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Dollars and Sense: Arts Organizations Get Creative to Keep Funding

Local arts organizations are staying connected to people—and funding

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When Kennedy Center President Michael Kaiser made stops in cities across the country--including Boise--last year, he gave arts organizations something to think about.

As with the corporations that once made huge annual donations to not-for-profit arts organizations, the people who made up the audiences had suffered the ravages of the recent recession. They may have still had an income but little to none of it was discretionary.

Even before that, though, patrons of the arts were aging and, frankly, dying off, and performing arts organizations were not seeing young faces taking their places. Those groups had consistently worked at trying to make their performances more interesting to much younger people but still weren't seeing them in the seats. One suggestion Kaiser made that several local organizations latched on to was to shift tactics: Don't ignore the 18- to 30-year-olds but understand that they may not be making the arts a major part of their lives ... yet.

Kaiser said that it isn't until people are in their 40s that they begin to view attending events such as dance, theater, opera or symphony--and then donating to them--as elements of their cultural enrichment and vital to their everyday lives. Robert Franz, music director of Boise Philharmonic agrees. He sees his audience as "Discovery Channel lovers."

"I think that's our exact audience. It's people who like to watch shows where they learn something," Franz said. "Eighteen to 40 is a dark zone for people ... Think about people's minds, think about what you do in your 20s and 30s. You're working your ass off to try to figure out how to make your career successful."

These people are also having and raising families and trying to figure out what they want in life. By about the age of about 40, many of them begin thinking about not only enriching their lives but also giving back to their communities. They start thinking about being a part of something.

"They start to lift their heads up out of the sand because their kids are out of the house, right?" Franz asked. "So you have these empty-nesters who all of the sudden have the time to connect in their communities."

But to survive and thrive, Franz and other heads of local arts organizations know that it is not enough to know who their patrons are. Individual donors are now the backbone of organizations' financial health, and to get those 40-somethings to give money above and beyond the tickets they buy to performances, the word "connect" is the key.

No longer can a maestro keep his back to his audience after conducting a symphony performance. No longer can a choreographer sequester himself in a studio, only granting an audience to a wealthy patron. No longer can a not-for-profit administrator hide behind a sheaf of spreadsheets, emerging only to ask a board of directors for more money. The heads--as well as the staff and performers--of local arts organizations understand that and are working to see that their audiences know the people who comprise the organization as well as they know their shows.

And those arts organizations must also look at the tried-and-true funding methods, i.e. grants, and find ways to make the process of obtaining them easier and more profitable.

With a yearly operating budget of roughly $1.5 million, Trey McIntyre Project Executive Director John Michael Schert is all too aware of the importance grants play in sustaining an arts organization. However, he said, contributions from institutional funders--foundations, corporations and government--provide little. Corporate gifts account for a mere 2 percent of TMP's budget, although it does receive generous corporate donations on occasion: Eagle-based company Camille Beckman has given TMP $20,000 on two different occasions. Assurant, a health insurance company out of Milwaukee, Wisc., gave TMP $100,000 over the course of two years.

"But we don't count on that," Schert said.

TMP does rely on ticket sales or earned income to meet its budgetary needs, but Schert said that individual giving is the driving force of any not-for-profit organization. The only way to get individual donations in the amounts necessary to help sustain an operating budget is to have a personal relationship with donors and for those donors to feel they have a personal stake in an organization's success.

"A third of our budget comes from individuals," Schert said. "Our board of directors gives 12 percent of our budget themselves ... our board this year gave $190,000, just among 16 people."

To be clear, TMP also applies for grants whenever and wherever possible. In 2008, the company was awarded $28,000 from the National Dance Project and $35,000 from the Multi-Arts Production Fund. In 2010, Dance/USA gave TMP an "engaging dance audiences" grant for $110,000; Mayor Dave Bieter named TMP the city's first ever cultural ambassador, a title that came with $25,000; and TMP also received a $2,000 Boise Weekly Cover Auction grant.

But though many of the grants are awarded annually, TMP has no guarantees that it will receive them from year to year, which means the dance company cannot rely on grants when budgeting. TMP has two people dedicated to doing little more than writing and applying for about four grants per week at a cost of about $80,000 per year. They get close to 16 rejections per month. The payoff doesn't always equal the pay out.

TMP rarely receives individual donations from anyone who doesn't have some sort of relationship with a company member. So TMP works at being as forward thinking in its relationship building as it is in its programming--and it takes it just as seriously.

"A lot of arts organizations have gotten lazy because they have had these tried-and-true funders that have supported them for decades," Schert said. "So they stopped being innovative in how they include those people in how they make them a part of what [they] do. Trey [McIntyre] says, 'I want our audience and our donors to feel included. What are all the little ways we can do that?'"

