As part of our ongoing efforts to engage with the sectors that drive economic development, Fourth Economy joined the Pittsburgh Arts Research Committee (PARC)—an advisory committee to the Greater Pittsburgh Arts Council. The PARC worked with the Heinz Endowments and the Pittsburgh Foundation to review and comment on their study of small and mid-sized arts organizations in and around Pittsburgh, PA. On October 28, the Heinz Endowments and the Pittsburgh Foundation rolled out the final report with a daylong event including panel discussions, breakout sessions and networking called The Unsung Majority.
Fourth Economy participated in the discussion on the best form of legal organization for artists—many of whom are freelancers operating on a project-to-project (or program-to-program) basis. When it’s time to organize, most artists choose nonprofit, or 501c3, status. However, this form of organization comes with limitations. A study for grant makers supporting the arts says “nonprofit start-ups find access to capital difficult because the fragmented, custom-bound, and opaque funding system discriminates against new entrants. This prevents anything more than incremental adjustments in the allocation of resources, even in non-incremental times.” The article points out that 501c3 status can actually stymie growth for artists and promote dependent relationships that skew economic systems. Part of what arose from our conversation at the Unsung Majority event is that many artists are unaware of the other forms of organization they could take and what are the benefits or costs of the alternate organizational forms. They often get stuck with the question “to be or not to be” a 501c3, but do not move far beyond that.
For the larger economy, the form of organization these individuals choose has a variety of financial implications—the most notable of which is taxation and revenue. Supporting a thriving arts and culture community within an economy (and measuring its impact) has to include knowing who the artists in the community are and what their constraints are. Many artists are unclear about when to report taxes, how to set up an organization, and they face real constraints moving from traditional employment to freelance work. Recognizing the potential for collaboration and innovation in the arts and culture industry, the New Museum recently set up the first incubator for arts, technology, and design- a 24/7 center that has the capacity to house over 60 start-up and creative entrepreneurs. Much in the same way small business incubators serve traditional entrepreneurs, centers like the one in the New Museum could provide the types of policy spaces required to help artists and creative freelancers/entrepreneurs become more economically engaged. Because this incubator is set up in collaboration with Columbia University, it could demonstrate an opportunity for partnerships between universities, large arts organizations, and smaller individual artists that is successful at strengthening the arts and culture sectors in an economy.
Our discussion on the legal forms of organization for artists was only one of the more than 11 break-out sessions that discussed important issues for artists at the October 28 event held at the Hill House in Pittsburgh, PA. The full report, the appendices and photo’s from the day’s events can be found at www.theunsungmajority.com We invite you to join the discussion on small and mid-sized arts organizations in Pittsburgh on twitter at #unsungmajority as well as follow our blog here on Economic Architecture.