Dollars and Sense: Arts Organizations Get Creative to Keep Funding 

Local arts organizations are staying connected to people—and funding

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But though many of the grants are awarded annually, TMP has no guarantees that it will receive them from year to year, which means the dance company cannot rely on grants when budgeting. TMP has two people dedicated to doing little more than writing and applying for about four grants per week at a cost of about $80,000 per year. They get close to 16 rejections per month. The payoff doesn't always equal the pay out.

TMP rarely receives individual donations from anyone who doesn't have some sort of relationship with a company member. So TMP works at being as forward thinking in its relationship building as it is in its programming--and it takes it just as seriously.

"A lot of arts organizations have gotten lazy because they have had these tried-and-true funders that have supported them for decades," Schert said. "So they stopped being innovative in how they include those people in how they make them a part of what [they] do. Trey [McIntyre] says, 'I want our audience and our donors to feel included. What are all the little ways we can do that?'"

When the company receives a donation in the mail, that donor must be called within 48 hours and thanked, regardless if they've sent $25 or $25,000. Many of those donors will also receive--along with a tax receipt--a hand-written note from McIntyre. The next time that person sits in a TMP audience, he or she will likely feel a strong connection to the company, what it is doing and its success.

"We never sit back and say we deserve this," said Schert. "It's a gift."

Schert said regardless of how successful it is at obtaining individual donations, TMP still has to rely on foundation and government grants, and it very likely always will.

Local government entities, such as the Boise City Department of Arts and History, are just as invested in the prosperity of not-for-profit arts organizations as the organizations themselves. Even as budgets are slashed, the department remains committed to supporting them.

Terri Schorzman, director of the city department, knows that corporate and government funding for arts is down and has seen organizations look to other avenues for operating money. The department and the Mayor's Office, however, have been longtime staunch supporters of the arts, and each year they make $45,000 available to arts organizations as part of a small grant program. In 2010, the mayor granted $105,000 in one-time economic development funds to five of Boise's largest arts and cultural organizations: Ballet Idaho, Basque Museum and Cultural Center, Boise Contemporary Theater, Idaho Shakespeare Festival and Trey McIntyre Project. It was a one-time event because the city seldom has extra money.

"We usually just have our little grant fund [of $45,000]," Schorzman said. "We'll open that up again in June, but everybody is competing for that money."

The city has had its own funding issues but has worked hard to sustain that $45,000 grant fund each year. Any extra money the city has goes back into the general budget whenever possible, although a recent opportunity allowed the city to repurpose $12,000 into about a dozen small performing arts and cultural community events, such as festivals.

In gathering data for a recent survey--the Arts and Economic Prosperity Survey IV--Schorzman's department put together a database of 66 Treasure Valley-based organizations like Boise Art Museum, Alley Repertory Theater, Idaho Shakespeare Festival, Ballet Idaho, Boise Rock School and more--many of whom look to grants for support. If each organization was awarded grants, that $45,000 would be stretched as thin as a sheet of onionskin paper.

Idaho Commission on the Arts is equally committed to supporting not-for-profit arts organizations. For several months, ICA feared the trickle-down effect of huge budget cuts that were forecast on a federal level, specifically from the National Endowment for the Arts. And though ICA Executive Director Michael Faison was prepared for a worst-case scenario, recent news turned out to be good news.

Recently, the House Appropriations Committee released the final budget agreement for the 2011 fiscal year, which was approved by the House and Senate and signed by President Barack Obama. It includes $155 million for the NEA. In 2010 $167.5 million was budgeted but the House had previously approved only $124.4 million for FY 2011. ICA will feel that cut, but Faison said, "It's not catastrophic by any means either for the NEA or for Idaho and [ICA's] ability to provide service."

This year, ICA was able to provide $700,000 in direct grants across the state, an impressive number and one that Faison said ICA was proud to have accomplished. The reason, in part, that it is able to provide those funds is because it pays close attention to the costs associated with writing grants.

"When I [have been] speaking on funder panels--I talked delicately because there are some of them out there that create onerous amounts of paperwork for organizations--but I tell them, 'Transaction costs matter. Pay attention to transaction costs,'" Faison said. "Make sure the cost for applying for and receiving money makes sense in terms of the actual money [arts organizations] are getting."

In simple terms, Faison said he tells the groups that are awarding grants in a time when funding is becoming scarcer that if "they can't provide more, make what they do provide more valuable."

Grant applications often require a lengthy narrative explaining an organization's direction (upcoming programming, for example), documentation showing what money has come in and where it has gone, letters of recommendation, audio or video components and more. And remember, grants are not always awarded annually. An organization has to reapply, in the same arduous manner and at the same cost, each year. Knowing that the costs associated with those applications--the transaction costs--cut deeply into the funds awarded, ICA moved to a three-year grant cycle and cut its transaction costs by a whopping 75 percent in the last couple of years. It wasn't that tough to do.

"For all of those organizations for which there is a known quantity, and they deliver ongoing services [that includes performances] to people year after year, we don't need big narratives about future plans. All we need is to review their past performance," Faison said. "As a result, there's really no application involved, only using the final report from their last time. Right there you cut it in half. Then, now that we have a three-year cycle, it gets even easier."

ICA reviews applications each year, and checks in with each organization, which, in turn, files a short report. That's about it. And unlike other entities like ICA around the country that give funds for general operating expenses, ICA bases its funding on services.

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