When the company receives a donation in the mail, that donor must be called within 48 hours and thanked, regardless if they've sent $25 or $25,000. Many of those donors will also receive--along with a tax receipt--a hand-written note from McIntyre. The next time that person sits in a TMP audience, he or she will likely feel a strong connection to the company, what it is doing and its success.

"We never sit back and say we deserve this," said Schert. "It's a gift."

Schert said regardless of how successful it is at obtaining individual donations, TMP still has to rely on foundation and government grants, and it very likely always will.

Local government entities, such as the Boise City Department of Arts and History, are just as invested in the prosperity of not-for-profit arts organizations as the organizations themselves. Even as budgets are slashed, the department remains committed to supporting them.

Terri Schorzman, director of the city department, knows that corporate and government funding for arts is down and has seen organizations look to other avenues for operating money. The department and the Mayor's Office, however, have been longtime staunch supporters of the arts, and each year they make $45,000 available to arts organizations as part of a small grant program. In 2010, the mayor granted $105,000 in one-time economic development funds to five of Boise's largest arts and cultural organizations: Ballet Idaho, Basque Museum and Cultural Center, Boise Contemporary Theater, Idaho Shakespeare Festival and Trey McIntyre Project. It was a one-time event because the city seldom has extra money.

"We usually just have our little grant fund [of $45,000]," Schorzman said. "We'll open that up again in June, but everybody is competing for that money."

The city has had its own funding issues but has worked hard to sustain that $45,000 grant fund each year. Any extra money the city has goes back into the general budget whenever possible, although a recent opportunity allowed the city to repurpose $12,000 into about a dozen small performing arts and cultural community events, such as festivals.

In gathering data for a recent survey--the Arts and Economic Prosperity Survey IV--Schorzman's department put together a database of 66 Treasure Valley-based organizations like Boise Art Museum, Alley Repertory Theater, Idaho Shakespeare Festival, Ballet Idaho, Boise Rock School and more--many of whom look to grants for support. If each organization was awarded grants, that $45,000 would be stretched as thin as a sheet of onionskin paper.

Idaho Commission on the Arts is equally committed to supporting not-for-profit arts organizations. For several months, ICA feared the trickle-down effect of huge budget cuts that were forecast on a federal level, specifically from the National Endowment for the Arts. And though ICA Executive Director Michael Faison was prepared for a worst-case scenario, recent news turned out to be good news.

Recently, the House Appropriations Committee released the final budget agreement for the 2011 fiscal year, which was approved by the House and Senate and signed by President Barack Obama. It includes $155 million for the NEA. In 2010 $167.5 million was budgeted but the House had previously approved only $124.4 million for FY 2011. ICA will feel that cut, but Faison said, "It's not catastrophic by any means either for the NEA or for Idaho and [ICA's] ability to provide service."

This year, ICA was able to provide $700,000 in direct grants across the state, an impressive number and one that Faison said ICA was proud to have accomplished. The reason, in part, that it is able to provide those funds is because it pays close attention to the costs associated with writing grants.

"When I [have been] speaking on funder panels--I talked delicately because there are some of them out there that create onerous amounts of paperwork for organizations--but I tell them, 'Transaction costs matter. Pay attention to transaction costs,'" Faison said. "Make sure the cost for applying for and receiving money makes sense in terms of the actual money [arts organizations] are getting."

In simple terms, Faison said he tells the groups that are awarding grants in a time when funding is becoming scarcer that if "they can't provide more, make what they do provide more valuable."

Grant applications often require a lengthy narrative explaining an organization's direction (upcoming programming, for example), documentation showing what money has come in and where it has gone, letters of recommendation, audio or video components and more. And remember, grants are not always awarded annually. An organization has to reapply, in the same arduous manner and at the same cost, each year. Knowing that the costs associated with those applications--the transaction costs--cut deeply into the funds awarded, ICA moved to a three-year grant cycle and cut its transaction costs by a whopping 75 percent in the last couple of years. It wasn't that tough to do.

"For all of those organizations for which there is a known quantity, and they deliver ongoing services [that includes performances] to people year after year, we don't need big narratives about future plans. All we need is to review their past performance," Faison said. "As a result, there's really no application involved, only using the final report from their last time. Right there you cut it in half. Then, now that we have a three-year cycle, it gets even easier."

ICA reviews applications each year, and checks in with each organization, which, in turn, files a short report. That's about it. And unlike other entities like ICA around the country that give funds for general operating expenses, ICA bases its funding on services.

"[Giving money for general operating] is really giving money to an organization simply because it exists," Faison said. "We don't. The only reason we give them money is because they are providing a valuable public service to people."

Again, as both the beneficiaries and the foundation of organizations, the relationships that groups forge with their patrons are vital. A person may enjoy dance or the symphony, but if he or she doesn't feel a connection, that interest may wane and the patron is likely to look to another source where there is a connection.

