Investing in the Arts

Over the past few weeks, I've been brewing some thoughts on what alternatives we have access to as an arts organization and cultural producer under the broader narrative driving the arts closer to business activities—entrepreneurship, social impact, investment, and job creation. Yet, unlike business activities, the arts in Canada face a narrowing market of known audiences and buyers, with very little means to develop new ones.

This dispatch is part 1 of a 3-part series of notes on challenges emerging from the question of how artists make money in the Canadian context.

Increasingly, the Canadian art world has begun buying into the narrative that the grants system is essentially start-up funding for artists and cultural producers. Another variant of this is stressing that arts and culture have a social impact, often viewed through the categories defined by national identity, philanthropy, or humanitarian causes. An artist who serves as a founder, platform owner, start-up, or social innovator is one of the responses. Moreover, funders continue to justify the value of arts and cultural production through economic benefit and job creation metrics within a fundamentally unsustainable sector. Artists get to play the game, but they are not in a position to rig the game through another set of values.

While it is both rare and extremely beneficial that the public funders in Canada provide a relatively low-risk chunk of money available to artists at early stages of their career or projects, the narrative is an unreliable one.

First of all, for independent artists, many of the grants' eligible line items don't directly contribute to the sustainability of the project. As for arts organizations, the hefty administrative costs aren't always covered.

Secondly, there's nowhere to "sell." Conventionally speaking, arts presenters "buy" works, and for artists, finding potential buyers means an upfront investment with no guaranteed return. The majority of the grant money spent for this purpose is on travel, hotels, and other transportation costs to move the works around. This money doesn't stay within the arts. Grants to cover these costs are often redirected to other industries, but there are very few instances where other industries would allocate resources to the arts. They'd invest in advertisement, marketing, and activations through spectacles through the works of consulting firms adjacent to the creative industry, but not directly into arts and culture.

Lastly, increasingly, artists express that there’s a shrinking pool of presenters they can “sell” to due to broad-scale losses in venues and presenters willing to take creative risks and a shift towards bringing in well-known productions with established audiences willing to travel to see the show because it ensures profit and economic benefits boosting tourism. This is perhaps why the narrative of public funding as investment stands on flimsy ground. Why would an investor put money into projects that have an ever-shrinking market? The only reason is that it is a personal belief in what constitutes art worthy of investment. Letting a centralized public funding structure decide on what kinds of art deserve investment is dangerous.

As far as the "early stage investment" argument goes, the recent changes to make available more micro-grants and production grants while shrinking strategic grants signal that the priority is shifting towards more early-stage works rather than developing long-term sustainability. The reality of microgrants up to $10,000 is that they provide a couple of months of cash flow, perhaps during transition periods for an individual or an organization. These times of transition may come abruptly, while the granting cycle takes a fair bit of time. I've spoken to a few artists now who would rather dip into credit card debt, bank overdrafts, or take out a line of credit than write a grant and wait for half a year to know if they are getting $10,000. Opportunities and drastic changes don't wait 4 to 6 months for a decision. It is not rare for artists to rely on someone who doesn't have their best interest at heart to support cash flow: credit cards, loans, and buy-now-pay-later services. Unlike other businesses with proven market success, arts and culture organizations at large have very little access to repayable loans from trusted sources. There's not a market in which this money can be made back in reliable ways. Artists produce works while taking up smaller and more volatile jobs here and there to make ends meet. Whether a project can provide a financial return is alwaysa a gamble. In many cases, they are simply sunk cost—especially when there's not a market for the works produced. Cash flow is often a material issue for those who choose to monetize their art: too often, the wait before an invoice is paid is 60 to 90 days.

If the arts sector were financially sustainable and had proven access to healthy markets, an interest-free (or low-interest) repayable loan option could be equally impactful, with fewer restrictions on activities. Other valuable financial instruments include the example of a community bond, made available by the Centre for Social Innovation to the general public, offering a stake in supporting shared causes. None of these solutions alone is perfect, but our current challenge is that we lack a diverse pool of solutions to draw from.

