The Foundation Heimlich Maneuver

In announcing their October grant awards, the Meyer Memorial Trust made an interesting statement about their intentions to support Portland's five major arts organizations at roughly 1% of their budgets for the next 2-4 years.

Specifically, the Trust has just awarded $300,000 over two years to the Oregon Symphony, $260,000 over an unspecified period to the Portland Art Museum, and $200,000 to PCS over two years. Presumably the Opera's and Ballet's proposals are still pending, because the announcement came with this explanatory statement:

While 60% of MMT's funding has gone to organizations addressing rising demand for health and human services during this economically challenging time, we recognize the importance of supporting arts and culture groups, which contribute to the quality of life of our communities and region with both cultural and economic contributions.

Historically, MMT has been a relatively strong funder of Portland's five largest arts organizations, with a total of nearly $21 million collectively awarded to Portland Art Museum, Oregon Symphony, Portland Center Stage, Portland Opera, and Oregon Ballet Theatre since 1982. Foundation support has represented a larger portion of these arts organization's budgets because until recently, Oregon was ranked 53rd among states and territories (behind Guam and American Samoa) in government support of the arts per capita. (Oregon now ranks 40th.)

Two years ago, MMT and other area arts funders began to converse with Portland's five largest arts organizations to better understand their business models and what they need to achieve financial stability, in addition to artistic excellence. As a result of these discussions and a study by a nationally recognized arts consultant, MMT has determined it can most appropriately assist the groups with two years of operating support limited to approximately 1% of the organizations' operating budgets, with the possibility of an additional two years. During this period, MMT will not entertain additional proposals for operating and project support from these five groups.

Now before all of the other arts organizations start asking what about me, I would like to point out that the majors have been part of some difficult conversations over the past year with MMT and other grantmakers (including RACC) who have been concerned about the long-range sustainability of these groups. At the foundations' request, each organization has worked diligently to produce a plan that helps satisfy the concerns of trustees everywhere who are no longer willing to invest in organizations with chronic deficit problems. However, it is important to note that each organizations' debt situation is different, and granted some organizations are in worse shape than others, but suffice it to say that conservative lenders have legitimate and reasonable concerns about investing in any of these organizations right now, which is why they all had some 'splaining to do.

Imagine, if you've been the trustee of a foundation for the last 25 years, how many times you have heard an arts organization say that it has finally identified the formula for sustainability, only to fall back into a deficit a few years later, sometimes chronically so. And then they'll tell you, you all just need to give us more money, so they'll build a budget that assumes the contributions will magically come flowing in because their board is newly motivated to raise millions of dollars, only to find that a recession or a snowstorm or a death in the family prevents them from achieving their goal. OK, maybe that happens in one year, that's understandable. But if a board lets that behavior go on for two years, three, ten -- you can see how a foundation trustee could start banging his or her head against the wall and declare, Not another dime for this madness!

Fortunately for our arts organizations, the foundations wanted to be part of the solution. So they brought in technical assistance providers and convened arts organizations to let them know what they needed to do in order to satisfy their increasingly skeptical trustees. They asked them to demonstrate an ability to raise money at historically proven levels before moving toward bigger budgets. They asked them for evidence that they were taking their deficits seriously, with viable plans for repaying their debts. And they asked each board to be more aware of its organization's finances so that they could address the real problems together -- it's not helping anyone to sweep little messes under the rug and hide financial concerns in the balance sheet. These foundations did NOT ask them to cut their product, only to demonstrate that the product can be scaled match what the public is willing to pay for. I think of it as attempting the Heimlich Maneuver before jumping into CPR.

Fortunately, the arts organizations are coming through with strong and convincing cases. Which leads me to why I think this is a rising tide that will float all ships. For MMT to philosophically set aside funding at 1% of arts organizations budgets is a good start, but we don't know what happens after these 2-4 years have expired. Presumably, hopefully, arts organizations will then be able to apply for larger grants, not smaller ones, for unique needs they'll have in the years ahead, having demonstrated themselves as completely viable organizations with net assets on the rise. Meanwhile, smaller arts organizations are still applying for and receiving grants from MMT that represent a much larger percentage of their own budgets, sometimes as much as 20%, although these are highly competitive grants that are difficult for many to compete for given MMT's emphasis on social change and problem-solving. This is my biggest concern, does a small arts organization really have to solve a problem in order to be considered a vital charitable organization in our community?

But the MMT is re-evaluating their role, and for that I give them much credit. For the record I still think the Meyer Memorial Trust could and should invest much more money in the local arts community, but this statement about the major arts organizations is a critical first step. The performance of these five groups over the next five years could greatly influence the future of arts funding in Portland, and we are counting on them all to demonstrate extraordinary returns on investment rather than becoming just another black hole of arts funding. Let's consider this a pilot in MMT's own internal conversations about whether or not they should be supporting more arts organizations with general support in the future.