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8/7/2019 Why is the nonprofit organisational form dominant in certain cultural sectors: The case of film festivals in Chile
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Guillermo Olivares 1
Why is the
nonprofit
organisational for m
dominant in certain
cultural sectors:
T he c a s e of f i l m
festivals in Chile
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Guillermo Olivares 2
1. Introduction
In this essay, the author will discuss the question
on why nonprofit sector is considered the
predominant organizational form in some cultural
activities, with an special emphasis in the
situation in Chile reviewing literature on the
topic. In the first part, the author will make a
general review on nonprofit sector, starting from
basic definitions and then focusing on some
economic and operative aspects that make it the
most used form of organization among cultural
entities. This chapter will also consider some
historic and social approaches to give an
overview on the topic from different points of
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view. In a second part, the author will review the
Chilean experience relative to nonprofit sector,
stressing those historical and social factors that
promoted the adoption of this form of
organization in civil society, and specifically in
the cultural sector. In this part, will be also
reviewed the nonprofit from actual experiences
and research in the Chilean cultural context, with
an specific emphasis in film festival as cultural
events and its relationship with nonprofit. In a
third section, the author will discuss the idea why
the nonprofit organizations are the form preferred
by cultural entities in Chile, with special focus on
film festivals.
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2. General context on nonprofit
There are several definitions for nonprofit
organizations, which use will depend on the
context in which they are being referred either
socio-political or national. Each one of these
definitions is based on specific characteristics
that allow us to explains their behaviour, their
funding policy, their social role or their
programmatic interest. Therefore, considering the
vast field of explanatory works on this subject, in
this essay the author will use the theoretical
approach made by Salamon and Anheier (1997),
who defined a set of shared characteristics among
these organizations. These features aim at their
basic form of operation, instead of being focused
on their purposes or ways of funding. This
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definition states that a nonprofit organization can
be identified by means of five main features.
They are: Organized, Private, Nonprofit
distributing, Self-Governing and Voluntary.
Moreover, the author will also use different terms
to refer the notion of nonprofit. The first one is
“third sector”, which is broadly used to name
those entities conceived as neither public nor
private. A second term to be used in this work is
“civil society” which is a usual concept in
Chilean literature and also in social and political
contexts. Now that basic concepts on this subject
are established, it is possible to argument and
discuss the topic, in order to give an appropriate
answer, considering the case given to be
analysed.
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As first argument, it can be argued that it is
generally accepted that nonprofit sector is the
dominant organizational from in the arts and
culture. This situation can be analysed from
different approaches depending on what feature
one wants to emphasise on the analysis. For
instance, paraphrasing Hansmann (1986) one can
express as an initial conceptualisation that an
organization which depends basically on
donations are in general due to be organized as a
nonprofit. So, this approach made considering
from where they receive funding can be taken as
a preliminary explanation to the question why
this form is the preferred in the cultural sector
(Hansmann, 1986). It is important to mention that
the concept of nonprofit is directly linked to
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economic theories because clearly alludes to the
way how they manage their incomes, however
above all possible approaches, one of the
characteristics that make them unique among all
private entities “is the presence of strict limits on
the appropriation of the organization’s surplus in
the form of monetary gain by those who run and
control it“. (Ben-Ner and Gui, 2003: 5). This is
an interesting definitions of the so called non
distribution constraint, which is key to
understand the nature of nonprofit sector and also
allows the comprehension of other features of
this kind of organizations. Nevertheless, it is
important not to get confused by this general
definition, because “the non distribution
constraint does not prohibit nonprofits from
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earning a “profit”; rather its prohibits individuals
(or corporate actors) from laying claims to any
surplus (or net income) or any revenues realized
from the sale of organizational assets”
(Galazkiewicz, 1998: 26).
