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From Communism to Civil

Society? The Arts and the

Nonprofit Sector in Central and

Eastern EuropeStefan Toepler

Version of record first published: 31 Mar 2010.

To cite this article: Stefan Toepler (2000): From Communism to Civil Society? The

Arts and the Nonprofit Sector in Central and Eastern Europe, The Journal of Arts

Management, Law, and Society, 30:1, 7-18

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D o w n l o a d e d b y [ V i c t o r i a U n i v e r s i t y o f W e l l i n g t o n ] a t 2 2 : 3 1 2 4 F e b r u a r y 2 0 1 3



From Communism to Civil Society?

The Arts and the Nonprofit Sectorin Central and Eastern Europe

STEFAN TOEPL ER

lthough thearts and culture were subject to governmental control andA ensorshipin the party-states of the Warsaw Pact,' the supply of artis-tic and cultural goods and services was plentiful, heavily subsidized, and

widely accessible. Artists-as state employees-enjoyed income and employ-ment security, and the production of the arts was-in Marxist terms-largelydecommodified: that is, freedof market and economic pressures. State patron-age of arts and culture took various forms, including stipends, interest-freeloans, and commissions; contracts from the state, mass organizations, andstate-run enterprises (Rueschemeyer1993);as well as employment in statearts institutions and schools. Other forms of patronage included the indirectsupport of a variety of amateur and folk art groups frequently affiliated withand sponsored by enterprises, collectives, and social and party organizations

such as the Communist youth organizations. The reasons for the privilegedposition of culture under Communism were manifold and included the desireto co-opt culture for the ideological goals of the state? to symbolize andshowcase the accomplishments as well as the moral superiority of socialism~ ~~~ ~~ ~ ~~~ ~ ~ ~

Stefan Toepler, the guest editor for this issue, i s Associate Research Scientiston thefaculty of the J ohns Hopkins University Institute for Policy Studies, where he is asso-ciated with the Center or Civil Society Studies and has served as the coordinator orCentral and Eastern Europe of the Johns Hopkins Comparative Nonprofit Sector

Project. His publications includeFinancing theArts:A Comparison Between Germanyand theUSA; Cultural Patronage: Beyond Corporate Sponsorship(both i n German);and, most recently, Private Funds, Public Purpose: Philanthropic Foundations inInternational Perspective.

Spring 2000 7




The J ournal of Arts Management, Law, and Society

over capitalism in the cultural competition with the West and especially with

the United state ^and to provide intellectual stimuli for the intelligentsiaas

well as compensation for the other deficiencies of the socialist system(Strachwitz, this issue, 65-72).With the demise of socialism and the fall of the Berlin Wall, perceived as

the victory of the capitalist West, concerns arose as to what the change of sys-tems might mean for the future of the arts in Central and Eastern Europe andin the Newly Independent States (NIS) of the former Soviet Union. “Whatwill happen to cultural life? Do we have to read and watch trash now that weare free and no longer have inexpensive books and subsidized quality films?’were among themany questions of the “Gentleman inWarsaw” towhom Lord

Dahrendorf’s Reflections on the Revolution in Europe was directed(Dahrendorf 1990, 4). In essence, one of the chief concerns was whether awholesale adaption of the Western system would mean a replacement of Karlwith Walt Disney (6)as Kevin Mulcahy pointedly puts it in the introductionto this issue (3-6).

A lthough the political collapse of the socialist experiment brought new-found artistic and creative freedom, at the same time its economic collapsewas seen as ushering in the end of comprehensive state patronage of culture.Because of the tremendous political, economic, and social challenges of the

transition, a widespread privatization of cultural assets, if not a completeabandonment of culture by the state, was the logical if undesired outcome ofthe revolution after the immediate post- 1989 euphoria had subsided. Manycountries in the region saw “the march through the ‘valley of death’ [take] itstoll” (Novotny 1995, 218) with the initial dismantling of certain cultural insti-tutions such as cultural centers, movie houses, theaters, and youth and musicclubs (M uschter 1993). But did governments across Central and EasternEurope and the former Soviet Union relinquish their responsibilities for artsand culture? And, if so, who took their place? In this article I argue that,

although the cultural industries (e.g., publishing, cinema, recording, and themedia) have mostly been transferred to the private or market sector, the statehas not relinquished its primary responsibility for the institutionsof high cul-ture in the region. Moreover, a third, or nonprofit, sector has alsodevelopedbetween the state and the market as a result of the loss of certain forms of statepatronage and of pre-existing, less institutionalized venues of cultural activi-ty and production in the socialist era.

