University of Amsterdam – Faculty of Economics and Business
Quality signals and personal subsidies
How cultural foundations in the Netherlands select artists
Koen de Boer 5799864 27-‐11-‐2013
Supervisor: Monika Kackovic
Abstract
With funding decreasing and competition increasing, the pressure on subsidy allocators and subsidy applicants is higher than ever. For many cultural foundations, the quality of an artist’s work is one of the most important criteria for personal subsidies. The problem is that the quality of cultural
products is often difficult to determine prior to ‘consumption’. It was expected that cultural foundations use alternative measures such as quality signals to determine the quality of an artist’s work. This research provides evidence that quality signals are able to influence cultural foundations’ appraisal of artists applying for personal subsidies. Data showed that the more quality signals an artist’s CV contained, the more personal subsidies the artists received. Participation in biennales turned out to be the strongest quality signal and public foundations are more likely to be influenced by the number of quality signals on a CV than private foundations. Interviews with professionals in the art sector showed that there are alternative ways to increase the chance of receiving subsidies. Personal connections, the artist’s reputation and the way the application was presented turned out to be other important factors in the selection process.
Contents 1. Introduction 4 2. Theoretical framework 5 2.1 Signalling theory 5 2.1.1 Reviews 6 2.1.2 Awards 7 2.1.3 Expositions 7 2.2 CVs 8 2.3 Stardom 8 2.4 Hypotheses 8 3. Empirical setting 9 3.1 Art subsidies in the Netherlands 9 3.2 New cultural policy 10
3.3 Cultural foundations 11
3.3.1 Financing 12
3.3.2 Requirements 13
3.3.3 Mission and criteria 13 4. Methods 14 4.1 Data 15 4.1.1 Independent variables 15 4.1.2 Dependent variables 16 4.2 Interviews 16 5. Results 16 5.1 Data 16 5.2 Interviews 20
5.2.1 Summary interview Lino Hellings 20 5.2.2 Summary interview Thijs Tromp 21 6. Discussions 23 6.1 Concluding remarks 26 References 28 Appendix 32
1. Introduction
Since the recession hit the Netherlands in 2008, large reforms in the art and culture sector have been planned. In 2013 the government imposed budget cuts on the cultural sector, which amounts to 200 million euros , or 20% (Ministerie van Onderwijs, Cultuur en Wetenschap, 2013). On top of this national cut, municipalities and provinces had to cut their annual budgets with an additional 10% (Berenschot, 2012).
Subsidies are an essential source of income for artists. Almost two-‐thirds of the total income of the art sector consists of subsidies (Berenschot, 2011). Because artists already had to compete for subsidies (Rengers and Plug, 2001), it is expected that these budget cuts will increase competition for subsidies among artists. Furthermore, many cultural foundations are becoming stricter in their requirements for subsidies. For instance, artists are required to show ‘cultural entrepreneurship’, which means that production of art has to better suit consumer demand (Ministerie van Onderwijs, Cultuur en Wetenschap 2013). Another core point of the new policy is an increased focus on artists at the top of their discipline (Ministerie van Onderwijs, Cultuur en Wetenschap 2013). This could potentially lead to complications, as art can be difficult to compare and rank (Currid, 2007).
Most cultural products can be regarded as experiential goods (Hirsch 1972, Holbrook and Hirschman 1982). This means that when someone plans on buying, viewing or otherwise ‘consuming’ a piece of art, one can only be sure about the quality of the product after it has been experienced (Wijnberg and Gemser, 2000). This makes pre-‐purchase quality judgments difficult to make. Moreover, cultural products are generally taste-‐driven and not performance driven, which makes the assessment of their value even more difficult (Currid, 2007). When the evaluation of an unobservable product is difficult, alternative mechanisms can be used to determine the quality of a product (Ali and Nauges 2007, Emons 1997). According to the signalling theory (Spence, 1973), certain signals can be used as proxies of product quality. These signals can convey information about a product or producer’s unobservable qualities. Examples of quality signals are awards, reviews and endorsements (Kirmani and Rao, 2000). Typically, this information can be found on an artist’s Curriculum Vitae (CV). The use of CVs is very common in the art sector (e.g., Ammodo 2012, Amsterdam Fund for the Arts 2012, Mondriaan Foundation 2012, Prins Bernhard Foundation 2012) since they are often used to leave an impression on clients or employers (Nemanick and Clark, 2000).
