Cultural Irrelevance II

Kerry Lengel’s [@KerryLengel] article in the Arizona Republic this morning [Arts groups struggle to stay relevant] surveys our current cultural arts landscape landscape.

Lengel says:

At least eight of the Valley’s largest cultural non-profits, including the Phoenix Symphony, Arizona Opera and Arizona Theatre Company, have hired or are looking to hire new artistic or business directors.

Those leaders will face tremendous challenges navigating rocky financial waters and exploring ways to make traditional art forms relevant to the next generation.

I’ve always said that cultural arts are important to Scottsdale and to Arizona, as Lengel says,

In a report earlier this year, the Arizona Cultural Data Project — which collects financial and audience information on 219 arts and cultural organizations — found that its participating groups spend more than $225 million a year, while their audiences inject $356 million into the economy.

And community leaders in both the arts and business agree that thriving cultural institutions are vital to drawing new business to the state.

As regards the economic impact numbers, however, I have also been critical of such studies. In particular, they often count money that patrons would otherwise spend at other venues, in which case it doesn’t represent real impact so much as a shuffling of spending.

I and others have similarly criticized the use of such ‘studies’ to rationalize taxpayer funding of venues for privately owned sports teams. Those studies exist to help the team owners and their entourages siphon money from the public treasury, and to provide elected officials cover for their decisions…the ‘impact’ of which won’t be felt until long after they are gone.

In the case of the Scottsdale Cultural Council even the attendance numbers are so vague–I’ll go so far as to say, “phoney”–that they are meaningless. Clearly any economic impact projects that are based on their attendance numbers are one step beyond phoney.

Lengel includes some sage advice for our cultural arts non-profits:

“The big challenge is to transform the way arts organizations do their business and create cultures that are more adaptive, more flexible, more responsive to the wants and the tastes of prospective audiences,” said Herb Paine, a management consultant at, who assists in reorganizations during mergers and financial crises.

“They have to demonstrate how they make a difference in our communities and our lives.”

I love this quote from Paine’s website:

All organizations are dysfunctional. What differentiates them is only a matter of degree. The dysfunction of the nonprofit is exacerbated by deficiencies that are inherent in its business model.

In the case of the Cultural Council, the $4 million annual taxpayer-funded subsidy they receive every year virtually guarantees dysfunction. Thanks to Scottsdale mayor Jim Lane and the Council majority (including former Cultural Council board chair Linda Milhaven) SCC doesn’t have to be relevant—ironically—to the taxpayers!


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  1. The McDowell Sonoran Conservancy Field Institute spent a few days counting Preserve lizards/reptiles this past year. There is no apparent interest when Game and Fish doubled the hunting season and bag limit with over the counter hunting licenses of javelina and deer. No member of the Conservancy, Field Institute or Preserve Commission has been to a Game and Fish monthly Commission meeting.

    These “non profit” and “city commissions” are either dumb or have an agenda other than protecting the charter of the $1.4 Billion McDowell Sonoran Preserve.

  2. An astute ScottsdaleTrails reader asked about the AZCentral article:

    “What wasn’t disclosed was how much of the $259 million spent by those many arts groups was taxpayer money provided by subsidies/leases/stipends etc.?

    “Does the Phoenix metropolitan area really need 219 arts related entities/venues?”

    Good questions

  3. Michael Kaiser is a lightning rod for many in the culture/arts sphere. The president of the Kennedy Center has strong opinions, many of them critical of the so-called arts “community.” In his latest post, however, he hits the bulls-eye: “Time to Stop Blaming the Economy”

    Arts/Culture Economic Impact studies have been conducted for decades. They nearly always conclude the same thing: the arts have a significant impact on local economies.

    In the case of Scottsdale’s Cultural Council, as John Washington correctly notes, the SCC’s annual public taxpayer supported subsidy (cash and in-kind facilities, which equal around 50% of the SCC’s total annual budget) heavily skews the actual impact of the SCC on the local economy (e.g., NET of public contributions).

    As I discovered early in my days at the Cultural Council, Bill Banchs, supported by his SCC Board collaborators had a voracious appetite to redirect resources to support his central operation. The reality is that the Cultural Council is nothing but a wasteful front for the actual divisions (Performing Arts, SMoCA, and Public Art), which actually create and present the programs and “the product” the public pays over $4 million each year to support. The methods and rationale for absconding with resources required to produce programs are deflected into the central coffers are too numerous to get into here, but the impact is significant and a source of continual angst throughout the organization’s operating divisions.

    The point is that the central bureaucracy is the tail wagging the dog, an ever-increasing bureaucratic web that adds exactly $0 value to the delivery of programs/product to the public that entrusts millions of dollars in taxpayer funds each year. In fact, on an economic impact basis, the SCC gets a grade of “F” – noted repeatedly as one of the most top-heavy–and therefore least efficient–organizations (on overhead as a percentage of total budget) in the country.

    Consider the SCC’s performance during Banchs’s tenure: At $4+ million a year in outright cash subsidy, the public has invested over $20 million in the SCC, with at least two of the years Banchs was CEO adding another 50% to that base amount . But the City’s cash investment is just the beginning. What is the value of free rent provided by the City of Scottsdale? Why not ask local property rental agents to do the math? It’s a lot of money.

    But free is not actually free. The SCC, under Banchs, charges the divisions rent for space the City provides to the SCC for free (performing arts center, for example). Add to that the $17 million renovation of the main performing arts hall; more on top of that for expenditures which have continued in the years since the rebuild of the Center; and you’ll get close to $50 million (maybe more) in cash and in-kind investment by local taxpayers during Banchs’s tenure.

    In the interests of fiscal responsibility to taxpayers, it’s way past time for the City Council to engage a qualified external auditor–one without any ties to either SCC or the City Council–to examine the past five years of the Cultural Council’s operations. There will no doubt be strong resistance from those on the City Council who have something to hide, but there are other City Council members and concerned citizens who would be wise to demand–finally, now that Banchs is leaving–accountability for every dollar of support (whether cash or in-kind) that the City has invested in the Cultural Council over the past five years.

    Yes, it will undoubtedly be embarrassing to some Cultural Council Board members, and some City Council members alike. But it will help to clear the air before hiring another CEO who will inherit the deeply troubled and embarrassing organization that the Scottsdale Cultural Council has become.

    The public more than deserves an accounting of what’s actually happened during Banchs’s tenure. Letting some sunlight into the dark recesses of the Cultural Council is but a first step on the road to recovery, recapture of public trust (which will be a long road) and the establishment of a business and artistic model worthy of a City that claims to value the Arts as a core asset.

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