Differences between American and European Arts Organizations

THE MAIN DIFFERENCE: THE FUNDING OF ARTS ORGANIZATIONS

Arts organizations have become increasingly dependent on both sides of the ocean and can no longer guarantee their survival on their own. That means, they are not able to survive economically by their own generated income. They heavily rely on funding from the outside.

And there is the big difference: the way that they are funded.

While American Arts Organizations can trust in getting a huge amount of private money, the European ones depend nearly to a 95% on public funding.  In Europe, many non-profit arts organizations are funded through local or regional government grants, whereas in the USA, these organizations are largely reliant on private donations and investments.

For example, while an American Symphony Orchestra might get a 40-60% of its annual budget financed by private sponsorship, patronage, crowdfunding or donors, in Europe this figure only reaches a sad 5-10%, depending on the orchestra.

However, in the US, sponsors not only donate money, they also become actively involved as volunteers or service providers. Often, they began as spectators, as audience, and as their interest in the organizations grows, they take on a regular commitment to the arts organization’s mission statement. They provide a steady income and everyday support, and not only a one-time contribution.

That is one of the hugest differences to Europe, where sponsors and patrons are willing to donate for a specific event, but do not engage regularly. And according to my opinion, this is due to the different cultural background. As Americans peruse their dreams being aware of the effort, they understand the needs of their arts organizations to be part of the society and support them as the self-sufficient people they are.

Obviously, the difference in funding breeds other differences between the organization’s administration and management. Nonprofit organizations in the USA also typically rely heavily on volunteers, whereas nonprofits in Europe may have more paid employees. It is sorrowful that there are no volunteers in administration and management in Spanish Symphony Orchestras (museums, theaters, dramatic arts companies etc., too) at least, on the islands I haven’t met even one yet. Only from Germany do I know that orchestras give people the opportunity to get involved as volunteers.

Maybe I should not forget to mention that in Spain – curiously – on stage there are plenty of volunteers as nearly all our choirs are non-professional. The same applies to ballets or dancers, secondary characters or roles. Yet, anybody calls them volunteers or applies the specific regulations to them. They are ‘gray zone’.

Furthermore, in Europe, many for-profit arts organizations are expected to comply with labor and environmental regulations, while in the USA, these regulations are often not applicable. Lastly, the level of competition among these organizations differs greatly, with the USA typically having a much more competitive environment.

Let’s continue.

Other contrasts are caused, for example, as for which project or art work gets the public or private funding and which not. In Europe, many grants are given to projects that are intended to have a positive social impact, while in the USA, grants are often given to projects that are focused on generating revenue and profit.

Based on all of this, we can say that non-profits in the United States are typically focused on promoting a social cause or advocating for a particular standpoint, while European non-profits may be focused on a variety of activities, including research and service delivery.

But we haven’t reached the end of the reasoning — yet.

Furthermore, due to public funding, politics, and public servants, who usually do not have the necessary training or experience, they interfere in artistic and operational questions and act as if stakeholders do. In light of public funding, a loss of artistic independence can be registered. Absolutely typical in Europe, thanks to private funding less dramatic in the States.

And finally, please do not forget that not only are arts organizations subject to public budgets from an economic perspective, but also regarding timelines and schedules. This implies that the settlement of funds might only be possible at a specific time, which obviously does not match the operational schedule of the organization. Or, the necessary paperwork to apply for the funds is subject to limits and deadlines that may not suit your artistic planning.

In summary, public funding involves a gigantic loss of freedom and individuality.

OTHER DIFFERENCES

DIFFERENCES IN SCOPE OF ACTIVITIES AND VENUES

The scope of activities of arts organizations differs between Europe and the US. In the United States, the focus is often on one specific activity, such as theater, music, or dance. In Europe, however, there is usually a much broader focus, with a greater emphasis on providing a range of cultural experiences. Again, the reason for this is, in numerous instances, that funding by public authorities attaches a subsidy to specific conditions like environmental protection initiatives, gender equity approach, diversity spirit or many others[1].

