Banking on Art

Mali Thu 15-10-2009

Banking on Art
By David Kaiza

The search for alternative funding for the arts

If things don’t go well in Mali, a lot of artists could end up losing their refrigerators and television sets in the coming years. To put it differently, if things go well in Mali and much of Africa, artists could end up losing their refrigerators and television sets in the coming years. It is not an arty paradox, but a matter of perspective in the continuing search for the most sustainable way to fund the arts.

The Dutch funding agency, the DOEN Foundation, together with its Norwegian counterpart, the Strømme Foundation, are carrying out a feasibility in Mali which if successful, would see artists on the continent borrow money from Microfinance institutions to fund their work.

With the ground-breaking study, the Foundation is trying to find out if the Microfinance sector, which has been credited with lifting millions out of poverty, can also lend money to fledgling artists who cannot afford to pay for airtickets, venues, paints and brushes.

Ms. Gertrude Flentge ( Far left) the programme manager culture and media / sustainable development of the DOEN Foundation chairs a session of the World Art Summit

Speaking at the World Summit on Arts and Culture in Johannesburg, South Africa, Ms. Gertrude Flentge, the programme manager culture and media / sustainable development of the DOEN Foundation, said that her organization, in conjunction with the Strømme Foundation, is looking for two alternative sources of funding through a study in West Africa.

Microfinance - or as it is sometimes described, banking for the poor – made it possible for the poor to borrow money by cutting out the arduous, traditional mortgage requirements by lending money against communal promises or simple but valued household items like television sets and refrigerators.

More often than not, artists do not have the business portfolio nor the assets that banks demand, in order to get access to loans. Secondly, art has not always been seen as a business activity requiring balanced books and auditing processes.

The second model which the Foundation is evaluating is what they call Africa Unsigned. Modeled on the successful Sell-a-Band, a funding mechanism by which musicians sell shares to their funds for work-in-progress and use the proceeds to pay for professional production, it hopes that money for the arts will itself come directly from the listening public.

Funding for the arts was one of the major topics at the World Summit on Arts and Culture held in the South African commercial capital, Johannesburg. While on the one hand, the current funding mechanism by which Western donor foundations channel money to poor, mostly African countries was criticized by speakers at the summit as “ghettoisation” of culture in poor countries, the very donor organizations, such as the DOEN Foundation also said they are trying to find ways by which the arts in Third world countries can be self-sustaining.

'We always discuss with projects their long-term sustainability, because we need to withdraw our own funding after 3 to 9 years, to be able to also fund new and upcoming organisations.

Arturo Navarro, Proffesor on cultural policies at the University de Chile addressing a session of the World Summit on Arts & Culture. At the same session, Mr. Arturo Navarro, Professor on cultural policies at Universidad de Chile presented a third alternative mechanism that operates through a public/private partnership by which among others, arts councils and directorates can become landlords, owning property – mostly museums and theatres that generate income by renting out space to private businesses.

While the concepts are exciting, Ms. Flentge said that the challenge of the study they are carrying out, which started in April 2008, is to find what she called a “niche where microfinance and cultural sectors meet on their own terms.”

“On their own terms” is often what is difficult, for art – and specifically the production of it – has never seemed like a viable, bankable activity that results-oriented banking executives get excited about and it is ways of making the case that art is bankable that the study is trying to establish.

By their nature, Microfinance institutions tend to be short-term lenders, and the DOEN-Strømme initiative is looking to developing lending facilities that would possibly be one-of opportunities for artists who need to fund a tour, obtain travel documents, buy materials and cover the costs of exhibitions.

The pilot study is looking at costs as low as $200 – 2000 as short term loans and up to $ 10,000 as relatively longer term loans.

However, as preliminary results show, the Microfinance institutions are not willing to give up guarantees and because of this, artists borrowing money will find that they have to go through the same rigors as ordinary borrowers by staking household items like television sets, fridges and computers – items that can be recovered should the loan payment default.

They can also receive loans through the verbal guarantees of relatives and respected individuals in communities or cooperatives. Loan facilities can have both fixed and flexible maturation periods. But for it to work, both the artists and the bankers would have to know more of the other side’s work.

Because of this, the Microfinance bodies involved in the pilot project are learning about the processes of art, which they in turn are teaching artists financial skills such as book-keeping and accounting. The Microfinance alternative would cover all kinds of arts. But one alternative mechanism that would be more useful for music is also undergoing pilot test in the DOEN- Strømme collaboration.

SellaBand (www.sellaband.com) is a Dutch initiative that has attracted such music groups and artists as Public Enemy and Chris Jones circumvents big label monopoly by selling shares or subscriptions to music fans, which money pays for the production process.

It is seen as a way of giving a hand to fledgling, unsigned acts but also as a protest against record company monopoly.

Through the website, www.africaunsigned.com, the initiative is asking fans (who listen to a sample of the music) to contribute money to artists whose work they like and would like to support. According to the website, when the money contributions reach $25,000, then the artists go ahead and record an album. The contributing fans are then entitled to proceeds from sale of the music.

The question for these initiatives is the dilemma between culture and commerce and related to it, the more subtle differences between what Flentge calls “stimulating an economic movement” or creating an “entrepreneurial subsidy”.

Flentge, who said public funding for the arts will continue to be a major part of funding for the arts, paused the key question: “The most important question is did the loan promote art or did it push artists to become more commercially minded?”

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