Scrambling to understand nonprofit arts funding? Here’s what you need to know

Many creative sector folks wear many hats, splitting our time between being arts practitioners and administrators, aware of what it takes to keep our organizations financially solvent. But if you’ve never worked in arts administration or you’re an artist striving to build a company in the future, there’s a lot to learn. I’m one of those hybrid creatures straddling being an artist and fundraising for a midsize nonprofit in Philadelphia, and I want to use what I know to spread knowledge and dispel some myths about what it takes to fundraise for the arts, where that money goes, and how the arts factor into the community at large.

Can you get sustainable funding?

It can take a long time to get funding from a particular source, be it a foundation, an individual donor, or a corporation. The first time you or your company applies for funding, it’s not likely to get that grant or that pledge—and it’s not because you’re doing something wrong or have an unattractive mission or project. There are a lot of folks and organizations applying to the same funders, and it can take a long time to establish a connection so that an applicant hits a funder’s radar. And the larger the amount of money you’re asking for, the longer it takes to actually see the rewards of your relationship building.

Unfortunately, sources of funding can be unpredictable, no matter how much time you put in to establish a longstanding connection. A foundation could give resources one year, cut it in half the next, or forgo support altogether if their funding priorities change or if your company gets knocked out of that granter’s orbit. For example, it can take years to get a grant from the National Endowment for the Arts, but it takes only one missed granting cycle before you’re putting yet more time into getting them to notice you again.

Additionally, sometimes funders have to diversify their giving—such as this year, when so many need assistance. Nonprofit companies must constantly research and hit up new sources of funding. Databases including Guidestar and Foundation Directory Online list local and national philanthropic foundations and grants, but they require a paid subscription. If it’s not in your budget to bust through that paywall, don’t get disheartened—there are other organizations, such as Artwork Archive, that pull together lists of grant opportunities completely free of charge.

Where does the money go?

It’s really tricky to get support for the everyday costs of running a nonprofit. Most money given by donation is program based, meaning that when an organization is awarded a grant from a foundation, the money received is dedicated to a particular project. Very few grants are for general operations—known as “gen ops” in the biz. When a budget is created for a particular program or artistic endeavor (like the production of a play), applicants have to give specific ideas about what their expenses might be, and then they have to tell foundations exactly how much of the grant will go toward given line items on their budget.

Very little of that grant money can actually go to the organization itself—but it’s possible! When creating that budget, you can build in some gen ops money by including overhead—a small portion of the project’s ask that can go toward general expenses for just existing as a business. Typically, the amount can be anywhere from 10 percent to 20 percent of the grant amount. Since COVID-19 has put many companies in danger, some foundations are allowing unspent project funds to be converted into gen-ops money. It’s unclear how these foundations will continue to evolve to meet needs within the pandemic, but for now, general operations grants are tough to come by.

Do the arts drain our city?

Sometimes we’ll encounter the notion that support for the arts is selfish or superfluous, and that arts are a drain on individual, government, and corporate resources. That’s a toxic and false ideology. According to a report by the National Endowment for the Arts and the US Bureau of Economic Analysis that was released in March 2019, the arts contribute hundreds of billion dollars a year to the economy—in Philadelphia alone, the arts-and-culture sector generates roughly $4.1 billion dollars a year, spurring the economic growth and health of our city.

The arts create jobs, support local businesses, uplift tourism, generate major tax revenue, and more—everything that contributes to a city’s bottom line. And the arts also have a significant impact on the social and cultural well-being of the city’s constituents. Most arts organizations function as civic institutions, providing programs to people who wouldn’t otherwise have access, creating educational opportunities, or offering other services that support their missions while staying connected to their artistic roots. Bear all this in mind when preparing a proposal for funding—your organization has a lot to offer, and you probably have a unique approach to fulfilling a concrete need.

Who can help?

Unless a company is established enough to hire someone full-time to research and cultivate funding opportunities, the organization’s founder or leader will have to do the proposal writing. One way to spread the workload is to seek a freelance grant writer to support that part of the process (a job I held before becoming a full-time employee). Freelance grant writers and consultants can be a great solution when a company is starting out, but there are some things to keep in mind. Freelancers might not be as familiar with your work because they have not spent time with you. Overcome this by making sure there are clear channels of communication between the organization and the grant writer if questions arise. Information needs to freely flow if you want a chance for your proposal to succeed.

Another option is to do the grant writing yourself, but look to organizations like the Cultural Alliance, which frequently hosts seminars and does its own research in the field about fundraising for the arts and the trends seen among donors. This route requires self-educating, but the resources are there, and learning from them will ultimately make you more nimble and better prepared to advocate for your work.

Work the system, for now

This information is a starting point, and it is centered on a system that has been operating a certain way for a long time. It is my hope that foundations, donors, and corporations with philanthropic leanings adapt to create more accessible funding opportunities in the near future. Until they consider changing their own structures to offer more holistic support, working from inside this system and learning to master it is how you must begin.