Almost all subsidies in the Netherlands are distributed by public and private cultural foundations such as the Mondriaan Foundation and the Prins Bernhard Foundation. Providing roughly a quarter, or 1,16 billion euros, of the total income of the cultural sector, the impact of the cultural foundations on art in the Netherlands is substantial (Berenschot/de Volkskrant, 2012). Most cultural foundations require a CV to be included in the application as it often contains most of the artist’s past activities and accomplishments such as expositions, reviews and awards. Furthermore, many cultural foundation mention artistic quality as one of the most important criteria for personal subsidies. Perhaps information on artists’ CVs can function as a quality signal, which can influence the foundation’s appraisal of the applying artist.
The focus of this study is to explore how, and on what basis, cultural foundations assign personal subsidies to artists. Additionally, the role of quality signals found on artist CVs will be investigated. Personal subsidies will be defined as merit-‐based scholarships, (residency) grants or stipends.
Thus, the main research questions will be:
How do cultural foundations select the artists that receive personal subsidies? Do quality signals have an effect on the selection committees of cultural foundations?
In the next section, the relevant concepts and theories will be explained in more detail. Also, to better understand how cultural foundations operate, a brief overview of art subsidies in the Netherlands will be given, along with a description of the new cultural policies. Then, the different guidelines and criteria of the public and private cultural foundations will be explained.
This study follows a mixed-‐methods approach. Using quantitative data from students who attended the Rietveld Academy in Amsterdam, the relationship between quality signals and personal subsidies will be explored. Additionally, interviews with professionals from the art sector will be used to shed light on both sides of the subsidy allocation process.
2. Theoretical Framework
2.1 Signalling theory
Cultural goods can be seen as experiential goods (Hirsch 1972, Holbrook and Hirschman 1982). The value of an experience good is based on the consumption experience and its hedonic aspects in particular (Cooper-‐Martin, 1991). Therefore, in this paper, a high quality experience good will be described as one that has high hedonic value.
The quality of a cultural good is often difficult to determine (Wijnberg and Gemser, 2000). This is partially because people can only determine the value of an experience good for themselves after the experience itself. Another reason is that cultural products are taste-‐driven and not performance driven, which makes the assessment of their value difficult (Currid, 2007). Perceived quality has been proven to have strategic value and influences the decision making process of potential consumers (Zeithaml, 1988). This is also true in the cultural industries, where recognition and attribution of value are linked to product differentiation (Wijnberg and Gemser, 2000).
Spence’s signalling theory (1973) describes signals as proxies of product quality. Signals can convey information about the unobservable qualities of a product or its producer. This can help close information gaps and reduce uncertainty in pre-‐purchase decision making. Guarantees,
advertisements, pricing, endorsements and brand extensions are all examples of quality signals. At the base of a quality signal lies either an up-‐front expenditure or a credible commitment (Kirmani and Rao, 2000). Both mean that a sender is risking something when a quality-‐related claims turn out to be false. An example of a signal with an up-‐front expenditure is an advertisement. A producer decides to spend money on advertising for its product now, with the expectation to recover it in the future. A rational consumer realizes that when a producer spends a large amount of money on advertising the supposed quality of a product that is actually low-‐quality, it won’t be able to recoup these advertising costs if no future purchases (other than trial purchases) will follow. Therefore, the quality-‐related claims are likely to be true. When a signal involves a credible commitment, there are no costs when the signal is transmitted but only when the producer defaults on its quality claim.
These types of signals can also be called default-‐contingent signals. An example of a signal which involves a credible commitment is a warranty. When a producer offers warranty over his product, a rational consumer deduces that the quality of this product must be good. This is because a producer wouldn’t knowingly offer warranty over a low-‐quality product as this would lead to high costs in refunds or repairs (Kirmani and Rao, 2000).
Quality signals can originate from different sources such as the producers themselves or from third parties. Quality signals originating from the producer, such as advertisements, can be perceived as biased. Third parties are not directly involved in the exchange between consumer and producer and are perceived as being trustworthy (Dean and Biswas, 2001). Third party sources can provide quality evaluations by ranking, reviewing and rating products. To be credible, however, signals coming from these third party sources must contain a ''bonding'' component, a potential cost to the sender if the signal is false and the product is of low quality (Ippolito, 1990). Bond vulnerability increases when the sender of a quality signal has more to lose. When a source with high bond vulnerability is willing to risk high costs, such as losing its credibility, it indicates a strong belief in the quality of the
product.
