The Arts Sector is Being Decimated by COVID-19. What Are Funders Doing in Response?

Spring 2020

By Mike Scutari

It’s only been a few weeks, but COVID-19 has already caused incalculable and potentially irreversible damage to the nonprofit arts world. Theaters are dark, museums are shuttered, work has dried up, and revenue has evaporated.

The good news—if there is any—is that funders are quickly ramping up efforts to help organizations and artists in need.

On March 20th, a broad consortium of funders, including Bloomberg Philanthropies, the Ford Foundation and the Andrew W. Mellon Foundation launched the $75 million NYC COVID-19 Response & Impact Fund to support the city’s cultural and social services organizations. Other funders are loosening grant application restrictions, extending or waiving deadlines, and honoring commitments for events that won’t take place.

I reached out to funders, nonprofits and arts advocates, asking them how philanthropy can make the greatest impact in the present moment. Three key themes emerged. First, “donors are doing much of what we would hope for: asking institutions what they need,” said Melissa Cowley Wolf and Sean McManus of the advisory firm M + D.

Second, while organizations need help as soon as possible, funders want to ensure they make a maximal impact. “The situation is complex, and evolving very rapidly,” Creative Capital President Suzy Delvalle said. “We’re reaching out to one another and trying to come to an understanding of how best to respond. We want to move quickly, but we also need to ensure we’re developing an understanding of where assistance is most needed and can be most helpful.”

And third, the arts sector had been plagued by shrinking government support, falling revenues and equity shortcomings before COVID-19 hit. What will it look like when the pandemic eventually ebbs? “The crisis,” William and Flora Hewlett Foundation Program Director Emiko Ono told me, “is exposing weaknesses that we should avoid inadvertently reinforcing through stimulus and recovery efforts.”

While this crisis has been unfolding for just a short while, a clear playbook is now emerging for how philanthropy can best support the arts during a period of profound trauma.

1. Provide emergency funds—the sooner the better

Less than a week after the first few COVID-19 response funds were announced by local grantmakers, the total number is more than 100 and rising. The individuals I reached out to unanimously encouraged arts funders to do the same.

“Because many working artists simultaneously work in the ‘gig economy,’ these individuals are struggling to make ends meet and support their families. Many do not have health insurance,” John D. and Catherine T. MacArthur Foundation President John Palfrey told me. MacArthur is a contributor to the Chicago Community COVID-19 Response Fund, which raised $8 million within the first 24 hours of launching.

“When it arrives, emergency support needs to be accessible and equitable, without too many strings or administrative barriers attached,” said Jeannie L. Howe, executive director of the Greater Baltimore Cultural Alliance.

On March 10, New York Foundation for the Arts (NYFA) and the Robert Rauschenberg Foundation announced a new medical emergency aid program that provides visual and media artists and choreographers with up to $5,000 to cover a number of unforeseen medical expenses.

“The timing of this announcement happened to coincide with the unfortunate spread of COVID-19, however, this program has been in the works for several months, now,” NYFA executive director Michael L. Royce said. “If a visual or media artist or choreographer catches the virus and meets the application requirements, their application will certainly be considered.”

Based on the foundation’s experience with the New York Arts Recovery Fund after 9/11 and the NYFA Emergency Relief Fund after Hurricane Sandy, Royce argues that “when it comes to emergency grants, the sooner the funding can go out, the quicker individuals or organizations can regain their footing.”

A Blade of Grass’ executive director Deborah Fisher said the funder is confirming its 2020 Fellowship for Socially Engaged Art cohort, which comes with a $20,000 minimally restricted honorarium, and that “the most supportive thing we can do is go ahead and provide the funding now, and then collaborate with each artist to create terms that will make sense for that support, given the new realities of their projects.”

Other examples of funders providing COVID-19-related emergency funds to artists and organizations include the Vermont-based CERF+, the Denver-based Bonfils-Stanton Foundation, and the Minnesota-based Springboard for the Arts. I encourage you to check out 303 Magazine’s ever-growing guide to resources and emergency grant opportunities for artists and creatives affected by the coronavirus.

2. Relax restrictions and loosen requirements

Echoing the sentiments of Edward W. Hazen Foundation CEO Lori Bezahler’s piece laying out philanthropy’s to-do list during the COVID-19 pandemic, those I spoke with encouraged funders to relax restrictions “even if their sponsored projects are not going forward,” Greater Baltimore Cultural Alliance’s Howe said. “It will also be necessary for institutional funders to loosen requirements for restricted grants so that grantees can keep the lights on, and artists can put food on their tables.”

