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1 September, 2011  ▪  Zhanna Bezpiatchuk

Harmony of Art and Money

Pennie Ojeda: “USA spends approximately $3 billion a year on the development of not-for-profit culture”

Director for International Activities of National Endowment for the Arts (NEA) Pennie Ojeda spoke with The Ukrainian Week about the institutional element of non-profit arts promotion, its state and private support in the USA.


U.W.: The American system of support for non-profit arts and culture is known for its decentralization. What is exactly meant by this?

First, it is important to understand that the United States does not have a ministry of culture. The cultural arena in the U.S. is extremely decentralized, and at the federal level, funding is focused on the not-for-profit cultural sector. A not-for-profit organization does not distribute its earnings to owners or shareholders, but instead uses them to pursue its public service goals. There is not a cultural plan for the whole country—instead of one agency with full responsibility for all cultural activities, we have numerous agencies that support the arts. By contrast, in Europe, a ministry of culture would have a portfolio that is much broader than any cultural agency in the United States. For instance, a European ministry of culture might support such things as a national dance company, a national theater company, and preservation of cultural patrimony. In the United States, different aspects of the country’s arts and culture are supported by a number of independent government agencies, including the National Endowment for the Arts, the National Endowment for the Humanities, and the Institute for Museum and Library Services. The United States Department of Interior oversees much of our cultural patrimony, such as the monuments you see here in Washington, DC. The U.S. Congress appropriates taxpayer money to each of these various government cultural agencies, and each agency has its own budget.

There is also support for the arts on the state level; each state has its own state arts agency. The state arts agencies are supported by taxpayer money from state taxes and other forms of revenue at the state level. In addition, many cities have a local arts agency. So, we have these three levels of government support for the arts—federal, state, and local. Federal, state, and local support for the nation’s not-for-profit arts and culture is approximately $3 billion a year.

U.W.: Why was the National Endowment for the Arts created?

A relatively new government agency, the National Endowment for the Arts was established by Congress in 1965 as an independent agency of the federal government. In the creation of the NEA there was an emphasis on recognizing the multicultural artistic heritage of the country. Among other points, the authorizing legislation states that it is necessary and appropriate for the Federal Government to help create and sustain not only a climate encouraging freedom of thought, imagination, and inquiry but also the material conditions facilitating the release of creative talents.

The National Endowment for the Arts is an executive agency, which means that the Chairman is appointed by the President. There is an advisory council called the National Council on the Arts, also appointed by the President, which has 20 members: 14 artists or arts experts and six Members of Congress who serve as ex-officio members of the council. The 14 council members are private citizens whose responsibility it is to review and approve all of the NEA’s recommendations for grants.

Every year the President of the United States, as part of his budget for the whole government, requests funds for the National Endowment for the Arts which must be appropriated by Congress. By law, 40% of the NEA’s program budget is allocated to the 56 state and jurisdictional arts agencies and the six regional arts organizations. The remaining program funds are awarded to not-for-profit cultural institutions through nationally competitive application and review processes. Most of the NEA’s grantmaking is made through Grants for Arts Projects. In other words, the NEA can fund a play, opera, or education program but not an organization’s capital or maintenance costs.


U.W.: What kind of arts and arts-related activities does the National Endowment for the Arts support first and foremost?

Under Grants for Arts Projects, organizations apply to the NEA for a broad range of activities. Projects range from the creation and presentation of art, to arts education, and projects which strengthen communities through the arts. The National Endowment for the Arts funds 15 different areas, including artist communities, arts education, dance, design, folk and traditional arts, literature, local arts agencies, media arts, museums, music, musical theater, opera, presenting (including multidisciplinary art forms), theater, and visual arts.

The NEA convenes peer panels to review all applications. There are two main criteria by which a project is evaluated: artistic excellence and artistic merit. The intention is to support exemplary projects in all artistic disciplines. Through its Grants for Arts Projects, the NEA is responsive to the interests and needs of the organizations and their audiences. The NEA sets out broad parameters through its grant guidelines, but the organizations themselves determine which of their activities best fit the NEA’s criteria and apply for that one. The NEA awards grants to small organizations in rural communities as well as larger organizations such as the Metropolitan Museum of Art and Metropolitan Opera in New York City.

U.W.: Arts organizations in the United States also receive private funding. Is this funding more important for the development of the arts and culture in the United States than government funding?

If you look at the budget of an average arts organization over the last five years or so, the government support ranges from about 10-13%. And by government we mean national, state, and local levels. The remaining support is split relatively evenly between private sector support (corporations, businesses, foundations, individuals) and earned income. The tradition of private support and private philanthropy is strong in the United States and has helped to establish a number of cultural institutions. In our nation’s history, there are many examples of wealthy individuals who created foundations to contribute to the benefit of society, such as the Ford Foundation and Rockefeller Foundation, and continuing to the present with newer foundations such as the Bill and Melinda Gates Foundation or the Paul G. Allen Family Foundation. This is very much within the American character. Since there is less of a tradition of private philanthropy in Europe, there may be more skepticism about private support than you see in the United States. The contrasting approaches to arts funding in the U.S. and Europe are to some extent related to the historic differences in the development of the countries over long periods of time. But it is not a question of one approach being better than the other, they’re just different.

