIG institutions, based solely on the operating budgets of the groups. A limitation in this brief is a lack of understanding of the complexity of an institution such as Lincoln Center for the Performing Arts. Lincoln Center Theatre files its own tax returns; however, as the grounds are maintained by Lincoln Center for the Performing Arts, it most likely receives substantial city funding. Should this suggestion be accepted by DCA, we would recommend a more thorough analysis of budgets and historic support, and would also suggest considering adopting this for all thirty-three CIG groups. The reaction from the city-owned institutions could be problematic, however. Although the Public Theater has an operating budget of approximately $22 million and could probably garner increased support from foundations, the Jamaica Center for Arts and Learning (JCAL) has an operating budget of only $1.2 million, and may not have as strong a base of support as the Public Theater has cultivated. For JCAL, the loss of city funding, for any period of time, could mean dramatic cuts in programs offered. The number of groups also could be a point of contention; the institutions themselves may prefer only two groups, so as to not have to go as

Department of Cultural Affairs, 13 long without receiving city funds. An in-depth analysis of operating budgets and historic support needs to be done by the Department, to minimize fluctuations in remaining funds for other theatre groups and institutions. Additionally, DCA should consult with leaders of these institutions in order to better understand the funding needs, including continued maintenance support even during a groups off years. Alternative Solution 2: Target Funding to Cultivate New Works Our second recommendation is to target funding to cultivate new works. Although DCA has highlighted the creation of new work as a funding priority, it would be more effective to have a pool of money to be used for competitive grants for the development of new works. We recommend either individual grants and fellowships for playwrights and composers, funding for theatres hoping to commission new work, or a combination of the two. In order to work within the confines of DCAs budget, we recommend considering a reduction in the amount of money allocated to assist organizations with capital support. Further, we recommend looking to foundations for smart practices and/or partnerships. The Harold and Mimi Steinberg Charitable Trust has long be an advocate for new voices, established on the belief that theatre is always in danger of decline and disinterest, and has provided generous support for individual playwrights and for festivals hosted by theatres such as Lincoln Center and the Public (Jenkins, 248). In order to gain some insight into the criteria used to identify potential playwrights and composers, we recommend the Rockefeller Foundations 1971 report, in which they identified a group of theatrical entrepreneurs, among which were Ellen Stewart of Caf LaMaMa and Joe Papp of the Public Theatre (Berwind, 235). We recommend looking at precedents set by the Steinberg Trust and the Rockefeller Foundation report in order to ascertain how to best identify and support both current significant and emerging voices of the American theatre.

Department of Cultural Affairs, 14 It has become harder and harder to raise money for the one thing that the theater is supposed to be doing which is new productions (Jenkins, 244). By leaving access to these competitive grants open to all institutions, DCA allows larger theatres with a tradition of encouraging new works to continue doing so. Although we are recommending strategies that allow more universal access to DCA funding, it would be a disservice to the cultural landscape of New York City to consider removing funding from city-owned institutions, especially when looking at those with a long history of encouraging and cultivating new voices for the theatre. This model of funding would be especially important as the perceived danger of mounting new works commercially increases among producers (Jenkins, 244). Past attempts of the government in funding the arts has lead to the accusation of the government being an art cop (Schanke, 7). On the other end of the spectrum, those voters aware of the projects funded by the government have voiced their criticism of using tax dollars to controversial works. Should DCA accept our recommendation of reducing capital support to institutions, there would almost certainly be a negative reaction from those theatres that had been benefiting from the generous capital support the city has provided. Additional Solutions In addition to these recommendations, we drew up three other alternatives. Although we are not strongly recommending them, we hope the Department of Cultural Affairs will take them into consideration. According the New York Foundation for the Arts, in 2000 the Department of Cultural Affairs Expense Budget was less than one half of one percent of total New York City spending. In real dollars in fiscal year 2009, DCA had a budget of $26.9 million. Of that money, nearly twenty percent was allocated to theatre, more than any other single discipline. Although an increase in funding would be ideal, the economic and political climates of the city render it

Department of Cultural Affairs, 15 almost completely infeasible. Additionally, theatre already receives such a large portion of DCA funding that we believe it would be inappropriate to call for more funds. The next two alternatives would involve engaging the corporate and commercial producers that have been dominating Broadway lately. We propose that the city enter into partnerships with corporations with a history of sponsoring cultural events. Although a privatepublic partnership could provide DCA with a sizable increase in funds, there could be considerable controversy if the corporate partner takes on a large role. For example, many corporations look to sponsor blockbuster cultural events, and may not be willing to put their name to something controversial. With the overwhelming presence of corporations in Times Square and throughout the city, some non-profits may be reluctant to partner with a corporation, even if it does mean more financial support and security. Similarly to a partnership with corporations, we also propose a partnership with commercial producers to support smaller theatres. To encourage partnership, we recommend allocating small grants that would go to funding programming choices in the smaller, non-profit theatre. It could be a benefit to the commercial producers, if they were able to use the non-profit theatre as a tax write-off. Disney has been labeled a modern Medici, which could be considered a good fit, given its largesse and the limitations and expectations attached to it (Privatt, 261). Disney, however, may not be willing to partner with non-profit theatre groups whose mission is not well aligned with their own. Similarly to the negative reaction non-profits might have about partnering with a corporation, some may be opposed to partnering with a commercial theatre, as there was most likely a reason those involved in the non-profit theatre chose to go into non-profit theatre over commercial theatre. Although we are not strongly

