For as long as I can remember, the artist-run-intitiative and other not-for-profit art organisations have constituted a significant part of the arts landscape.
Often organised in the shape of foundations, they are not usually self-reliant and instead funded by government grants and other public funds.
Their existence is however a fairly recent development, coming only into being during the late 1950's to 1970's. New York's PS1 was founded only in 1971, for example.
Before these now important exhibition venues there were only private galleries, like 291 and Art of this Century, or else there were museums housing collections that were wholly owned and organised by either governments or wealthy individuals.
There existed some smaller initiatives that had a more independent spirit, like the Arts Club of Chicago or the various Kunstvereins in Germany, but they were funded by private patronage of either collectors or artists.
One can thus say that it's a only a recent development that private initiatives for the display of art are financially supported by the state. This development followed the introduction of redefined ideas about significance of cultural relations after the second world war. They are therefore most likely influenced by initiatives such as the United Nations and the European Economic Community, which was founded after the 1957 Treaty of Rome.
During that same period, ideas about the welfare state also became a bigger part of the political agenda of many Western countries.
The current landscape of funding for the arts can't be separated from these developments and I believe it's no coincidence that the independent exhibition venue came about only after the political and economic climate had shifted in the aforementioned direction.
The state funding for such cultural endeavours is intrinsically linked to notions of national identity, as well as the political idea that the state ought to provide for those who can't provide for themselves.
At the same time, state funding was seen as highly suspect after the second world war. After all, both Nazi Germany and the Soviet Union saw considerable state intervention in their business ventures.
These conjectures I'm making here are nothing new. They are ingrained in current practice, where various subsidy programmes in the Netherlands (and presumably elsewhere) refer for their legitimacy to possible exceptions under EU regulations, as the subsidies they receive could otherwise be considered illegal government aid for businesses. These exceptions are listed in Commission Regulation (EU) No 651/2014 under paragraph 72, which states that '
In the culture and heritage conservation sector, a number of measures taken by Member States may not constitute aid
because they do not fulfil all the criteria of Article 107(1) of the
Treaty, for example because the activity is not economic [...] and case practice has shown that such aid has limited effects on trade.' It furthermore states that it 'recognises the importance of promoting culture for the Union and its
Member States and provides that the Union should take cultural aspects
into account'.
It thus can be said that the legal basis for the public funding of such art initiatives lies in the (in)direct benefits for the state, or any other issuing body, combined with the limited economic activity involved.
It is the combination of these two factors that make public funding for art organisations possible. Or as it's worded in the Commission Regulation concerning exemptions to the government aid: 'In general, activities which, although they may present a cultural
aspect, have a predominantly commercial character [...] should not be covered.'
With this rationale it's easy to see how direct funding by the state is possible for individuals, especially since it's partially inspired by the long history of art patronage of individual artists.
In the Netherlands, such individual funding started with the SBBK or 'Social Support for Visual Artists', which was introduced in 1949. It thus supports artists who, due to the nature of their work, are not able to sustain themselves, and a special kind of social welfare has been designed for them. This type of social security recognises the cultural importance of their knowledge and that without financial support this knowledge might be lost. This would presumably be to the detriment of all and thus a government is allowed to directly support such an individual.
It is however more difficult to understand how an exhibition space fulfils both criteria of being beneficial to the national culture, while also being limited in its economic possibilities.
The benefits for the state may be there, as an exhibition venue is a way to bring the cultural production into circulation without direct state intervention, but the activities of a large exhibition venue are not economically neutral. Anything that employs multiple people likely brings enough economic influence to fall firmly within the rules for government aid.
That's why in the Netherlands today, the non-commercial nature of the cultural activity is usually safeguarded by a stipulation that organisations applying for multi-year funding have to be registered as a stichting.
Under Dutch law a stichting is similar to a foundation, whereby an abstract goal can be considered an independently acting legal entity. And while a stichting is legally allowed to make a profit, this may not be its only goal, and any profits ought to benefit the goal of the stichting, instead of any natural person who is involved in the stichting.
In theory the founders and directors of a stichting are thus nothing but meat puppets that are the physical beings who are able to act outside of the legal fiction upon which the structure of the stichting is based.
It is then easy to see that the legal justification for the state support of arts organisations is that it's the abstract goal of the stichting that is supported, and attaining that goal is in turn beneficial to the state. The goal itself is financially helpless almost by definition, so this also satisfies the legal requirement for limited economic impact.
But of course, this is not how this principle is commonly applied in practice within the arts.
In many ways, a score of the stichtingen that operate in the Dutch art world today could be considered almost as fronts for the benefit of individuals.
It is of vital importance to the legitimacy of the system that there is no connection between the (goal of the) stichting and the personal interests of the individuals that are employed by it. In a strict reading this is however rarely the case.
In most instances these art organisations are founded by one person, or a small group of people, and their mission is based on their own ambitions. These ambitions are usually related only indirectly to any kind of common good, and the main drive for founding the quote-unquote organisation is a private desire to participate in, or contribute to, the arts as a whole. In most cases, this kind of entrepreneurship requires a substantial amount of capital investment and such a project naturally contains a degree of financial risk. Many art graduates, especially those just starting out, are unable, or unwilling, to bear these kind of financial burdens.