“Beyond sharing and spreading the word about emergency resources that are available now, funders should be loosening restrictions on grants and embracing flexibility on the usage of funds,” Creative Capital’s Delvalle said.

Hewlett Foundation’s Ono and her team have told their grantees that “we’re flexible about grant requirements, and are inviting them to contact us about their needs, particularly for project-based grants where our funds were for a specific conference, event, or body of work that might have to be canceled or postponed.”

And while MacArthur Foundation provides its organizations with crucial general operating support, “it is obviously not sufficient at this time,” Palfrey told me. In response, the foundation may offer additional general operating support grants, extensions to grant terms, and targeted project budget reallocations. Check out MacArthur’s letter to its grantee partners laying out its response to COVID-19 here.

3 – A COVID-19 response to-do list

The launch of the NYC COVID-19 Response & Impact Fund, which will be overseen by the New York Community Trust, is a welcome development because it lays out how funds will assist arts organizations and social services groups. The initiative will provide grants and no-interest loans for needs including:

  • Unrestricted, flexible funding to support new and emergency needs and meet community demands, particularly for service offerings outside normal operations required to respond to social distancing, isolation and quarantine
  • Technology to support remote work and services—laptops and remote calling capacity for staff, securing staffing and training to fulfill their mission
  • Temporary staff support to cover for shortages caused by employees who are ill, may have to quarantine, or stay home to care for family members or children during school closures
  • Equipment and supplies such as masks, hand sanitizer, gloves and cleaning supplies
  • Additional cleaning services to augment in-house operations

An advisory committee formed by public health, community development, and arts leaders will allocate the funding, giving priority to those supporting essential healthcare and food insecurity. The Community Trust will continue to solicit donations.

Meanwhile, MacArthur’s Palfrey told me that local arts funders are considering a fund parallel to the Chicago Community COVID-19 Response Fund. The city’s arts organizations have asked funders to consider all of the following action items:

  • Create a pooled fund that can support both organizations and individual artists; design the fund to operate with maximum efficiency, and with minimal proposal and reporting requirements
  • Consider making larger grants and “topping off” existing grants
  • Make bridge loans to organizations that are in need of immediate funds and that have capacity to generate income later to repay the loan
  • Offer financial management and capacity building advice to organizations
  • Buy tickets to or sponsor events that had to be canceled to help organizations recover the funds they typically obtain through fundraising events
  • Provide general operating support and, where possible, convert project grants to general operating support grants

You’ll note that both lists include general operating support. This is no coincidence. “Because a full 70 percent of Hewlett’s performing arts grants are general operating support, we’ve been making sure grantees understand those funds can and should be used for whatever their organization determines is most needed,” Emiko Ono told me. “Coping with this type of unanticipated event is an important part of why we tend to give unrestricted grants to many organizations that we support.”

Other suggestions from people I spoke with include:

  • “A helpful rewrite of a project grant can have a line item that covers artist fees for all canceled events, helping them to secure their income and keep nonprofit leaders from having to make the ‘tough choices’ to leave artists unpaid,” said A Blade of Grass’ Fisher. “There also needs to be unrestricted support of salaries and other indirect costs, so that staff can feel secure and there are venues to go back to.”
  • M + D’s Cowley Wolf and McManus noted that this crisis is coming at a time when many organizations host their annual galas. They encourage donors who have purchased a ticket to roll it over as a gift to the institution. “The same applies to any programming fees,” they said. “Let the organization know they may use this as a donation. And most importantly, communicate that the organization can allocate it toward any purpose they deem necessary during this crisis.”
  • Kate Levin, head of Bloomberg Philanthropies’ Arts program, also zoomed in on the museum space. These organizations have buildings to maintain and artwork to secure, in addition to payroll and other contracted services. Many organizations, she said, “are asking that supporters convert ticket purchases to general operating contributions, and honor funding commitments even though events and exhibitions won’t be happening as scheduled.”

The philanthrosphere’s response to COVID-19 serves as a reminder that funders can pivot with urgency and nimbleness when the moment calls for it. We’ll be keeping an eye on the fast-moving developments in the arts sector as they continue to unfold.

In the meantime, stay tuned for a follow-up article I’m writing—also based on interviews with leaders in the sector—regarding how philanthropy can use this moment to build a more sustainable arts sector once the present crisis subsides.

This article comes from Inside Philanthropy. click here for more resources.