I. The objective
of the research and the problem to be studied
The objective is an analysis
of several existing forms & mechanisms of financing of cultural
organizations and projects, both traditional (that is, inherited from the
Communist past with or without change) and newly adopted, both in contemporary
Ukraine and in neighboring Post-Communist countries.
There are several reasons
why such analysis is needed, two major ones being, first, that some of the
traditional public funding schemes are losing its rationale and perhaps must be
either transformed or altogether abandoned; second, that many of the newly
introduced forms of funding have adopted some local (or rather Post-Communist)
peculiarities and therefore are in many regards unlike their Western
counterparts bearing same names, which means, they can hardly be expected to
have similar positive effects on cultural sphere, unless properly modified.
In Ukraine, for instance,
main traditional schemes of culture funding are the following:
·
fixed allowance from state or local budget(s)
for public cultural organizations which are non-profit in their character
(so-called ‘budget organizations’);
·
budget subsidies for other public cultural
institutions (called ‘enterprises with pre-planned losses’);
·
so-called ‘target funding’ for major cultural
actions.
There are problems with each
of these schemes nowadays. The level of budget allowance for each cultural
institution is usually defined on the
basis of the previous year’s level, regardless of the institution’s actual
needs; second, it has been quite typical for the 1990s that only a part of
officially promised budget funding was actually given to cultural
organizations, and there is virtually no legal mechanism to force the (national
or local) government to give the money they promised. Such legal provisions
seemed unnecessary in Soviet times when the Communist Party would force anybody
to do what he/she is supposed to do.
Similar story can be told
about budget subsidies to public cultural industries ‘with pre-planned losses’:
their actual losses has been usually much bigger than actual budget subsidies
given to them.
Another bad thing about the
traditional forms of budget funding is that they are not related to actual
artistic performance and/or quality of services. They are supposed to ‘cover
basic needs’ of an institution, which does not necessarily coincide with
cultural needs of the society. For instance, when local budgets cut their
funding for local public libraries (which has been typical for the ‘90s), what
remained was usually enough for basic running costs (salaries, building
maintenance etc) but not for purchasing new books. As a result, public
libraries were getting less and less attractive to readers.
The worst thing about public
financial support for non-public cultural organizations is that, legally, the
state does not have to support them. Since 1991, they are allowed to exist,
they are tolerated, and sometimes even praised for their artistic achievements,
but that’s just about all. The usual explanation is, if there is not enough
money for public cultural infrastructure, why should the government care about
private ones? Let them care about themselves. The result is, several formerly
independent theaters in Kiev and elsewhere tried, with some success, to get the
status of municipal theaters so as to get funding from local budgets.
There is, however, a form of
public financing where recipients may be non-public cultural organizations,
too: it is called ‘target funding’. For instance, productions of festivals and
artistic exhibitions are often commissioned by national or local cultural
authorities from private entertainers or cultural NGOs. Biggest shortcomings of
this form of funding, as it exists in contemporary Ukraine, are lack of
transparency and lack of competition. This was perhaps normal for Soviet times
when Party officials controlled everything, but today it simply feeds
corruption. A rumor has it, juicy public commissions for large-scale cultural
actions usually go to those entertainers who are willing to share their income
with corrupt bureaucrats who make funding decisions. What makes ‘target
funding’ still more attractive to some not-so-honest culture managers is the
usually weak control over project spending.
Since recently, a more
transparent and clean mechanism of compulsory competitive tendering (perhaps
styled after the British one) for national-scale projects (including cultural
ones) with budget over 40,000 euro was introduced by the Cabinet of Ministers.
However, it provides no elected board to make decisions, it does not cover
smaller projects, and it does not oblige local authorities.
During the ‘90s, several new
forms of culture finding, usually meant for non-public cultural organizations
and/or individual artists, have developed in Ukraine, including:
·
project grants & matching grants from
cultural foundations, both Western and domestic;
·
charitable donations (mostly corporate, and too
often being a form of political or
business advertising in disguise);
·
corporate & private sponsorship;
·
finally, not very numerous examples of
commercial success in cultural industries.
