Artist and Wharton lecturer Gizem Saka discusses why artists need more business skills with Jenifer Simon of CERF+.

Artists contribute much creativity to society, but business acumen may not be their forte. Paying for health care and business insurance, saving for retirement and recovering from disasters can be tough to handle for artists without traditional jobs. To gain insight into new financial models for them, Knowledge at Wharton tapped two experts: Jenifer Simon, director of  programs and outreach at CERF+, a nonprofit that helps provide artists with a financial safety net; and Gizem Saka, an artist who is also a senior lecturer at Wharton. They offered their thoughts on the Knowledge at Wharton show, which airs on Wharton Business Radio on SiriusXM channel 111, as part of a content collaboration with Orangenius, a firm that helps artists develop business skills.

The following is an edited transcript of the conversation.

Knowledge at Wharton: Jenifer, how big a concern is this right now in the artist community? Roughly how many artists are you working with to provide these services?

Jenifer Simon: After Hurricane Katrina, it became evident that artists weren’t really represented at the emergency relief table, so a bunch of different arts organizations started a national coalition for artist preparedness and response. That’s when we really got to see artists be effective, especially in Louisiana with jazz artists. We directly help about 50 artists per year with our emergency relief financial assistance, but we help hundreds of artists throughout the year with preparedness.

Knowledge at Wharton: What do you offer to help out artists?

Simon: The first is our emergency relief grant. An artist can get up to $6,000 within two weeks of submitting their application, so there are direct funds to use as they wish. We don’t prescribe how the funds are used to get them started in their recovery. We also provide training, advocacy, education. Our website, the Studio Protector, has a lot of vetted resources, and we’re neutral in that we don’t specify one or the other. We just want artists to be educated and make good choices.

Knowledge at Wharton: When artists reach out to you, is there surprise or a lack of understanding about things they may not have thought about in terms of their preparedness?

Simon: Absolutely. I’d say the first one is business insurance. When an artist has a studio fire or an injury, they’re unable to make their work and create a livelihood for themselves. If they don’t have business insurance, there’s no coverage for that lost time or to replace equipment. That’s the number one thing that we see artists not have. It’s inexpensive. It can be done. It’s protection that all artists should have.

Knowledge at Wharton: Gizem, as a senior lecturer here at Wharton and also being an artist, have you seen these issues pop up?

Gizem Saka: Yes, especially during the aftermath of the Great Recession. We saw both organizations and individuals looking into revenue-generation models. It’s definitely insurance problems, but much more.

“After Hurricane Katrina, it became evident that artists weren’t really represented at the emergency relief table.” –Jenifer Simon

Some artists are more interested in financial solvency and business issues than before. Traditionally, the artist was seen as this type of person who was aloof or being unaware of the real world. It gave them some X-factor. But not anymore, because there are more than 2 million artists in the U.S., and they have to survive somehow. According to data, we know that only 40% of them will remain as working artists within five years, and only 10% of them will persist in the long run. Without a business plan, they won’t get to practice their art in the near future, and that should be a warning sign.

Knowledge at Wharton: Some art schools are incorporating business into their curricula just to help artists understand that this is something they need to consider.

Saka: I think every art program in the country should have a business class for their students. That’s for the students’ benefit and, therefore, for our culture’s benefit because the market is evolving very fast. It’s becoming difficult for artists in the sense that they’re now supplying their labor in an increasingly flexible way, sometimes by the hour or on a per-project basis. They don’t have long-term employment. You can think of them as freelancers. A big portion of them need to work outside the art sector to support themselves. So, we are modeling the art world almost like a spot market now.

Knowledge at Wharton: Is not having a basic business plan a problem that you see with some artists?

Simon: It’s definitely something that not all art students are getting in the undergraduate or graduate programs because a lot of faculty don’t feel that it’s their job. They’re there to teach the student about the art form itself. But there is increasing pressure with career services and alumni to show that the artists are getting jobs and are creating for themselves a business that they can thrive on. Who is their customer? What are their costs? What’s their overhead? What should they charge? These are all critical and should be informed decisions, not things that an artist feels vulnerable to answer quickly. It should be planned out and made to be something that they are intentional about.

Knowledge at Wharton: Jenifer, tell us about your organization. There are grants, but there’s also a learning element to CERF+ as well.

Simon: Studio safety is a huge issue after the unfortunate events at the Ghost Ship in Oakland, Calif. (Thirty-six people died in a December 2016 fire that broke out during a dance party at Ghost Ship, a dilapidated warehouse that was being used an artist studio.) Artists are looking for space that’s cheap, that’s in an environment where it’s creative. That often means that there might not be a lease. The building might not be up to code. We’re educating artists to be really informed about the studios, that they use our studio safety guide and make sure that they’re informed about the space they’re going to be inhabiting.

Knowledge at Wharton: If you have a studio, you need to think about insurance to cover that space, but also to cover the art that you have produced there.

Saka: There are so many hidden costs. Even when you’re working in your studio, you need coverage for your assets. Obviously, your artworks are your assets. But most artists must handle insurance during transportation of the asset, let’s say to the gallery. This can be costly due to the higher possibility of damage.

