Philanthropy Chat: Holly Sidford Describes
a Recent Study of Arts Funders

Charlotte Dion, director of the New York Library of the Foundation Center, sat down with Holly Sidford, consultant, author, and president of Helicon Collaborative. Ms. Sidford discusses the recent report commissioned by Grantmakers in the Arts to document how certain arts funders are responding to today's economic climate. "Vital Signs: Arts Funding in the Current Economy" shows that these 22 funders remain committed to their organizational and individual grantees but are striving to be flexible in their grantmaking approach. Helicon Collaborative created an earlier study on arts funders in the Puget Sound area.

Interview:

Charlotte Dion: As part of our special funding for the arts in October I've asked Holly to discuss an article she wrote recently for Grantmakers in the Arts on how arts grantmakers are responding to the economic crisis. Holly, thank you so much for agreeing to share your findings with us today.

Holly Sidford: It's a great pleasure to be here with you, Charlotte

CD: I'd like to start by having you give us a little background about what Helicon Collaborative does, and how you came to write this article, "Vital Signs: Arts Funding in the Current Economy" for Grantmakers in the Arts.

HS: Helicon Collaborative is a cultural development company, kind of a cross between a consulting company, a think tank and a "do tank." We have offices in Brooklyn and the Bay Area, and we work with a variety of different kinds of arts organizations, foundations, and public sector agencies, all trying to enhance the role of culture in communities across America.

CD: And how did you come to be working with Grantmakers in the Arts?

HS: Grantmakers in the Arts (GIA) approached us last spring to see if we would do a snapshot of how arts funders were responding to the recession. We had done a similar piece of research on the response of arts organizations in the Puget Sound region just prior to that, and that had caught the attention of Grantmakers in the Arts. I should say I'm a former board member of GIA. I was for many years a staff member for the Lila Wallace/Reader's Digest Fund and worked for the Ford Foundation and others for many years.

CD: Grantmakers in the Arts is an affinity group — a group of funders with a common interest, in this case, the arts.

HS: That's true. GIA is a membership organization of private- and public-sector funders across the country who are interested in arts and culture.

CD: Can you tell us more about this snapshot, and how you gathered the data? What kind of funders did you speak to and what was diversity, the mix of funders?

HS: GIA has a regular newsletter it issues to the public (actually, primarily to its funders, but others can get it) and for the spring issue they wanted to take a qualitative look at what arts funders were saying about how they were responding to the recession, and to combine that with a quantitative analysis of how funders were responding, which actually, your Foundation Center colleague Steven Lawrence did for that issue. We identified 22 funders across the country, both private foundations and public agencies. These funders were working at national, regional, and local levels. We talked to foundation presidents, program officers, and some board members. We tried to get a broad range of perspectives based on size of foundation, concentration of funding, and viewpoint. We did hour-long interviews with these 22 different funders and then tried to compile what we saw were the patterns in their responses and what they were forecasting going forward.

CD: And can you tell about the key findings, particularly those that you think are unique to arts funders?

HS: Let me start by underscoring a few things that I think are not unique to arts funders. Funders of all kinds are taking a very substantial reduction in their assets. We found in our survey that cuts of 20% and more were commonplace, and in some cases organizations had gone all the way up to an 80% cut. And there is the expectation that there would be further cuts next year and the year after. Some really don't think that their assets or their grantmaking are going to rebound for four to five years, so that's not a pretty picture.

Beyond that, some of the things that we found funders saying were that they are committed to their existing grantees and they are holding on to their existing priorities, but they are trying to be more flexible. They're renegotiating grants in some cases, or extending grants, and trying to understand and be responsive to the circumstances that their grantees are experiencing. Many funders who have in the past made capital grants are suspending that activity, not making any grants to support facilities, and there are a number of other points, but the general profile is that those funders who are funding the arts are sticking with the arts. In other words, they are not cutting their funding to the arts disproportionally, although several noted to us that in the light of the extreme human emergency that we have in this country some board members are finding that it's getting harder to justify grants in the arts during this period of time. I should say that this recession is much more extreme than anything we've seen since the Great Depression, but if you look at what happened to arts funding after 2001 or after the previous recession, by and large arts funders stuck with it. They may have taken a slight dip in their commitments, but they rebounded quickly after the economy rose again, so arts funders seem to be committed to their cause.

