Arts Groups Face Financial Instability Despite Expected Influx of Funds

Citing their big gains in the stock market, two out of three grant makers who give a significant portion of their funds to arts groups say they expect to increase the amount of money they provide to such organizations over the next three years, according to a new Foundation Center report.

The grant makers also predicted that new philanthropists — drawn from the ranks of entrepreneurs and others who also have profited from the healthy economy in recent years — would join them in supporting the arts.

But despite a possible influx of new money, arts groups may still find themselves in competition for cash because the number of arts groups in the nation is growing, the report noted. Moreover, the foundation officers cautioned that many arts groups still struggle to be on stable financial ground from year to year and suggested that grant makers would support efforts to train arts leaders in finance, management, and organizational development.

The report, “Arts Funding 2000,” was published by the Foundation Center in partnership with Grantmakers in the Arts. The Foundation Center interviewed 35 representatives of foundations and corporate-giving programs about trends in giving to the arts; all but four of them give at least 10 per cent of their grants annually to cultural organizations, and many give a bigger share than that.

The Foundation Center report also took note of the following trends:

Narrowing of focus. The majority of the grant makers interviewed said that they are limiting the types of issues or disciplines they support, rather than supporting the arts more broadly.

For example, the John S. and James L. Knight Foundation, in Miami, is supporting symphony orchestras in an effort to generate interest among new audiences, while the AT&T Foundation, in New York, is underwriting the development of new plays.

Collaborative programs. Many of the grant makers said they are awarding more grants that blend two or more elements of their philanthropy’s missions. For example, the Eugene and Agnes E. Meyer Foundation, in Washington, is bringing together its arts and employment programs to explore ways to promote the arts as a part of local tourism campaigns and to consider the role of the arts in economic development.

Multiple-year grants. The arts grant makers said it is becoming more common to give larger, longer-term grants to groups over a period of years instead of making small, short-term grants.

Focus on results. The program officers said formal evaluations of grantees are becoming more common as foundation trustees increasingly ask them to show results. Some report that they are struggling to develop appropriate ways to measure the effectiveness of arts grants.

The new study was conducted as a follow-up to the 1998 Foundation Center report “Arts Funding: An Update on Foundation Trends” (The Chronicle, December 17, 1998), which studied trends in arts grant making through 1996 and included more quantitative data than is contained in the new report. The Foundation Center plans to issue one similar to the 1998 report next year.

Nancy Sasser, president of National Arts Stabilization, a Baltimore group that advises arts groups on finance and management issues, said that if grant makers provided longer-term grants while also limiting their focus, then that could lead to a bonanza for some groups — while others might face a harder time winning grants.

At the same time, she added, more and more groups are seeking private grants because of tight government support for the arts. The combination of those forces, she said, means that “arts organizations are going to see competitive pressures increase” in fund raising.

Copies of the report are available from the Foundation Center, Department NW54, 79 Fifth Avenue, New York 10003-3076; (800) 424-9836; http://fdncenter.org. The price is $14.95 per copy plus $4.50 shipping for the first copy, and $2.50 for each additional copy. Discounts are available for multiple-copy orders. The order code is ART4.