Help! My arts organization lost its key funding

April 24, 2012 9:04 AM

I'm on the board of an arts organization that is in a funding emergency. I'm looking for suggestions of ways to raise money for our organization in a hurry - we've lost funding we were counting on and will lose our paid staff if we can't come up with some answers in a hurry. Why anon? Going public with the degree we're in trouble may make things worse. Details: we're a convening/connecting organization that facilitates other arts organizations and individual artists/musicians/creatives activities. We do some programming and help other organizations and individuals develop their programming and artistic careers. Most organizations like us are funded by supporting organizations and or a small percentage tax but we weren't set up that way and all arts organizations in our region - shoot the whole country - are struggling. Throwaway email: [e-mail]

More - we have multiple grant proposals outstanding. There are very few operational arts grants available these days. In the longer term we are actively working with local foundations, funders and individuals to build a more sustainable funding situation but the key funding we were counting on will not happen. We're looking for creative ideas. Already in the works - multiple fundraising events - help us figure out ways to enhance them!

posted by anonymous to society & culture (13 answers total)

Do you have any longtime supporters that you would feel comfortable going to and explaining the situation? They may be willing to give you a capacity building/emergency grant to keep your doors open for the time being.

Just be aware that any donor that you go to with this is going to be extremely concerned about your long-term viability as an organization. What got you to this point? Was the "funding you were counting on" coming from a variety of sources, or just one funder? The number one rule of fundraising is to never, ever count on any funding source - and to certainly not count on just one.
posted by anotheraccount at 9:19 AM on April 24, 2012

I realize you're doing fundraising, and likely those are things like benefit concerts, art shows, etc. Do you have networks with complementary (but maybe not directly associated) industries, like restaurants, etc? I only mention this because I recently attended a fundraiser for a women's shelter, which was a local "celebrity" chef doing various dishes for an enraptured audience, which they could then sample afterwards. It was very well received, and allows you to tap into a slightly different group than the "artsy" crowd.
posted by LN at 9:21 AM on April 24, 2012 [1 favorite]

Unless you are a very large org deemed publicly essential (orchestra, ballet, opera, art museum), which you aren't, this is going to be tough. When the Oregon Ballet got into straights a few years ago and needed to raise millions in a matter of weeks to stay afloat, the entire country rallied. But that is definitely the rare example.

You basically have three options:

1) Go to a major donor/supporter and be honest about your situation and ask for an emergency gift. As anotheraccount rightly points out, there will be concern about the sustainability of your org. But if you can talk a good talk, this is your best option for a lifeline.

2) Try and get a bridge loan or use your revolving line of credit (if you've got it). Sometimes your bank will do this, sometimes a private foundation will do it (but going through a foundation could take months to secure).

3) Fold and then try to rebuild yourselves. Kinda sucks, but it is a reality for many non-profits. Sell assets if you have them. If you have lease, sublet it or get out of it. Downsize, restructure, try again.

Your other option would be to go really public and do some sort of "save the x" campaign. This could involve an online petition, fundraising event (you say you have several - you might be better off just doing one large one, really making it an all or nothing seeming situation), and those types of things. This will only work if you have a lot of public support or think you might. You'd really have to make the case for your survival, which is very difficult for non-institutional or publicly beloved arts organizations. This also has long term ramifications p.r.-wise, because getting grant funding these days is highly dependent on the long-term viability or seeming long-term viability of your group, and situations such as this can cast a negative light on that in the minds of potential foundations and other grant makers.

I feel for you. The economy has been hell on arts non-profits, which are always the first to go when things get bad. Pledges falling through is not an uncommon thing. Best of luck.
posted by Lutoslawski at 9:32 AM on April 24, 2012

Oh - and because you're on the board, go to each board member and ask for help. That's what the board is there for.
posted by Lutoslawski at 9:34 AM on April 24, 2012 [1 favorite]

One of the hardest parts of being on a board like this is organizing a downsizing. IT SUCKS, but depending on context it can be like how getting old sucks; it beats the alternative. What you need to do is accurately asses the long term sustainability of your organization and be absolutely and honestly clear as to whether this is an acute or a chronic problem.

If this is a chronic problem that will keep coming back, the fastest way to murder your organization and everything it has built is treat it like an acute problem. You would need to get together with the board and keep cutting until you are within what your community and funding structures can sustainably support.
posted by Blasdelb at 9:42 AM on April 24, 2012

How much money are you talking about? How quickly must it be raised? The answers to both of these questions will advise you which roads you should spend the most time investigating, and likely, you'll have to try a bunch of different things to meet your funding goal.

As anotheraccount says, you should definitely have a financial plan available for potential big donors that addresses how you got into this situation and how you plan to get out of it. Having your latest audit letter won't hurt either to demonstrate the org's fiscal accountability.

Grants are always fickle business, and it sounds like your org needs to work on some in-house revenue generating activities that aren't dependent upon grants and donors. Are there any services your org can start charging a reasonable fee for? Is there mission-aligned in-house expertise that you can contract out to other orgs for a reasonable fee? Any well-known people on your board who can work their connections?
posted by smirkette at 9:46 AM on April 24, 2012

The usual thing in this situation is to cancel what you can where you can and go hat in hand to the board and the core individual donors and ask them to stretch. I've been through this with a few organizations both as a board member and as a consultant to the board.