In the cultural sector, the dominance of nonprofit
entities took place mainly during the last decades
and according to researchers is not yet complete
(DiMaggio, 1986: 4). In fact, Paul DiMaggio
support this asseveration, based on the U.S. case,
claiming on one article that “it is no accident that
interest in the cultural organization of the arts has
emerged at this point in our history. The past 30
years have been a period of dramatic flux in the
organisations of U.S. art, music, drama and
dance, as well as in the way we think about them
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(DiMaggio, 1986: 4). This current interest is also
accompanied with a change in the usual policies
of management of the arts and cultural
organizations, which has been stimulated by the
progressive shift to private patrons instead of
large institutions as main founding bodies. This
change has also affected their internal
equilibrium of power and what aims are pursued
by them (DiMaggio, 1986). From an economic
perspective, the author want to stress, in this
essay, two theoretical approaches which will be
useful to understand the Chilean case which will
be reviewed in further pages and that are
essential to understand the essence of the work of
nonprofit organizations. The first one is the
Weisbrod model, which is also called the Public
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Goods Theory, that explains the satisfaction
made by nonprofit organizations to a demand of
public goods which their provision is left unfilled
by the government (Hansmann, 1987). In this
model the government “tends to provide public
goods only at the level that satisfies the median
voter” (Hansmann, 1987: 27), so as a
consequence nonprofit organizations seek to
satisfy the residual demand for public goods,
which remained unfilled by government
provision. “These nonprofit organizations are
financed by donations of citizens who want to
increase the output of the public good”
(Hansmann, 1987: 53). Another theoretical
approach to be considered at this point is the
theory of Impure Altruism which “models donors
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as receiving public and private benefits form the
act of contributing” (Kingma, 2003: 57).
According to this theoretical approach, those
benefits possible to be received by private donors
are expressed as prestige, status, access, and so
on. Furthermore, this theory is not inconsistent
with the public good theory. However it goes
beyond the original ideas provided by the public
good theory, because, theoretically, private
donors might be interested only in their own
goals than in receiving the public goods resultant
of their donation.
On the other hand, one historical approach to this
field, which has been very influential on research,
is the text written by Paul DiMaggio on the
culture sector in Boston in the nineteenth century.
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In this text, the author stated the distinction
between high and popular culture which emerged
from the efforts undertaken by the Bostonian
élite in order to keep high-art expressions
separated from those considered as inferior.
(DiMaggio, 1986). In this sense, the U.S. version
of high and popular culture just could take shape
after both organizational forms (nonprofit and
commercial) were established completely. Then
those considered high culture started to be
organized under nonprofit entities; in contrast to
those considered popular that kept their
commercial organization. In the coming pages,
these approaches will be useful to put in context
the Chilean case in order to find similarities but
also differences.
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3. Nonprofit sector in the Chilean context
In Chile, the nonprofit sector has a long history
closely related to the national independence from
Spain and its further republican development.
Even in the colonial period under the Spanish
crown existed some charities, mainly managed by
the Catholic Churchi. After the independence
struggle in the early 1800s, the new Chilean state
was focused on the political and economic
consolidation, so multiple charitable and welfare
tasks were undertaken by private organizations
basically administered by the church and the
aristocracy whose members served voluntarily in
them (Irrarazabal et al , 2006). During the second
half of the 1800s, the third sector in Chile is
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given an important boost by a legal framework ii
which recognised the existence of nonprofit
foundations and corporations, specially because
many of the public goods were not available for a
huge number of people and workers living in
precarious conditions. After some decades living
in political instability, in the 1930s the Chilean
state reached a threshold in its level of economic
and political stability which was expressed in a
growing provision of public goods and services
in education, health, housing, but also in a
protective economic system which tended to
favour the industrialisation and the substitution of
imports with local products (Irrarazabal et al ,
2006). These factors were accompanied by a
progressive democratisation in the electoral
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registry and process and the incorporation of a
growing middle class into the political system. In
that way, the nonprofit sector in Chile had the
opportunity to take advantage of new
prerogatives and develop different approaches to
those in use in the 1800s and early 1900s.
