Donations to Milwaukee-Based Arts Nonprofits are 50 Percent Below Pre-Recession Levels. Why?

As the U.S. economy continues its slow recovery—the recent gyrations in the stock market notwithstanding—many economists have talked about the "jobless recovery." The premise stipulates that while economic indicators may be improving, the rising tide isn't lifting all boats. 

The same logic applies to the nonprofit arts sector. As we've repeatedly noted in this space, an improved economy doesn't guarantee politicians or administrators will reinstate previously cut arts funding. In some cases, politicians acknowledge that the public money will never return; only private donors can fill the gap. In some extreme cases, even the private donors choose to remain on the sidelines.

We regret to pass along news that this phenomenon currently seems to be manifesting itself in Milwaukee—and it could be a harbinger for other cities around the country.

As this piece in the Journal Sentinel notes, while donations to area nonprofits have rebounded to pre-recession levels, the same cannot be said for grants to arts and cultural programs.

According to a new report by the Public Policy Forum, Milwaukee-area arts and cultural program grant revenue is 50% lower than pre-recession levels. "Our analysis shows that regular foundation grantmaking to the arts and culture sector dropped from about $8.5 million in 2007 to $4.2 million in 2011," said forum researcher Anne Chapman, the report's lead author.

So what's the cause of this funding disparity? Have Milwaukee-based arts organizations suddenly become less interesting, innovative, or engaging? Has their programming dramatically changed for the worse? The answer to these questions, thankfully, is no. The two reasons for the funding discrepancy, according to the authors of the report, are the increased consolidation—or is it monopolization?—of a region's philanthropic kingmakers, and changes in foundation funding priorities.

Let's tackle the first piece. As of 2011—the most recent data available—five philanthropic organizations out of a total of 134 provided about 60% of foundation grants to the city's arts and culture organizations. Consolidation has intensifed in the interim, and alas, there's not much any of us can do about it.

As to the second root cause, foundations have our permission to change their priorities. It happens all the time (just look at the disruptive changes afoot at the Ford Foundation). In fact, according to the study, at least two of those five Milwaukee-based philanthropic organizations have already have shifted their focus and are giving considerably less to art programs than they used to.

But priorities change for different reasons. And to hear the Public Policy Forum tell it, Milwaukee-area foundations' change of heart is driven by somewhat myopic motivations. According to the report, "Though private philanthropists have the financial capacity to plug gaps in revenue for the programs, they currently are focused on big projects deemed to be most critical to boosting Milwaukee's image as a 'major league' city.'"

To quote George Will: Well.

In other words, foundations seem to think that funding a dance troupe, for example, won't exactly propel Milwaukee to "major league" status. The irony, of course, is that every week, we publish dozens of posts looking at foundations who do this exact same thing for their respective cities.

On the bright side, Milwaukee's cultural landscape continues to grow. The number of arts and culture nonprofits rose by 147 percent between 1989 and 2011. But for these organizations to remain sustainable, they'll have to learn to do more with less—or hope local foundations reassess their reassessed priorities.