CD: I notice that you also commented on the viewpoint of supporting individual artists. Can you elaborate on that?

HS: Yes, I was very pleased and heartened by the fact that those funders who do fund individual artists through fellowships or other kinds of support are holding firm. They're not cutting those programs.

I was very pleased and heartened by the fact that those funders who do fund individual artists through fellowships or other kinds of support are holding firm.

One person said to me, "Fellowships for artists is like operating support for cultural institutions. Artists have a hard time making a living in the best of times…we need to sustain their support." I might add that we just completed a survey of individual artists in this country, asking them about their experiences with the recession, and one of the astounding findings was that approximately 89% of artists say they think these are good times for artists — in this time of turmoil, this time of reconsidering our values — they see a lot of opportunity, and particularly opportunities to better serve their communities. So that's very heartening.

CD: That's very encouraging to find that much spirit and optimism among artists. Are you finding also that funders are expecting arts groups to change the way they do their programming or the way they are thinking about their operations?

HS: I think there is a wide range of views, but we heard pretty strongly that arts funders do have some changing expectations. They are expecting arts organizations to be connected to their communities, to genuinely serve their communities, and to have a base of support in their communities that's meaningful and demonstrable. They are expecting organizations to collaborate more. They are expecting organizations to "do more." Not necessarily to "do more with less" but to recognize that circumstances are straightened and to make cuts in programming, make cuts in their ambitions in accordance with that reality. As one person said, I thought very eloquently, "Anybody can cut 10% in a budget, but when you start to cut 20, 30, or 40% of a budget, it's not the same enterprise, and we expect organizations who are taking those kinds of budget cuts to go back and reconsider what it is that they are doing. What's their mission, how can they accomplish their goals with fewer resources." And so I think there is a bar that's been raised by funders that organizations adapt to these changed circumstances.

CD: You mentioned the issue of mergers and collaborations, which are not simple in the best of circumstances. Are there particular challenges for arts groups around the issue of collaborations?

HS: I think that's really true. We didn't probe that deeply in these interviews but let me opine from my own experience. In part because arts organizations are driven by the artistic vision of a given individual artist or artistic collaborative, marrying those artistic visions, in other words, having two organizations with different artistic visions, is really difficult. It's not quite the same as marrying two social service organizations or two hospitals. So in my view, mergers are going to be difficult in the arts. But where they are more likely to occur is between arts organizations in different disciplines, where a dance company and a theater might merge. Or a dance company and a social service agency. Where there are going to be some cross-disciplinary opportunities to make more than the sum of the parts.

Let me just mention one article that I found very thought provoking: it's by Paul Light in Nonprofit Quarterly in the Winter 2008 issue. Paul is a professor at New York University and a really thoughtful expert on nonprofit management. He was forecasting four different futures for the nonprofit sector and one of those futures was that the whole sector step back and take a look at its assets and the needs of communities and reorganize those assets to better serve those communities. The thought is that we should get out of our silos. Arts organizations, social service organizations, welfare agencies, and what have you, if they thought about their assets together, and aligned the allocation of resources from that vantage point they might go a lot further. One example of this: in the study we did in the Puget Sound area, one museum in that region, looking at its community, and realizing that several after-school programs for children were going to go out of business as a result of the recession, actually invited those organizations to join with the museum. And I believe one of the organizations did actually merge with the museum. So there are lots of opportunities like that, I believe.

CD: You mentioned a list of frequently mentioned characteristics that funders have identified in groups that they think are adapting well and that they think will be able to sustain themselves in these difficult times. Can you talk about what those key characteristics were?