Nevertheless, this story ended abruptly in 1973
when general Augusto Pinochet seized Palacio
La Moneda
iii
and took over the government in a
military coup. After the coup, many nonprofit
organizations were intervened and kept under
surveillance in a process which ended in a
progressive lost of autonomy and prerogatives
(Irrarazabal et al , 2006). However, in contrast to
what one may think the dictatorship could not put
an end to a long story of participation in civil
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society, but make it gave a step forward in a
different direction and another emphasis. As
Hugo Fruhling wrote in the 1980s “the work of
NPOs in Chile was also favoured by the nature of
the repressive policies implemented by the
regime” (Fruhling, 1986: 361), because just one
month after the coup, leaders from different
religionsiv
created the Committee of Cooperation
for Peace which according to its founding act had
the mission “(1) to give material aid to people
affected by the present situation; (2) to provide
legal aid to defend personal rights; and (3) to
collect information on irregular situations "which
gravely affect personal dignity and which surely
are no desired by the Supreme Government"
(Fruhling, 1986: 361). So to a certain extent the
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initial fear to the repressive actions likely to be
taken by security services, fuelled the work of
others to undertake similar projects. “Once a
human rights organization is established and
gains legitimacy and space for its activity, it
opens the road for the creation of new
institutions” stated Fruhling (1986: 364). Once
the dictatorial period was over, the sector that
was constantly under surveillance, had also
gained institutional strength, fundamentally those
devoted to the defence of human rights. The
subsequent democratic regimes started a process
which was focused in fostering and strengthening
those civil society organizations as a necessary
step to consolidate democracy (Irrarazabal et al ,
2006). Government increased the expenditure on
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social matters, improved the legal framework and
broadened the programmatic offer. This process
was deepened during the President Bachelet’s
administration who based the public
administration upon civil participation as main
axis in Chilean political process.(Irrarazabal et al ,
2006). In that sense, the nonprofit sector, as
defined in the previous chapter and taking such
historic background, played a major role in the
social, economic, political and cultural
development in Chile in late 1990s and early
2000s.
Thus to a certain extent one can recognise two
main stages in the development of third sector in
Chile, the first one during the 1930s when the
political and economic life reached a threshold of
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stability and it aimed to social issues but also to
new interests and, a second one, during the
Pinochet’s dictatorship when the nonprofit sector
lived a reactivation based on the defence of
human rights. In this fostering process of
nonprofit organizations, the cultural ones played
a significant role. In fact, some years after under
democratic regimes came an official recognition
to the outstanding role played by cultural
movements and artists in the recovery of
democracy (Consejo Nacional de la Cultura y las
Artes (CNCA), 2005). That recognition along
with the demands made from civil society and the
cultural community resulted in 2003 in the
implementation of a national cultural policy
regarding the democratic principles and a brand
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new institutional framework for culture, which
tended to make the state to adopt an active role in
protecting heritage and in fostering both artistic
and cultural expressions (CNCA, 2005).
According to a document written then, one of the
main aims in this policy was to promote the
participation and decentralise civil organizations
for cultural purposes, but also to make local
governments to be involved in the cultural
development through the Regional Development
Plans for the short and medium term (CNCA,
2005). Along with the institutional framework
implemented by the government, there are two
important factors generated from the economic
field in the thriving of cultural manifestations in
Chile during the last 10 years. The first is the law
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number 19.985 about donations for cultural
purposes broadly known as Leyv Valdesvi, which
allows tax exemptions to those companies that
make donations to cultural organizations. This
bill allows companies to deduct up to 50% of the
money donated from its annual tax declaration
(CNCA and Biblioteca del Congreso Nacionalvii
,
2009). The second one is the so called FNDR
2%
viii
, which is the percentage of each regional
budgetix
possible to be invested in cultural
activities and organizationsx. In both cases, only
nonprofit organizations and city governments are
allowed to apply for this funds. As possible to see
in these both legal frameworks, Chilean legal and
tax systems tend to favour funding of nonprofit
organizations in the arts and culture development
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recognising their value as legitimate expressions
of civil society.
However, in spite of their political, historical and
social importance in Chile, never was undertaken
a systematic effort to research the actual outreach
of this sector in economy. To remedy this
situation, in 2006, the John Hopkins University
developed a massive research on the economic
impact of nonprofit sector in Chile as part of its
project Centre for Civil Society Studies, which
meant the first effort and the biggest one so far to
asses and understand these organizations in the
country. Naturally the study was not only focused
on cultural or artistic entities, but the global
context, nevertheless it allows to explain the
outreach of the civil society activities, that
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includes them. In a first level, the study
concluded that in Chile, the main source of
funding in the third sector is the state, which in
different waysxi, provides the 45% of all its
incomes (Irrarazabal et al, 2006). According to
the research this level surpasses those of
developing countries and reaches those seen in
Western Europe (Irrarazabal et al, 2006). In
economical terms, the nonprofit sector in Chile
explains a 1.5% in the GDP and represent,
considering paid and unpaid workers, a 4.9% of
labour which in absolute terms meant 303.000
people working in this sector. From the cultural
perspective, 16% of nonprofit labour is employed
in culture and leisure sector. In terms of funding,
this sector get a 24% from public funding, a 12%
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from private philanthropy, but mainly via own
resources (64%) which can be explained to a
certain extent through the selling of goods and
services, which are also exempt of taxes, so they
are considerably cheaper than commercial goods.