Department of Cultural Affairs, 16 recommending this proposal to DCA, we believe that there is merit to private-public partnerships at this level. Final Recommendations Working within DCAs budget, we believe that a combination of alternatives one and two would be able to meet most fiscal and artistic needs. Many of the CIG institutions are champions of new voices in American theatre, and we believe it is essential that they be allowed continued access to funding to support new playwrights and composers. We also recommend that they be allowed access to the new works funding even during their off-years, although more work needs to be done by DCA to better divide and organize the groups. We also recommend DCA reevaluate the practice of multiyear grants. The sustainability of all theatre groups, whether large or small, is vital to the continued survival of an arts infrastructure in New York City. We are not recommending the discontinuing of these multiyear grants; however, we believe it would behoove the Department to evaluate the use of these grants, to ensure that they are being implemented within the theatre groups as DCA intended. At this point in time, they receive such a large share of the funding allocated by DCA, and it would be imperative to understand their received funding in relation to the funding granted to the other institutions receiving DCA funding. The six CIG institutions identified earlier in this report are too important to the arts landscape of New York City for DCA to sever the relationship too severely. As such, we recommend working directly with those institutions to better understand all of the financial nuances, especially of an organization like Lincoln Center. If it is appropriate to separate Lincoln Center Theatre from Lincoln Center for the Performing Arts in regards to funding, then we recommend DCA consider this possibility. In addition to working directly with leaders of the

Department of Cultural Affairs, 17 CIG institutions, we recommend DCA consider a series of panel or round table discussions with leaders of non-profit theatres throughout the city. There are numerous groups of varying sizes; it is impossible to understand and meet all unique funding needs without involving them in the conversation. New York City has built itself to be the cultural leader in the United States, and one of the cultural leaders in the world. Although the Department of Cultural Affairs has made important steps towards allocating its resources to better meet the needs of theatrical groups throughout the city, we believe that there is still more that can be accomplished. If these recommendations are implemented, theatre will be more available and affordable to people throughout the city, resulting in a more creative and artistically inclined city.

Department of Cultural Affairs, 18 Appendix 1 Culture Counts: Strategies for a More Vibrant Cultural Life in New York City

Department of Cultural Affairs, 19

Department of Cultural Affairs, 20 Appendix 2 Cultural Development Fund: Fiscal 2012 Application Guidelines Funding Levels For organizations with a Fiscal 2009 operating income of $250,000 or less: Awards will range between $5,000 and $50,000 at the following increments: $5,000 $7,500 $10,000 $12,500 $15,000 $17,500 $20,000 $25,000 $30,000 $35,000 $40,000 $50,000 Please note that total project cost(s) must be $10,000 or more in cash to qualify for minimum funding. Organizations with projects costing less than $10,000 are encouraged to apply directly to their local arts council regrant program. All funding is awarded for one year with no guarantee of renewal. For organizations with a Fiscal 2009 operating income of greater than $250,000: Awards will range between $15,000 and $300,000 at the following increments: $15,000 $25,000 $35,000 $50,000 $65,000 $80,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000

Please note that total project cost(s) must be $30,000 or more in cash to qualify for minimum funding. Organizations with operating incomes over $250,000 in Fiscal 2009 will be eligible for multiyear support. Organizations receiving multi-year support based on their 2012 Application must comply with DCAs annual reporting procedures in order to receive funds in 2013 and 2014. Support in Fiscal 2013 and 2014 is contingent upon funds available and may reflect decreases or increases to DCAs Fiscal 2013 and 2014 budgets.

Department of Cultural Affairs, 21 Bibliography Berwind, Stephen D. "Raising the Curtain: Rockefeller Support for the American Theater." Angels in the American Theater: Patrons, Patronage, and Philanthropy. Ed. Robert A. Schanke. Carbondale: Southern Illinois University Press, 2007. 225-241. Jenkins, Jeffrey Eric. Funding the Theatrical Future: The Harold and Mimi Steinberg Charitable Trust. Angels in the American Theater: Patrons, Patronage, and Philanthropy. Ed. Robert A. Schanke. Carbondale: Southern Illinois University Press, 2007. 242-258. Markusen, Ann. Arts and Culture in Urban/Regional Planning: A Review and Research Agenda. Working Paper. University of Minnesota. Minneapolis: University of Minnesota, 2009. McCarthy, Kevin F., Elizabeth Heneghan Ondaatje and Jennifer L. Novak. Arts and Culture in the Metropolis: Strategies for Sustainability. Santa Monica: RAND Corporation, 2007. McCarthy, Kevin F., et al. Gifts of the Muse: Reframing the Debate About the Benefits of the Arts. Santa Monica: RAND Corporation, 2004. New York City Department of Cultural Affairs. Cultural Development Fund: Fiscal 2012 Application Guidelines. New York, 2011. New York City Independent Budget Office. City Revamps Arts Funding Process: More Fund for More Groups. Fiscal Brief. New York, 2009. New York Foundation for the Arts. Culture Counts: Strategies for a More Vibrant Cultural Life in New York City. New York City, 2001. Privatt, Kathy L. "Modern Medicis: Disney on Broadway." Angels in the American Theater: Patrons, Patronage and Philanthropy. Ed. Robert A. Schanke. Carbondale: Southern Illinois University Press, 2007. 259-275. Renner, Anna-Theresa. An Economic Analysis of Public Cultural Subsidies. Graduate Thesis. University of Vienna. Vienna, 2010. Schanke, Robert A. Introduction. Angels in the American Theater: Patrons, Patronage, and Philanthropy. Ed. Robert A. Schanke. Carbondale: Souther Illinois University Press, 2007. 1-17. The Broadway League. The Broadway League. 10 July 2011 <www.broadwayleague.com>.