U.W.: What role do tax incentives play in increasing financial support for arts and culture?

In the early 20th century, certain tax regulations were established which allowed donors to reduce their taxes through contributions to not-for-profit charitable organizations. These tax incentives are not the total motivating force behind the private contributions, but certainly have an effect. It is a complicated system, and the percentage of the deduction varies. For instance, depending on income and how the tax documentation is prepared, an individual can donate $1,000 to a not-for-profit organization and reduce the payment of federal income taxes by a percentage of the donation. In some sense, through this system, individuals make the decision about where to spend their money rather than paying higher taxes and letting the government make the decision.


U.W.: How do you avoid subjectivity, any biases, or any conflicts of interest in the decision-making process?

The NEA’s review process is very rigorous and respected. The NEA staff does not participate in the qualitative judgment of the applications’ excellence or merit. Instead, the agency invites arts experts and peers in a particular discipline to come to Washington, DC to serve on review panels.

Here’s how it works—there is a director for each arts discipline and several broad fields of the arts, such as museums or folk and traditional arts. The NEA will receive applications for a variety of forms within each discipline or field. For instance, the dance director may get applications for jazz, classical ballet, contemporary or ethnic dance, and so on—the whole range of aesthetic expression in dance. It is the director’s responsibility to identify a panel of individuals who collectively have the expertise to be able to review these proposals based on their artistic excellence and artistic merit. These panels must include individuals that reflect diversity of artistic expression, geography, ethnicity, and be balanced in terms of gender. No one can serve on a panel if an application from his or her own organization is being reviewed.

The panelists review work samples, discuss the project, and rate the applications. At the conclusion of the meeting, which may run to three or four days, the panel provides the NEA with a list of projects they recommend as worthy of NEA support. The staff uses this list to make recommendations for grant dollar amounts, in consultation with senior management. Then the recommended projects go the National Council for the Arts. It is very rare that the Council does not approve the recommendations from the panel of experts. After the Council approves the grants, the NEA chairman signs on them as well.

U.W.: Can a grant from the National Endowment for the Arts help an organization to receive more grants from the private sector?

Yes, a grant from the National Endowment for the Arts is quite helpful in attracting other funding. The grant application review process is rigorous and well respected. An NEA grant has considerable prestige. Therefore, organizations that get NEA funding are in a better position to get private sector support.

U.W.: In what type of situation could the National Council on the Arts would reject a recommended grant?

In rare occasions that there may be something that they feel is not appropriate to fund with public money. There are two main criteria that all NEA grants must meet: artistic excellence and artistic merit. If a grant did not meet those criteria it would likely be rejected.

U.W.: Does the NEA support individual artists so that they can focus on their creative work instead of making a living?

The law under which the NEA operates does not allow the NEA to fund individuals, with the exception of literature fellowships. Creative Writing Fellowshipsoffer grants in prose(fiction and creative nonfiction) and poetry to published creative writers that enable the recipients to set aside time for writing, research, travel, and general career advancement. We fund poetry and prose in alternating years. Of course, this funding is often not enough to support a writer for a whole year but it can give them a chance, for instance, to not to be a waiter at night, but instead focus on writing. The NEA also provides literature fellowships for translation projects which enable recipients to translate work from other languages into English.

The NEA also supports artists through annual lifetime honor awards in three categories: NEA National Heritage Fellowships to master folk and traditional artists; NEA Jazz Master Fellowships to jazz musicians and advocates; and NEA Opera Honors to those who have made extraordinary contributions to opera in the United States.

Artists are also supported through the projects the NEA funds. For instance, the budget for a project often includes artist’s fees. The NEA also funds artists communities, organizations that provide a place and time for artists to work, and sometimes even stipends. Some states and local governments support individual artists directly.

U.W.: Do you support emerging artists, especially beginners who are just making their first steps in arts?

We do support emerging artists. But they would have to have some distinction and achievements already. Someone right out of college is more likely to get support at the local and state level.

Some projects that receive NEA grants include support for emerging artists, but to get a direct grant from the NEA through a literature fellowship for creative writing, you must be a published writer.


Pennie Ojedahas been involved in international work at the National Endowment for the Arts since 1991. Currently, she is Director of International Activities with responsibility for developing and managing international initiatives in cooperation with other government agencies or private institutions. Ms. Ojeda provides expertise and guidance on international cultural policy issues and does extensive liaison with the U.S. Department of State, with international organizations such as the Organization of American States (OAS), UNESCO, and the International Federation of Arts Councils and Cultural Agencies (IFACCA).

Before joining the Arts Endowment, Ms. Ojeda was on the staff of the Peace Corps in Washington, DC. She served as a Desk Officer in the Africa Region, as Coordinator for Anglophone African countries, and subsequently as an agency Planning Officer for Peace Corps programs.

Ms. Ojeda has a BA from Chatham College in art history and Spanish literature.

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