One other possibility, if this really is a one-time issue rather than a chronic problem, is to approach a local bank about opening an additional line of credit. (An individual donor with deep pockets, or a group of same, might be more willing to underwrite a line of credit with a local bank than to make an additional cash donation.) But, as Blasdelb wisely says, you have to be clear that this is a situation where that is a solution, not just staunching a money hemorrhage with a Band-Aid.
posted by Sidhedevil at 9:50 AM on April 24, 2012

This is what I do for a living, and my recommendation is to go to local corporations and corporate foundations for help. As opposed to competitive private or government grants, they can often give funds quickly and for non-designated needs. Where competitive grants require a proposal that becomes a contract when funded, corporate foundations can often write a check in response to a personal visit or letter.

My recommendation is to make a list of the medium and large corporations in your town and region, write a letter to each of them and hand-carry it to them if they will grant you an appointment. Remember to match your organization's need to their mission (think "What's in it for them?") -- this should be an investment they want to make for them as well as for you.

MeMail me if you'd like to discuss further... I know it's tough out there for nonprofits right now.
posted by summerstorm at 9:57 AM on April 24, 2012 [2 favorites]

There are very few operational arts grants available these days.

One thing donors are going to tell you is that this isn't a new problem, so why did you get into an emergency situation? This issue has been a serious one for several years now, with a big downturn after the financial crisis of 2008.

Here in my local arts community, we've had a high-profile opera company closing and a massive museum reorganization. My guess is that other organizations in your community have had similar turmoil, and that most of the donors you approach are going to be supporters or board members of other organizations that have weathered (or not weathered) the crisis. So you really need to sell why you're different and why you need to survive and how you have made a plan that gives you a better chance of survival than the other organizations coming to these folks for money.

It's going to be very important to be clear with the "family" about what went wrong and why, and especially on what kind of plans you have going forward.
posted by Sidhedevil at 9:58 AM on April 24, 2012 [3 favorites]

I think a devil's advocate will help you raise money best of all...

What is the point of a coordinating arts council if you don't have access to a tax levy? That is the question you should be considering. The way you raise money now is to redefine your territory and poach clients and funders. Do not focus on your region alone, start calling funding orgs of all kinds and say, "we are the arts coordinators of the entire A. We are not at all supported by a levy, so we have no geographic restrictions." Bang goes the theory. Your route to survival is for another coordinator in your locale to go out of business. You might hate the idea, but you will hate unemployment more.
posted by parmanparman at 10:04 AM on April 24, 2012

In addition to the ideas above:
Where are you based? If there are corporations in your area, you could reach out to their sponsorship department and explain your situation. In exchange, you could put their logos/name on future shows. Raffle tickets to cruises/vacations at your fundraising events.
posted by ichomp at 10:56 AM on April 24, 2012

If your organization is providing a valuable service in your community you should be able to capitalize on that market and get donations from those you serve or those who have an interest in the welfare of those you serve. If you cannot drum up financial support from either segment it would seem the market has clearly answered: your services are not valuable in the market and you should fold. So again, go directly to those you serve and those who have interest in the welfare of those you serve.
posted by TestamentToGrace at 11:36 AM on April 24, 2012

A couple of years ago, a major donor cancelled funding abruptly to our non-profit. We had to close programs or replace the funding. It was a cash-flow issue more than total funding. We did an appeal, laying out how much we needed and emphasizing that we would continue as many programs as we could, but that X, Y and Z would end and that would mean X number of children would be turned away. We raised the amount, and it ended up broadening our donor base.

Is this cash flow or more fundamental? If it's cashflow, an appeal can help. If it's fundamental, then the reality is that you will probably need to close some programs.

Draw up three budgets: What you would do with your current very low funding, what you would do if you could replace the lost funding, and what you could do inbetween. Lows, highs and inbetween. There will be something that is immediately obvious - cancel a lease and have everyone telecommute, cut a planned conference etc. Look hard at payroll and think if you could outsource anyone's jobs cheaper *and* better. It's dumb to fire a talented employee until the absolute last measure, but if you have deadwood, now is the time to cut.

Put a good spin on it in your appeal. No matter how you feel about the lost funding, do not blame the donor - if possible, don't even name them at all. Donors don't want to give to a place that embarrasses other donors. Make it clear that you're cutting programs so you can continue to serve your core clients, or that this funding is this one-time for this specific need and you'll be able to do all these amazing things as a result.

Take that attitude of giving people an opportunity to keep an amazing organisation open, to make all these wonderful things happen right now with this critical funding, and go for personal meetings with your past large donors and your high-net worth donors. Now is the time for face to face meetings.

And really think about what you can cut, about what's critical. Grants take forever - we only use them for extending or piloting programs and try not to rely on them for anything critical now, because the cashflow is so uncertain.

Working out what to cancel, what to close and who to let go is painful but necessary. You may not need to do it if your various appeals are successful. But even if you did get the funding, cutting stuff that's not core is probably good long-term. It always hurt when we did it, but in hindsight, was generally the right decision. Your board should be the ones making the final decision.
posted by viggorlijah at 8:54 PM on April 24, 2012 [2 favorites]