Shifting arts funding trends highlight the need for adaptability, community focus, and artist-centered strategies to thrive in uncertain and changing times. Here’s our take on the industry round-up. I sent an email during last May to our clients about the state of the industry in response to their concerns. In meeting after meeting, folks were feeling stressed, financially drained, and unsure about the future. In the weeks preceding and following that email, we had seen two groups announce closures and a third launch an emergency campaign, while many others were facing deficits after three years of growth and surpluses. We had counted at least eight arts and culture funders who were pausing new giving until 2025, going into strategic planning, or changing direction and guidelines entirely.

Government funding from the New York City Department of Cultural Affairs had been delayed, and other government entities, like the California Arts Council, were evaluating their processes, causing shifting timelines. Instead of being able to plan ahead, we and our clients were doing an exhausting dance to juggle shifting deadlines, changing guidelines, and ongoing silences from funders. It proved to continue into the summer, making the June/July grants season pretty tiring for all of us.  

While I continue to advise caution and conservative planning, I am writing this update to share more changes we are seeing and, perhaps, even provide a bit of optimism for the future. 

I’ll start with the tough stuff. 

Many of us saw the email from the New England Foundation for the Arts announcing that the Mellon Foundation would no longer be partnering with them on their National Theatre and National Dance Project programs. While this is sad news, NEFA Executive Director Harold Stewart had some hopeful words in the announcement, and did not close the door on these programs having a future life:

“As we look to the future, NEFA will embark on a reimagining of both NTP and NDP amidst our strategic planning process, which is underway. I share this letter with full alignment and support from our Mellon partners as they do the important work of aligning their resources to best serve social justice in the performing arts for future generations.”

Did you catch that important bit about Mellon? They have been doing their own strategic planning coming out of COVID. As a leader in philanthropy, especially in arts and culture, Mellon  is often a bellwether for what the industry is thinking about and moving towards. To that end, I found this discussion with Mellon Program Officer, Stephanie Ybarra, about how the models of nonprofit theaters are shifting, very interesting. To address the challenges of costs increasing faster than income (“cost disease” – see the article for a more thorough definition), she notes:

“But here’s how I think of theaters that are mitigating it [cost disease] to the best of their ability: instead of reaching for a kind of elitist structure that privileges the top of the donor pyramid, some theaters are flipping that and looking toward volume of engagement. And I don’t only mean just in terms of buying a ticket. It’s focused on aggregating small revenue rocks—that grassroots component. As a result, the theaters are looking more like grassroots political fundraising than anything else. “

Stephanie goes on to discuss some examples of theaters around the country who are adapting to changing times in new and exciting ways. This is interesting stuff, but also highlights how many funders have moved away from the long-standing push towards institutionalization, and are supporting organizations who are finding more innovative, equitable, community-based structures. 

Across the country in the San Francisco Bay Area, the William & Flora Hewlett Foundation has also been evaluating its arts and culture funding approach, and released this white paper detailing their updated strategy. They echo a lot of sentiments from the Mellon article, with a particular focus on centering artists and ensuring their proper support:

“The updated Artists strategy introduces a more holistic approach to artists’ well-being and a significant increase in the strategy’s budget. Our revised strategy will broaden the kinds of support we provide to strengthen the ability of artists themselves to shape the creative and economic conditions that enable their work and livelihood in the Bay Area. That is, we will increase our support for advocacy and infrastructure efforts toward helping artists, specifically.”

These shifts are nuanced, but impactful for organizations and important to dig into. They also highlight an increasing need to diversify our income sources. Foundations are nonprofits, too, with their own Boards and priorities, so while many may give multi-year support, we cannot necessarily count on them in perpetuity. TRG Arts reflected on revenue, subscriptions, and donor trend in a webinar for the League of American Orchestras, and noted “…the importance of continuously adapting offers and experiences to meet the dynamic preferences of today’s potential arts patrons.” This report by the National Endowment for the Arts also highlights a need to embrace new technologies, explore different ticketing models, and to stay nimble to the constantly changing ways of communicating in our current world. 

The only thing constant in this “new normal” seems to be change itself. 

So why am I optimistic? How do we make sense of this round-up? As a consulting firm focused on small organizations and independent artists, we see incredible alignment between the shifting demands of the industry and those qualities that make small groups so impactful. While philanthropy is far from perfect, I am hopeful when seeing them make shifts in strategy that make space for groups whose structures are more flexible and nimble. How can you make the most of these changes?

  1. Take a deeper look at your structure, and don’t be afraid to adapt and try new things. Stephanie’s article, the TRG webinar, and NEA report demonstrate that different models are working for many groups. Without the overhead of larger institutions, small groups can change with the needs of the time. Lean into this when creating plans: set up the framework, but be prepared to shift when the opportunity arises. 
  1. Highlight and reinvest in your artists. So many of you have been artist-centered for your entire organizational history; many funders are just now codifying this focus into their strategies. Demonstrate your leadership in this area in your conversations with program officers and show them how you align. 
  1. Stay grounded in your community. Community Centric Fundraising has been gaining ground for some time now. The old-school principles of philanthropy – the classic donor pyramid, focusing on major funders – are clearly not aligned with the way many of us work now, and that can be a good thing. The more connected you are to your  community and audiences, the more ability you’ll have to weather any storm. 

Pull in your stakeholders and exercise, in your administration, that incredible creativity that you demonstrate in your artistic work. As always, if you need a partner for brainstorming, we’re here to help – check out our services here and follow us on our socials! 

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