This figures do not seem to support the idea of a
close relations between arts-culture and
nonprofit, however in contrast to other countries,
the Chilean case shows an oversized Education
sector, due to a legal scheme that forces to all
educational organizations to be nonprofit, so the
figures looks relatively small in comparison to
other regions.
On the other hand, the legal system in Chile has a
series of regulations to establish a nonprofit
organization, which tend to become gradually
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more complex in the way they are organized
taking into account, for instance, the patrimony
to be administered. Nonprofits, in the Chilean
context, are legal entities registered in the
Ministry of Justice or in Town Councils and
under this umbrella co-exists a series of
organizations of different kind, for instance, trade
unions, sports clubs, co-operatives, foundations,
corporations and community-based
organizations. Due to a series of legal constraints
or the nature of these organizations, those
focused on cultural or art activities are, in
general, corporations, foundations and
community-based organisations. In the first cases
we are talking about legal entities which
existence is granted by a Presidential decree by
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means of the Ministry of Justicexii
. In spite of this
commonalty, foundations are aimed to administer
and to develop a patrimony and, in contrast,
corporations are devoted to develop an end which
in called an ideal. Administratively, foundations
require a bigger patrimony than that required to
corporations to be created. Despite both of them
are constituted by a directory and a general
assembly, the big difference is that in
foundations, the founders name the directory
which is an autonomous body to the assembly,
whereas in corporations, the directory is named
by the assembly. The case of community-based
organisations is the simplest one, because they
are a sort of corporations established and
identified on a territory and that are constituted
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voluntarily by a minimum of fifteen people and
which legal existence is granted by the town
councilxiii
. Due to its simplicity and inexpensive
process of creation, this type of entity is preferred
by citizens who share common interests, because
it does not require the representation of a lawyer,
like the others types mentioned in order to be
created. Nevertheless, in general, both
foundations and corporations are more prepared
to face major projects than those possible to be
faced by community-based organizations, due to
the same complexities previously stated for their
creation, which tend to make them being
considered as more professional environments.
But regardless these considerations and according
to the law, all these organisation due to their
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nature and the non distribution constraints are
due to reinvest their potential earnings, product
from their activities, services or goods into the
organisation in order to achieve their goals. In the
Chilean cultural sector one can see that those
policies tending to foster social participation have
been to a great extent successful, if one make an
initial review on the main cultural organisations
in Chile one can observe that in a vast majority
they are organised under a non-profit form or
sheltered under an umbrella organisation which
is, in general, non-profit. As defined in the
second chapter, to classify organisation between
for-profit and non-profit organisations, in this
case, I will use the structural-operational
definition given by Salamon and Anheier
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regarding those 5 characteristics suitable to be
found in them (Salamon and Anheier, 1997).
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Table 1: Cultural organizations in
Chilexiv
Organization Sector Type
Santiago a mil Performing arts Foundation
Balmaceda Joven Music Corporation
Museo Interactivo Mirador Museum Foundation
Artesanias de Chile Craft Foundation
Teatro Municipal de Santiago Opera/ ballet CorporationOrquestas Juveniles de Chile Classical music Foundation
Centro Cultural Palacio La
MonedaMuseum Foundation
Fundacion Pablo Neruda Museum/Heritage Foundation
Fundacion Violeta Parra Heritage Foundation
Fundacion Andes Education Foundation
Fundacion Vicente Huidobro Heritage Foundation
Centro Cultural EstacionMapocho
Venue Corporation
Cine Arte Alameda Film Corporation
Fundacion La Fuente Reading Promotion Foundation
Centro Cultural Matucana 100Visual arts / Performing
artsCorporation
Centro Nacional del Patrimonio
FotograficoPhotography Corporation
Fundacion Chilena de la Imágenes
en MovimientoFilm/Heritage Foundation
Sociedad Nacional de BellasArtes
Painting Foundation
Corporacion Cultural MetroArte Culture Corporation
Fundacion Telefonica Culture/ Education Foundation
Fundacion Amigos de las Iglesias
de ChiloeArchitecture/Heritage Foundation
Source: Organizations websites
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In these cases, one can see that all these entities
are constituted and organized as a nonprofit
organization and it is also interesting to consider
that among them the preferred forms are
corporations and foundations. After reviewing
the information provided by these entities one
can express that mainly this situation is, in
general, produced due to the institutional
background of these nonprofits. The most of
them are linked to for-profit companies (i.e.