According to the literature on quality signals, the more accurate, specific and clear a signal, the more likely it will provide information that is useful in an assessment of product quality (Dawar and Parker 1994, Kirmani and Rao 2000). Furthermore, the attribution theory states that cues from low-‐
credibility sources will be given less weight by consumers in their decision-‐making process than those from high-‐credibility sources (Eagly and Chaiken, 1975). Consumers will not blindly accept any quality signal, but will attempt to assess for themselves whether the source of the cue is credible or not (Gemser et al., 2008). A signal originating from a highly credible source can therefore be more convincing than a less credible source (Eagly and Chaiken, 1975).
Because the empirical setting of this paper is the art sector, three third party sources that are common in the art world will be described in the next section.
2.1.1 Reviews
Because of their independence of the producers, art critics can be seen as credible third party sources (Dean & Biswas, 2001). According to Debenedetti (2006), critics are integral to the economics of cultural products: “Being part of the media industry and contemporaneous with the works they critique, their complex links with creators and managers upstream and with the public downstream put critics at the center of a system of material and symbolic relations that make them key actors in the cultural industries”. According to Cameron (1995), criticism, either positive or negative, is equivalent to advertising because it increases visibility and awareness of the artist. Art critics can be seen as opinion leaders in the cultural sector, as they can often determine the success or failure of cultural offerings (Reddy, Swaminathan, & Motley, 1998). Debenedetti (2006) describes critics as “a special provider of information in a market characterized by consumer uncertainty over the value of cultural goods and by the difficulty of developing practical knowledge to inform decision-‐making”.
In the case of experience products such as art, reviews can help close information gaps because they offer the indirect experience of non-‐tangible attributes (Nelson, 1970). Consumers perceive critics as credible sources because of their expertise and independence (Levin, Levin & Heath, 1997). A critic’s
reputation depends on his ability to identify talent and originality, but also its ability to spot potential superstars (Cameron, 1995). When a critic claims to have found a new star but the artist does not live up to the expectations, the critic’s credibility suffers. This has to do with the potential costs, or “bond”, a third party source (such as a critic) can be subjected to (Ippolito, 1990). In the case of a false quality signal (when the supposed quality does not match the actual quality), this cost would be the loss of reputation, perhaps the most valuable asset a third party source possesses (Dean & Biswas, 1990). The willingness of a third party source to risk these costs will be perceived by others as an indication of quality (Dean & Biswas, 2001).
2.1.2 Awards
Awards play an important role in the cultural industry because they offer a way for consumers to assess the quality of a cultural product (Gemser, Leenders and Wijnberg, 2008). It is therefore similar to a (positive) review, but in a more easily recognizable and accessible form. An award is essentially an endorsement in the form of a ‘seal of approval’ of an award committee or a jury of critics (Dean & Biswas, 2001). Research showed that expert “selectors", with their considerable knowledge and credibility, play an important role when the value of cultural products is hard to determine
(Wijnberg and Gemser, 2000). Critical consensus on cultural products has been proven to serve as a strong quality signal for cultural products (Basuroy, Desai & Talukdar, 2006). Similar to reviews, the bond or potential cost is at the core of the credibility of the quality signal. When the sender (the jury) defaults on the quality claim, its reputation suffers (Dean & Biswas, 2001).
2.1.3 Expositions
In past research, exhibitions and art shows history have been used as indicators of the quality of visual art (Bonus and Ronte, 1997). Artists and galleries often collaborate by exhibiting and selling the artist’s art in the gallery holder’s gallery. Usually, the resulting revenue is split between the gallery and the artist (Caves, 2003). An exposition can function as a quality signal because the gallery is essentially a third party source. It is expected that a gallery is motivated to exhibit “high quality” cultural products because of its higher perceived value (Zeithaml, 1988). According to Kirmani and Rao (2000), when a sender of a quality signal defaults on this quality claim, it can have two consequences: the loss of up-‐front expenditures or damage to its reputation.
A gallery resembles a retail store where shelf space is limited. Two paintings cannot hang on the same spot at the same time. Chu (1994) argues that when a shop offers a certain product, it signals the quality of the product to customers. This is because rational consumers expect shop owners to prefer selling high quality products as they have a higher chance of being sold. The same could be true for galleries. When an exposition takes place, the gallery holder is risking the costs associated with promoting and organizing the exposition. Additionally, the gallery holder risks the opportunity cost of not having another, more successful, exposition in its gallery.
