Next Phase: A Pooled Fund Aims to Transition LA Arts Organizations from Survival to Recovery
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The Getty Center in Los Angeles. The J. Paul Getty Trust initiated the LA Arts Recovery Fund, which recently announced 90 grantees. Joseph Sohm/shutterstock
In February, the California Community Foundation (CCF) announced the launch of the LA Arts Recovery Fund to support organizations with a pre-pandemic operating budget of under $10 million. The J. Paul Getty Trust initiated the fund, which then received support from an impressive array of regional and national funders, including the Andrew W. Mellon Foundation, Ralph M. Parsons Foundation, Sony Pictures Entertainment, Rita Wilson and Tom Hanks, Netflix and the Ford Foundation, which made a $5 million challenge grant through its America’s Cultural Treasures initiative.
Last Thursday, the fund announced the winners. Ninety nonprofit organizations will share more than $36 million in operating support grants, ranging from $5,000 to $2 million over two to three years. Recipients span visual arts, theater, music, dance, literary arts and arts education and serve communities throughout Los Angeles County. Seventy-one percent of the fund’s 90 grantees are founded, led by, or have boards with a member majority of Black, Latinx, Asian and Indigenous leaders.
Speaking on behalf of the LA Arts Recovery Fund Communications Committee, CCF Director of Marketing and Communications Paula Valle Castañon told me that by providing critical multi-year general operating support to L.A. arts nonprofits, the fund hopes to “create a more equitable and inclusive arts and culture sector for the future.”
The announcement comes at a critical time for the arts sector. Organizations survived 2020, but revenues and fundraising returns are still nowhere near pre-pandemic levels. Cash reserves and emergency funds are drying up. And while some venues have resumed indoor events, they’re doing so at limited capacity. The LA Arts Recovery Fund provides recipients with something akin to a financial bridge to deliver them to something resembling normalcy—fingers crossed—this fall.
“We know that much more needs to be done to sustain the region’s entire arts ecosystem, which is why we are calling on philanthropy, public institutions and community members to join us as we increase our grant resources toward a goal of $50 million,” Castañon said. “We need to mobilize for the larger systemic solutions our communities need.”
How the fund evolved
In April 2020, the J. Paul Getty Trust launched the $10 million LA Arts Relief and Recovery Fund for small and midsized organizations. It awarded $2 million to 80 organizations in the spring of 2020. The trust then “paused the initiative,” wrote the Los Angeles Times’ Deborah Vankin, “with the intention of bringing in philanthropic partners and growing the pool of resources.” The slightly reworked LA Arts Recovery Fund is the result.
Struggling arts institutions were in dire need of immediate support during that first year of the pandemic, but it was around this time that some funders began taking a more long-term view of the unfolding crisis.
I recently spoke with Jerome Foundation President Ben Cameron about the funder’s pandemic-era support for arts grantees in Minneapolis and New York. He told me that in 2020, the board signed off on a plan that would ramp up its support over and beyond its 5% annual endowment payout. However, instead of emptying the safe within a compressed time frame, leadership decided to reserve the bulk of the funding for the last three years of a five-year arc.
It’s also important to remember that arts funders were shoveling money out the door with minimal fuss in the early days of the pandemic. The approach was ad hoc and imperfect, but coupled with federal relief, it provided many—though certainly not all—organizations with enough support to remain solvent throughout the year.
Last November, I spoke with Suzanne Appel, managing director of New York’s Vineyard Theater, about how she and her team navigated 2020. Appel told me that the New York Community Trust’s NYC COVID-19 Response & Impact Fund was a “lifeline. They asked us what we needed, we told them, and they fully funded our request. That early support was critical.”
Grantmaking leaders may not go on the record and explicitly say it, but I suspect some of them saw the robust response from philanthropy and government and calculated that they could be equally impactful by supporting organizations a bit further down the line once that initial phase of funding dissipated. The LA Arts Recovery Fund leaders’ decision to retool its operations last year paid significant fundraising dividends. The $38.5 million fund is the largest-ever private pooled investment for the arts across L.A. County.
An uneven recovery
The outlook has brightened for the performing arts sector, but funders acknowledge that organizations aren’t out of the woods yet.
In April, the Ford Foundation announced it had extended its Building Institutions and Networks Initiative, which provides organizations with five-year flexible funding and institutional strengthening grants, by another $1 billion. Program Director Kathy Reich told me she worried that “in the next six months, as things start to open up, that a sense of complacency will set in. There’s a risk that foundations will go back to business as usual, and there won’t be a spigot of federal support that organizations can fall back on.”
The same day the LA Arts Recovery Fund announced its winners, TRG Arts and Purple Seven released a study surveying the state of the performing arts sector in March and April 2021. The good news? Organizations saw the best comparative sales and revenues since May 2020. However, 48% of total advanced revenues held by U.S. venues are for performances to take place in 2022. Most alarmingly, compared with the pre-pandemic period of January to April 2019, the majority of U.S. organizations reported “a significant reduction (20%+) in numbers of gifts and gift revenue they had received” from January to April 2021.
“While this analysis does give some grounds for optimism, the recovery so far in the U.S. is partial and uneven,” said TRG Chief Executive Officer Jill Robinson. “Some organizations that have worked consistently to deepen their relationships with their customers during the pandemic are now being rewarded with record subscription sales. At the same time, organizations that have effectively hibernated for the past year will find re-engaging with their audiences far more challenging.”
Given this context, the LA Arts Relief and Recovery Fund’s announcement comes at a pivotal transitional phase for L.A. arts organizations emerging from hibernation.
Advice for arts fundraisers
I asked Castañon how philanthropy can best support the arts in the months ahead. “Now, more than ever, our arts and culture sector partners need multi-year general operating support,” she said.
Castañon is correct, naturally, but we’re still not sure if other funders received the memo. A December Center for Effective Philanthropy report found that 44% of foundation leaders spanning sectors were either undecided about permanently making new grants as unrestricted as possible (29%), or had ruled out the idea completely (15%).
Beyond grantmaking, Castañon, speaking for the LA Arts Recovery Fund Communications Committee, said philanthropy can also support arts practitioners by “raising awareness, ensuring public funding and policies are in place to support the sector now and in the future, incorporating equity practices, promoting a consistent and unified public health message as it pertains to engaging in arts and cultural activities, and, of course, by encouraging individuals to return to museums, theaters, outdoor performances and other events.”
Meanwhile, fundraisers are navigating a different terrain compared to last year. Rather than make the case for survival while staring into an existential abyss, fundraisers are now asking donors to help their organizations recover and reinvent. It’s a less urgent message than what came before it, which may explain why, according to TRG Arts and Purple Seven, fundraising returns were sluggish from January to April of this year.
It’s against this backdrop that Castañon encouraged fundraisers to take command of the narrative by “telling the world where you are headed, and what you believe the future holds for your organization and your community. Stay the course. Be honest.”
Fundraisers can also use this time to focus on stewardship and relationship building, Castañon said. “Take this time to clean and update your lists. Spend time in prospect meetings. Invest in training your board members how to be fundraisers, which includes encouraging them to reference your organization in their bios. If you have a planned giving program, lock those gifts in from your board members. Encourage your CEO to reach out to your board members and top donors. Finally, analyze your donor histories and go for it!”