Privatization

With the old hierarchical structures disintegrating and cultural policy rele-gated to political limbo throughout Central and Eastern Europe, the issue ofprivatization and the concomitant threat of a commercializationor “marketiza-

8 Vol.30,No. 1




From Communismto Civil Society?

tion” of the arts and culture began to dominate the policy debates (van Hemeland van der Welen 1997). As Schuster (1997) has argued, privatization became

a buzzword indiscriminately used for a whole range of processes and rationalesfor policy action. What the debate frequently failed to take into account, how-ever, was that privatization hardly affected the whole sphereof culture in thefirst decade after the fall of the Wall. Specifically, as Ilczuk and Wieczorek (thisissue, 53-64) detail in their discussion of the Polish situation, it was the cul-tural industries that were mostly soldoff and thus became part of the marketsector throughout Central and Eastern Europe (Smithuijsen 1997; Kurkela1997). State arts institutions (e.g., museums, theaters, and symphonies), n con-trast, remained for the most part firmly in the public sector, although the locus

of control and funding responsibilities frequently shifted from the central to theregional and local governmental levels (Smithuijsen 1997).Conventional analyses therefore characterize the post-socialist cultural

landscape in the context of two key developments: the privatizationof cultur-al industries and the decentralizationor denationalization of the arts sector.The responsibility for culture is viewed as lying with the state, and the rele-vant relationships are either between the state and the commercial culturalmarket or between the central state and the regional and local levels of gov-ernment (Amestad 1995). At the same time, the civil society concept that has

prominently figured in the larger discourse on how to renegotiate the state-society relationship in the region (Havel, Klaus, and Pithart 1996) has hardlybeen discussed. In addition, the emerging role of the nonprofit sector in thearts and culture in Central and Eastern Europe as an institutional alternative toeither the stateor the market hassofar largely been ignored.

On the one hand, the neglect of the nonprofit sector has partly been due tonarrow analytical lenses that either fail to distinguish between the financingand the delivery of artistic and cultural services, assuming that state fundingalso typically equals state provision (Toepler and Zimmer 1997)or (in the tra-

dition of economic public finance) that delivery matters less than state fund-ing. Boorsma, for example, states that

ownership of cultural organizations is less crucial in this field than the issueoffunding: cultural organizations are largely dependenton government subsidies,and their withdrawal can and does in many cases lead to such organizationsbeing closed down entirely.(1997,9)

This view, however, is only partially true because it makes the somewhat sim-plifying assumption that there are no qualitative or behavioral differences

between service providers in public, nonprofit, or for-profit auspices andtherefore no implications for cultural production and support. cop%and Tomc(this issue,42-52) argue, however, that a transfer of the service delivery func-tion to nonprofits would increase the competitiveness of organizations and

Spring 2000 9




The J ournal of Arts Management,Law, and Society

would help improve the effectiveness and efficiency of public funding.Nonprofit organizations are generally credited with a number of distinctive

features and special functions, such as serving as social (artistic) innovators;facilitating the free expression of valuesor of local or minority interests;or

providing services that neither the government nor the market can or willdeliver (Kramer 1981). These roles or functions remain, however, largelyunexplored in the cultural field.On the other hand, the absenceof empirical data on the actual extentof

nonprofit activity may also have prevented analysts in the past from placinggreater emphasis on this institutional alternative to the prevailing statelmarketdichotomy:

The saleof former state enterprises to the private market seemed tobe the fastest

way to get rid of the old situationof a compIetely staterun society. But what to

do with the staterun cultural institutions?In the majorityof Eastern Europeancountries a “third sector”of noncommercial culture did not exist. The absence

of a third sector proved tobe a problem for the developmentof noncommercial,

private organized culture. Without a legally protected (including: tax exemp-

tions) nonprofit sectorlsecteurprivi non marchand in the cultural field, pnvati-zation almost automatically meant commercialization(Smithuijsen1997.96).