Therefore, they register their initiative as a stichting, have some cookie-cutter statutes drawn up, and all of a sudden they are eligible for state funding for their pet project. In such a case, the stichting is nothing but a vehicle through which funds can be acquired so that their private financial risks, or losses, can be passed on to society.
This behaviour doesn't arise from malevolence, but rather out of ignorance. Applicants to government funding often don't question why a government would hand out that money. They simply see it has a gift, a reward for their good artistic work. That's why every funding round there are a number of shocked responses from applicants who believe that they are making worthwhile artistic contributions, yet found that their application was denied. They erroneously believe they are judged on their artistic merit, rather than their adherence to the goals of the issuing body, which may vary over time.
This is not necessarily their fault. Most governments don't present their subsidy programs as benefitting themselves over the artists. They are still often presented with an air of patronage, where funds are ostensibly provided to create an amount of freedom for the arts.
Therefore the applicants often approach the grant with the idea that
they themselves are the beneficiaries and that the received funds are a
gift, rather than a resource that they're allowed to use on the implied
condition that it also (indirectly) benefits the governing body that
provides it.
Many organisations thus approach the very founding of their organisation as a way for the founder(s)/directors(s) to provide themselves with a reliable and moderate to high income, something they likely are unable to attain without such a vehicle.
This leaves an incredibly murky situation, where both sides of the application process are often unhappy with the results of the system. Yet since they are unaware of its fundamentals, they blame various unrelated factors and not uncommonly fall back into distrust of the other.
It is however easy to see that a disconnect between the intended legal use of a stichting and the inadvertent misuse of such a system is at the root of a lot of the problems associated with funding for arts organisations.
This is especially true for the kind of grants that span multiple years, with budgets that can easily grow above € 500.000 per year. As I stated before, the essential aspect of a stichting is that, from a legal point of view, it is the abstract goal that is acting, and that the humans involved in it are fully interchangeable.
We all know that this isn't true for arts organisations. The specific humans involved in an organisation are crucial for its outcome and (lack of) success. This isn't only true for young art organisations, where those who founded the organisations are also those who are in charge of it.
Very often it is still the case when organisations have been around for a longer time. Often the original founders have left at some point in their history, and thus in theory all that remains of the stichting is its stated purpose. The only thing that is then needed are a number of people who are willing and able to pursue this purpose. At least that's the theory.
In practice you often see that directors of such organisations, once they have found
their seat, don't leave it for anything. Art organisations are commonly in precarious situations with a large amount of turnover in their staff. Yet if an organisation
survives at all, then it's almost a standard scenario that their
director is present for ten, twenty, thirty years. This is even sometimes seen as a
sign of a stable organisational structure.
Yet if you would have an
organisation in any other field where the executive positions are
constant over time, while the rest of the staff is continuously
changing, then that would clearly be a company that is wholly based
around the direct interests of the individuals in upper management. This is of course in direct opposition to the nature of a stichting, where there is no theoretical room for such personal interests.
This minor legal travesty is so ingrained and unremarkable in the normal proceedings, that it has disrupted the very basis of the arts system without anyone really noticing.
I myself see only two easy solutions out of this conundrum.
The first is that (local) governments acquire a number of venues where exhibitions can be held and that those governments also provide the technical staff and other utilities. Then every number of years there is a tender for a director who can house a program in one of those venues. Such a system is already at times in place for theaters and music venues.
Although it is thus similar in practice to the current situation, it does nearly completely negate initiatives that, for whatever reason, don't fit within this structure. So although it could be a reasonable way to maintain the status-quo with greater security, with such a system it will be difficult to anticipate on the ever changing needs of the cultural and political landscape.
The second solution is that applications to structural funds ought to require an exit strategy for any
executive positions in such an organisation, including how the abstract
goal that is the basis of the stichting will be safeguarded in the
future. I don't think it's a good idea to prescribe a maximum term for any positions, but a clear description of how the interests of the of stichting are kept seperately from the personal interests of any of the people involved would be a welcome addition. If you take that reasoning a bit further, it should be easy for any stichting to describe how the organisation could function without any of its current upper management, or conversely, why these specific people serve the organisation better than any other people could.
In fact, a toned-down version of this solution is already in place, under recommendation four of principle three of the Dutch 2019 Cultural Governance Code, which states that: 'Managers and supervisors let the interest of the organisation prevail over their own interests and refrain from personal favouritism towards themselves or their peers.' But although in theory this also covers greyer areas than blatantly illegal conflicts of interest, in practice there is quite a lot of leeway in how these principles are interpreted and applied. Additionally, there are only limited possibilities for accurate supervision of these principles outside of the organsiations themselves, as the principles are guidelines for self-regulation and not enforcable laws. Therefore a more strictly defined requirement might provide a more effective instrument for enacting change.
Of course there is always a third option, which is that those working in the cultural field educate themselves on the ramifications of their choices, but such wishful thinking unfortunately can't be considered a realistic scenario.
