Foundations Offer Operating Support to Help Arts Groups in Tough Times

Theatre in the Square, a nonprofit playhouse in Marietta, Ga., has weathered its share of economic downturns since its founding in 1982. But the company’s managing director, Raye Varney, says the current economic downturn has decimated her charity’s fund-raising efforts, which rely heavily on the philanthropy of housing developers and financial institutions. “Over a year and a half we lost 75 percent of our corporate support,” she says. “It was shocking.”

The group ended its fiscal 2008 in the red, a first for the charity; last year’s books also closed with a deficit.

That the curtain still rises regularly in Marietta is thanks in part to the Atlanta Arts Recovery Initiative, a three-year, $2.5-million grant-making program organized by the Metropolitan Atlanta Arts Fund, a joint project of the Community Foundation for Greater Atlanta and the Metro Atlanta Chamber of Commerce. Its focus: helping small and mid-sized arts organizations stay afloat. Ms. Varney’s theater got $150,000 in general operating grants through the program, $75,000 last spring and $75,000 this year.

“In this economy, when arts organizations are bleeding out, to give general operating support is just the most useful thing they could have done,” says Ms. Varney. “To take that money and make payroll is critical. No one else is giving you money that pays things like light bills, and that’s what makes this money so important.”

Local arts groups certainly haven’t been getting much of that kind of support from the state government. Last year, the National Assembly of State Arts Agencies ranked Georgia 44th among states in per-capita arts spending. In April, the state’s legislatures eliminated money for the Georgia Council for the Arts, the state’s arts grant-making body, prompting artists and concerned citizens to march on the capital in protest. Some money was eventually restored, though at a level that’s down 80 percent since 2008.

Unrestricted Grants

Lisa Cremin, director of the Metropolitan Atlanta Arts Fund, says the roots of the program predate the recession, when the fund had started to raise money for an endowment.

After the economy soured, the fund-raising focus shifted and the goal became to double the community foundation’s annual grant making to arts groups—and to offer no-strings-attached grants that groups could use to plug financial gaps as they saw fit. Last year, nine donors, including the Robert W. Woodruff Foundation and the Zeist Foundation, both in Atlanta, and Bank of America, in Charlotte, N.C., gave $2.5-million in total.

“For certain donors it may be more satisfying to fund a program or a project, but happily all of the donors involved have respected and supported this strategy of general operating support,” Ms. Cremin says. “When funds are unrestricted, it allows organizations to innovate and change.”

In addition to increased grant making, the initiative also provides $150,000 for the fund’s Nonprofit Toolbox program, which provides charities with professional consultants to assist with strategic planning, board development, and other organizational needs. The money has also bolstered the Arts Loan Fund program, which provides short-term loans to arts groups, particularly those that may have lost access to traditional lines of credit.

Ms. Cremin stresses that the Arts Recovery Initiative’s grant application process is rigorous, and grantees must have strong business plans in place and have already enacted sound cost-cutting measures.

“These grants were not focused on organizations that were failing, but rather groups providing a lot of artistic vitality but also clearly having a need,” she says. “Because we work so intimately with these organizations, we can understand the level of their issues and can do very close due diligence.”

‘Relax a Little Bit’

“The Arts Fund offered the ideal vehicle for us to invest in immediate needs of small to mid-sized arts organizations in our community that were struggling to adjust to a new economic environment,” wrote P. Russell Hardin, president of the Robert W. Woodruff Foundation, in an e-mail message to The Chronicle. Woodruff, whose arts grant making is usually focused on larger organizations, provided $1.5-million to the Atlanta Arts Recovery Initiative.

Atlanta Celebrates Photography, a charity that runs photography classes, lectures, and shows with an annual budget below $250,000, has received grants of $20,000 and $25,000 through the initiative.

“We were able to continue operating without cutting programs,” says Amy Miller, the group’s executive director. “Between steps we were taking to be fiscally responsible and proactive, and the grants, we were able to relax a little bit.”

“We often have a hard time getting money from foundations because they always want to give money to capital campaigns,” Ms. Miller adds. “I hope the Arts Fund is enlightening other foundations to the importance of operating support for arts organizations.”