Is it the case then that a nonprofit sector in arts and culture has not yet

developed in Central and Eastern Europe?Or has its emergence only escapedthe attention of analysts who are focused on traditional state-run institutions?

The Nonprofit Sector in Culture and Recreation:

The Neglected Alternative

The fall of the Berlin Wall in 1989 and the reinstitutionof civil freedomsled almost immediately to a phenomenon that is frequently referred to as the“rebirth of civil society” (Siege1 and Yancey 1992), and high hopes accompa-

nied the development of the nonprofit sector in the region. Indeed, nonprofitactivities developed rapidly. In the space of only five years, private associa-tions, foundations, and other civic groupings began to average a 1 percentshare of total employment in four Central and Eastern European countriesstudied in the J ohns Hopkins Comparative Nonprofit Sector Projecp andalmost2 percent with volunteer labor factoredin. In Western Europe, by com-parison, the nonprofit sector accountedfor7percent of total employment afterseveral decades of government-seconded development (Salamon et al. 1999).The momentum that nonprofit activity has gained in Central Europeisthere-

fore nothing short of astounding.Moreover, the Western European nonprofit sectors are, typically, heavily

tilted toward the welfare area, where large institutions such as hospitals anduniversities account for large parts of total nonprofit employment. The core

10 Vol. 30,No. 1




Fmm Communism toCivit Society?

welfare areas (education, health, and social services) thus accountfor nearly

80percentof the total size of the nonprofit sector in theWest compared with

half that share in the East. Accounting for this difference puts the size differ-entials between these two regions into further perspective with regard to the

arts and culture. The welfare orientationof the Western nonprofit sector con-

trasts significantly with a strong orientation toward culture and recreation in

Central Europe. Whereas35percentof all nonprofit employment in the East

is in the culture and recreation field, rangingfrom a low of 31percent in the

Czech Republic to a high of 38percent in Hungary, the respective Western

European share stands at only 10percent (Salamon et al. 1999).

Although this suggests a stronger presenceof the nonprofit sector in culture

and recreation in Central Europe, it is only a relative measure. In addition,recreation (e.g., sports associations and clubs) tends to account for larger

sharesof employment within the nonprofit field thando the ar ts and culture.

A more accurate measure to assess the role and positionof the nonprofitsec-

tor is to compare the relative shares of all three sectors (public, for-profit, and

nonprofit). Table 1 shows the sectoral breakdown of the arts and cultural

employmentin a select number of countries where this information was avail-

able. In 1995, in the three Central and Eastern European countries (Czech

Republic, Hungary, and Romania), government employmentstill accounted

for close to90percentof the total employment n the field, the nonprofitsec-tor for 3to 4 percent, and the for-profit sector (including media and commu-

nications) for about twice the nonprofit share. Nevertheless, the nonprofit

share, although still small, already approximated the dimensions of nonprofit

cultural activity in some developed countries suchas Germany.

TABLE 1. Employment Shares in Arts and Culture, by Sector

Nonprofit (%) For profit (%) Public(%)

Germany 4 n/a

Spain 24 53Australia 7 58J apan 34 10CzechRepublic 3 8Hungary 4 10Romania n/a n/a

Ida

24

3456

888688

Selected Countries, 1995.Source: Primary data generated by the Johns Hopkins Comparative Nonprofit SectorProject. Copyright0 2000.n/a=not available.

