Establishing a hierarchy of "merit" - on whatever criteria such selection might be judged in a notably "temperamental" sector - is fraught with difficulty and invites the roar of disapproval from the dispossessed and the overlooked.
There are, however, potential threats to the cultural health of communities in the business of picking winners and losers.
In the wake of the most recent CNZ funding announce- ments, Dunedin and Otago are a case in point.
Even for the most senior and successful arts bodies in New Zealand, the difference between surviving and flourishing lies in the size of the subsidies, grants, and sponsorships they receive.
By its very nature artistic endeavour is a risky business and the certainty of CNZ funding a lifeline.
Late last year, with the announcement of the new Arts Leadership programme, several former top-level arts organisations found themselves hanging by a thread.
Following a radical reassessment of funding priorities in 2010, CNZ reshaped the channels through which it would in future support the performing arts.
Most of the country's premier arts bodies had received the State's largesse through the Recurrently Funded programme which delivered funding at a high level and over extended periods.
This category has been replaced by the Arts Leadership category and comes into effect in 2012.
The Contestable Funding tier, delivering less for shorter periods of time, becomes the Arts Investment Development programme, providing grants for between six months and two years.
Of great import to Dunedin and Otago - with particular regard to its history and heritage as a progenitor of the various arts - is the fate of the Fortune Theatre and the Southern Sinfonia.
Both to date have enjoyed RFO status and received concomitant funding.
But as prefigured earlier in the year, they did not feature among the bodies named in the Arts Leadership category in mid-December.
They were instead short-listed among 10 organisations asked to provide further information to help "assess their fit with the programme", according to CNZ head Stephen Wainwright.
Should they not make a suitably persuasive case and be relegated from the leadership category, the consequences for the Fortune, and the Sinfonia - and indeed for Dunedin as a centre of creativity and culture - will be dire.
They would lead to the loss of talent and infrastructure and, ultimately, a diminishing of the character and nature of Dunedin as a creative hub.
Given the northern weighting of the successful "leadership" organisations, it would be easy to speculate that a bias has been at work.
Of the 22 qualifying bodies thus far named, only two are in the South Island, the Court Theatre and the Physics Room in Christchurch.
This does seem an extraordinary discrepancy - as if "culture" stopped short at Cook Strait, with a couple of refugees setting up shop in the Garden City.
But the final die is not yet cast.
Regardless of what or how the official documentation defines "Arts Leadership", there are hints to be seen of what CNZ may be looking for in the theatre world.
In the lower North Island, for example, Centrepoint Theatre in Palmerston North and Bats Theatre in Wellington have been successful in their bids for leadership roles, while the Wellington Circa Theatre has more work to do to persuade CNZ it is a deserving candidate, as does the Downstage.
Centrepoint and Bats have been at the forefront of staging innovative theatre works and, importantly, "home-grown" drama.
In Dunedin, the Southern Sinfonia can point to having recently premiered a major new work by Dunedin composer Anthony Ritchie, as well as performing a repertoire of the classics to high standards.
At the Fortune, new commercial and artistic management is in place.
The 2011 season's programme, to be released early next month, is eagerly awaited.
However exciting or adventurous it proves to be, if it is not supported by the community at large - by the one vote of confidence that really matters, "bums on seats" - it may all come to nought.
CNZ will not continue to support artistic ventures that do not appear to have a significant audience within the local community.
So while perhaps the South can feel marginalised thus far over the allocations, it must demonstrate over the next year it does value professional theatre and top-quality local orchestral music.
In the well-worn terminology of an altogether different ball game: "use it or lose it".
