Giving to arts, culture, and humanities organizations in the United States increased by roughly 27% from 2020 to 2021 rising to $23.5 billion, according to Giving USA Foundation. And yet, large art institutions attract the majority of arts related funding instead of individual artists. Because of the reputational benefits and seemingly reduced risk in giving to large institutions, this concentration of funding often deters direct support of individual artists.
We encourage philanthropists to consider funding artists directly—to complement the support of art institutions—through decentralized philanthropy.
Decentralized philanthropy—small donations aiming at big impact—has the capacity to propel the arts in significant ways. For opera singer, Soula Parassidis, this approach changed her life. After recovering from cancer and overcoming the odds to graduate from the University of British Columbia, she was approached by a local philanthropist who thought she had promise as an opera singer. Parassidis presented him with a business proposal, and he gave a life-changing gift of a few thousand dollars. That generosity was enough to make it possible for Parassidis to move to Germany to train, and, after a lot of hard work, launch an international career and even a worldwide arts community called Living Opera that is aimed at empowering other artists.
In short, a single act of philanthropy in a relatively small amount set in motion a chain reaction of creative artistic expression that would eventually build Living Opera, impacting over 14,000 people across the world, in addition to catalyzing Parassidis’s career in opera.
Unfortunately, these stories of direct connection between donor and artist are the exception, not the rule. Despite all the funding that fine arts institutions receive in philanthropy, very little of it is passed through to artists. In fact, our research and surveys by Living Opera show that real wages for artists have declined over time and that most artists are bearing a bigger financial burden than ever before. For example, 53% report having a job outside of the arts to fund their primary calling, and 54% were clinically diagnosed with depression—arguably driven by the financial precarity and challenge of settling down when going from gig-to-gig.
In this sense, the question of how we increase funding for the arts is relevant, but it does not address the deeper issue: that the artists themselves have been experiencing greater hardship. So, how can we scale decentralized grantmaking to encourage greater engagement between philanthropists and the artists that many donors ultimately want to support through their charitable giving?
Enter blockchain technology and non-fungible tokens (NFTs), which have the capacity to facilitate philanthropy in the arts. Although NFTs and the broader cryptocurrency market faced some challenges and controversy in 2022—which are unrelated to the technology—when used appropriately, this technology can serve as a democratizing force within philanthropy by providing a transparent, more open forum for artists and philanthropists. This technology has the potential to take Parassidis’ rare experience and make it a more regular occurrence for artists.
But how does it work?
Blockchain technology provides the infrastructure that allows users to access, record, and validate activity digitally. Often through a decentralized process, the technology lends itself well to collaborative involvement, fostering coordination and authentication of activity—like different art forms—among multiple people, especially those who may not already know each other, allowing a community to unite under a common objective. That potential for greater collaboration and decentralization does not mean it always happens, but the possibility is built into the design.
As a complement to the blockchain technology platform, NFTs enable direct support of artists by a community of philanthropists. Given the growing, yet unrealized potential of these philanthropic tools, Living Opera recently launched an NFT collection called Magic Mozart and a nonprofit called Living Arts Foundation, a decentralized grantmaking community with the ability to fund individual artists and their unique creative contributions.
When someone buys a Magic Mozart NFT, they obtain not only a unique piece of digital and musical artwork, but also a “digital key” that grants them access to Living Arts Foundation. For those who want to contribute funds, but do not have the time to participate in the community, they can donate and sponsor recipients of the Mozart NFTs.
The use of these technologies enables a two-step, collaborative, and open grantmaking process to resource individual artists.
First, interested artists undergo the Living Opera arts entrepreneurship curricula, which upon completion, makes them eligible to submit a proposal to Living Arts Foundation. Though structured as a nonprofit, Living Arts Foundation will operate as a decentralized autonomous organization (DAO), which automates otherwise routine tasks such as validating a certificate and disbursing funds.
Second, NFT holders receive governance rights in the DAO, allowing them to vote on the proposals that they most identify with and believe in. This enables individual artists to not only learn presentation skills and accountability, but also philanthropists are able to directly support and follow the artists throughout the creative process.
Another important requirement for grant recipients within the community is that they produce multimedia that they upload on social media and YouTube describing how they benefited from the grant. That has the dual benefit of providing visibility into how the funds were used and showcasing to donors that they are changing the lives of individuals, while also training the recipients on how to build and showcase engaging content—a principle of the arts entrepreneurship training. In this sense, the inclusion of blockchain technology helps the project achieve scale, but the essence of it still relies on people giving and helping other people—something technology can never replace.
DIVERSE AND DEMOCRATIC GIVING
The arts empower the American way of life by allowing us to express ourselves freely, foster beauty and creativity, and encourage a truly vibrant and free society. Stories like Parassidis’ are increasingly rare, and we believe philanthropy has a significant opportunity and role to play in fanning the flames of further artistic expression in our society.
To conserve, propel and deepen the impact of the arts in our society, we encourage donors to consider micro-philanthropic approaches to further cultivate vibrant artistic expression and not hinder it.