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The J ournal of Arts Management, Law, and Sociery

Another way to gauge the relative significanceof the different sectors in

the productionof culture is output measures. Tables2 and3 present two such

output measures-the number of museum visitors and the number of atten-dees in the performing arts-for a limited number of countries. Although thesample of countries is not representative, both tables suggest that the nonprofitsector plays a larger and more significant role in the provision of the arts inWestern European and other developed countries than is commonly assumed(Toepler and Zimmer 1997). Even in France, which is traditionally highlycentralized, nonprofit museums attract approximately 33 percent of all visi-tors and nonprofit theaters nearly40percent of all audiences. In the CentralEuropean countries, however, state institutions continue to dominate artistic

provision because little privatization has taken place (see above). As of 1995,nonprofit museums drew 7 percent of all visitors in the Czech Republic. InHungary, a recent survey of independent cultural organizations estimated thenumber of visitors to nonprofit museums, galleries, and exhibitions organizedby other nonprofits at 1.7million, accounting for 13 percent of total visitors(Kuti 1997, 17). In the performing arts, the nonprofit sector also shows astrong presence. In the Czech Republic, nonprofit theaters and music as wellas dance groups drew 16 percent of all audiences, with state institutionsaccounting for the remainder. In Romania, at the same time, the nonprofit per-

forming arts drew a similar share(14 percent), but with a higher for-profit(33percent) and a lower government(53percent) presence.

The picture that emerges from these data highlights a still small but signif-icant share of nonprofit activity in the production of the arts and culture in

TABLE 2. Number of M useum Visits, by Sector

Nonprofit (%) For profit (%) Public(%)

AustriaFinlandFrancethe NetherlandsJ apanCzechRepublicHungary"Average

4923

3441227

1325

0

0

01714305

51776642

64

918770

Selected Countries, 1995.a1997.

Source: Primary data generated by the J ohns Hopkins Comparative Nonprofit SectorProject. CopyrightQ 2000.

12 Vol.30,No. 1





TABLE 3. Number ofAttendeesat thePerforming Arts,by Sector

~~

_ _ _ _ _ _

Nonprofit (%) For profit (%) Public (%)

Austria 22 27 51

Francea 39 45 16

Czech Republic 16 2 82Romania 14 33 53

Theaters only.

Selected Countries,1995.

Source: Primary data generated by the Johns Hopkins Comparative Nonprofit SectorProject. CopyrightQ 2000.

Central and Eastern Europe, Moreover, as these data cover only the first five

years after the changes of 1989,they capture only the beginning of the emerg-

ing role of the nonprofit arts. In addition, the lack of a broader set of more spe-

cific output measures tends to cloud the larger significance of nonprofit activ-

ity in the cultural development of Central Europe over the last decade.

Socialist Past and Post-Socialist Roleof the Nonprofit Sector

Why has the emerging role of the nonprofit sector been overlookedso far

in the debate over cultural policy and privatization in Central Europe? Asargued previously in this article, the main analytical thrust has been on the

formerly state-run enterprises of the cultural industries and the still state-run

arts institutions. This focus has, in large part, been due to a somewhat sim-

plified understanding of socialist cultural policy that posits that the cultural

production and financing were done by the State-understood as a central-ized and monolithic state apparatus. Hillman-Chartrand and McCaughey say,

for example, “[all1 artistic enterprises are state-owned and operated; that is,

all artistic means of production belong to the State” (1989). In general, the

study of cultural policy and economics frequently uses relatively narrow ana-

lytical frameworks (such as the market-failure paradigm) that should be

broadened with a neo-institutional perspective (Zimmer and Toepler 1999). n

the case of the Warsaw Pact countries, a broader view of the institutional

organization of arts and culture under Communism would yield a more com-

plex picture of the socialist realities and the varying paths of post-socialistcultural development.

The key factor is the all-but-monolithic nstitutional makeup of the social-

ist party-states.For example, in East Germany,

Spring 2000 13





the rolethat private sponsorsof the arts play inWest Germany was played in theGDR [German Democratic Republic] by the state-owned enterprises, the par-ties, the mass organizations like the Kulturbund (Culture Federation), the

Federationof Labor Unions, theFDJ youth organization, and the Gymnasticsand Sports Federationthat were obligedtousepartof their resourcesforpatron-ageof the arts” (Muschter1993,38).

Of particular importance in this context were the state enterprises thatpro-

vided a wide range of social, educational, and cultural as well as recreational

services for their workers, their families and to some extent the broader local

public ( hearand Rosen 1995). Although all of these enterprises and organi-

zations were closely connected to party and state, nevertheless, the cultural

groups and organizations that they organized and supported were at least par-tially atarm’s length from the official cultural bureaucracy. Such organizations

were allowed some degreeof independent, entrepreneurial, and even critical

activities. In addition, as noted, individual artists werealso typically support-

ed through state, enterprise, and mass organization commissions and contracts.