If Canadian arts are to continue embracing the Venture Capital and early investment narrative, we must also create an environment that fosters the development of new metrics to measure the success of arts and cultural production. Given that art rarely generates direct market value for artists, investing in the arts in a way that directly benefits them makes little sense. Arts organizations are tasked with providing affordable experiences for the audience and paying artists a standard minimum wage, as if it were a part-time job. This is not only unsustainable, but also creates a false idea that arts organizations are ultimately responsible for affordable tickets and fair pay to artists. The stories about art and impact communicate the value of the arts but offer no measurement of the health and sustainability of the ecosystem. 

Many funding sources and even private sponsorship often see investment into content products as a means of supporting the arts. This makes sense because IP has the potential to generate scalable returns. This also means compromise in creative autonomy. Even national public funding influences the projects that are selected and aligned with strategic priorities such as diplomacy and identity-building.

I see that audience size and access to the arts are issues that are underexplored by those funding arts and culture. Again, returning to the question of the market. We are currently seeing more total spending on large-scale festivals, “A-List artist” concerts, and international productions touring Canada, bringing in considerable income. At a glance, this is good news. On the ground, none of these revenue-generating activities translates to financial sustainability for independent artists. Audiences tend to spend more money on a single event (i.e. putting their Coachella ticket on Klarna) than on smaller, more frequent expenditures on a diverse set of arts and cultural productions.

What does it look like when public funders also fund access to arts and cultural production? I've come across the culture points system in Taiwan, which has been piloting for the past few years. It is a national campaign for youths under 22 to access local cultural productions. It covers a broad range of what the points can be spent on, from tabletop games to independent theatre, to clothing, as long as they come from local creatives. Classes, workshops, and art supplies are also eligible for points spending. This develops a market for local arts and culture, establishing the context for audiences to appreciate a diverse set of experiences at reduced risk. High-school-aged individuals receive the equivalent of 600NTD per year, and the amount doubles for college-aged individuals. 

It's not a perfect system, but it relieves artists, cultural producers, and arts organizations of the need to develop a comprehensive pay-what-you-can or cost-offset system (there are also issues with bar sales and unsustainable merch releases) themselves. This also means that public funding for arts and culture has been invested in a non-arts digital infrastructure, in this case, a digital wallet and an online repository of current cultural activities in different regions. Without trust in the government's management of tech solutions at this scale, a national subsidies program like the points-spending system to support access to arts and cultural experiences in the broadest sense is difficult. It risks adding to the already privileged image of art, or the fact that arts and culture have always been leveraged for nation-building and propaganda. This raised a question for Canadians that goes deeper than the value of art: where’s our public trust when it comes to investing in a system like this with public funding?

Under the conditions of public trust and accountability, Taiwan’s investment in digital technological infrastructure cascading into the arts and cultural sector opened up a new avenue for how our public funders can invest in the arts. This offers resonating provocations—“What if an investment into tech is an investment in the arts? What metrics do we need to develop to ensure that arts and culture are a part of our civic infrastructure rather than spectacles with an ill-defined purpose? What if arts funders invest in audiences, too?”

Some updates:

• UKAI Projects launched the Cultural Technologies Lab

• I will be joining Manifesting Future Festivals: Accessible, Capable, Resilient at MUTEK Forum in Montreal alongside Rachel Weldon (Debaser / Pique) and Mira Silvers (FEMINAE NOX)

• Earlier in June, UKAI Projects made a short trip to DEMO2025 in New York City. Here's what we've heard from Srushti Kamat, envisioning an equitable future through these set of questions: What does a future of technological mediation look like for human creativity, growth and artistic endeavour? Can we sustain, as stewards of the future, while sustaining the collective?

Read more & subscribe to follow along the series: https://algae.beehiiv.com/p/algae-creative-technology-and-a-way-forward