When you have a business, you need liability insurance. Even when you’re working from home, for example, a studio is not officially a residential space, so damage wouldn’t be covered under your normal domestic policy. Even when you teach an art class, you need public liability insurance. You need business interruption insurance. There are so many areas in which you need to cover yourself. It’s kind of impossible to relate all of this to the students during their tenure in college because the universities and public funds cover almost all of these costs for the young artists. Unfortunately, there is this misperception that they can afford a 24/7 studio because they had one at Penn or somewhere else, or they can transport their artwork to the gallery for free, and they don’t have to worry about their public sculpture falling on someone’s foot and causing damage because all of that would have been taken care of by the public funds. But there are so many hidden insurance problems that they need to be aware of.

Knowledge at Wharton: Jenifer, one of the programs you have is called “Covering You’re A’s: Art, Assets, Archives.” That’s what we’re talking about, right?

“I think every art program in the country should have a business class for their students.” –Gizem Saka

Simon: Absolutely. And it’s not the traditional professional development practice workshop in terms of the marketing and business plan. It’s really about managing risk and identifying what you can least afford to lose. We talk about documentation and safe storage, and artist health and wellness — a lot of artists use repetitive motions and are experiencing issues with their body. If they have an injury or if they’re not ergonomically set up correctly, that could be affecting their ability to make work or make a certain quantity of work. It’s definitely a space that CERF+ is excited to be in because there is such a need. A lot of universities are paying attention to the studio safety issue because of the issues that have been going on.

I would say to artists, the first thing they could do is talk to a financial adviser, especially if they are leaving school in debt. You don’t have a lot of money to throw around, so you want to be sure you’re using it wisely.

Knowledge at Wharton: It’s probably good to get involved with the right real estate agent to find the proper space that you can afford.

Simon: That’s incredibly difficult because artists get priced out of their studios when gentrification happens, but artists were the ones who are part of gentrifying it because they helped make it hip and creative and inhabitable. That’s another problem. Where can artists afford to work these days?

Knowledge at Wharton: You mentioned the problems you saw in the wake of Hurricane Katrina. How have the artists you worked with recovered from that disaster?

Simon: It takes about 10 years for an artist who has had a disaster to truly recover. They’re going to have a new normal. They’re not going to get back to where they were. A lot of artists stayed there because they felt a loyalty to their community to help out. Many artists are a little bit better off in that they know what precautions to take. But I know artists who have had disasters from Sandy, and they still don’t have business insurance. There’s always education to be done.

It takes a long time to build back their studio, to build back their business. A lot of artists may have had wholesale orders or commissions that were delayed or canceled as a result. We have one artist in Boulder, Colo., that put his work in a studio just for a couple of months while he started a new professorship. A studio fire ruined everything. He’s starting over.

Knowledge at Wharton: We hear about how the art world and artists are truly a community. These are people who really need to rely on one another and support one another in tough times.

Saka: Luckily, there are communities both online and in real life, in the physical space where artists support each other and guide each other about how to pay back the debt and so forth. We also need communities to help artists procure secondary jobs because about three-quarters of them will need it.

Artists, on average, are more skilled than the general working population. About 60% of them hold at least a bachelor’s degree. They’ll get good second jobs, and the peer support will become much more crucial. Looking at the very big picture, the National Endowment for the Arts sends money to the states, which then provide emergency relief for artists. They try to reach a bigger group of artists by providing smaller funds, so something like $500 could go to an artist as emergency relief.  If we lose the National Endowment for the Arts funding, as President Trump has proposed for the 2018 budget, that sets us back. Peer support is good, but we do need also organized federal and state support for artists.

Knowledge at Wharton: Does some of the funding for CERF+ grants come from the private sector?

“Peer support is good, but we need also organized federal and state support for artists.” –Gizem Saka

Simon: Our organization is pretty unique in that we’re a nonprofit that relies heavily on individual donations. About 70% of our contributed income is from individuals, over half of which are artists. This is really a mutual aid, pay-it-forward organization that artists hope that they never have to use. But if they do, most artists who receive our assistance will say it’s not so much the dollar amount, it’s knowing that somebody cared. Artists are very apt to doubt themselves, so when you’re at your low and somebody gives you that sign of support, their community just raises them up, and it makes a huge difference.

Knowledge at Wharton: Gizem, have you seen artists who are in trouble for whatever reason and tried to help?

Saka: Yes, the best thing is to give them a financial plan, actually. Many of our students at Wharton have expressed interest in starting a business that is related to art. They may be artists, or they may be interested in starting an auction house or a space where art is bought and sold, or they want to start a virtual space where people can see concerts, etc. Art is a more general category than we assume. We only think about fine art, but both the U.S. Department of Labor and the National Endowment for the Arts have a very wide category that includes architects, authors, dancers, designers, etc. It’s a big business.

One thing that we can do is to facilitate the private funding to channel to the artists. The problem there is to get a wide variety. The one problem with the market is that about 50% of the individual gifts and grants go to the top 2% of institutions. What we need is to give more equally, especially to people who are not living in large cities.

Knowledge at Wharton: Should art schools consider partnerships with other colleges and institutions to be able to provide this information as a class for artists?

Saka: Not only artists, but whoever wants to work in an art-related profession. That could be insurance work about the art, that could be an auction house. That could be anything that relates to the art, but the artists for sure. You could be a dealer. You could be a gallery owner. You need to have the business aspect of it done.

Simon: We’re really talking about the creative economy, and there are a lot of great art programs that are creating entrepreneur or “artrepreneur” programs, where it is very much business and art. As Gizem was saying, they want artists fully aware of what they’re getting into. There are a lot of savvy artists who are in incubators and social enterprise, or social justice who are getting funding and are really smart about what they need to do. They’re not playing the victim. They know that they’re not going to make a living off of their art, per se.