The Microfinance for Artists Research Project (MARProject) started out to investigate how micro-finance tools work and how individual artists in Ontario might use them. The long-term goal of the project is to improve artists’ socio-economic status. We recognized that although in recent years artists have been encouraged to improve their business skills and see themselves as entrepreneurs, they often lack access to the important business tools of credit and capital. After all, Ontario artists earn on average $24,500, which represents an earning gap of 38% between them and the Ontario labour force average (2006 census data) and that doesn’t exactly make us the favourites at the bank.
Although the term, microfinance, refers to a range of financial service, we were not surprised to learn that its major instrument is microcredit, or small loans. We decided to focus on microcredit in the MARProject.
In many ways, the situation of artists is no different than other impoverished Ontarians (and around the developed world), which means that any credit we can get is at a high interest rate. The convention is – poor equals poor credit risk so let’s-charge-this-person-more-than-the-wealthy (for any credit we can get). (You may have heard something about the 99% lately, so at least artists know they are not alone.)
We also have a lot in common with every other self-employed person. However, 40% of Ontario artists are self-employed, compared to 7% of the overall labour force, so an awful lot of us face the reluctance of banks and credit unions to loan money to someone with uneven cashflow, i.e. without a regular paycheque. The norms in banking reflect the social norms about a “steady job”.
Artists also often face specific barriers that reflect how our work is regarded in society. You know – hey artist, go get a real job. Although I believe that prejudice towards artists has decreased (empirically looking at my own long career as an artist), barriers arise when your work is regarded as insignificant.
Why would we care if artists can’t get loans anyway? Isn’t debt a bad thing? Do we want to encourage artists to take on debts? My answer is simply that our chances at improving our socio-economic status are significantly lessened when we are shut out of a key part of how the economy works. Everyone except the very rich usually make a major purchase through mortgages and loans. Whether we are talking about a stable live/work space you own or a piece of equipment, if you don’t have a huge sum on hand, you have to borrow it.
Here are some examples of how an artist’s career and ability to make a living can be compromised by lack of access to credit:
- your new work is financed by an arts council grant which won’t arrive until after the performance
- you have a chance to buy a house and be free of the landlord’s whims and restrictions, you know the mortgage would be less than your current rent so you can afford it but don’t have a downpayment
- you need a new computer to run the new software you need to make the work that will be in exhibiting next year (and you won’t receive the artist’s fee until then)
- you need to take a course now to upgrade your skills before you start that new teaching gig
- a commercial gallery is finally interested in your work and all you need to clinch it is to strengthen your portfolio with new work – you want to quit that minimum wage joe job to get into the studio and paint for a month, you can find another one after if necessary
- etc. etc. etc.
All these examples are about financial stability, research and development or cashflow. If it’s good business for business why isn’t it good business for artists?
Next (unless I get distracted by another topic for the next post) – the relationship of this to the topic of social finance.