Creativity Econ 2: Non-Profit Edition
Make no mistake about it: the arts and creativity will be in the cross-hairs for the 2012 election.
Kansas Gov. Sam Brownback has eliminated the Kansas Arts Commission. Arizona Gov. Jan Brewer excised the Arizona Arts commission’s general fund. Florida Gov. Rick Scott removed the state’s Division of Cultural Resources’ grant-making budget. State arts funding is also in jeopardy in New Hampshire, Georgia, Pennsylvania, Wisconsin, Texas, and Washington. And the NEA makes “grants that lend themselves to ridicule,” according Arizona Congressman Jeff Flake at a recent budget hearing.
While some politicians may question the value of the arts, they don’t question the value of using them as a political tool.
Last week I proposed a Creativity Theory of Value, which amplifies the Labor Theory of Value common in economics discussions.
I wrote that the Creativity Theory of Value holds that the value of anything is the product of the Creativity involved in creating it multiplied by the Labor required to produce it. In mathematical terms, we could express it as C * L = V, where C is Creativity, L is Labor and V is Value. This allows us to identify a Creativity Index for anything.
But reader Jeremy M. Barker, editor at Culturebot, pointed out: “As someone who works in the performing arts, I have to point out that everything except a profitable Broadway show would have a C value of less than one. Effectively this model proposes that all non-profit-based arts are a bad idea, because all it actually does is identify the profit multiplier as the value of Creativity.”
Good question: How would the formula C*L=V relate to the non-profit sector?
Non-profit arts have two sources of funds: generally speaking, ticket sales and grants. But they are both income. In fact, grants and in-kind contributions are called “un-earned income.” Therefore we would put both the earned and the un-earned income on the V side of the equation.
Here’s an example.
Theatre X produces a play that costs $100K. Theatre X gets $50K from ticket sales, and $75K from un-earned income (including foundation grants, in-kind contributions, below-market space rental, etc.).
In this case C*L=V would be C*$100K = $125K. Therefore, C=1.25; the Creativity Index of this show, the amount that Creativity affected the Labor value, is 1.25.
This is a pretty clean example, because we know that the actors and the playwright and the designers were not paid very much money. If they got scale (they hope they got scale!), they got maybe $500 a week. So the Creativity Index is a good measure of how creativity – in this case the play, choice of the play, marketing, level of creative skill involved – influenced the value proposition.
Of course, C*L=V solely measures is economic value. It is the Creativity Theory of Value, intended to augment the Labor Theory of Value. It measures only economics, not aesthetics, nor any of the other qualities of a work.
I agree with NEA chairman Rocco Landesman, who said during the budget hearings, “The marketplace shouldn’t be the sole determinant of what is allowed to flourish.”
Thanks to Cultural Weekly reader Bill Bushnell for tipping me to the states’ war on arts funding.
ABOUT THE AUTHOR
Adam Leipzig is the founder and CEO of MediaU, online career acceleration. MediaU opens the doors of access for content creation, filmmaking and television. Adam, Cultural Daily’s founder and publisher, has worked with more than 10,000 creatives in film, theatre, television, music, dance, poetry, literature, performance, photography, and design. He has been a producer, distributor or supervising executive on more than 30 films that have disrupted expectations, including A Plastic Ocean, March of the Penguins, Honey, I Shrunk the Kids, Dead Poets Society, Titus and A Plastic Ocean. His movies have won or been nominated for 10 Academy Awards, 11 BAFTA Awards, 2 Golden Globes, 2 Emmys, 2 Directors Guild Awards, 4 Sundance Awards and 4 Independent Spirit Awards. Adam teaches at UC Berkeley's Haas School of Business. Adam began his career in theatre; he was the first professional dramaturg in the United States outside of New York City, and he was one of the founders of the Los Angeles Theatre Center, where he produced more than 300 plays, music, dance, and other events. Adam is CEO of Entertainment Media Partners, a company that navigates creative entrepreneurs through the Hollywood system and beyond, and a keynote speaker. Adam is the former president of National Geographic Films and senior Walt Disney Studios executive. He has also served in senior capacities at CreativeFuture, a non-profit organization that advocates for the creative community. Adam is is the author of ‘Inside Track for Independent Filmmakers ’ and co-author of the all-in-one resource for college students and emerging filmmakers 'Filmmaking in Action: Your Guide to the Skills and Craft' (Macmillan). (Photo by Jordan Ancel)