In sum, the cultural life under Communism was all but restricted to the

state-run industries and institutions. After 1989, many of these cultural and

recreational activities were spunoff, asstate-tunenterprises, farming collec-

tives, and many party and mass organizations dissolvedor were transformed

and began to shed their role in providing public goods. Together with dissi-dent cultural groupings (partially hosted under the umbrella of the churches)

and transformed artists’ organizations (such as the artists’ and writers’

unions), community culture, amateur and folk arts groups, formerly hosted

under the auspices of enterprises as well as party and social organizations,

formed one source of the emerging nonprofitarts and culture sector: “NPOs[nonprofit organizations] seamlessly took the place of public and enterprise-

related providers in culture, spor ts and recreation” (Zimrner, hiller, and

Anheier 1997,64).

In addition, new nonprofit organizations without any roots in the socialistera also began to emergein significant numbers. Although little work hasbeen

done so far in analyzing the motivations of nonprofitarts entrepreneurs from

across a spectrum of countriesin the region, nevertheless, some preliminary

conclusions can bedrawn. To some degree, independent organizations arose

in response to a demand for truly free artistic production and expression (Katz

1997). Because the political leadership but not the cultural administration

changed in many countries after 1989, state institutions often remained under

the control of administrators and bureaucrats who continued to occupy the

same positions they had held under socialism (Jakobson et al., 19-28; Adams,this issue, 294)-potentially limiting their ability to shed old structures and

ideologies. The establishment of independent, nonprofit organizations for

artistic and aesthetic purposes, on the other hand, allowed a fuller exploration

14 Vol.30,No. 1





of formerly suppressed worksorstyles as well asavant gardeand other artis-tic expression not feasiblein the context of existing institutions.

Perhaps more important, there were also supply-side factors at work, withartists beginning to establish and to use nonprofit organizations to conveyorganizational legitimacy to their founders and to facilitate proposals for inde-pendent sourcesof funding similar to other professional fields (Sokolowski1998).5Creating a new organizational base to enable them to become eligiblefor domestic as well as international grants was especially important for thoseindividual artists who had lost the stipends, commissions, and contracts thathad formed the basis of their economic security in the socialist system.Finally, although the traditional statearts institutions escaped abandonment

and privatization, they nevertheless often faced fewer state subsidies. Thesereductionsin turn led the institutional leadership to create nonprofit associa-tions and foundations withinthe structures of the state institutions to carry out“their fundraising and business activities” (Kuti 1996, 78; FriE, DeverovB,Pajas, and Silhanovii 1998).

Conclusion: Privatizationor Nonprofitization?

As I have shown in this brief discussion, cultural life under Communism

encompassed a broad set of groups, actors, and activities beyond the state-run,centralized cultural administration and production system. This broader spec-trum of cultural groups and individual artists has spurred a nascent but signif-icant nonprofit sector in the region.As the available output measures suggest,the nonprofit arts have made some inroads into the provision of traditionalhigh culture, but haveso far most likely pursued different forms of artisticexpression. For the most part, these nonprofits are more grass-roots orientedand-as embodiments of civil society in the cultural field-perform very dif-ferent functions from the traditional state-run institutions (Zimmer, hiller,

and Anheier 1997). Insofaras

social integration and the democratizing func-tion of arts and culture as important policy goals are concerned, a broadeningof the analytical focus beyond the arts institution and cultural industry sectorsseems warranted. Interestingly, a changein the perception of the nonprofitartsin Central and Eastern Europe is slowly taking place, as evidenced by theCouncil of Europe’s recent review of cultural policy in Lithuania (Ilczuk1998). which was the first of these reviews of the cultural policy of theCouncil’s member states to devote a section on civil society and the indepen-dent (i.e., nonprofit) sector.