HS: Almost everybody we asked mentioned three or four things, which we thought was a very interesting pattern. First and foremost is courageous leadership - the ability of the leaders of an organization (and that includes board members as well as executive or artistic leadership) to stand up, ask tough questions, recognize that the environment is changed, and make tough choices. A second is a relentless focus on mission — great clarity about what makes that organization unique, what is distinctive about its purpose, and especially in light of the changed environment and reduced financial circumstances, what can be let go. What is core mission, and what is "nice" but not "necessary." A third quality that we heard is flexibility about structure. If you're really clear about your mission, it can take many forms and may take a form very different than the form it took ten years ago. So in some cases the funders were talking about organizations that were selling buildings, going virtual, thinking about their business in a really different way, holding tight onto the mission, but saying "We don't have to do it the way we've always done it because we can't." And finally, a very powerful connection to community. Some people have talked about it as embeddedness — a strong tie between the organization and whatever community it's trying to serve, which can be large or small, national or local, but a real conversation between the organization and the people it's trying to serve.

CD: Can we talk about the new realities that both funders and nonprofits have to face, and then conclude with what you saw emerging as the perceived opportunities for the arts and artists in this climate and moving forward after this crisis?

HS: In the arts field, I think there are many people who would say that we've come through a 50-year arc of development that started with Nelson Rockefeller's creation of the New York State Council on the Arts in 1959. It's been a 50-year public/private partnership and now we have more than 100,000 arts organizations in this country. That's extraordinary growth. But we're either overbuilt or we're under-resourced, or both. It's not really clear that we can sustain 100,000 arts organizations so something's gotta give. Each organization individually — and communities collectively — everybody has to ask "What is essential now? What do we want to sustain? What is extraneous and what can we let go?" I really think that's a reality that's hard to accept but those that get on that truth faster are going to be the ones that are more nimble in responding to it. e just created the Wiki. We met for the first time, last week. And over the next few months we'll see how it's actually used.

I think there's a growing sense that many arts organizations might have a very vital and lively lifespan but it might not be in perpetuity.

CD: You're hearing also that perhaps not all arts organizations need to exist forever?

HS: Yes, definitely. I think there's a growing sense that many arts organizations might have a very vital and lively lifespan but it might not be in perpetuity. So many funders are saying "Is this an organization that we need to sustain forever? Is there something we can do to help them go out of business gracefully?" I think there's a real reluctance on the funders' part to play God and say "No more for you" but I think they are asking organizations to take seriously questions about whether they can be sustained.

I think it's going to get tougher and tougher to create new organizations. But I also think there are many organizations that really are projects. It's a great idea that may last a year, or two or three years and could then be pursued under the aegis of another organization that's more stable and has more resources to continue. But not everything needs to be its own 501(c)(3).

I think that these are very disturbing times, but I'm full of optimism. I think it's very exciting what's happened in the last year and a half — politically there's a lot of conversation now that says we have to do things differently, so how can we do that. There's a lot more openness to collaboration and partnerships, both within the arts and between the arts and other sectors.

I think that these are very disturbing times, but I'm full of optimism.

I think there are many funders who are thinking less about project funding and more about what some are calling "negotiated project support," in other words, more flexible funding for a range of costs in an organization once the funder and the organization have come to an agreement about what the outcomes should be. I think there are knowledge networks popping up all over where arts organizations are sharing with each other lessons of their own experience and tricks for how to make it, but also learning from experts outside the field. And I think there are lots of new opportunities presented by the rising generation and by the Obama administration for greater service, whether it's involvement in the National Service Corporation or diplomatic initiatives — I think it's a new day and we should be
making the most of it.

CD: It's great to hear some optimism in these difficult times. I don't want to close without mentioning that Grantmakers in the Arts is going to be holding a conference here in New York in October, and I'm wondering what you're thinking will come out of that conference. What kind of information will our listeners be able to gain if they're not able to attend the conference?

HS: Grantmakers in the Arts is meeting in Brooklyn, October 19-21, 2009. It's open only to members but there will be sessions on a whole range of topics and the agenda is on GIA's web site. Usually after the conference the proceedings are made public on the web site, and this year in particular there will be an effort to share lessons and to encourage funders to collaborate with each other going forward. I don't know all the plans but I would encourage people to watch the web site during and after the conference.

CD: Thanks to our guest Holly Sidford for joining us today.