By David Maggs, Metcalf Fellow on Arts and Society
Does Grant Dependent Mean Precarious?
In my previous essay on Arts & Social Finance, I suggested grant dependence is the problem we want to fix. That’s not quite true. The grinding struggle arts leaders are facing as they try to maintain stability and viability within their organizations — that stressful, exhausting, demoralizing condition we refer to as “precarity,” is what this fund hopes to relieve wherever it can.
There is a Canada where precarity disappears without addressing grant dependence. It’s the Canada that indexes grants to operating costs, the Canada that adds new funding whenever new arts organizations appear, the Canada that views being an artist as a right and follows Ireland into Universal Basic Income designed exclusively for them.
While I am not sure that Canada ever existed, it is nowhere to be found on current policy horizons. In that Canada, grant dependence would be assumed rather than a predicament. But in this Canada, grants represent an increasing portion of our revenue profiles as they make up for declines in corporate sponsorships and box office. Here, as operating costs keep rising and funding programs continue to weaken, grant dependence and precarity grow increasingly joined at the hip.
But is this inevitable? Or can the relationships between grants, grant dependence, and precarity be disrupted? Can we reduce our grant dependence without reducing our grants?
As I’ve been working through this question, I’ve found it helpful to move beyond thinking about grant dependence as a simple percentage of revenues, and whose chief risk to our viability are changes in the funding programs we rely on. That’s a real risk, but not one that invites much creativity or agency. Rather than trying to decouple our grant dependence from our grants, can we decouple it from its broader organizational and sectoral tendencies — the mindsets, capacity, strategies, tactics, and activities that stem from grant dependence and represent an equal risk to our viability?
In thinking through these tendencies, I find myself stuck between the haste of modern life and the need for proper nuance. Not wanting to lose you to the curse of TLDR, I beg forgiveness for the too-brief provocations that follow and invite you to connect over email or tea.
Relationship Drift
Imagine there are two healthy pathways to the art-society relationship: artist-centric and audience-centric. The first is rooted in art’s ability to reflect, revise, and transform the world through its aesthetic autonomy. It’s the one we find in most artistic vision statements and represents the standard path of nonprofit art sectors. The second seeks to weave artistic practices into more immediate relationships to human flourishing, stemming from diverse influences such as Indigenous views of art as inseparable from everyday life, or Western preoccupations with art’s impacts on economics or well-being. For some artists and organizations these paths divide sharply, clearly signaling which relationship is primary in their practice — artistry or community. For others, they weave together so seamlessly that the very idea of two pathways is, functionally speaking, a false dichotomy.
In a context of grant dependence, however, a third option arises. Instead of artist- or audience-centric, we risk becoming “funder-centric” instead, where our primary relationship is to neither creativity nor society, but bureaucracy. Here, our focus on funding programs crowds out attention to practice and community, as policy alignment becomes a questionable proxy for creative vitality or relevance to community.
Compliance Bubble
Funder-centric sectors not only risk such displacement, we risk not noticing it when it happens. Locked within self-referential feedback loops between funders and organizations, a grant-dependent sector grows susceptible to confusing the echoes of programmatic priorities for more fundamental indicators of healthy art-society relations. As such echoes form themselves into a broader compliance bubble, internal coherence distances funders and practitioners alike from originating creative drives and/or the throbbing cultural needs of our communities. The art-society relationship slowly morphs into an art-policy relationship, where engaging (typically) federal programmatic criteria differs from engaging local public need.
Adaptive Capacity
While any art-society relationship is in constant flux, Canada’s cultural nonprofit sector is working through not one, but two profound transformations. We are shifting from a Eurocentric sector to one reflective of the most diverse Western nation on Earth; and from a sector dedicated to analogue orthodoxies to one that must find relevance in a rapidly digitizing world. Given such disruptions, adaptive capacity — that ability to proactively respond to disturbance and arrive at new ways of operating — becomes essential.
For this reason, I dedicated the last chapter of Art and the World After This (2021) to the growing priority of learning — can our sector experiment, innovate, scale, and change? What I didn’t realize at the time, is that there’s a relationship here to grant dependence. In 2022, UK researchers Bhattarai & Bhandari analyzed 150 nonprofits, finding that grant-dependent organizations consistently score lower on learning.