Also, because rational consumers expect galleries to look for ways that benefit its reputation, they assume that they will not knowingly exhibit low-‐quality art. When a gallery promises an exposition with high quality art but defaults on this promise, its reputation will be damaged (Rao, Qu & Ruekert 1999). This in turn, could harm future sales.
It is assumed that rational consumers are aware of the previously mentioned risks that galleries are facing. Galleries can therefore be seen as a third party source that sends out signals about the quality of art. Using the same reasoning, a past exposition can be viewed as a quality signal for the displayed art.
2.2 CVs
An artist’s review-‐, award-‐ and exposition history can typically be found on his or her Curriculum Vitae (CV). The use of CVs is very common in the art sector (e.g., Ammodo 2012, Amsterdam Fund for the Arts 2012, Mondriaan Foundation 2012, Prins Bernhard Foundation 2012). Previous research showed that a CV is an important starting point in the applicant selection process as it provides the first means to attributions a selector can make about a candidate (Knouse, 1989). The content, length, format of a CV have all been shown to influence the judgment of applicants (Nemanick and Clark 2000, Thoms, McMasters, Roberts and Dombkowski 1999, Toth 1999). Research showed that hen the evaluation of an unobservable product is difficult, proxies can be used to determine the quality of a product (Ali and Nauges 2007, Emons 1997). It is therefore assumed that cultural foundations rely on the quality signals, found on artists CVs, when they assess the quality of applicants for subsidies.
2.3 Stardom
Rosen (1981) described the phenomenon of superstars, wherein relatively small numbers of people earn large amounts of money and dominate the activities in which they engage. In markets such as the cultural sector, a tendency exists for the market share and reward to be disproportionally skewed toward most talented people in the industry. The classical music market for example has never been larger than it is today. However, there are remarkably few full-‐time soloists. Only a handful is considered as the top and enjoys very large income while most consumers can’t differentiate between ‘first’ and ‘second’ rank performers in a blind hearing. Rengers (2001) also found evidence of rewards structurally flowing to the same artists, which he called the ‘winner-‐ takes-‐all’ hypothesis. According to Adler (1985), this phenomenon of stardom exists mostly when consumption requires knowledge. Adler argues that people have to acquire knowledge about an artistic activity before it can be understood and fully appreciated. This requires discussion with others who also have some knowledge of the same artists. In this situation, everyone is better off choosing the most popular artist because it minimizes searching costs. As a result, certain superstars are being patronized while their talent is not significantly greater than that of others. On a smaller scale, this effect of stardom is expected to also exist in the Dutch art sector. Thus, it is expected that relatively few artists receive the most rewards, which in this context means subsidies. Because a subsidy could function like a third party quality signal similar to an award, it is possible that receiving a subsidy is easier for artists who already received one in the past, which supports the winner-‐takes-‐ all hypothesis. It is therefore expected that of all subsidized artists, most have received more than one personal subsidy in their career.
2.4 Hypotheses
Cultural foundations that provide personal subsidies attempt to judge applicants based on their previous activities and accomplishments, as documented in an artist’s CV (e.g., Amsterdam Fund for the Arts 2012, Mondriaan Foundation 2012, Prins Bernhard Foundation 2012). The content of CVs
has been shown to influence the judgment of applicants (Nemanick and Clark, 2000). The previous section showed that third party signals like awards, exposition history and reviews are likely to influence quality perceptions. Artistic quality is often mentioned as one of the most important criteria the foundations judge applicants on (e.g., Mondriaan Foundation, 2012). It is therefore expected that cultural foundations are influenced by quality signals and award personal subsidies to the artists that send out the most quality signals. In other words, the artists that received personal subsidies are expected to have provided the most quality signals through their CVs. Here, personal subsidies will be defined as merit-‐based scholarships, (residency) grants or stipends.
Following the assumption that a subsidy itself could also function as a quality signal, the first hypothesis tests if subsidized artists are more likely to have received more than one subsidy in their career. Subsidized artists will be defined as artists that have received at least one personal subsidy in their career.
H1. The average amount of personal subsidies that subsidized artists received is significantly higher than 1.
The next two hypotheses explore the relation between quality signals and performance.
H2. The total number of quality signals on a CV is significantly different for artists who have received personal subsidies compared to those who have not.
H3. The total number of expositions, reviews and awards on an artist’s CV have a significant effect on performance, measured by total number of personal subsidies received.
