The Journal Gazette
 
 
Friday, February 26, 2021 1:00 am

Arts groups adapt to financial challenges

Many optimistic despite uncertainty about year ahead

COREY MCMAKEN | The Journal Gazette

In the past year, the public has seen arts and culture organizations pivot how they approach programming, offering more virtual options and making sure events follow pandemic health guidelines.

Behind the scenes, though, the organizations have also had to rethink their budgets as they face lost revenue from ticket sales and fundraisers.

With emergency relief, grants and – in some cases – increased support from donors, local groups made it through 2020. But some of those options might not be as readily available in 2021, which means local arts nonprofits could be entering their most difficult period of the pandemic, says Susan Mendenhall, president of Arts United of Greater Fort Wayne.

Business models vary from organization to organization, and so do the challenges they face during a pandemic. While some larger groups have more capital assets and robust fundraising capacity, smaller organizations have fewer fixed costs and can transition programs more easily.

Some smaller organizations saw fault lines forming even before the pandemic, which then accelerated the process, Mendenhall says.

But since the start of the pandemic, all of Arts United's anchor organizations are looking at their strategic plans and none are expecting to return to exactly how they did things before.

“They are finding new opportunities, despite the challenges of 2020 and 2021, to reach out to new audiences and to serve those in different ways,” Mendenhall says.

“And they are looking forward to recovering in a way that is even greater than they were before. I find that really encouraging and very exciting.”

The local arts community is significantly outpacing national trends, Mendenhall says.

That shouldn't come as a surprise. She says the city regularly “punches outside our weight class” in the areas of arts and culture compared to cities of similar size.

Although there is reason for optimism about its survival, the local arts community is still in a resiliency phase.

A recovery phase will follow, Mendenhall says. But we aren't there yet.

Staffing support

Support for staffing is the top need for organizations right now, Mendenhall says.

Many organizations are too small to cut staff as a cost saving measure, and workers' institutional knowledge will be key to rebuilding.

Government aid such as the Paycheck Protection Program mitigated a lot of losses for part of 2020, but support also comes on a local level.

Arts United's Arts & Culture Nonprofit Resilience Fund last month announced a new round of grants to help offset organizations' losses.

About $1.6 million was granted to 18 organizations in October for operating and facilities support and an additional $600,000 was announced in January for operating costs, according to an Arts United news release. Another round of grants totaling more than $600,000 is planned for May.

The fund was seeded with $500,000 from Arts United's endowment and has raised more than $2.8 million.

Arts United's participating organizations, which include Fort Wayne Civic Theatre, Fort Wayne Ballet, Fort Wayne Youtheatre, Fort Wayne Museum of Art, Artlink, Cinema Center, Science Central and The History Center, are projected to lose $1.8 million in the first quarter of 2021 and between $1.5 million and $2 million per quarter after that until public activities return to full strength.

Mendenhall says Arts United anticipates a total need from local organizations of about $6 million from March 2020 to March 2021.

What hasn't been made up by distributions from the Resilience Fund will come from other grants, PPP, the CARES Act, fundraising and organizations' money-saving efforts.

Many arts and culture nonprofits are still seeing support from individual donors and increased support from foundations. But decreases have been seen in the corporate area as businesses face their own challenges related to the pandemic.

Arts United has looked at past financial crises for an idea of what to expect now. Mendenhall says that historically, the organizations that strengthen relationships and share their value with donors through some kind of programming are the ones that recover more quickly.

Raising money

Fundraising is one of the most difficult things to do for a nonprofit, says Stacey Kuster, executive director of All For One Productions.

Kuster says the nature of fundraising hasn't changed much, even during the pandemic. Though the hurdles nonprofits face when approaching donors might be different now, there have always been obstacles that needed to be overcome in those discussions.

She has also found a lot of great tools such as webinars available for organizations looking for tips on fundraising during these times.

All For One is among organizations that have seen an increase in individual donors over the past year. Donor loyalty is key to helping arts and culture groups continue their missions.

Fort Wayne Museum of Art Vice President and COO Amanda Shepard says about 60% of donors to the museum's annual fund have increased giving and the museum is expecting to have exceeded its goal when its fiscal year ends this summer.

“Throughout the whole pandemic, individuals have been the group where we've had the most success,” she says.

People have a natural desire to find meaning in suffering, Shepard says. Everyone wants to feel like they can help solve a problem, and charitable giving is one outlet for that.

In addition to individual fundraising, some organizations get a big boost in revenue from major fundraiser events. Though some have moved forward in the past year – such as Cinema Center's Hobnobben Film Festival – other groups including Fort Wayne Ballet, Civic Theatre and the art museum canceled their big events for 2020.

The museum decided not to do its ARTrageous gala and auction because it didn't want to drastically change the ritzy event by adding social distancing, Shepard says.

The gala typically brings in about 20% of the museum's operating budget, which was cut from $2 million to about $1.8 million for this fiscal year. A lack of expenses for events such as the gala helped trim that budget.

The museum still needs to make up a significant portion of that lost revenue, however. It is planning an online auction and is asking people and businesses that would normally have purchased gala tickets to consider donating that money instead.

Kuster hopes donors will be understanding and not give up their support as the pandemic continues to affect the type programming organizations are able to offer.

“What I would like to see is more engagement on the things that arts organizations are able to do,” Kuster says.

She encourages the public to engage with organizations and buy tickets as they produce the best work they can in current circumstances.

Adjusting budgets

Shepard says she doesn't see a dark year ahead for the art museum, which expects to continue operating with a trimmed down budget. But it can't operate like that for more than a year or two without losing the quality programming it has become known for.

