What does it mean to center equity in your investment strategy? And why is that important?

Cultural equity is critical to the arts and culture sector’s long-term viability, as well as to the ability of the arts to contribute to healthy, vibrant, equitable communities for all. If the field is not investing in the artistic and cultural traditions of every aspect of their community, then we are not fulfilling our purpose. This isn’t as easy as just saying, “Sure, let’s do it.” The historically inequitable distribution of resources and the values systems, biases, and systemic barriers associated with that distribution hold within them insidious checks and balances that make achieving the goal of cultural equity something that requires deep and specific engagement, self-reflection, and transformative effort.

To achieve fair and equitable distribution of resources within the cultural sector of each community, all types of investment made by local arts agencies need to adhere to core practices and competencies that center equity and address bias; honor and embrace the inherent knowledge of the communities and constituents with which they engage; strengthen and broaden the leadership pipeline; support the fullest range of arts, cultural, and creative expression; and embrace new models of power-sharing and decision-making.

To help local arts agencies and others understand more about what it takes to take those steps, and what is at stake if we don’t, Americans for the Arts recently released “Equitable Investment Policies and Practices in the Local Arts Field.” This report reviews results from the 2018 Profile of Local Arts Agencies, an annual survey deployed in April 2018, with a particular focus on an added module to the survey about how, when, and where local arts agencies (LAAs) in the United States currently consider equity in the deployment of their funds, time, space, and staff. The data was gathered from a broadly representative sample of 537 local arts agencies in the United States of varying budget size, community size, tax status, geography, etc.

Each year the United States’ 4,500 LAAs collectively invest an estimated $2.8 billion in their local arts and culture ecosystems, including an estimated $600 million in direct investment in artists and arts and culture organizations through grants, contracts, and loans.

This makes LAAs, collectively, the largest distributor of publicly-derived funds to arts and culture in the United States. It is therefore crucial that LAAs employ a strong lens of equity to consider the full scope of their investments—including both direct financial investments like grants, and indirect financial investments like staff salaries and rent.

Overall, the report tells a story of a field where direct and indirect practices about and centered on equity are on the rise. While major demographic challenges continue to exist among staff at LAAs of all sizes, many LAAs are taking steps to consider, engage, and develop support mechanisms for the full diversity of their communities.

That said, there is significant work to do. Only half of LAAs with DEI-related policies say that those policies affect fiscal decisions. The majority of entry- and mid-level staff do not have access to supported professional development. And, perhaps most starkly, LAA funds are distributed inequitably, with the largest 16 percent of grant recipients receiving 73 percent of the dollars awarded.

Here are some other top-line findings:

• LAA staffs and boards/commissions are generally more homogeneous than the general U.S. population, and have fewer people from historically marginalized populations in their ranks.
• The percentage of organizations that track any sort of demographic data increases with budget size.
• Half of LAAs current adhere to a diversity, equity, and inclusion policy of some sort—an increase of 21 percent since a similar survey in 2015—and one-in-five are currently in-process on creating or adopting a diversity, equity, and inclusion statement.
• Tax status has a marked effect in the nature of diversity, equity, and inclusion statements.
• LAAs equally rely on written and unwritten/informal policies related to diversity, equity, and inclusion, depending on the policy area.
• In terms of revenue for LAAs, 40 percent comes from public dollars, 27 percent from contributed income, and 25 percent from products and services.
• Seventy-three percent of the total dollars awarded by LAAs in the study went to the top 16 percent of organizations by budget size. Six percent of the total dollars awarded went to the bottom 45 percent of organizations by budget size. Grants requests from organizations are significantly more likely than requests from individual artists to receive at least partial funding.
• Traditional/standard mechanisms like grants, contracts, and commissions are more prevalent than nascent/non-standard distribution mechanisms like loans/microloans or start-up capital.
• About three-quarters of LAAs with granting programs integrate mechanisms for managing personal or systemic bias in the grant review process.
• Indirect investment—the components of spending within an LAA that are not direct distribution of funds to arts organizations or artists for the purpose of supporting work—makes up approximately two-thirds of the total expenditures of the LAA field in a given year.
• Just under half of LAA respondents provide training, guidance, or recognition directly related to equity; and a third provide training for board, staff, and/or volunteers.
• Half of all LAAs have created a marketplace to sell artwork, and nearly half of LAAs provide some form of free or discounted marketing or promotion.

The centering of equity in the investment practices of the LAA field is necessary to the continued relevance of not only LAAs themselves, but the arts and culture sectors each LAA nurtures. The information in this report provides a jumping-off point. It identifies those agencies at the cutting edge of new practices like start-up capital, loans, and other creative financial mechanisms, as well as those who are pioneering and iterating better ways to address systemic inequities, biases, and other challenges within the field and its structures—and now their stories and learnings can be more easily told.

And so, I invite you to take a look. Thank you to everyone who took the time to respond to the initial survey, as well as all those who weighed in on the text of the report. And thank you as well to the Ford Foundation, whose underwriting made this report possible.