To further examine which type of quality signal has the strongest effect on the number of subsidies received, the quality signals will be separated into categories: reviews, awards and expositions. It is assumed that the most effective type of quality signals is the one that is the most commonly found on subsidized artists’ CVs. Furthermore, the total amount of subsidies will be divided into public and private subsidies in order to analyze potential differences between public and private foundations. It is expected that the content of an artist’s CV is not the only relevant factor in the subsidy
allocation process. This process is likely to be influenced by other internal and external factors such as the distinctive features of the selecting cultural foundations and the environment in which these foundations operate. In the next section, a brief overview of the Dutch subsidy climate will be given, along with a description of the new cultural policies of 2013-‐2016. Then, the different guidelines and criteria of the public and private cultural foundations will be explained.
3. Empirical setting
3.1 Art subsidies in the Netherlands
Art is important for the Dutch economy. In 2011, the cultural sector added 13 billion euros (2.4%) to the GDP Ministerie van Onderwijs, Cultuur en Wetenschap 2012). Art and culture also adds to the general livability of the Netherlands and draws businesses, professionals and tourists to the country (Marlet and Ponds, 2011). Furthermore, an estimated 251.000 people (or 3.2% of the Dutch labour force) have jobs in the cultural sector Ministerie van Onderwijs, Cultuur en Wetenschap 2012). Culture is also an important export product for the Netherlands, as it is among the top 10 export
countries of ‘cultural goods’ (UNCTAD/UNDP, 2010). However, not all the benefits of art and culture can be measured in money. Art and culture also indirectly contribute to society by adding to a creative climate (KEA/European Affairs, 2009) and strengthening social cohesion (Burton & Griffin, 2008). According to research conducted by the ministry of education, culture and science, 75% of the Dutch citizens regard art and culture as an important part of society (Ministerie van Onderwijs, Cultuur en Wetenschap 2012).
Many art disciplines in the Netherlands rely on subsidies. Most of the cultural institutions do not earn enough to cover their costs (Ministerie van Onderwijs, Cultuur en Wetenschap 2012). For instance, the state pays an average of 120 euros of subsidies for each opera visitor. Although a lot cheaper, a visit to a museum still requires 11 euros of subsidy (van der Ploeg, 2002). At the start of the financial crisis in 2008, when it became clear that the neo-‐liberal government had to radically lower its expenditures, voices from the political right emerged which demanded the abolishment of art subsidies, or “leftist hobbies”. In 2011, it was decided that the government would cut 200 million euros in culture and art funding. This could be viewed as part of a long-‐term trend of changing cultural policies in the Netherlands.
The 60s could be regarded as the heyday of Dutch art subsidies. The government took the role of a “guardian” for artists (Rengers, 2001). For instance, the Beeldende Kunst Regeling (BKR), established in 1956, made it possible for artists to receive subsidies in exchange for pieces of art that the
government would buy off them. By 1972, this policy resulted in an estimated 220.000 artworks that the government could no longer handle. The arrangement was gradually reduced and abolished in 1987. In the late 90’s the term ‘cultural entrepreneurship’ was introduced by State Secretary of Culture and Media van der Ploeg. It marked the beginning of a series of initiatives to make the cultural sector less dependent of government funding. Artists had to better adapt to modern society where free market mechanisms played an increasingly important role (Velthuis, 2000). Other arrangements like the Wet Inkomensvoorziening Kunstenaars (1999-‐2005) and the Wet Werk en Inkomen Kunstenaars (2005-‐2012), originally designed as a type of stimulating allowance, were deemed ineffective and were therefore terminated. It is argued that these changes in policies have great consequences for the art sector in the Netherlands. According to Bevers (2012), a period of prosperity in the Dutch art sector ended in 2010. In his research, Bevers showed that Dutch art flourished between the years 1980 and 2010 when generous art policies contributed to a great increase of representations of Dutch art abroad in that period. Between the years of 1996 and 2010, the amount of expositions of Dutch artists outside the Netherlands increased fivefold compared to the decade before. According to Bevers, these overseas representations can be seen as an indication of quality of Dutch art in general. This is because it is generally not solely the artist’s decision to exhibit abroad as there has to be a certain appreciation for their work and they have to be invited by a gallery. The year 2010 marked the end of this “Third Golden Age” and Bevers attributed this change to the Dutch government being less generous to the art sector.