Moreover, many European organizations are more likely to focus on ensuring access to the arts, with a strong emphasis on education, outreach, and community engagement as well as on the development of culture and heritage at a regional and international level. The activities of US arts organizations are principally geared towards fostering community involvement in artistic activities.

On the other hand, classical music experiences and performances in Europe and the United States differ greatly, especially when it comes to the question of where to perform. In the USA, classical music often follows a more standardized approach, with venues like concert halls and performing arts centers hosting regular performances.

In Europe, however, there is a greater emphasis on smaller-scale, more localized performances. These events often take place in unique settings such as temples, churches, and local galleries, offering a more intimate experience for the audience.

Additionally, due to the diverse cultural landscape of Europe, there is often more opportunity for collaboration between different disciplines and genres. This allows performers to gain access to a wider network than they would have in the US, enabling more fluid mobility between venues.

My dear reader, I guess you already got the idea. Overall, it always comes down to languages, culture and history.

DIFFERENCES IN MOBILITY AND TOURING

Going on tour in Europe can be more complicated than in the United States due to a variety of factors. For instance, the European Union consists of many countries with varying laws, tax regulations, and languages. This can make it difficult to plan a tour that meets the requirements of each country.

Additionally, some outermost regions of the European Union, such as the Azores and Madeira in Portugal, or the Canary Islands in Spain, can have additional restrictions due to their unique geographical locations or tax regime.

What is more, borders between countries in Europe can be a challenge to navigate and require additional documentation or permits. In Spain, we have to apply for a specific NIE-number[2] for all the musicians who come and work with our orchestra. This can sometimes be a jigsaw puzzle.

DIFFERENCES IN MARKETING STRATEGIES

The marketing strategies used by arts organizations also differ significantly across the two regions.

In Europe, arts organizations continue to use traditional marketing techniques such as print and online advertisements, radio and television broadcasts, and public relations campaigns. Most recently, many European arts organizations also use social media as a primary means of marketing. If you allowed me, I would say: they do publicity, little more.

In the US, apart from ordinary and digital Marketing, many arts organizations have also established creative partnerships with the audience and local or national businesses to gain additional support for their activities. This often places greater emphasis on providing interactive experiences and cultivating relationships with audiences because in the States they already made the connection between marketing, on the one hand, and fundraising and audience development, on the other hand[3]. In Europe, to speak of audience development is not normal. Whatsoever, seeing it put in the same context as marketing and fundraising is absolutely rare.

I could go on and on and make the list longer and longer, but that’s not my intention.

CONCLUSIONS

By way of conclusion, I did not summarize my speech. Instead, I opened up a debate among our students[4] and I asked them, inter alia, the following question:

Would it be possible to run an arts organization or

an orchestra on a for-profit basis?

To answer this question, we should firstly define what we understand by arts organization. Do you see any differences between organizations like Walt Disney Inc., a rock-club, an independent promotor or a museum?

Secondly, we should consider Baumol’s cost disease. It says that, in arts organizations, we can observe that the rise of wages in jobs have experienced is huge compared to little or no increase in labour productivity [5] while in private companies it is precisely the other way around: salaries and labor productivity increased in similar ways in the last century.

Lastly, you should consider different ways to grow our income with their advantages and disadvantages, such as higher prices for tickets, diversifying our product line, activities of education mentoring, focus on niche markets, targeting specific demographics, and options as business services. There might be numerous other options and ideas which could make arts organizations profitable. All should be part of this debate.

Nevertheless, I would say, it is at least not totally impossible to run a symphony orchestra or other arts organization on a for-profit basis, though it is an extraordinarily difficult undertaking which we should not stop thinking about.

The main challenge is finding the resources and audience to sustain the orchestra’s operations. In order for the symphony orchestra to make a profit, it must find enough donors, financial supporters, and concertgoers to make up the difference between the money it earns and the money it spends. It must also maintain a high level of quality, as well as creating and marketing a product that appeals to a wide audience.

That’s all for now.

Until we meet again on this blog or in whatever digital or real classroom or concert hall, think about this question and let me know in the comments.

Nicole Martín Medina

Las Palmas de Gran Canaria

April 2023

DOWNLOAD: Summary Chart (PDF)