The museum was already doing more than museums in similarly sized cities on a smaller budget, she says, and it has been working for years to get up to a $2 million budget because that is where operators have placed the market value of what the museum offers to the community.

It isn't alone in adjusting budgets during the pandemic.

Executive director Jim Sparrow says Fort Wayne Ballet built budgets for this season while keeping in mind the capacity it might actually have for in-person performances. Virtual performances – such as this season's presentation of “The Nutcracker” – just doesn't give the same experience as live dance, Sparrow says.

So the Ballet looked at what it could do to still offer in-person experiences. For its world premiere of “Dracula” on Halloween weekend, it planned additional performances to make up for the smaller audience capacity of Arts United Center. Some performances have also been pared back to just its core dancers who can rehearse and perform in smaller, more easily controlled groups.

The Ballet has created various budget scenarios. Of course, the goal is to stay in the best-case scenario. But there are other options to fall back on. As of late December, Sparrow said the Ballet was operating in the middle range between best and worse cases and it will take a loss on the season.

But to maintain a professional dance company and quality academy, there is only so far the Ballet can cut back, Sparrow says.

The organization is being careful with the money it has, and it is anticipating the fall will be better as people will have been vaccinated and larger events might be possible.

There is no way to know how many audience members will be able or willing to return this year, says Phillip H. Colglazier, Fort Wayne Civic Theatre executive and artistic director. Along with reduced relief funding, that is one of the reasons he expects 2021 to be more concerning financially.

Civic adjusted its budget this season to more of a “rolling projection,” Colglazier says. He says Civic will be proceeding with caution and it will likely take several years for Civic to get back to where it had been, especially if social-distanced seating remains in place for an extended period.

In a December interview, even before the announcements that “The Mousetrap” was being canceled and “A Funny Thing Happened on the Way to the Forum” was being pushed back, Colglazier said he didn't expect Civic to end the season in the black. Civic also canceled this month's performances of “Sunset Boulevard.”

Civic has built up a reserve in recent years, and Colglazier credits aid from foundations for mitigating the need to pull from that reserve too heavily in 2020.

The organization received a National Endowment for the Arts award of $15,000 for its production of “1776” in the fall, which also made Civic eligible for additional NEA funding.

There were other grants and aid from the PPP as well, but all totaled it isn't enough to cover losses from subscriptions and ticket sales.

Though some organizations might not be as lucky, Colglazier says Civic can weather the pandemic while still serving its mission of providing arts to the community.

The Ballet is looking beyond the pandemic.

In addition to having best and worst case plans in place for the here and now, Sparrow says the organization wants to make sure it is ready when the pandemic and its restrictions are over. That means making sure it has plans and resources in place, even though it might seem odd to think about growth during this difficult time.

“At some point we're going to come out of this situation, and it may not be rapid,” Sparrow says. “But we need to be prepared to, as we come out, put our foot back on the gas.”

Lingering changes

Changes to programming are expected to be around for a while.

Arts organizations would love to see things to go back to normal with event calendars that don't have to be adjusted at the last minute because of changing health protocols, audiences that can fill houses without social distancing and full-scale productions.

That doesn't seem likely for 2021, at least not until much later in the year. Don't read that as everything being doom and gloom, though.

Even a season of smaller productions can be exciting, Sparrow says. It's all about getting creative and making the most out of what is available.

Reduced audience capacity hasn't cut the Arts United Center and ArtsLab theaters from the Ballet's plans. Among other factors, both are convenient as the Ballet's downtown studios are also located on Arts Campus Fort Wayne.

But some performances require more space or larger cumulative audience totals than might be possible in those venues if social-distanced seating remains a factor, Sparrow says.

So, upcoming productions could take place at multiple locations such as having a few performances of a ballet take place at Arts United Center and others in a venue such as an outdoor space – something that was in the Ballet's long-term growth plan already.

Civic Theatre is also making adjustments as it plans for next season. It is focusing on smaller shows that are less expensive to produce and require smaller casts.

Smaller shows can be just as popular with audiences and sponsors, Colglazier says. He points out that doesn't mean they won't have a large show next season, just not as many bigger shows.

The organization is still looking at bringing in shows that haven't been seen in the city, at least recently. The organization isn't giving up its base model, Colglazier says, just scaling it down until it can be built back up.

Civic is among area groups that have tested the water with virtual offerings, with varying degrees of success.

For the art museum, digital programming has been a boon.

It recently launched professionally filmed and edited virtual exhibit tours, which Shepard says have been going well. There has also been an increase in views of the museum's blog where staff and curators talk about exhibits as well as topics from the world of arts and culture.

The museum has discovered that the videos aren't just serving people that aren't able or willing to come to the museum because of COVID-19, but also people who wouldn't have been able to come to the museum despite the pandemic because they are homebound with disabilities.

“That's been a special thing to know, that this thing we did out of necessity because of the pandemic is actually opening the museum up to countless people that I didn't realize were in need of this programming for other reasons,” Shepard says.

Those videos have become a tool the museum will continue to invest in after the pandemic.

cmcmaken@jg.net

About this series

This is one of several Weekender stories that have explored issues affecting the local arts and culture community as the one-year anniversary of the coronavirus outbreak being declared a pandemic approaches in March.

The stories are part of “COVID-19: Caught in the Grip,” a Journal Gazette series about changes prompted by the virus – at least temporarily – as individuals and communities rallied to respond and learned to cope.

Other stories from the series can be read at https://on.jg.net/CaughtInTheGrip.


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