3.2 New cultural policy
The Ministry of Education, Culture and Science (OCW) receives advice from the Raad voor Cultuur (Council for Culture) regarding the assignment of funding. Every four years, the Council presents its recommendations on the perennial, government-‐subsidized, cultural institutions. The
for subsidy. It has been decided that for the period 2013-‐2016, the government will cut 200 million (or 25%) from arts and cultural subsidies (Ministerie van Onderwijs, Cultuur en Wetenschap, 2012). The art sector is increasingly expected to cover more of its own costs which requires many artists and institutions to assume a more market-‐orientated approach and seek for alternative forms of income (Ministerie van Onderwijs, Cultuur en Wetenschap 2012). As a result, subsidized
organizations now have to indicate in their plans how they are going to attract more visitors and increase their income (Ministerie van Onderwijs, Cultuur en Wetenschap 2013).
Less dependence on government funding and more connection with the audience are at the core of the cultural policy of 2013-‐2016. All subsidized institutions and organizations within the cultural sector have to find ways to engage more people while finding alternative ways to finance their activities. In order to receive funds for the next period it is required that all institutions and organizations cover at least 17,5% of the costs on their own which means that for every €1000 of funding, at least €175 have to be generated autonomously. This percentage will increase with 1% every year until 2016 (Ministerie van Onderwijs, Cultuur en Wetenschap 2013).
Another core point of the new policy is an increased focus on talent at the top of their discipline, as dictated by State Secretary Zijlstra. A smaller part of the budget will go to stipends and scholarships for which established artists will now receive priority over starting artists. This policy is closely related to the ambition to expand the market by promoting Dutch visual arts and cultural heritage abroad. By focusing on “the top” of the art sector, the visibility of Dutch art is expected to increase which can attract potential buyers (Ministerie van Onderwijs, Cultuur en Wetenschap 2013). The Ministry of Education, Culture and Science also attempts to stimulate purchasing and commissioning of visual art by companies and private individuals. By introducing matching grants, for instance, companies are being stimulated to commission artists to create specific art works (Ministerie van Onderwijs, Cultuur en Wetenschap, 2013).
3.3 Cultural foundations
The largest part of the budget cuts (€125 million) will come from the main cultural infrastructure (BIS): cultural institutions and foundations that receive direct funding from the government through the Ministry of Education, Culture and Science. The BIS now consists of 30 museums, 9 orchestras, 16 theatre companies, 3 opera companies, 4 dance companies, 3 festivals and 15 art-‐supporting institutions. A total of 327 million euros will be divided between these organizations over the coming 4 years. Also included in the main cultural infrastructure are the six public cultural foundations:
Fonds Podiumkunsten: Foundation for institutions and artists in performing arts (dance, theatre,
festivals, music)
Stimuleringsfonds Creative Industrie: Stimulating foundation for projects in the field of architecture,
design, e-‐culture and games.
Mondriaanfonds: Foundation for visual arts and cultural heritage that focuses mainly on museums,
art initiatives and galleries.
Nederlands Letterenfonds: Foundation that supports and promotes the Dutch Literature with
subsidies and scholarships for writers, translators, publishers and festivals.
Fonds voor Cultuurparticipatie: Foundation that supports cultural initiatives that cause active
participation to art.
The Mondriaanfoundation has merged with the BKVB foundation and in the coming period the Culture Participation Fund (Participatiefonds) will be merged with the Performing Arts Fund (Fonds Podiumkunsten). These foundations have the authority to provide funding to smaller institutions, organizations and individuals with a combined budget of 133 million euros in 2013, which is 21% less than 2011 (Ministerie van Onderwijs, Cultuur en Wetenschap, 2012). They play a crucial role in the implementation of the cultural policy of the government because of their proximity to the art sector in which they operate. Because of this, they’re able to detect and react to developments within their art sector (Ministerie van Onderwijs, Cultuur en Wetenschap 2012). This is in line with the cultural-‐ political principle that it is not the task of the government to judge the quality of cultural expressions (Ministerie van Onderwijs, Cultuur en Wetenschap 2013)
Apart from the public foundations, a large amount of private foundations exist. The largest of which are the Prins Bernhard Foundation, VSB Foundation, Ammodo and SNSReaal Foundation with an annual budget of 25, 17, 15 and 12 million euros respectively (Prins Bernhard Foundation 2012, VSB Foundation 2012, Ammodo 2012, SNSReaal Foundation 2012).
