Cathy Hunt, writing for The Australian Financial Review:
Capitalization
Grantmakers in the Arts defines capitalization as “the accumulation of the resources an organization needs to fulfill its mission over time,” specifically regarding financial health. Capital is money saved in order to respond to challenges and opportunities. Capital is different from revenue (which is immediately spent), and from assets like endowments or facilities (which are not available as liquid cash that can pay expenses). It has been the norm for the nonprofit arts sector to be poorly capitalized, an issue which disproportionately affects organizations of color. In response, GIA embarked on the National Capitalization Project (NCP) in 2010. Since its launch, GIA has provided resources, conferences sessions, publications, and workshops on nonprofit capitalization. GIA’s Capitalization and Nonprofit Financial Health Workshops are specialized workshops, held separately for funders and nonprofit grantees, focusing on what each group can do to support the financial health of nonprofit arts and culture organizations. GIA has also updated the workshop to reflect the financial impacts of the pandemic and to reflect a racial equity lens. These workshops are available either in-person or online by contacting workshops@giarts.org.
Extensive research has demonstrated what those close to the arts, culture, and humanities sector already know: the health of the sector is intertwined with the health of our communities. In addition to cultural enrichment, arts, culture, and humanities nonprofits create jobs, support economic growth, and contribute to community revitalization.
Read More...In the wake of the worst global economic recession in living memory, the creative industries sector has emerged as a powerful engine for economic growth and social, environmental, and cultural sustainability. With growing concern over the staggering amounts of funding now being directed toward social impact initiatives globally and the effectiveness of those investments, perhaps the time has come for gatekeepers to consider adding the creative industries to the short list of investment-worthy target sectors.
Read More...Capitalization has been a hot topic in the arts funding community — and in these very pages — in recent years. Funders and cultural organizations alike are increasingly invested in the capital structures that undergird a vibrant cultural sector. Driven by a shared desire to increase artistic vitality in the Greater Boston area, two GIA members — the Barr Foundation and The Klarman Family Foundation — are taking a closer look at how capitalization supports their grantees’ ability to both take and manage risk.
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by Steve
Rebecca Thomas finishes her six myths piece for Associated Grant Makers:
In my last piece for In Philanthrophy, I offered three recommendations for how grantmakers can overcome commonly held misconceptions about the role of money in strengthening nonprofit effectiveness. I encouraged funders to: support comprehensive capitalization planning, reward financial management practices that promote surpluses and savings, and consider seeding cash reserves as a source of funds for handling and taking risk. Here, I share three additional myths that get in the way of healthy nonprofit finances and suggest funder practices that, in my experience, create an environment more supportive of organizational success.
by Steve
In 2009, TDC published Getting Beyond Breakeven, a study commissioned by the William Penn Foundation and The Pew Charitable Trusts, which reviewed the capitalization needs and challenges of arts and culture organizations in Philadelphia. This study, also commissioned by the William Penn Foundation, is divided into two major sections.
by Steve
Lessons Learned about Change Capital in the Arts: Reflections on a four-year evaluation of Nonprofit Finance Fund’s Leading for the Future initiative, a report from Alan S. Brown and Arthur F. Nacht, takes stock of a four-year evaluation of Leading for the Future: Innovative Support for Artistic Excellence (LFF), an experimental $15 million funding initiative administered by Nonprofit Finance Fund (NFF) with support from the Doris Duke Charitable Foundation (DDCF).