Inside Philanthropy: “Remake the Model.” Philanthropy and the Arts After Coronavirus
As arts funders navigate the opening stages of what will be a prolonged effort to stem the impact of COVID-19, many are already looking beyond the pandemic.
As A Blade of Grass Executive Director Deborah Fisher told me, “In the long term, I think that there are much bigger questions about how arts economies function and how they are valued. This is something that philanthropy and arts institutions can and should meaningfully address together.”
What should this conversation look like?
I recently broached this question to a cross-section of foundations, nonprofits and arts advocates. New York Foundation for the Arts executive director Michael L. Royce summed up respondent sentiment best: “More government support, and funds from institutional funders that support general operating expenses or endowments or cash reserves have always been needed. The crisis only underscores how vulnerable our cultural infrastructure really is.”
Respondents laid out a broader set of action items to ensure that the sector emerges stronger and more sustainable once the crisis abates.
1. Build a Stronger Streaming Presence
First off, it’s important to state the obvious: Everyone is treading on unfamiliar ground, here. While some funders have referenced lessons learned in the aftermath of 9/11 and the Great Recession, those two events aren’t particularly strong analogs, given the breadth of the current crisis, which, according to Americans for the Arts, has forced 91 percent of responding arts organizations to cancel one or more events.
William and Flora Hewlett Foundation program director Emiko Ono picked up on this idea, telling me, “The need for greater financial resilience is the most obvious” imperative once coronavirus recedes. This mandate has profound long-term programming implications for performing arts organizations looking to expand their online footprint.
Performing arts organizations with a strong online presence “will see now, it is a priority, and others will realize we need to get in this game or we vanish for six months,” Doug Noonan, a professor of public and environmental affairs at Indiana University-Purdue University Indianapolis, told the Washington Post’s Philip Kennicott.
“One thing that will be certain will be a concretized understanding of how important it is for organizations to support their own constant upgrading and maintenance of technology so that programming and services can be implemented when in-person facilitation may not suffice,” NYFA’s Royce said.
Similarly, “We are seeing operas and ballets streaming into homes and museum collections from around the world now available to a wider audience with lower barriers to entry. This is creating an entirely new population to whom artists and organizations can make their case for support,” said Melissa Cowley Wolf and Sean McManus, whose advisory firm M+D’s Arts Funders Forum (AFF) helps arts organizations engage younger patrons.
Funders focused on accessibility and engagement clearly have a role to play in helping organizations roll out an online presence that remains in place after the crisis recedes, especially if it serves as a reliable income stream. “Digital storytelling, featuring donors and innovative ways of giving, can be highlighted to convert these new audiences into donors, engaging an entirely new sector of the public,” Wolf and McManus said.
2. Support Virtual Operations
COVID-19 has forced organizations to abandon physical office spaces. Many are finding that their operations haven’t been significantly disrupted. Will organizations still need an expensive pre-coronavirus physical presence with a lavish waiting area, a water delivery service, conference rooms, and piles of utility bills once the crisis passes? Some may not.
Elizabeth “Liza” Yntema, whose nonprofit, Dance Data Project (DDP), highlights persistent gender and funding inequalities in the dance space, embraced a leaner and more remote model long before coronavirus hit. Funders weren’t always supportive. “They don’t get it,” she told me. “Over and over, I encounter funders and foundation executives who simply cannot process how much we get done on such a small budget.”
“These consultants, foundation program officers, and development staff have clearly been taught, or indoctrinated, that an NFP should look, smell and act a certain way, which might have been spot-on in 1938, or perhaps even 1999, but is holding not-for-profits back in terms of survivability,” said Yntema, who, it should be noted, is also a prolific donor in her own right.
COVID-19 may force funders to reconsider their resistance to support “lean” operations without what Yntema calls “glorious, large offices with imposing lobbies.”
Of course, respondents acknowledged that not all organizations can afford to move their operations online. Some, like Hewlett’s Ono, called for the establishment of dedicated funds to support “large portions of the arts workforce without safety nets.” Similarly, M+D’s Wolf and McManus said the current crisis exposed “a lack of a safety net from the private sector.”
3. Guide Efforts to Better Articulate Impact
A Blade of Grass’ Fisher noted that the coronavirus crisis has revealed deeply ingrained tensions within the arts nonprofit business model.
Unlike other nonprofits, “the business model for an average arts nonprofit is more shaky because it has a lot of cognitive dissonance embedded in it,” she said. On one hand, “we simultaneously need substantial support from individual donors, who need things like social capital, or to increase the value of their collections.” This underscores the inconvenient truth that donors don’t always operate out of pure, unadulterated altruism.
Organizations could live with this reality if not for the fact that they also need “support from foundations, who want to base funding decisions on social or civic value of what we do.” These competing motivations create “an exhausting feedback loop of escalating expectations from donors and diminishing trust from foundations, even in the best of times,” Fisher said.
How can organizations mitigate these conflicting tensions? “I think the first step,” she said, “is for arts leaders to get much more clear about what art is doing for their communities and how its value and impact should be measured. And program officers and directors should step up and start advocating for increases in support that are driven by the value and impact the arts are providing.” (I spoke with Fisher at length about this very issue earlier this year.)
4. Double-down on Advocacy
In a similar vein, funders now have an opportunity to remedy what Hewlett’s Ono calls a “lack of advocacy capacity” during the crisis and while shaping relief efforts.
“Above all, communicating the value of these organizations is paramount,” said Kate Levin, head of Bloomberg Philanthropies’ Arts program. “In New York, the new Response and Impact Fund is an effort to provide some speedy financial assistance. But it’s also a significant acknowledgment by a consortium of donors that cultural organizations are essential to the city’s identity, resilience and future dynamism.”
