Why the Government cannot Rely on the Wisdom of the Crowd

By Quirijn van den Hoogen

Just a few days after the general election, the dust seems to be settling: the neoliberals (VVD), the Christian-democrats (CDA), and the social-liberals (D66) will form the core of the new government. Only the social-liberals have plans to raise the nation’s cultural budget, compensating somewhat for the severe budget cuts of 2013. A fourth party is necessary to build a coalition and everyone is looking at the Green Party, who, understandably, are hesitant to join the coalition: the neoliberals are not their ‘natural’ choice for any form of co-operation. But hey, they too want to raise the cultural budget, so it might be two against two at the negotiation table.

Raising the cultural budget is necessary, because for the Dutch cultural sector, the dust is hardly settling. The government may have published quite re-assuring arguments that after the unprecedented budget cuts of 2013 (20% in total for the national budget, another 10% was cut by local authorities) most cultural institutions still keep on surviving, but do not ask how. The Council for Culture and the Social Economic Council have published alarming facts about the employment in the cultural sector: many artists work without pay, and if they are paid they are not offered a permanent contract. Even crucial staff members in these institutions – such as artistic directors and marketeers – are being hired on freelance basis. Most cultural workers are forced into a precarious existence as self-employed professionals, spelling doom for both the prospects of artists still earning a decent living in the sector and for sustained quality of the production in the sector.

Let us return to 2013 for a moment. The minority government of neoliberals and Christian-democrats, supported by Geert Wilders’s populist Freedom Party in parliament, legitimized its intervention in the cultural sector by arguing that the cultural sector was ‘over-reliant on public funding’. Good art sells itself in the marketplace, or so they argued. The budget reduction was accompanied by measures to enhance public donations to the arts, the so-called Geefwet, which has yet to prove a substantial increase of private sponsoring. The government also pointed to crowdfunding. With the advent of web 2.0, crowdfunding has taken root in our societies, including the arts sector. Local authorities started looking at crowdfunding as a means to ‘measure’ public support for the arts or, rather, its societal relevance. It is not uncommon that authorities rather than subsidizing based on artistic or social merits match each euro obtained through crowdfunding as an incentive to cultural entrepreneurship. Some private art funds have followed in their wake, allowing voordekunst.nl, for instance, to distribute their money.

But, what happens when the government relies on ‘the wisdom of the crowd’ rather than decisions of experts from the cultural sector? Does this imply a totally different value orientation for cultural institutions? The good news is: no it does not. Empirical research on the largest Dutch crowdfunding website, the aforementioned voordekunst.nl, demonstrates that crowdfunders are driven by the same values that artists hold dear, namely artistic development and cultural relevance. Crowdfunders want to be convinced that the produced work is qualitatively good and that it is relevant, either for the art sector as a whole or for the development of the artist in particular. Moreover, crowdfunders want to know that the artist possesses the expertise to execute the work. Endorsements by well-know and seasoned artists are therefore a plus in the crowdfunding campaign. Crowdfunders also expect transparency on how their money will be spent, making the formulation of a solid budget a necessity. The transparency can also be provided by offering a reward in exchange for a donation: a ticket to the show, a copy of the DVD produced, or a meet-and-greet with the artists. Particularly generous donors can expect a private concert or performance or some other special treat. This might all seem very product-oriented, reducing crowdfunding to a mere early form of payment of the end product of a project, i.e crowdfunding seems very market oriented. However,it turns out this is not a particularly important issue: 35% of Dutch crowdfunders on voordekunst.nl pay a higher donation than the monetary value of what they will receive or do not expect anything in return at all. So, relying on crowdfunding is different from market-based funding: it focuses on the intrinsic values of art rather than on saleability. In addition, crowdfunding creates a community around the artist and the works produced, so funding and finding an audience seem to be going hand-in-hand.

But crowdfuding is certainly not a cure for all ails. Ostentatiously absent from the list of ‘project makers’ of voordekunst.nl are the cultural institutions who receive structural funding from the government. The only structurally funded institution to crowdfund a project successfully in 2015 was the Dutch Metropoleorkest – not unsurprisingly the orchestra whose funding was totally withdrawn by the government, to be re-instated only a year later. They did not crowdfund a concert series but raised the capital to produce a remembrance book.

If we look at the numbers, crowdfunding campaigns raise € 5.000 to €5.500 euros on average and that money does not come easily. It is hard work to run a successful crowdfunding campaign, which implies communicating with an expanding circle of small individual donors. It takes a lot of planning and time. Larger cultural facilities, such as libraries, museums and archives, theatre and dance companies, or theatre venues cannot fund their programmes or the upkeep of their collections with such a budget. So, evidence suggests crowdfunding is only suitable for a very specific part of the cultural sector: for artists working independently, who may not have the symbolic capital to be successful in subsidy applications. Moreover, voordekunst.nl raised € 3.636.950 in 2015 and € 4.230.084 in 2016 for 690 and 777 project respectively. So sure, it is a growing phenomenon, but the growth rate will not in the near future compensate the aforementioned budget cuts, which totalled ca. 200 million on the level of the state alone. It is wise to trust the wisdom of the crowd when funding art and culture, but all those project-makers rely on a network of fully functional cultural institutions that provide the opportunities to develop their projects and present them to an audience. Without such a system, no artists or projects will be possible, and therefore no funding by the crowd.

See for more info on the research: http://www.rug.nl/staff/q.l.van.den.hoogen/research



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