Furthermore, the future role of the nonprofit sector in the cultural develop-ment of the region will grow beyond its current scope and encompass manyof the arts and cultural institutions at the municipal level in the near future.Aprivatization of state arts institutions has not yet taken place, however, because

Spring 2000 15





of (1) the initial unwillingness of local politicians and the cultural adminis-tration to forgo control of municipal museums, orchestras,or theaters; and(2)

the insufficiency of the legal frameworks that gave rise to occasional fraud andmisuseof independent nonprofit organizations in the firstyearsof transition(Simon 1995).As we have noted elsewhere, however,

many countries across the region have since passed new legal frameworksthatspell out the functionsand purposes of various types of nonprofit organizationsmore clearly; and some have also improved thetax treatment of both organiza-tionsand donations. Indeed,in many ways, the new legal frameworks emergingin the region appear to besuperior to those in the West, which developedin amore haphazard fashion. (Salamon etal. 1999,33-34)

In the process, these countries have begun to lay the groundwork for the even-tual privatization of the state-run arts institutions. In the Czech Republic, forexample, the recent Act on Public Benefit Corporations paved the way for thedegovernmentalization of the so-called “budgetary and contributory organiza-tions” that include state and municipal museums, theaters, and other culturaland educational entities (FriE et al. 1998).

The process of converting these public institutions into nonprofit publicbenefit corporations is currently beginning. With the exception of arts institu-tions of national significance, cultural institutions across the region will be

transformed from public to private statusin the space of a few more years. Theprocess, however, is not one of privatization, but of nonprofitization. The like-ly outcome will be a mixed system combining a U.S.-style of relying on thenonprofit sector to deliver cultural services with a European-styleof depend-ing on the state to be active in setting policies and funding priorities. Thefuture role of the nonprofit sector in the provision of theartsand culture in

Central and EasternEuropewill become increasingly difficult to overlook.

NOTES

I . This article owes much to a session on cultural development in Central and Eastern Europethat I convened at the 3d Conference of the I nfemafionalSociety of Third-SecforResearch heldin Geneva, Switzerland, in J uly 1998. Three of the authors in this issue-Vesna CopiE, LevJakobson, and Rupert Graf Strachwitz-presented initial versions of their articles in this session;fiva Kuti and Brenda Gainer served as thoughtful discussants. I am also indebted to Dorota

Ilczuk, with whom I discussed many issues in post-socialist economics of the arts during her phil-anthropy fellowship at the Johns Hopkins Institute for Policy Studies in 1996. WojciechSokolowski’s nsightful comments and suggestions greatly improved a recent draft of this article.Any remaining errors of judgment and interpretation are mine.

2. In 1934, the statutes of the newly formed Soviet Writers’ Union, in defining the new con-cept of socialist realism, stated that “truthfulness and historical portrayal ought to becombined

with the task of the ideological remaking and education of laboring people in the spiri t of social-ism” (qtd. from Pravda in Brooks 1994, 977).

3. In the early 1950s. theUS. Advisory Commission on Educational Exchange found that “theSoviet Drive in the fine arts field finds the U S . at present without a counter offensive” (qtd. inGoldfarb Marquis 1995, 28).

16 Vol.30,No. 1




From Communism to Civil Soci ety?

4. The following data are drawn from the J ohns Hopkins Comparative Nonprofit SectorProject, a cross-national research project on the size, structure, and financing of the internation-al nonprofit sector. This project is coordinated from the Center for Civil Studies at the J ohns

Hopkins Institute for Policy Studies in Baltimore and works with teams of local researchers in allparticipating countries (see www.jhu.edu/-cnp). Data for twenty-two countries were recentlyreleased and included four countries in the region: the Czech Republic, Hungary, Slovakia, andRomania (Salamon et al. 1999). The project collected data for twelve key groups of nonprofitactivity including “culture and recreation,” encompassing the following subgroups: arts and cul-ture (i.e., media and communications; visual arts and architecture; performing arts; historical, lit-erary, and humanistic societies; museums; as well aszoosand aquariums); sports; and recreationand social clubs (Salamon and Anheier 1997).The base year for the data collection was 1995.

5. Sokolowski (in press), for instance, describes the case of a Polish artist who founded a per-forming arts organization to work with disadvantaged children as a vehicle to establish a servicethat could be eligible for local government support.

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from communism to civil society

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