For arts and cultural organizations to truly thrive and enrich communities, financial health is critical. Financially strong institutions can focus on mission rather than on survival—they can produce, present, and preserve ambitious work. They can support and compensate artists at appropriate levels. And they can make artistic work accessible to more diverse audiences.
However, across the nation, cultural institutions are facing extraordinary challenges. The scarcity of financial resources is a persistent issue across the sector, particularly for smaller arts and cultural organizations. While 90 percent of all nonprofit cultural groups in the US have annual budgets of under $1 million, they only receive 21 percent of all grants or philanthropic gifts, according to a 2017 report from Helicon Collaborative. And just 4 percent of all arts funding from foundations goes to groups that primarily serve communities of color, according to the same report.
“For a long time now, we’ve observed that long-term stability has been a consistent struggle for some of our partners, especially organizations of color and geographically isolated community groups,” says Sage Crump, a cultural strategist and program manager at the New Orleans-based National Performance Network (NPN), a service organization that supports a diverse network of artists and arts organizations throughout the US.
In fact, Crump says that 10 organizations within the NPN that serve people of color have closed down within the last decade.
At the same time, in the arts and cultural conservation space, financial challenges are limiting the capacity of small organizations to support talented conservators, manage increasingly digital environments, and perform high-quality work at a rate that can keep pace with heightened demand. Funding to pursue conservation work is often dependent on grants, but longstanding sources like the Institute of Museum and Library Services, the National Endowment for the Arts, the National Endowment for the Humanities, and Save America’s Treasures now routinely experience threats of scaled back resources—or even closure.
“Market assumptions from the 1990s and 2000s no longer hold,” explains Alison Gilchrest, program officer for Arts and Cultural Heritage (ACH) at the Mellon Foundation.
Whether focused on performance or conservation, small- to medium-sized arts and cultural institutions face the same financial reality: When they cannot predict their cash flows with accuracy or consistency, they are often unable to develop or maintain a plan for long-term sustainability or adaptability in shifting market conditions.
In order to address these challenges, The Andrew W. Mellon Foundation partnered with the Nonprofit Finance Fund (NFF) to develop the Comprehensive Organizational Health Initiative (COHI), a multi-phase program designed to improve the structural and financial health of underserved and under-resourced arts and culture organizations. Through cohort-based grants with a strong emphasis on peer learning and evaluation, COHI was launched in 2015 to advance the broader goals of Mellon’s Arts and Cultural Heritage program.
To date, COHI has focused on three core groups of organizations across the sector: regional art conservation centers, theater and performance groups that are members of the NPN, and dance companies drawn from the cohort of the International Association of Blacks in Dance (IABD).
COHI begins with a one-year review of a discreet segment of the arts and culture ecosystem, analyzing the existing operating models and capital structures of various organizations. A select group of participants then transitions to the program’s second phase, receiving a series of investments that can include recovery capital, general operating support, and personalized consultancies with NFF in matters such as board development, facilities, or leadership transition. Depending on outcomes, grantee participation in COHI may last up to four years.
“These organizations know what they’re doing. They’ve done it, they’ve done it for a long time, and they’ve done it well despite the challenges that they’ve had to face,” said Trella Walker, associate director at the Nonprofit Finance Fund who works directly with members of the IABD. “So we’re not coming in to say, ‘This is the measure of a perfect organization that you need to meet.’ We’re coming in to say, ‘What do you do? How do you do it? How can we help you do it with less stress, less strain, and more resilience?’ And then helping them frame and prioritize measures to help them achieve that goal.”
In the years since launch, COHI’s flexible and innovative approaches to nonprofit capitalization have ushered 14 organizations to the third phase of investment—with change capital—and another 11 are in phase two. All are showing benefits from their participation. For example, COHI enabled IABD executive director Denise Saunders Thompson to expand her work there into a full-time role, coordinating the participation of 30 dance companies in the network’s activities.
“Together, the companies offer considerable geographic diversity,” said Saunders Thompson. “There has been a reinvigoration in the black dance community and IADB membership fueled by Mellon’s investment in us. Many of the cohort participants have reached out to one another in their respective communities to partner, collaborate, and band together to move forward with their organizations’ mission.”
Members of the NPN have felt the benefits, too.
“Many of our community-based arts organizations have managed to survive all these years through their own persistence, creativity, and ingenuity. COHI provides valuable financial advice, education, and much-needed capital,” explains Crump. “But it’s also helping us move beyond a conversation about the importance of equity into one of strategy and action.”
For conservators, the opportunity to collaborate with NFF has been equally important—and life-changing. Cher Schneider, head of paper conservation at the nonprofit Intermuseum Conservation Association (ICA) in Cleveland, Ohio, says that COHI has allowed the organization to build a newly expanded regional paper lab and has made possible a career she and her students might not otherwise have been able to sustain. “Through this expansion, I will have the wonderful opportunity to train new students and junior staff members to grow our field,” Schneider says.