The actual shape each of
these funding mechanisms has adopted in contemporary Ukraine is rather
problematic, too. With grant-giving foundations, the problem is that most of them
come from the West (The Renaissance Foundation, being local member of G.Soros’
network, the F.Ebert Foundation, the Eurasia Foundation, Pro Helvetia etc.) and
tend to have Western-type agendas. Ukrainian charitable foundations are also
growing, but many of them are in fact PR-outlets of strong business-political
‘networks’, and their support often has hidden political motivations or
conditions.
As for corporate or private
patronage and sponsorship, the major obstacles for its development are lack of
tradition and almost unnoticeable tax relieves for benefactors. Similarly, tax
incentives for cultural ‘third sector’ are microscopic, this being one of the
reasons why it is so difficult to be commercially successful in Ukrainian
cultural industries.
What
should be studied about each form of culture funding:
1. legal regulations & bylaws related to this form of funding;
2. funding source (state or local budget, corporate profits, advertising or
marketing budget, private income etc);
3. who funds & whom using this mechanism;
4. typical reasons for using this form of funding;
5. decision making mechanisms (or traditions), formal and informal;
influence groups; typical reasons behind funding decisions etc;
6. use (spending) patterns/habits;
7. reporting/accountability; evaluation mechanisms/traditions;
8. how the form of funding has changed during the transition period in its
legal basis, scale, effectiveness, ideological connotations, public attitude
etc.
9. future perspectives for this form of funding.
Phase 1. Investigation & data collection.
First, existing legal regulations and sectoral bylaws related to culture
and its financing should be studied.
Cultural financing statistics, as well as culture/entertainment
production and consumption statistics from the period of the ‘90s should be
collected.
Second, representatives of national & local cultural authorities
(the Ministry of Culture & the Arts, regional Directorates for Culture, top
managers of selected public cultural organizations) should be interviewed on
project-related issues.
Also, selected managers of grant-giving foundations, cultural NGOs and
private entertainment businesses will be interviewed.
To make European (and, most importantly, Eastern European) comparisons
possible and productive, some fresh material on culture financing in other
European countries should be collected, using the Internet, periodicals and,
hopefully, study visits to neighboring
countries. As a matter of fact, my 1997 Fulbright scholarship in the US and my
recent CEU Visiting fellowship in Budapest gave me a lot of such material.
Time period for this phase:
5-6 months.
Phase 2. Comparisons & analysis.
This will include:
·
a comparative analysis of legal regulations for
different ways of culture funding /arts patronage;
·
a SWOT analysis for each funding mechanism
mentioned above;
·
a general analysis of cultural economy in
Ukraine and its main tendencies;
·
an attempt of prognosis for Ukraine’s cultural
industries and its finances.
Time period: 3 months.
Analysis results will be used as a basis for policy recommendations
which can be broken up into three sets:
a) recommendations for legal improvements for cultural sphere;
b) concrete policy proposals for the Ministry of Culture & the Arts,
aimed at improvement of the existing financing mechanisms;
c) recommendations for cultural NGOs.
Time period for this phase:
3-4 months.
III. How the results will be implemented in Ukraine
and possibly in other Post-Communist countries.
The most obvious way to use project results is to publish them, which my institution, Ukrainian Center for Cultural Research, is quite able to do. This will hopefully make the project results a useful resource for Ukrainian cultural community.
Second, it is a part of my regular job as deputy director of the Center
to provide the Ministry of culture & the arts of Ukraine with new policy
proposals and draft legal regulations which, if approved, will then go to the
Parliament.
Third, I plan to provide an English version (at least abridged) of my
analysis and funding policy proposals and paste it to the Center’s web-site
(now in construction) so that East European cultural policymakers will have an
opportunity to read them and, if they find it relevant, use them in their work.