Painful cuts for Dutch arts funding

vrom_holl_china
FROM ANDRAS SZANTO AND JONATHAN NEIL, ON THE ROAD IN THE NETHERLANDS

They knew it was coming. A succession of governments in the Netherlands had warned over the years that the country’s arts subsidies are not sustainable. But the recent economic crisis gave Holland’s right-wing political leaders an excuse to do the unthinkable. They will ax $200 million of the $900 million federal arts budget. Factor in 20-40 percent cuts in local funding, and the Dutch system may lose $1 billion in support by 2013. Europe’s most generous arts funding regime is about to turn into a laboratory for transitioning to, well, no one knows what exactly…

Many arts officials are blindsided. In discussions with artists, museum directors, and art dealers this week, on a study tour with the Sotheby’s Institute, we heard complaints about the sudden cessation of public largesse, but little in the way of solutions. Hopeful arts managers spoke of how “the market” and “companies” will need to share the burden. But there are few incentives for the private sector to do it.

In fact, Holland’s usually circumspect and methodical policymakers are being less than consistent. Appeals for philanthropy and sponsorship are not being counterbalanced with tax breaks. Even while the government seeks to shift arts promotion to the private sector, it has raised the gallery sales tax by 13 percent.

Arts institutions find themselves in a fix. They lack tools to function in a more “American” system. Museum directors are looking for expertise in fundraising and marketing. Endowments, private patrons, and boards of directors with fiduciary responsibilities are still largely unknown here. Cultural groups have little access to credit facilities. Experiments with bonds, subsidized loans, and art landing are in their infancy. Institutions are being asked to act independently, yet they don’t control their own assets and destinies. And as government representatives, they can hardly raise their voice in protest.

Where will it all lead? Some believe the current government is simply anti-art, seeing culture as a left-wing “hobby.” Others are more realistic. They acknowledge that Dutch arts leaders have refined the craft of lobbying government, but they don’t quite know how to court the public and the commercial sphere.

Whatever the case, look to Holland in the next few years as a test case for what happens when a great welfare state’s cultural machinery is pushed into a closer alliance with the market.

3 thoughts on “Painful cuts for Dutch arts funding

  1. From years of first-hand experience, it is sadly true that all levels of the Dutch art economy are enormously inefficient.

    Both the commercial side and the non-profit side alike can take great strides to resolve this ongoing muddle, if only they would, to fix this.

    There is no need for the government to continue playing an out-sized role since the resources are mostly there without its participation. It should, however, be very smart about a total re-think of its tax statutes to provide incentives that would support a new form of enlightened Dutch self-interest.

  2. What makes the subsidy cuts in the Netherlands particularly frustrating for many Dutch art lovers is that they are so steep, abrupt, do not give art institutions the time to adapt to this new reality, and hardly contribute to the purpose they are supposed to serve: a sound government budget (the cuts in art subsidies amount to a 200 million euro while the total government budget cuts amount to 18 billion euro). So that’s why it has been perceived by progressive cultural elites as a revenge from the populist right (the new secretary for the arts himself confessed that he does not like “heavy novels” but prefers Dan Brown).
    Nevertheless the days of the Dutch model of providing grants to individual artists (about 20 million euro annually) were numbered anyway. It has been criticized from within, even by the director of the Foundation for the Visual Arts, Design and Architecture which provides these grants (I am a board member of the foundation myself). Many people have become convinced that a more mixed, less government-based support system is needed, with a greater role for private art galleries. There are some welcome signs that the Dutch art market, which has been in a sorry state for decades, partially due to the governments suffocating presence, is revitalizing.
    I am much more skeptical about plans to copy the American system of tax incentives for donations to art institutions (the Dutch government is currently drafting a new ‘gift act’ which should accomplish exactly that). One problem with these tax incentives: they do not necessarily reduce subsidies (one euro of tax revenue foregone is de facto a subsidy), but merely make them less visible. A second, related problem is that these subsidies are out of the parliament’s control: it is the philanthropist who decides which art institutions are supported. Since this is tax revenue foregone, it involves public money, so why should philanthropists decide how it is allocated?

  3. Eric Holterhues, Head of Arts and Culture, Triodos Investment Management, Netherlands, adds this comment:

    Terrific view of an outsider on the situation about Dutch Arts Funding.

    In the opinion of Triodos Bank it’s about time for a different, more balanced system of art financing. A system that does more justice to artists and cultural institutions, and art financiers. There are huge gains to be made by all parties. Quite apart from the current situation, the present system of art financing, based above all on government subsidies, raises important questions.

    Even in more favorable times, such a system creates a situation that puts both subsidy providers and subsidy recipients on the defensive. Every time a subsidy application is submitted, institutions and individual artists are required to defend their position. Time and again they must show they are truly unable to generate more private income. Depending on the budget available, government authorities in turn are forced to argue why, this time, less or maybe even no budget at all is available. The crushing embrace of a difficult marriage.

    In the worst case, artist and institution are made dependent upon subsidies, and art financing itself in turn is dependent on the political context and social agenda. This is an extremely fragile constellation above all in a situation, like now, when government expenditure is being slashed.

    It is a disastrous approach. The creation of art – either consciously or subconsciously – is viewed as a loss-making enterprise, that must subsequently be compensated by the subsidy provider. Effectively that makes art financing the financing of loss. A negative dynamic is established, which fails to do justice to the positive contribution made to society by the art sector. After all, artists do not make a loss. They are in fact productive. Art broadens our vision, confronts us with ourselves, sows confusion or offers recognition. It stimulates the individual and brings people together. All these effects are of profit to society. And the gains are not only intangible. They are also specific and palpable. Artists also add economic value. Wherever artists settle, we often see neighborhoods and districts start to improve. Urban gentrification not uncommonly starts in places where artists – often as pioneers – see opportunities.

    A different, more balanced system of art financing would better suit this vision on the art sector. There is a world of difference to be made. It is a world in which artists and cultural institutions can call upon a broad mix of sources of financing. The mix still includes government subsidies; that much is certain. Subsidizing artists and cultural institutions is something that fits in with the policies of any civilized country. It is however completely uncivilized to make artists dependent on subsidies.

    There are far more possibilities: financing by private individuals, by funds, by associations of friends and by sponsors. And by banks – for many artists an institution still very much a terra incognita. In other words, it is a world in which the difficult marriage between art and government makes way for a fruitful relationship between the art and a broad selection of financiers. These more varied relationships will offer opportunities for new partners.

    Banks could play a greater role than is currently the case. They are after all in a position to make an important contribution to achieving cultural ambitions. Take for example the financing of assets held for long periods on the balance sheet (such as the purchase of premises) or financing in the framework of a guarantee scheme. Triodos Bank, for its part, has established just such a scheme with the Dutch Guarantee Fund for Artists. The Triodos Cultural Fund issues loans to cultural institutions, and finances the construction and renovation of for example museums and theatres. To date, Triodos Bank is the only bank in The Netherlands with a specific focus on financing art and culture.

    I would call for many other banks to become involved in this sector: it would be better for artists and cultural institutions. It would enable them to seek support from a range of banking financiers. My experience has shown that our best financing programmes are generally those in which we are in competition with other banks. In such cases, we are faced with entrepreneurs who know exactly what they are capable of. It is up to us to do our best to meet their needs.

Leave a Reply