In the year he has been in Boise, Tom Bennett, executive director of Boise Philharmonic, has put a great deal of effort into establishing the same kind of rapport with his company's audiences that Schert described. Bennett also recognizes the importance of maintaining existing connections patrons may have with an organization. Bennett has grown Boise Philharmonic's volunteer base and has retained a focus on fund-raising programs that have been in place for years.

"We have implemented a number of new steps and fund-raising processes, including more and more volunteers," Bennett said. "That is producing more results, and we have been opening up a number of new doors."

Bennett is a proponent of "systems." He believes it is important to use database and tracking systems. Paying attention to detail and repeating what they do at the same time each year is essential--it accounts for 80 percent of fundraising.

As an example of how important continuity is to donors, Bennett told the story of how, when he was in a former position, a symphony in the state he was working in had a 14-year successful track record of an annual fund-raising event, which usually raised $90,000-$100,000. One year, the event didn't happen. The following year, the same people put on the exact same event. They raised around $20,000.

"That's one extreme example. In another job, people were saying they were tired of putting on the same event, like the Boise Philharmonic does with its Chef & Gourmet Gala. I told them [that same] story," he said with a laugh. "Is it a pain in the neck sometimes? Yes. But there are certain advantages to getting into everybody's budget cycles."

Staying on people's radar--in their budget cycle--comes by way of regular events but also by fostering a sense of a personal connection with them.

Boise Philharmonic Board President John Stedman and Franz both extend personal thank yous in the form of phone calls and letters to donors whenever possible. And although he calls himself "just the money guy," Bennett does, too.

"Last night, I called 10 people who had given $100 the year before," Bennett said.

He not only thanked them for their recent gift, but because he uses "systems," he knew when and how much they had given before and was able to say, "Thank you for your $100 gift each year for the past five years," if warranted.

"If I know that history of what they have been giving for the past five years, then they know that we are paying attention," Bennett said.

On the other hand, getting other people to pay attention to an organization like Boise Philharmonic is equally important and may engender connections of another kind. Arts organizations are willing to reach out to anyone willing to listen about the importance of the arts and why continued funding is essential.

On March 21, Franz eloquently gave testimony before the Idaho House Education Committee. Chairman Bob Nonini, a Republican from Coeur d'Alene, had heard Franz speak a few days prior at an evening event and was so impressed with what Franz had to say about the importance of classical music on young, developing brains, Nonini asked Franz to repeat the speech he had given. And just as he does during a philharmonic performance, Franz captured the attention of the dozen or so Republican and Democratic representatives present.

Franz explained that either through students attending Boise Philharmonic performances or through outreach programs, this year, "we are just north of 20,000 students that will experience the Boise Philharmonic ... the Boise Philharmonic is involved with education because music makes a unique and vital impact on how the brain develops in children. While it's a common misperception that orchestras perform concerts for children to mainly ensure audiences for the future, the reality for me is really quite different. Our work in this realm is vibrant, important and immediate. If we do our job properly, students will become better learners, more engaged citizens and generally more successful."

He cited a handful of studies, including one by Northwestern University, one by Stanford University study and one done in Duesseldorf, Germany, in which scientists using MRIs found that musicians' corpus collosum--fibers that connect the left and right brain--were 10 percent to 15 percent larger than those of non-musicians, evidence that "musicians have a sense or an ability to connect left-brain/right-brain activities, which is key, of course, to solving problems ... a real asset in today's world."

Franz then told the committee about a study he was asked to lead that, though done in the early '90s, is still an important factor in how he approaches his job as both conductor and instructor. The Winston-Salem Symphony in North Carolina, Franz's home base at the time, was given a grant by the NEA to answer a question: Does the act of listening to music, in a very directed way, actually change how the brain develops?

Franz was asked to lead the Bolton Project at Bolton Elementary School in Winston Salem, N.C., an at-risk school. The project integrated music into arts, science and social studies. After three years of the small orchestras working with first-, second- and third-graders, those third-graders took their required standardized tests. Whereas three years before, only 44 percent of third-graders had been passing the tests, 88 percent passed after having had music as an integral part of their curriculum.

The leaders of the Bolton Project sent their findings to scientists at Wake Forest University in North Carolina, who found that the children had developed "high-level, active listening skills and ... acute and high functioning oral abilities." That translated into students that were "fast little readers and, therefore, successful learners."

At a time when education funding in general is taking a hard hit, Franz knows that stressing the importance of continuing to fund the arts when basic classes are in danger is a tough sell. Still, talking to anyone willing to listen about the role of the arts is a necessity when every dollar counts. Speaking in front of the committee may not lead to money in hand, but it may lead to something equally important: connections.

"The fact is, we're not going to get a dime from the state Legislature. We know that and that wasn't the approach," Bennett said. "But ... if the Legislature can help guide us, if they get us in some doors, that's a story that can go a long way."