Is there a fatal flaw in the New Zealand arts ecology?

A guest editorial by cultural manager Eric Holowacz


A guest editorial by cultural manager Eric Holowacz While many arts organisations overseas receive annual operating support grants, here in New Zealand funding is mostly restricted to programme/project expenses.

A guest editorial by cultural manager Eric Holowacz While many arts organisations overseas receive annual operating support grants, here in New Zealand funding is mostly restricted to programme/project expenses. Direct costs such as theatre props and venues are covered, but without funding to cover the parent organisation's operational costs, creative efforts can often only exist project to project. Is this a fatal flaw in New Zealand's cultural ecology?


In many city and state arts agencies, at least in North America and Europe, annual operational funding is treated as the cornerstone of a healthy and stable creative landscape. General support grants, often called annual operating funding, are awarded competitively to even the smallest cultural organisations. The result is good government supporting its cultural ecology: it is public policy designed to professionalise and advance the basic existence and mission of many smaller institutions. Annual operating support grants, often between $5,000 and $20,000, are usually called "unrestricted," because the funding can go to cover any overhead or administrative cost: staffing, utilities, Internet, postage, insurance, newsletter, a ream of paper. But where is this method of funding support in New Zealand?

A non-profit organisation's annual budget can be divided into Operational Expenses and Programme/Project Expenses. New Zealand offers plenty of funding sources for projects – musical productions, plays, exhibitions, films and the like. But this hard-won income is usually restricted to certain direct expenses related to the project activity (theatre props, venue for a dance workshop, publicity for a music festival, seasonal crew and technicians). Without ample sources to cover the operational costs of the parent arts organisation, creative efforts often have to exist from project to project. Ambitious cultural organisations seem stuck in a un-professionalised seasonal cycle, with a spare bedroom for an office and a personal mobile phone as the main number. Operational things like a desk, phone and administrative person are activated project by project and not as an ongoing concern. Serious operational matters, such as annual meetings, final grant reports, multi-year budgeting, insurance and strong board governance are often an afterthought. A scattering of volunteers is left to patch the holes in the dyke, whilst looking for the next project funding source.

How do we expect smaller, emerging, visionary companies to establish a head office, and use that professional core to leverage additional income sources and programme funding? Without annual operational funding, it is almost futile. Truly good New Zealand organisations, the arts groups producing and presenting and building new audiences in our towns and cities, eventually run out of steam without ever really having a firm operational footing. And while their projects may have been professionally structured and produced (meaning people were paid, or expected to be), the parent organisations are never really able to achieve professional status. The go out with a bang. They wither on the vine. They transform into something else. They go on a Big OE. They vanish from the New Zealand landscape.

Creative New Zealand's Recurrently Funded Organisations are at the top of the food chain, as are the select few who receive incontestable, multi-year unrestricted funding from their local governments. Good for them: this is annual operating support at the highest, most select level. But the rest of the cultural ecology is left to fend for project grant money that does little or nothing to help cover operational staffs, overheads, office rents, and the core essentials. How do major funding bodies, Creative New Zealand and local governments included, expect smaller, exciting arts organisations to stabilise, professionalise, and grow? Or would they rather keep theatre companies, film festivals, and dance troupes operating out of somebody's spare bedroom, hoping that the mobile phone can be topped up soon?

Maybe this is why perfectly wonderful and ambitious festivals, even those running expenses of $50K+, have to spend all their budget on programme costs and close up shop entirely in the off-season. Is this why many theatre companies exist for only a few years, producing high-quality work from production to production, then evaporate? Is this why professionalised dance companies are as scarce as hen's teeth? Is this why talented administrators and producers hop from job to job, season to season? Is this a fatal flaw in the New Zealand cultural ecology?

If you even thought about answering in the affirmative, why not ask Creative New Zealand and local funders to develop new schemes for annual operating support, providing grants of, say, $10-30K per organisation. Lower level grants could focus on start-up organisations (1-5 years old) who are doing interesting things, serving unique niches, building audiences, engaging communities. There are many. Larger amounts could go to the established stalwarts who are unable to achieve recurrently funded status, or have failed to tap their local governments for that special support known as non-contestable money. There are even more of these.

New annual operating grants could be applied for annually, as a competitive process, and requested amount will be based on total projected annual budget, track record of organisation and its principals, public exposure and audience development impact. As with most schemes, a panel of advisors would review and rank the applications, and make a recommendation for funding levels. This bread and butter support, unrestricted operational income, would almost instantly professionalise those spare-bedroom offices, providing a stepping stone to a real office, phone line, and paid administrator. But operational funding would also provide leverage for that elusive thing called growth: the securing of project grants, major new sponsorships, new part-time staff and core infrastructure development.

Cultural organisations, and the non-profit sector in general, are businesses. The ones that do not work as such are ephemeral and one-off affairs, and that's perfectly fine. And perhaps there are even some who wish to operate seasonally, and out of that room off the kitchen. But why are we not treating the fresh and visionary ones, the ones striving to professionalise and achieve a long-term presence in New Zealand, as an important part of our overall economic and business environment? Non-profit organisations can and should be professional concerns. They should be good employers, that grow staff as they grow their mission and its application – whether that's feeding the hungry, curing the sick, teaching the young or producing our culture. Many of these societal missions have already achieved professional stature, and most have plentiful sources of annual operating support. Yet it's the arts sector that is left out in the cold, with no juice left on the mobile phone.

Investment in the long-term stability of widget-making is fine and good, and that is backed up by policies toward Economic Wellbeing. Supporting the larger, nation-wide service organisations and festivals is how we put the humanity into our cities and communities, hence a strong Social Wellbeing structure. But how about a bit of investment in our local cultural industry and our amazing, creative start-up arts enterprises? How about a new scheme offering Annual Operating Support for small, emerging, ambitious, arts organisations in New Zealand? Wouldn't that do something for our growing culture, and its wellbeing? Wouldn't that help our communities say something about who we are as New Zealanders – and as incredibly creative people?

Written by

The Big Idea Editor

28 Feb 2007

Interests Cathy Aronson – The Big Idea Editor Cathy is a journalist, photo journalist and online editor.

Story / Management & Admin
NZ On Air has appointed David Ridler as the funding agency’s new Head of Music and Radio, leading the funding and promotion of local music.
Story / Literature & Publishing, Management & Admin
Poet Anna Jackson has been awarded the Katherine Mansfield Menton Fellowship for 2015.
Story / Toi Maori, Pasifika, Management & Admin
The August 2015 round of arts grants resulted in 83 grants totalling more than $1.8 million being offered to support projects by NZ artists, practitioners and arts organisations
Story / Music, Performing Arts, Management & Admin
Bespin has been named as the winner of the NZ On Air Critics’ Choice Prize in the 2015 Vodafone New Zealand Music Awards.