Economies and Diseconomies of Scale in the Arts
How does scale influence impact in the arts?
In 2007, back when I was a fresh-faced grad student, I actually addressed this question head on in the eighth post ever published on Createquity. I argued pretty strongly that scale in the arts was a myth, or at least not salient to the same extent as in other fields:
"It’s not that I don’t think large arts organizations do good work, or that they don’t deserve to be supported. What I’m going to argue instead is that there is a tendency among many institutional givers to direct their resources toward organizations that have well-developed support infrastructure, long histories, and vast budgets, and in a lot of ways it’s a tendency that doesn’t make much sense (or at the very least, could use some balance).
For one thing, those well-developed support infrastructures don’t come cheap. Consider the case of Carnegie Hall… [snip]
In contrast, small arts organizations are extraordinarily frugal with their resources, precisely because they have no resources of which to speak. It’s frankly amazing to me what largely unheralded art galleries, musical ensembles, theater companies, dance troupes, and performance art collectives are able accomplish with essentially nothing but passion on their side.
A $5,000 contribution that would barely get you into the sixth-highest donor category at Carnegie might radically transform the livelihood of an organization like this. Suddenly, they might be able to buy some time in the recording studio, or hire an accompanist for rehearsals, or redo that floor in the lobby, or even (gasp) PAY their artists! All of which previously had seemed inconceivable because of the poverty that these organizations grapple with."
The literature on scaling impact in the social sector tends to take for granted that scale is a good thing—that services are provided more effectively when centralized under a strong leader and when efficiencies can be exploited across functions and sites.
This logic makes sense when the goal is to solve a systemic problem that is evident in many different contexts, such as physical places. If you’ve come up with a solution that works in Chicago, why wouldn’t you want to bring it to New York and DC? Arts service organizations, in fact, can likely benefit from economies of scale. Fractured Atlas has certainly been able to accomplish a lot more because its focus is national and cross-disciplinary than would have been the case otherwise, and scale has no doubt been a motivating factor behind Americans for the Arts’ many mergers.
But when you get to talking about arts producers and presenters, which I think is what most people mean when they say “the arts,” the conversation about scale becomes very different. What problem, exactly, is being solved here?
It seems like the whole point of the nonprofit arts is to add to the aesthetic diversity that would otherwise exist in the marketplace for creative expression. If the point is diversity, how is that goal served by attempting to scale up institutions? The very commercial marketplace to which the nonprofit arts strive to provide an alternative loves scale—it thrives on it, because scale begets market power, which begets revenue, which begets profit. (Profits worth talking about, anyway.)
Leaving our cultural lives in the hands of commercial entities, many theorists have worried, will result in a boring sameness, an attempt to feed the world’s aesthetic appetite with the equivalent of TV dinners every day.*
Our sector takes it on faith that there are forms of artistic expression that have clear cultural value and relevance even if replicating them widely is not practical. I suppose if you believe that these forms are specific and identifiable in nature (e.g., classical music, plays by Henrik Ibsen), then scaling them to help them compete with commercial cultural products would make sense. But if you believe, as I do, that their value comes in large part from the diversity they add to our collective palate, it’s much better to spread the subsidy around.
On a purely theoretical level, my view hasn’t changed that much in the five years since I wrote that thought piece. However, having become more closely involved with several grantmakers (including serving on a couple of grant panels) since then, I’ve developed a newfound appreciation for what large organizations can accomplish with scale.
The scale that institutions traffic in does not have to do with the creation or presentation of work, but rather the audiences reached by that work. There are arts consumers—plenty of them, in fact—who simply will never frequent a show or exhibition by a smaller, experimental group or venue unless they personally know someone in it. But give that experimental group an institution’s stamp of approval, and those audience members are all over it. That’s got to count for something, and speaks volumes of the curatorial role that large institutions have in the broader ecosystem.
That said, one thing I still don’t see much of on the part of arts funders is a willingness to consider the transformative potential (or lack thereof) of grants.
Some years ago, the Hewlett Foundation developed a simple yet very clever rubric for grant selection called Expected Return. One of the ways in which Expected Return is clever is that it accounts for the proportion of a project’s success in an ideal world that can be attributed to the grant you made. The less of the budget you’re responsible for, the less of a difference you’re really making.
As I wrote then and still believe now, “Foundations concerned with ‘impact’ should remember that it’s far easier to have a measurable effect on an organization’s effectiveness when the amount of money provided is not dwarfed by the organization’s budget.”
*Defenders of pop culture will no doubt cite the many creative achievements of the entertainment industry as evidence against this point—and they are certainly right to celebrate The Wire, Radiohead, and The Lord of the Rings. But for every groundbreaking artist who succeeds in the market economy, there are dozens more who don’t, and plenty of mediocre talents gumming up our headphones and screens instead.