Do Foundation Sustainability Strategies Work?

Grantmakers have pursued many strategies to stabilize arts organizations through leadership and governance initiatives, general operating support programs, audience development, technical assistance programs, endowments and other capacity-building efforts. Have these funding strategies worked? Or do we need to look for answers for alternative means of support beyond traditional 501(c)(3) structures? Designed to be a lively and candid discussion by funders about their funding practices, lessons learned and potential innovations. (Roundtable)

Themes (verbatim) from the session included:

• There is a dependence on public and private funding.
• There needs to be a candid conversation between grantseekers and grantmakers to encourage sustainability.
• Executive Directors are changemakers.
• There is a difference between leadership advancement vs. leadership development.
• Artists are entrepreneurs.
• For profit and not-for-profit partnerships.
• Questions: “What is your founder owed?” “Whose job is it to build demand?”
• Creating buy-out structures
• Closibility—(choosing not to fund organizations); money ends, program ends.
• Sustainability as the adaptive capacity of an organization.
• Stewardship as part of the sustainability conversation.
• Mission drift issues.
• Stabilization grants
• Characteristics of high performing non-profits, multi-year funding.
• Land use policy becomes cultural policy.
• Capacity building and policy are elements of sustainability.
• Public good.
• Supply and demand.
• Parallel economics.
• Funders as market forces at work.
• “My art speaks for itself.”
• Funders tend to be prescriptive.
• The politics of sustainability, are funders complicit?

Each interlocutor provides 5-minute introduction to her current/recent efforts to fund the sustainability of non-profit organizations.

Olga Garay, City of Los Angeles, Department of Cultural Affairs (DCA)
Introduces her diverse background. She states that roles and approaches different depending upon point of view. From her years at Doris Duke, the big lesson was inverting the option to allow grantseekers to determine the best way to invest in success and advancement of their organizations and have the foundation fund according to individual plans.

Jeanne Sakamoto, James Irvine Foundation
Introduces four guiding principles of the James Irvine Foundation's fund for leadership advancement, which invests in personal/organizational growth. This program is a customized, on-the-job investment determined by individual proposal. The budget provides an organizational consultant to assist with implementation. The only liability is if a leader leaves their organization, then the learning leaves with them…

Jessica Cusick, City of Santa Monica (California) Cultural Affairs Division
City of Santa Monica has isolated through a cultural plan that real estate and affordable housing are the key factor to sustaining its art ecosystem. Jessica is currently working with the City's housing agency to make new and re-zoned artist space at the Airport, 18th Street Art Center, as well as studios along the alleys bordering the city's major pedestrian shopping promenade. A future project may be a new Civic Art Center in empty space across from high school.

Eileen Newman, ReNew Media
Renew Media gives $25,000 grants for independent filmmakers. From her past experience she referenced a 501(c)(3) arts service organization aimed to help filmmakers which, 40 years later is obsolete, yet stubbornly against going out of business. Renew Media with finacing from Warhol and McArthur Foundations has established a new deal with Amazon will be an aggregation of independent film/video parallel to Amazon's book listings. This new visibility for independent film/video is conceived as an earned income vehicle for individual artists.

Claire Peeps, Durfee Foundation
We need to question the model of perpetuity. We have not created graceful ways of helping organizations go out of business. We need to promote this as an element of success and acclaim those who select to twilight organizations that have run their course.

Jennifer Hill, Ruth Mott Foundation
The Santa Monica model will not work in a City like Flint Michigan where jobs are scarce and philanthropy is being reinvented. There is clearly not enough money to keep most organizations open. We are needing to make tough decisions about which groups to assist and which to let go.

Lisa Mount, Alternative Roots
We are a membership organization… we were taking the other day about leadership transition. We see a lot of 30-year old organizations staying open because their founders have not been offered a retirement package. Perhaps the field of arts philanthropy needs a leverage buyout program, Could community foundations help founders retire and organizations either reorganize or close-out?

Anita Alexander, Chicago Community Trust
How many of you rely on boards to provide professional development to the Executive Director?

Kathleen Cerveny, Cleveland Foundation
When we look at proposals for staff support, we ask organizations if they have sustainable payroll and benefit packages, governed by the board.

Eric Walner, City of Ventura
Are we considering how the next generation would like to transform existing organizations?

Eileen Newman, Renew Media
In my case I work for younger people. Sometimes the senior staff members need to be willing deputies for younger leaders and dedicate themselves to life-long learning.

Mary Trudel, Wallace Foundation
The Wallace Foundation only gives grants to organizations that are 5-years old and financially stable with sustainable relevant programs. She describes two groups that showed lack of program sustainability and therefore were declined organization stabilization funds.

Kelly Barsdate, NASAA
How do we judge the elastic capacity or adaptive capacity of staff and orgs?