Could this be evidence of the funder centrism and compliance bubble described above? That such grant-dependent organizations are held within the relative comfort and security of grants and therefore less inclined to look outwards, observe, experiment, change, and adapt? What the researchers go on to illustrate is that it is less their grant dependence and more their overall learning capacity that ultimately explains the precarity we typically associate with grant dependence. Which is good news. If the problem lies less in the resource profile itself than in the mindsets and habits that typically grow around it, a bit of light starts to shine at the end of the tunnel.
Positive Feedback
To reach that light, however, we must first wander into the dark heart of grant dependence in order to confront its most pernicious feature: positive feedback. While positive feedback does not sound like the name of a super villain, it is the nemesis of much human agency. For it is this that takes a little bit of grant dependence and increases its hold over us bit by bit. As revenue concentrates, an organization’s ability to experiment and explore steadily declines as it falls into lockstep with program requirements.
These constraints are not purely financial, however, as granting cycles limit temporal horizons, eliminating both quick, responsive activities and slow, strategic reorientations. Declining wages and rising labour instability strain staffing plans, costing organizations experience, memory, and stability, while pushing leadership towards increased internal management burdens. Operational environments keep on changing, while the capacity of organizations to respond withers. Adaptivity declines, precarity expands, and grant dependence tightens its grip.
Then when grants come along specifically for experimentation and change, the pressures of precarity have built up so much that those resources for transformation get taken up as a means for preservation instead — you can’t give book money to hungry students and not expect them to buy food.
But is this where Arts & Social Finance comes in? Admittedly, it’s hard to see from here how a program to develop low-interest lending to cultural nonprofits is a response to the positive feedback loops cycling them downwards into steadily worsening precarity. That hardly sounds like a good moment to take out a loan. And yet something has to come along and break that cycle before we either slip into unworkable precarity, or our funders face the unenviable task of choosing which dependents to cut off and which to save.
Market Failure
When something essential to society isn’t profitable enough to sustain itself, we don’t always blame it for not being able to make it on its own — sometimes we call it market failure and blame the market for not cultivating everything humans need to flourish. Arguments about where and how much market failure to recognize are essential to healthy systems. Once profitable, journalism has lost much of its viability, yet we see surprisingly little public desire to reposition it despite profound social costs. Solar energy, on the other hand, began within market failure, requiring significant subsidization before transforming into one of the world’s most cost-effective energy sources. This boundary is necessarily porous and strategic, inviting us to wonder, where it belongs within a cultural sector? Protect too little, and we lose an essential element of national sovereignty at an especially touchy moment for Canada on the global stage. But is there such a thing as protecting too much?
A Choice of Risks
There is energy in risk. It sharpens attention, introduces consequence, and generates the necessity that so often precedes invention and transformation. Yet it is also something cultural sectors try to avoid, and with reason. In a world where markets repeatedly fail to recognize their public value, seeking maximum shelter from risk has been rational, even principled. In the face of market failure, public funding has offered us not just resources, but refuge.
Yet any refuge can quietly become enclosure, and all too often, the more complete our protection, the greater our vulnerability. Arts & Social Finance aims to offer carefully designed, well-supported forms of market exposure — paired with robust readiness and capacity-building — to replace the precarity wave approaching us with something more like a vaccine: a controlled exposure that strengthens our ability to adapt and ready ourselves to the forces pressing in from all sides.
This is not a proposal to replace public funding, but to relieve it of the pressures it finds itself facing increasingly on its own. Like it or not, the conditions facing cultural nonprofits are irrevocably changing — demographically, technologically, economically, politically. Our choice is not between risk or no risk, but between risks we design for and risks that come to us unbidden.
Arts & Social Finance wants to give us a choice before a choice is made for us: to loosen the feedback loops that inadvertently convert protection into precarity, and to rebuild organizational capacity in ways that grants alone cannot. While our Prime Minister recently observed that “we need to take the world as it is, not as we wish it to be,” it’s important to remember that our business is wishing things into being, and now, more than ever, we must prepare ourselves to succeed in that affair.