Metroarte – Underground company, Telefonica
Foundation - telecommunications company),
some others are linked to individual or legal heirs
(such as Pablo Neruda, Violeta Parra, Vicente
Huidobro), others to the government or political
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institutions (i.e. Artesanias de Chile, Palacio La
Moneda, Museo Interactivo Mirador). They all
share that they are closed entities with close links
with these parent entities. So in a way they are
not open to share the control of these
organizations with outsiders and even to lose
control over its nonprofit ‘branches’.
In this sense it is interesting to review another
case, which is at the same time, similar and
different. One of the cultural activities that has
showed a dramatic development and growth is
that related to the film festivals in the last 20 and
10 years. In 1990 in Chile there were no films
festival in the countryxv
, in 2000 about 10 films
festivals were produced in mainly in three
citiesxvi
. However during the last 10 years this
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number grew until reach more than 28 events in
the whole country, with at least one film event in
every region, in a way to democratise the access
to these cultural goods, which is coherent with
the policies implemented in the country during
the last five years (CNCA, 2005). In this sense,
this case is interesting to be analysed, because
film festivals are activities, as other cultural
events, that requires numerous teams which
develop several activities in different fields at the
same time. The activities involved in this kind of
productions include programming and curatorial
work, publishing and editing, fundraising,
logistics, print traffic, media and PR, executive
production and so on. So in this sense, the non
profit organizational form can eventually be
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Guillermo Olivares 34
suitable to be adopted by large groups of
individuals who share their interest for the film
industry. To know about this industry in the
context of nonprofit organizations, it is
interesting to start a small research on the
organizational form used by all film festivals
based in Chile which have a webpage and give
organizational information about them.
The following table shows the 28 most important
film festivals and film events in Chile, which
websites were surveyed to obtain information
regarding the organizational structure, and in
which one can observe a sustained trend in
general under what kind of organization these
activities are developed and organized.
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Guillermo Olivares 35
Table 2 : Film festivals by
type of organizationxvii
Festival Type of
organization
Organizer
16 Valdivia International
Film Festival
Nonprofit Centro Cultural de
Promocion
Cinematografica de
ValdiviaDIFF - 8th Digital
International Film Festival
Nonprofit Centro Cultural Quinta en
Movimiento
2nd Festival de Cine de la
Patagonia
Nonprofit Agrupación Patagonia
Visual
2nd Rapa Nui Film For-profit Productora Audiovisual
Pueblo Cine
5th Festival de Cine de las
Ideas
Nonprofit Centro Cultural Cineideas
SANFIC 6 Nonprofit Fundación CorpArtes4th Festival de Cine Social
de los Derechos Humanos
Nonprofit Centro Cultural Colectivo
Cine forum de Valparaíso
9th Festival Cine Las
Condes
Nonprofit CorpArtes
8th Festival Cine Bajo lasEstrellas
Public Municipalidad de Vitacura,Celfin Capital y El
Mercurio
21st Festival Internacional
de Cine de Vina del Mar
Public Municipalidad de Vina del
Mar 2nd Festival Internacional
de Cine Tarapacá
Public Siete Magias
34th Festival Cine UC Nonprofit Pontificia Universidad
Católica de Chile
10th Festival Internacional
de Cine de Lebu
Nonprofit Agrupación Cultural
Festival de Cine Caverna
Benavidades
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Guillermo Olivares 36
4th Festival internacional
de Cine Región de
Coquimbo, “El encuentro
de las Civilizaciones”
Nonprofit Kosmos Cultural - Berne
Piñones
6th Festival Internacional
de Cine de Rengo
Public Municipalidad de Rengo
9th Muestra Cine de la
Patagonia
Public Municipalidad de Puerto
atales
3rd Muestra de Cine y
Creaciones Audiovisuales
de Atacama
Public Municipalidad de Caldera
2nd Festival Internacional
de Cine Independiente de
Iquique (FICIIQQ)
Public El Tejón Films
10th Festival de Cine de
Ovalle
Nonprofit Agrupacion del Amigos del
Arte de Ovalle
18th Festival Chileno
Internacional del
Cortometraje- FESANCOR
Nonprofit Corporación Cultural Arcos
13th FIDOCS Nonprofit CULDOC CorporaciónCultural Documental
4th Festival de Cine SocialAntisocial de La Pintana
FECISO
Nonprofit Several community-basedorganizations
6th Festival de Cine
Documental Musical: IN-
EDIT
For-profit Catchil Producciones
6th Chilereality Nonprofit Centro Cultural Chilereality
13th Festival Internacionalde Cine de Valparaiso Nonprofit Corporación Cultural MaríaGraham - Fundación Duoc
UC
9th Bienal de Video y
uevos Medios de Santiago
Nonprofit Corporación Chilena de
Video
2nd Festival de Cine
Lésbico, Gay, Bisexual y
Transexual (LGBT) de
Chile
Nonprofit Movimiento de Integración
Liberación Homosexual
(MOVILH)
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Guillermo Olivares 37
12th Festival de Cine
Europeo UC
Nonprofit Centro de Extensión de la
Universidad Católica de
Chile
Source : Consejo Nacional de la Cultura y las Artes /
Organizations Websites
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pages above that make this kind of organizations
more suitable in the Chilean context. I mean as
activities collective in nature, film festivals are
the propitious field to the development of
nonprofit organizations in the cultural sector,
mainly because usually they emerge from keen
and active communities or students societies in
