How Things Work, Part 2 (cont)May 20, 2010
California Cultural Data Project
Many foundations and organizations are mobilizing to confront the daunting task of how organizations can measure their relationships with their communities. In the last few years, nonprofit and government organizations in California have begun to use a comprehensive financial reporting system called the California Cultural Data Project (CCDP). The standardized data profile collected for each participating organization is based on the Internal Revenue Service accounting guidelines for all 501(c)3 organizations, but then goes further to also track "basic organizational information, revenue, expense, marketing activity, balance sheet items, investments, loans and a wide range of non-financial information (including contributor and attendance numbers, facilities, pricing, capital and endowment campaigns, program activity and staffing)." According to the Cultural Data Project's website, the CDP began in 2004 in Pennsylvania "as a statewide, web-based data collection system for nonprofit arts and cultural organizations." Based on the success in Pennsylvania, Maryland was the first additional state to adopt the project in 2007, followed by California in 2008.
Recently, the CCDP, in conjunction with the SFAC, released information from its first set of completed surveys in the state. Statewide, over 2,800 organizations are participating in the CDP, with 342 (of the estimated 450 total arts organizations in San Francisco) participating. Some of the results were very unexpected. For example, overwhelmingly, revenue for these organizations is coming from individuals. Board contributions, membership drives, and individual donations (exclusive of volunteer hours and in-kind donations of goods and services) account for over seventy percent of the income for all organizations. This is not a recession-era statistic either. The study shows that foundational support accounted for only ten percent and corporations accounted for only four percent before the recession hit.
These figures elucidate a crucial point, and one that seems to hold the key to organizations’ sustainability over time, no matter the structure: individual contributions and support are what maintains the community's vitality. The idea that large funding institutions or a small handful of wealthy benefactors drive the community is simply inaccurate.
Although still in its nascent stages, the CDP has already begun to provide invaluable data that tracks organizations’ financial health over time. Eventually, the information can help arts workers across the state understand where the most valuable resources reside in their communities, and then translate this data back into programming and outreach. It is also an advocacy tool to secure and preserve arts funding using empirical data, by which government agencies and developers might leverage cultural tourism to get investments, construction, and money into the Bay Area. The CDP study determined that for every dollar spent on an arts event, four dollars comes back into San Francisco in other spending (food, lodging, transportation, etc.).
New Means of Support
In part, due to the CCDP’s results, several organizations are looking for new ways to support hybrid and grassroots modes of operation. These organizations are trying to determine if the funds are getting to the most vital projects, and if the artists and communities are being effectively heard. For example, the SFAC, led in most part by the Cultural Equity Grants program, has been working to facilitate changes in sustainability practice to create a holistic approach to the entire ecosystem of government and institutional funding. The SFAC hosts town-hall style meetings and conferences, and participates in studies to go beyond identifying ways of adapting to vastly diminished funding resources that impact everyone across the board. It is also trying to understand the changing demographics of artists and arts communities. (Full disclosure: I am the Gallery Manager for the San Francisco Arts Commission Gallery.)
On a national level, the Andy Warhol Foundation for the Visual Arts, a funding organization largely responsible for the survival of many nonprofit arts spaces, provides necessary support to the nonprofit agencies in San Francisco (and the rest of the country) through the capacity building Warhol Initiative. In 1999, the Warhol Foundation launched this initiative to award capacity-building grants to small and mid-sized nonprofit arts organizations across the country as a way to both preserve and bolster the operational strength of historically underfunded community arts organizations. Grantees were given the opportunity to build capital for the long-term survival of their organizations in whatever way made the most sense for their model. The Warhol Foundation continues to respond to the ground-level needs of arts communities by creating a regional regranting program, of which the San Francisco‑based nonprofit Southern Exposure’s Alternative Exposure Grant was the pilot program.
James Bewley, a Program Officer at Warhol Foundation for the Arts, discussed with me via e-mail the underlying principle in employing effective models of visual arts presentation in a sustainable way. It became clear that part of this paradigm shift is not just in how we act, but in how we articulate those actions. He described what is at the core of the Foundation’s principle.
Ultimately we hope that everything we do ends up benefiting artists. We’re an artist-centered Foundation, and we consider the needs and opportunities to artists first and
foremost in all our funding activities. As many ways as we can achieve this, we pursue.