Finally, a number of art-‐supporting municipal and provincial foundations exist, the largest of which is the Amsterdam Foundation for the Arts (AFK) with an annual budget of 8 million euros (AFK, 2012). In total, the municipal and provincial foundations provide an estimated 43% of the total income of the entire art sector (Berenschot, 2012) while playing especially large role in the amateur art sector. Most of the estimated 70.000 amateur-‐art associations receive funding from municipalities (93%), followed by private foundations (33%), the provinces (8%) and the pubic foundations (3%)
(Berenschot, 2010).
All public, private, municipal and provincial foundations have different functions and financing. These differences determines their criteria and guidelines for subsidies. The differences between the foundations will be explained in more detail in the following section.
3.3.1 Financing
Public foundations are part of the BIS and therefore receive funds directly from the Department of Education, Culture and Science (OCW). Municipal and provincial foundations receive their funding indirectly from the state through the provinces.
Private foundations are financed in many different ways. Foundations like the Prins
Bernhardfoundation and Stichting DOEN receive large parts of their budgets (69% and 62% in 2011, respectively) from lotteries like the Bankgiroloterij, Postcodeloterij and Lotto (Prinsbernhard Foundation 2012, Stichting DOEN 2012). According to Dutch law, at least 50% of the income of lotteries has to be spent in the public interest (Kansspelautoriteit, 2012). The VSB foundation and SNSReaal Foundation both originated from banking/insurance companies and are funded from the interest on capital these companies administer. The VandenEnde Foundation is founded and directly financed by media tycoon Joop van den Ende and his wife Janine.
3.3.2 Requirements
The foundations also have different requirements and guidelines regarding the support of arts. Practically all foundations make a distinction between legal persons (a group of people or organization with legal rights and responsibilities) and natural persons (actual persons). The VSB Foundation, SNSReaal Foundation, Ammodo and most of the foundations in the BIS explicitly state that only legal persons are eligible for their subsidies. Most of the municipal culture foundations don’t make this distinction and the same is true for the Prins Bernhard Foundation, the Mondriaan Foundation and the VandenEnde Foundation: both legal and natural persons can apply.
The majority of the foundations exclusively offer project-‐based subsidies and will not support individual artists. Only the Mondriaan Foundation, Prins Bernhard Foundation, VandenEnde Foundation and the municipal foundations offer a limited amount of stipends and scholarships to individuals.
3.3.3 Mission and criteria
There are a number of similarities and differences between the various foundations in terms of selection criteria for organizations or individuals applying for subsidies. Most foundations expect applicants to actively seek an audience for their work. A central question in most applications is how applicants plan to reach a broad as possible audience. Another common prerequisite is that artists and organizations show entrepreneurship by looking for alternative ways of funding and by marketing their work or project. This emphasizes this administration’s general cultural policy to engage more people in the arts and make the sector less dependent of government funding
(Ministerie van Onderwijs, Cultuur en Wetenschap, 2013). Another prevalent requirement is quality, of which each foundation has its own definition. The Mondriaan Foundation and Prins Bernhard Foundation both explicitly mention quality as their main criteria.
The Mondriaan Foundation looks at the relationship between the artist’s principles and the way these are being reflected in his or her work. Quality is defined as the way the artist’s work and attitudes relate to historic and modern context (Mondriaan Foundation, 2012) and is determined by a special committee of professionals active in the art sector. The deeper meaning of the aesthetic concept, the skillfulness and the imagination of the artist are also given special consideration. The Prins Bernhard Foundation states its mission as stimulating culture in the Netherlands by “describing, reaching and preserving” (Prins Bernhard Foundation, 2012). It strives to support extraordinary art which is “of real artistic quality”. This is judged by the craftsmanship of the maker, the expressiveness of the work and its contribution to the development of the arts. Individual scholarships are reserved for applicants with “demonstrable talent”, which is defined as an academic degree with an average grade of 8 or higher.
Most private foundations have their own particular mission and assign subsidies accordingly. For instance, the VSB Foundation was founded by a group of not-‐for-‐profit banking companies and aims to enhance the quality of Dutch society by supporting artistic projects and individuals with money, knowledge and networks. A central theme within the foundation is the enrichment of ‘inner life’ in
order to inspire people to further develop themselves and contribute to society (VSB Foundation, 2013).
The SNSReaal Foundation also views arts and culture as a way to enrich life but focuses mainly on young artists and new audiences. A-‐typical and innovative projects that contribute to the
development of the art sector receive special attention. The same is true for projects that are topical and urgent.