film or communications. In this sense, it looks
interesting to note that a majority of these events
are organized under the form of community-
based entities, which means a contrasting
difference in comparison to the other entities
shown in the table one, which are basically
corporations and foundations with more
formalities perhaps due to its origin and nature.
As community-based organizations are the
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simplest form to organize nonprofits in Chile,
groups of interests in the country tend to use it as
a platform for fundraising and also for production
purposes. As stated before, following the policies
implemented by the government in order to foster
social participation through this kind of entities,
these events tend to democratise the access to
cultural goods that in other circumstances would
not reached every administrative zone in the
country. It is evident that in early 1990s, the film
activity was focused in three cities in the country
and now, almost 20 years after, this activities
have reached all the country.
It can also be argued that in the cultural field,
specifically in that of film festivals, the
government assumes a kind of variation in the
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policies tending to support politically and
economically this growth would achieve the
flourishing that Chile has testifies during these
years. In the Chilean context as in the
international level, the use of the nonprofit sector
as form of organization in the culture sector is a
common practice. Nevertheless, the reason for
that are probably different in both cases. In that
sense, there is a trend in Chilean society given
historically since the country was ruled by the
Spanish crown to put certain social issues on
private hands on a voluntary basis, by then
specially on ecclesiastical and aristocratic
organizations. This trend was reinforced during
the independence struggle and directly
afterwards. The new government was completely
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devoted to achieve the political consolidation of
the country and to give a structure to the new
independent state, so the provision of several
public goods were responsibility of private
charities. This process gave a new step during the
first half of the twentieth century, when in the
1930s the republican stability reached a
threshold, specifically in the provision of public
goods by a protective state, that allowed the third
sector to search different fields of action and use
new prerogatives which were made laws. The
democratic fracture in early 1970s by the military
coup gave the civil society a twist in its concerns
and during those years the focus was the defence
of human rights. Nevertheless since the first
efforts on this specific subject, the experiences
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lived in those years meant an important boost to
the work made by nonprofit entities and allowed
the consolidation of this organizational form as
the preferred by civil society. As a result, since
the inauguration of the democratic
administrations, from 1990 on, the government
progressively, based on the decisive role played
by these organizations in the recovery of
democracy, started a process aimed to foster,
strengthen and support the third sector and
devoted to give the civil society political, social
and economic attributions in order the empower
it as a main character in the consolidation of
democracy. In fact, currently, the legal
framework in Chile favours this organizational
form, which is specially significant in the culture
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and art sector due to a series of funding
constraints. In this sense for instance, the tax
incentives to private donations are only allowed
when given to nonprofit organizations and also in
the regional budgets only this type of entities are
entitled to receive public funds. Despite the
annual application for public funds granted by
the Consejo Nacional de la Cultura y las Artesxviii
is not discriminatory to individuals or for-profit
companies, it is usual that nonprofit
organizations receive a kind of special status of
preferencesxix
, which is basically based on the
non distribution constraint, internationally
recognised as a key factor of interest in this
group of enterprises. As I wrote above, some of
the international economic theoretical approaches
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possible to be applied in this case are the public
good theory, which can be expressed in a first
stage as a “compulsory” task for civil society in
different degree depending on the democratic
development, up to 2000s when the government
left – in a conscious way - to a certain extent
areas to the action of civil society as base of the
democratic consolidation and implementing a
framework to foster the creation of this kind of
organizations allowing them to thrive. So in a
sense, and reviewing some of the approaches
given in the first chapters one can express that the
government has opted voluntarily, specially in
the cultural field, to give civil society the task of
fill the provision of certain public goods, such as
culture, through a series of legal tools intended to
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facilitate its work. Even more, historically the
state in Chile have tended to rest in the so called
Public Goods Theory by means of different
entities throughout its history and nowadays the
government have created a legal framework to
consolidate this historic trend, based on the
importance given by the government to the
participation of citizens in public and social life,
but also in a recognition that there are social
bodies which have a more appropriate know-how
to develop this enterprises.