Marc Vogl, Hewlett Foundation
Our reminds me that we need to also consider the bigger contextual factors of housing, healthcare,… that are necessary to build and sustain arts organizations. And unless we consider the whole, we will be back to this conversation next year, and the sea will be higher.

Susan Edmonson Bee Vrandenburg Foundation
Recent books on characterizations of highly effective non-profits suggest that organizations with the best sense of policy and political context, should get the best investments.

John Killacky, San Francisco Foundation
Lets be real! Only million-dollar, long term grant givers should be asking questions about these issues. For most of us, considering the amounts we have to invest… complete organizational sustainability is the objective.

John McGuirk, James Irvine Foundation
We have an overbuilt supply of artistic products and diminishing demand… yet we are asking about sustainability? Irvine is looking at touring, collaboration, and consolidation to shift products to areas without and partner similar organizations as a way of suggesting that many could merge.

Olga Garay, City of Los Angeles, Department of Cultural Affairs (DCA)
The other tension within “survival of the fittest” is considering the changed demographics of America. We must recognize the most privileged and stable organizations may not be the best organizations to facilitate our new future.

Veronique LeMelle, State of Lousiana Division for the Arts
Yes, in the aftermath of hurricanes Katrina and Rita, we shifted to providing stabilization grants for small organizations and pulled back from our capacity grants, which are for projects.

SuzanneLodato, Andrew W. Mellon Foundation
Speaking about decreased arts audiences, we need to look at grants to eliminate ticket prices.

Loris Ann Taylor, Native Public Media
We own 21 stations for radio storytelling. I like the mention of policy because that is important for building and sustaining Native radio.

Cora Mirikitani, CCI
Other sessions have considered the general lack of market research ad tools for his topic area.

Roberto Bedoya, Tuscon—Pima Arts Council
The issue is also about engendering community stewardship for their arts ecology.

Olga Garay, City of Los Angeles, Department of Cultural Affairs (DCA)
When we talk about encouraging some organizations to go out of business, let's be careful to consider those which are founder-driven, ensemble companies from those organizations with a civic purpose which are intended to live through multiple generations.

Ted Russell, James Irvine Foundation
(Jokes about doctor Kevorkian and great laughter) We are looking at the very different scenarios for capacity challenges against each type or size of organization. Even the artistic discipline matters when considering how/if to assist.

Cee Brown, Art Matters
Tells the story of three generations of executives at Creative Time, with each radically adapting the organization's mission… yet the same board. Unless we can get boards to buy-into change, then we cannot effectively support dynamic organizations.

Veronique LeMelle, State of Lousiana Division for the Arts
The second-largest employer in the State of Louisiana is the creative sector …yet the types of jobs we have supported are not for middle class people. They are for starving artists. That is why the latest sustainable strategies provide younger artists with business training.

Roberto Bedoya, Tuscon—Pimas Arts Council
Back to stewardship, it is a helpful idea to build arts policy.

Kelly Barsdate, NASAA
Is the best sustainability policy about product or demand? Which side are we trying to upgrade? And, by the way, isn't the supply/demand model a false dichotomy in the arts?

Lawrence Thoo, San Jose (California) Office of Cultural Affairs
Borrowing of Kelly and John's comments, philosophically I am interested in the “art as public nutrition” idea …but non-profit arts cannot exist separately from the market economy …and therefore supply and demand is important because we always seem to be half-starving.

Lorenzo Lebriga, John S. and James L. Knight Foundation
We determine whether something is good. We are the crutch that enables the goodness or failure of product for an audience.

Mary Trudel, Wallace Foundation
Whose job is it to build demand? We know that 85% of adults who enjoy arts got it at home and in school. Wallace is working together with the City of Chicago on audience development programs with small organizations. Chicago asks its Arts Education grantees to develop return-on-investment statistics. Often the reports represent losses for up to 10 years …before any return is forthcoming.

Sharon DeMark, The St. Paul Foundation
We have a Management Improvement fund that is available so that community-based organizations can hire consultants to help institute stabilization.

(unknown)
Regarding the supply and demand issue…in all art, the expression/production comes first …and that's why fine artists and non-profit organizations struggle with audience.

Cora Mirikitani, CCI
And we are running out of time… so I will ask Shelly Cohn to provide the last word.

Shelly Cohn, formerly of the Arizona Commission on the Arts
The State of Arizona created an “Endowment for the Arts” specifically for mid-size organizations. It was not as successful as we would have liked because the mechanics were difficult…organization consultants were expensive, staff turned over… so in the end it was an experiment in providing stabilization resources wherein only 50% of the organizations succeeded. Nonetheless, Arizona would do it again, because there is no way you can ever know what is just beyond the curve.

Cora Mirikitani
Thank you all. Clearly the answer to the question of whether sustainability strategies work… is yes and no. (smiles and giggles)