“Right now, we are seeing a demand for the arts like never before: Individually and collectively, societies around the globe are expressing themselves through art, yearning for creative expression, using the arts to heal, and understand this complicated moment,” said M+D’s Wolf and McManus. “Committed arts donors and entities alike should leverage this shift in attitude, becoming spokespeople for the arts. Out of this moment, we may find the most captive audience the arts have had in this century.”
Funders can’t do this alone, however. “In a world in which arts institutions and foundation folks collaborate on the social value of arts, the government needs to be a substantial collaborator,” said A Blade of Grass’ Fisher. Her comments came around the same time that museum leaders wrote to congressional leaders requesting Congress allocate at least $4 billion to nonprofit museums that are losing, on average, at least $33 million a day during the crisis.
Around the same time, Americans for the Arts rolled out a Coronavirus Resource and Response Center, and called on Congress to include the sector in federal stimulus funds. “The nonprofit arts sector is a $166 billion industry, and it is suffering,” said Americans for the Arts President and CEO Robert L. Lynch in a statement.
5. Recruit New Advocates
A post-coronavirus arts sector that enjoys more robust advocacy from funders and more government support would clearly be an improvement over the pre-virus environment—but it still won’t be enough. Respondents were unanimous in their belief that organizations and funders need to expand the donor base collaboratively.
Americans for the Arts’ Lynch said the financial fallout from the crisis “points out a severe weakness in the current nonprofit art finance model that has become highly dependent on earned income such as ticket sales, which has grown dramatically, and now represents about 60 percent of the income of aggregated budgets of nonprofit arts organizations (the percentage differs by sector, region, size, etc.).”
“Another thing that I believe will come out of this is how important agility and the ability to pivot is when it comes to sustaining any operation that relies on the public for support, as those that can’t will not survive,” said NYFA’s Royce.
M+D’s Wolf and MacManus saw donors step up during the Great Recession, especially for organizations delivering basic/essential needs. “However, since then, we've seen the trend of more money being donated, but fewer people donating it. Both of these things are hazardous for the arts sector: The general public does not consider arts a ‘must-have,’ but a ‘nice to have.’”
In order to address what Wolf and MacManus called a pre-coronavirus “crisis of relevance,” organizations need to “collectively remake the model into one that better engages next-generation donors. It is these donors that are yearning to redefine our system, and it can be remade in their image.”
The AFF research study reported that three out of four art funders believe “collaboration and partnerships” and “new funding vehicles” will have the most significant impact on increasing funding for the arts. Wolf and McManus pointed to the VIA Art Fund as a particularly innovative philanthropic model that “engages a wider audience, includes direct investment into artist and organizational initiatives, and allows donors to better influence impact.”
Similarly, “the emerging class of donors views cultural philanthropy through the lens of social justice,” they said. “Donors have the ability to more equitably shape the funding and arts landscapes of cities across the country. Saving the local economies and ‘thinking locally’ has never seemed more relevant.”
6. Solve the Inequity Dilemma
Many respondents echoed pre-coronoavirus calls for foundations to pivot to greater equity in their arts and culture grantmaking.
“We all make decisions about how the arts are funded, talked about, and held in the collective imagination, that either tell a story about its civic value—or value for all of us—or a story about who’s in and who’s out,” A Blade of Grass’ Fisher said. “When we resolve that inequity, I think we are going to create a much more robust arts sector.” Fisher spoke with me at greater length about how funders can remediate inequities across the arts sector in early March. Click here for the full piece.
Americans for the Arts’ Lynch also implores funders to look beyond the usual grantee suspects. “The philanthropic and contributed income sources have simply not kept up in giving, especially for small and midsize organizations, as the nonprofit arts sector has grown over recent years to some 120,000 arts organizations,” he said.
“The questions many of us are asking include how to streamline access to support, to centralize or share data collection on impacts, and to avoid duplication of effort whenever possible,” said Kay Takeda, deputy director, artist programs, Joan Mitchell Foundation. “This is a small part of the answer to how we can ensure equity in terms of who is accessing resources and how they are being distributed. In times of urgency, we can’t lean on existing outreach and review processes that may be insufficient in creating equal access to resources. We have to be more expansive in our own approaches.”
7. Loosen Up
As noted, funders have streamlined grant requirements, revisited project expectations, and simplified reporting and renewal procedures in response to COVID-19. Most notably, many embraced general operating support as a short-term financial lifeline to grantees. Respondents expressed hope that this support will remain in place.
“General operating funding is the most flexible form of funding, and puts the organization in control of how it gets spent,” said Cate Fox, senior program officer, of the MacArthur Foundation’s Chicago Commitment.
“Funders can also strengthen institutions by funding cash reserves that can be deployed in emergency situations just like the one we are in. We have heard from a number of grantees that MacArthur supported to build a cash reserve, and they have told us it is giving them a little breathing room.”
Joan Mitchell Foundation’s Takeda expressed hope that grantmakers’ response to the crisis will “encourage us as a field to keep some of these practices in place as part of the way we do business.”
“Funding for individual artists isn’t necessarily being adjusted this way, however,” Takeda noted. “Outside of project funding, many grants to individual artists are one-time awards. They don’t renew, which keeps artists in a year-to-year budgeting mode and a constant cycle of applications. Very few funders commit to individual artists on a multi-year basis. Now might be a good time to consider why not.”
Creative Capital is one funder that transitioned to an annual funding cycle for artists prior to COVID-19. “When we’ve made it through this crisis,” President Suzy Delvalle said, “we’ll all be looking to our artists to help us process what has happened, and where we go—to enlighten us, make us laugh, lift us up. We must be laying the groundwork now to ensure that’s still possible when the time comes.”