Valuing small to medium arts venues

Structure and Operation

The structure and operation of S2M arts spaces in the CoS varies but tends towards incorporated not-for-profits with a board structure; auspiced spaces within institutions; or privately run and funded ventures (including commercial galleries and some ARIs). The prevalence of not-for-profit organisations appears directly related to this often being a requirement of government funding. For these organisations, the constitution, governance and operation of the board appears vital as the board is often required to fundraise and be involved in programming and other operational matters. Continuity of board members can become an issue through boards that are not renewed often enough to respond to the needs of the organisation or staff having to constantly train new board members and manage change.

The sector relies on passion and goodwill to deliver value to the community with limited prospects for financial reward. Almost all activity in the sector appears to be subsidised to some degree by an external institutional or philanthropic funder; provision of unpaid labour; or out of workers’ own pockets. Problematically there may be a tendency for the sector to value curatorial skills over business acumen. Invariably this means S2M arts spaces will, at some point, need to attract philanthropic or government funding and / or the attention of private or institutional collectors.

Public activities held in S2M arts spaces are diverse and include live music, film screenings, theatre, popup restaurants and performance art; as well as openings and exhibitions. Audience engagement with S2M arts spaces is concentrated around opening events. Many of the ARIs within the CoS coincide their openings to encourage audience overlap and migration between venues. Despite this initiative, Sydney’s S2M sector is seen as not as interconnected as other cities due to the distance between spaces and their placement outside, or at the fringes, of entertainment precincts.

Across the sector there is a very high turnover of new work and most spaces host openings every 4-6 weeks. Despite this high volume of activity, there are relatively few full-time paid staff in the sector and remuneration is often poor given the responsibilities of these roles. S2M arts spaces are generally under-resourced and this requires them to work collaboratively with others in the sector. There is an expectation and general acceptance of unpaid work being part and parcel of a career in the visual arts for both arts workers and artists. This is reflected in workers’ stated motivations, which were typically described in terms of individual creative expression and the value and role of art in a civil society. No one interviewed for this research identified personal gain as a significant motivation and most subjects acknowledged there was limited opportunity to profit through their work. However, this reliance on unpaid labour jeopardises sustainability and longevity of S2M arts spaces. Long hours, relatively low pay and the need for to be constantly performing at or beyond capacity typically results in significant risk of burnout among sector workers.

More generally, partnerships with other organisations within and outside of the visual arts sector are seen as vital to delivering new projects where organisations are at capacity. However, these create additional time and resource costs and often require new staff with different skills to manage them.

There is a high degree of uncertainty and change in the sector and interviewees who have had longer careers commented on a constant stream of new and closing spaces as characteristic of the sector. Having said this, there is also a general feeling that the sector has contracted post 2007 due to the negative impact of the Global Financial Crisis on art investment; changes to government funding; and increased rental costs in the CoS. Currently there appear to be fewer ARI’s within the CoS than may have previously been active and there is a perception that a number of commercial galleries have recently closed. This is likely attributable to the high cost of rent for commercial property in the CoS and a perceived greater risk to establishing arts spaces that are not compliant with government regulations.

Income and Costs

In the last decade the costs associated with operating S2M arts have escalated where income has remained the same or diminished. This has left many S2M arts spaces in a precarious position. Many organisations perceive themselves as being in crisis and at least one interviewee admitted facing bankruptcy due to their investment in an S2M arts space.

The cost of rent and uncertainty over ongoing lease terms/lengths is a major stress across the S2M sector in Sydney, ahead of all other costs. Even well established S2M arts spaces reported being in a precarious position with respect to the cost and long-term availability of accommodation. Commercial rents were described as having increased significantly in the last seven years and most organisations do not have the financial reserves to fund relocation, even if a suitable alternative location could be found. Real estate development has also brought some S2M arts spaces into conflict with residents over noise and other complaints that restrict their activity. This has reportedly forced the closure or relocation of several arts spaces in the CoS in recent years. This has encouraged some arts spaces operate within the premises of another business, in the owners’ residential property or as pop-up spaces.

Schemes such as the CoS accommodation grants have alleviated some of this financial pressure, however organisations report that consecutive 12 month leases do not provide sufficient stability. In contrast, S2M arts spaces 3 year + rental agreements feel secure to invest in infrastructure and development of their space to enable expanded operations.

Staffing is the next biggest cost, followed by insurance; transportation of artworks; amenities; installation costs; advertising; and documentation. These costs are small compared to rent but are significant given often very tight operating budgets.

The basic operation and infrastructure (rent, staffing, electricity, etc) of commercial and non-commercial spaces alike is subsidised through unpaid labour, institutional support (e.g. uni galleries) or private benefactors.

The prevalence of government and philanthropic funding in the sector, income does not align closely with reported audience spending. Income for S2M arts spaces typically includes some mix of grant funding; sales commissions; venue hire; provision of workshops or other educational events; rent from studio spaces; philanthropic giving; and, for some spaces, auspicing projects and funding for artists or other organisations. The majority of earned, as opposed to grant, income tends to come from other businesses – including artists – rather than consumers.