With the Regional Regranting program, (which is now active in four cities across the country, with more in development) we partner with organizations to reach those collectives, living room galleries, spontaneous festivals, and unincorporated artist groups that we ordinarily would simply not be able to fund. These efforts are an essential part of the local arts ecology, yet existing mechanisms for support were not always set up to serve them. And rather than push organizations into the 501c3 process, which in most cases would either be not appropriate or desirable, we found a way to reach them, in order to assist them in doing this vital work they do. It’s important to note that this program wouldn’t be possible without the leadership and vision (not to mention administrative time and energy) of those long-standing nonprofits and artist-centered spaces. So from our perspective, it’s not a question of incorporating vs. non-incorporating as an institution, it's how can we as a Foundation support the work of artists as broadly as possible.
By briefly considering just a few of the strategies being forwarded by funding organizations and by examining the transformative model put forth by Triple Base, it becomes clear that the conversation needs to shift away from the lament that we are all reaching for the same piece of a shrinking funding pie to an examination of how we articulate and maintain our vitality. Is the work we are doing in our arts spaces, practices, and nonprofit organizations serving a meaningful purpose for the arts community? Are we pushing ideas forward? Are we staying true to our mission? These are questions for each individual, from audience members to heads of the largest funding institutions. They demand a response and the response comes in the actions of the community at large.
In an interview with John Killacky, Program Officer for Arts and Culture at the San Francisco Foundation, he noted in no uncertain terms that sustainability has little to do with the length of time an organization has been in existence and even less to do with its formal organizational structure. Instead, it has everything to do with how it creates and maintains its relationship with its audience as a collection of individuals. The people who make up the audience are the same people who should be supporting the organization, whether it be direct financial support or in-kind services.
Mr. Killacky described the growth potential in individual giving, which verified the result of the CDP survey in no uncertain terms. Even in this economic environment, individual donations are consistently the highest sources of income for nonprofit organizations. He directed me to an article he recently wrote for nonprofit management website Blueavocado.org in which he referenced individual giving.
Consistently, 75% of private donations come from individuals and another 7% from bequests (GivingUSA). Religion garners one-third of this largess; arts, culture, and the humanities only receive 4%. None of us minds tithing to our mosque, temple, synagogue, or church. In the arts, we too offer transformational experiences, so let's operationalize the "church ask." Start with the people you know: audiences, volunteers, donors, and neighbors―and ask for modest gifts, often. The Obama campaign proved the power of this kind of fundraising. 
People will provide financial support at whatever level they can, not only if they believe in what the organization is doing but also if they have a connection to the programming itself. This revelation is simple, but it is not always easy to translate this kind of one-on-one communication to organizations that have been trained through the vernacular of institutionalized giving. It is this individualized communication—the requests that are short-term and directly linked to specific programming—that can translate into sustainability.
For example, Intersection for the Arts has, for over four decades, maintained a ground-level relationship with young writers and performers in its theater and literary programs, and has supported the careers of countless artists and musicians in its gallery and jazz programs. It has made it its mission to listen to and address its audiences in a very direct way. I have often been to Intersection gallery openings and performances in which executive director Deborah Cullinan or program director Kevin Chen has directly addressed the audience with one very simple message: if everyone there tonight became a member of Intersection, they would not have to fundraise.
To be sustainable is more than having streams of income and formal organizational strategies. It is the effective articulation of individuals' experience with art presented in the context of a space or project, and how that articualtion is transformed into financial and sustainable support. It is also the effective articulation of one artist pushing their work in an unexpected direction and having a community with which to share that. It is making sure we can all continue to work inside this system.
The successful arts-organization models are not successful because they are rejecting nonprofit status or because they have an exclusive line of funding. They are successful because they have discovered effective ways to foster relationships with the communities in which they participate. By creating strategies of fundraising on a direct individual level, adapting exhibition spaces to involve spontaneous projects and experimentation, and combining commericial revenue streams with different means of institutional support—from fiscal sponsorships to regranting programs—an organization, living room gallery, or short-term project will be able to successfully navigate the paradigm shift at work in visual-arts spaces today.