Stichting DOEN aims for a green, social and creative society. Its mission is to strengthen social cohesion in the Netherlands by supporting projects that stimulate interaction between groups and individuals (Stichting DOEN, 2013). Applicants need to describe how they plan to meet these targets.
Table 1. Subsidy applications per foundation in 2012
Approved applications Total applications % SNSReaal Foundation 492 3291 15 Stichting DOEN 125 774 16 Mondriaan Foundation 1377 3810 36 VSB Foundation 1437 3291 44 Prins Bernhard Foundation 3542 5538 64 Amsterdam Fund for the Arts 697 1039 67
Source: SNSReaal Foundation (2013), Stichting DOEN (2013), Mondriaan Foundation (2013), VSB Foundation (2013), Prins Bernhard Foundation (2013), Amsterdam Fund for the Arts (2013)
The previous overview of the subsidy structure for art in the Netherlands indicates that although there are many ways for artists to receive subsidies, there are always more requests than there is money. In some cases 85% of the applications are rejected (SNSReaal, 2012). Artists often have to compete with each other for government funding (Rengers and Plug, 2001) and with less
scholarships and stipends available than before (Ministerie van Onderwijs, Cultuur en Wetenschap 2012), it is likely that this competition will increase. At the same time, because art subsidies have become a politically charged issue, the cultural foundations expenditures are under increased scrutiny (ter Braak, 2007). As a result, pressure on selection committees to allocate subsidies responsibly has increased.
4. Methods
In order to test the hypotheses, quantitative and qualitative data will be used. This is because quantitative data alone could give an over-‐simplistic image of the researched issue while a mixed method can contribute to a more expansive, inclusive, pluralistic and complementary research (Johnson and Onwuegbuzie, 2004).
Part one consists of a quantitative study that uses data from ex-‐Rietveld students to explore the relation between quality signals and subsidies. Part two consists of a qualitative study that uses interviews with professionals from the art sector to add context to the data.
4.1 Data
For this part, data was collected from artists that graduated at the Gerrit Rietveld Academy between the years 1990-‐2010. The Gerrit Rietveld Academy is a renowned Dutch academy for fine arts and design, located in Amsterdam. It offers two bachelors programs and four masters programs with specializations such as photography, fashion design and video. The data used in this study comes from a larger database created to track the career advancements of Rietveld alumni. All graduates between 1990 and 2010 received an email informing them, in English and in Dutch, about the research that the Rietveld is conducting in collaboration with the University of Amsterdam. It stated that the Rietveld academy is aiming to learn more about the career development of the Rietveld alumni both in and outside of the art and design world. By knowing which kind of careers alumni undertake the Rietveld is “able to keep the program in tune with the ever changing artistic climate, which in light of the current debate in the Netherlands is more relevant than ever” (Gerrit Rietveld Academy, 2011). Included in the email was a link to a QuestBack Internet questionnaire. The online questionnaire consists of closed questions about basic personal information (age, date and place of birth) as well as details about the respondent’s career (awards, reviews, exhibition history). Because the questions are dependent on previous answers, the respondents only get to view the questions relevant to his or her situation.
The resulting database consists of the career information of 640 Rietveld alumni. The self-‐reported data was verified and complemented by information found on the internet. In most cases, a CV could be accessed through the personal website of the artist while in some other cases data
provided on social media profiles such as LinkedIn was used. Data that could not be verified was not used in this analysis, which amounted to a set of 423 participants.
4.1,1 Dependent Variables
Number of subsidies: The total number of personal subsidies an artist has received (i.e.
basisstipends, startstipends, scholarships, grants, residency grants). 4.1.2 Independent variables
Number of exhibitions: The total number of group exhibitions, solo exhibitions and biennales and
artist has participated in according to his or her CV.
Number of awards: The total number of awards and prizes that an artist has won or was nominated
for, according to his or her CV.
Number of reviews: The total number of reviews of the artist’s work according to his or her CV.
There will be made no distinction between positive or negative reviews as that was beyond the scope of this paper. It is assumed however that the majority of the reviews are positive. This is because critics can gain a higher level of legitimacy by spotting new talent before they become mainstream (Debenedetti, 2006). This can be an incentive for critics to review “high-‐quality” art as it could potentially increase their status. But according to Debenedett (2006), “even a negative review can contribute to the artistic legitimization of a work by deeming it a valid subject for discussion; (...) media coverage can count as much as the evaluation itself”.