A second theoretical approach we have talked
before and now it is interesting to analyse it
based on the given evidence is the so called
Impure Altruism, which can be analysed from the
point of view of a series of regulations tending to
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stimulate commercial companies to donate to
cultural nonprofits based on tax incentives.
Actually, major companies has established
departments under the general label of corporate
social responsibility, which in general are internal
project-based entities with a budget given by
those legal tax incentives. In the Chilean context,
this entities have tended to use the tax
exemptions established by the government
mainly as a PR and marketing tool, because those
companies normally demand to be mentioned by
nonprofits and in some cases with technical
specifications. in the case of film festivals, there
is an interesting approach because these
corporate donors tend to use the media of these
events to market their donations, specially
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because it is usual that film events have links
with media, in contrast to other cultural activities.
In summary, trying to answer the question, the
author can say that in the Chilean context,
cultural organizations have tended to adopt
nonprofits as organizational form based on
historical, social, political and economic reasons.
Those historical and social approaches are
strongly linked with the national history and
those economical have a political background,
but in this case can be explained using
international theories. So the understanding of
these entities in this context can be reached using
both national and international perspectives.
Nevertheless, it can be stated that in Chile in
general, cultural entities, have opted to use the
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nonprofit form, and specifically, film festivals,
have chosen community-based organizations to
undertake their projects, so in this way they can
offer donors a legal entity suitable to be
supported, but also can develop themselves in a
flexible way.
iFor instance, the Society of Jesus was responsible for
education in Chile during the colony under the Spanish
crown.ii
The Civil Code, published in 1855, gave the first
regulations for nonprofit civil contracts. (Codigo Civil, title33)iii
Presidential palace in Chileiv
This committee was formed by leaders of the Catholic,Methodist, Baptist, Greek Orthodox and Jewish churches
(Fruhling, 1986).v
Ley is the Spanish word for Bill or Act.vi
The bill was named after the Senator Gabriel Valdes, a prominent politician and diplomatic who was its main
promoter.viiNational Congress Library
viiiFNDR means National Fund for Regional Development,
which is the centrally-assigned budget for every one of the
15 regions in Chile.ix
Regional budgets are assigned by law a year in advanceand it is approved by the National Congressx
This allowance is established by the bill which defines the
fiscal budget every year. In 2010, the bill is the Bill 20.407
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xi
State funding can be given by direct transfer, project- based public bids, subsidies and so on.xii
Legal entities are regulated by a series of legal
regulations such as Civil Code in its Title 33, Decree-Law110 (1979) and Decree-Law 1183 (1975), and its further
modification by Decree-Law 1382 (1976)xiii
The legal framework for the creation of community-
based organisations is given by the Bill number 19418
(1995)xiv
These organization are among the main entities in Chile, but this is not an exhaustive survey, This table can be
considered as a list of examples.xv
The oldest film festival in Chile is the Festival de Cine
de Vina del Mar, which was founded in 1967. but was
closed after the coup. The festival was reopened during the
1990s.xvi
The cities which started to develop their own filmfestival were Santiago (the capital and main city), the
metropolitan area formed by Vina-Valparaiso and Valdiviaxvii On April 14, 2010 using as reference a annual calendar
provided online by the Consejo Nacional de la Cultura y
las Artes, the websites of these festivals were surveyed in
order to provide information to complete the Table 2 “Film
Festival by type of organizations" as seen above.
Calendar available at:
http://www.consejodelacultura.cl/portal/galeria/text/text19
29.pdf xviii
The Consejo Nacional de la Cultura y las Artes
(National Council for Culture and the Arts) is the Chileanequivalent to a Ministry of Culture.xix
For-profit companies have other sources of funding andsupport which have been established by national economic
bodies tending to foster the creative industries in the
country.