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Arts Funding Troubles, part 1: How We Got Into This Mess

Charlotte Arts Journalism Alliance

There’s a group in Charlotte called the Cultural Life Task Force meeting every couple of weeks with a charge to save the city’s cultural sector. The traditional way arts and culture is being funded in the city is no longer working, and as a result, Charlotte’s arts institutions face an uncertain future.

There’s no real mystery to the funding crisis Charlotte’s arts groups find themselves in.

Lounging on a blanket at the Symphony’s Independence Day Pops Concert, Brett Miller answers simply: no, he has never donated to an arts group. “We’ve never sought to specifically give,” he says, “But if asked, we probably would.”

Then his wife Susan, who is also in her late-twenties, chimes in, “I think we contribute by attending performances and being totally willing to come to events as this when we can support the arts.”

The Millers are not alone; across the crowd, concert-goers echoed two themes. “I do my part by buying tickets to see shows in Charlotte,” and “I haven’t given because I haven’t been asked."

But no one at the concert had any idea that most of Charlotte’s arts groups cannot survive on ticket sales alone. Exhibition costs tend to cover only a fraction of real costs, such as the Mint Museum’s exhibits last year.  While the exhibits attracted 30,000 visitors, each paying $10, the real cost of the ticket would need to be $200 to cover all expenses.

Symphony concert tickets, too, cover a fraction of the actual cost of production. The average $45 Classics ticket would have to cost more like $120 to pay for musicians salaries, marketing, and production costs of the show.

Credit Julie Rose
Source: Most-recent available nonprofit reports filed with the IRS for the period July 2011 - June 2012.

And, if you’re thinking this is a terrible business model, you’re right, but it is actually how most arts non-profits work. Arts groups rely heavily on donations to subsidize tickets so that everyone can enjoy art, not just the rich. 

But as to why people say they have not been asked, that goes to the crux of Charlotte’s current arts funding crisis. 

“The Golden Years”

Back in the 80's and 90's, during what some in Charlotte call “the golden years,” a tight-knit group of corporate leaders worked alongside civic leaders to shape everything in Charlotte.

Bank of America CEO Hugh McColl was the ringleader, and according to Laura Meyer Wellman, who briefly worked at the bank back then, says McColl’s ability to get things done was legendary.

“Being able to, at breakfast, decide that X amount of money was needed to do something and it got done,” she says. “Legendary because he looked out of the window of his office and saw north Tryon and said it was a blighted landscape and it needed to be fixed.”

It was decided that the Arts and Science Council would be the official fundraiser for culture in Charlotte, a kind of broker to do big donation drives, mostly through workplace giving, and then dole money out to arts groups. Companies like McColl’s bank only had to deal with one entity, the Arts and Science Council, while arts groups didn’t have to run around asking for money from everyone in town.

Credit Arts and Science Council

The plan worked. At its peak in 2007, the Arts and Science Council raised $11.6 million, most of that coming from workplace giving. Around 20 percent of the money is held back by the ASC, with most of the rest supporting basic operations at arts groups, large and small.

Serious Cracks

But the Great Recession exposed serious cracks in the system. Everybody tightened their belts, especially the banks. And that left the Arts and Science council especially vulnerable, as it had come to rely on a few large companies in Charlotte for more than half of its fundraising every year.

The ASC quickly realized it needed to diversify its funding streams and start raising money in ways other than just workplace campaigns at big companies. Online, for example.

“It does take a wake-up call sometimes to step back and say, ‘geeze,’ it would have been nice if we had this ten years ago,” says the ASC’s former president, Scott Provancher, who just stepped down from the position earlier this month.

The online thing worked well, but it doesn’t raise nearly what the ASC used to get from workplace giving. And the really bad news is that while the economy has turned around, workplace gifts to the ASC have not. They are down 40 percent since 2008 and have basically leveled out. Provancher says Charlotte’s big corporations are different; today they’re global.

“So whether it’s in St. Louis or San Francisco or New York City, their community engagement strategy, they’re trying to apply it across an entire footprint of a much larger company, so it makes it harder to have a kind of unique campaign like the Arts and Science Council.”

And the employees of those companies have changed, too. Fewer and fewer are willing to allocate a portion of their paycheck each month to the ASC. A study done by the Foundation for the Carolinas in 2010 found that many workers were plain burned out and sick of being guilt-tripped by their bosses to give.

It’s also an issue of connection; many people said they don’t feel like they are connected to Charlotte’s arts institutions. This is a city of transplants, after all. People like Monty Ridenhour, who moved to Charlotte several months ago.

“I have to somehow feel like I relate to them,” says Ridenhour, “we were pretty active in the art museum up in Martinsville (Virginia) and that’s the reason we gave there.”

The big arts groups in Charlotte admit they’ve not done enough to connect with their patrons. Partly because they didn’t feel the need, says Kathleen Jameson, CEO of the Mint Museum, “The ASC was doing such a great job that I think a lot of folks, including at the ASC and throughout the community thought that that would just continue to grow.”

But the problem was also the system itself. To preserve the fundraising power of the ASC, arts non-profits were prohibited until recently from approaching individual companies for donations. These constraints have had consequences, says John Mackay, Discovery Place CEO, “There’s not really a lot of opportunity to have access to your patrons and your corporate partners, it makes it very difficult, I think, for us to be as responsive, as resilient, if you will.”

“All for one, one for all,” is great when times are good, and potentially devastating when they’re not.

The Symphony is scraping by on emergency gifts from some anonymous donors who say they'll only keep giving if the Symphony gets its financial house in order.

The Mint Museum was forced to tap its cash reserves for the first time in recent memory and just announced it'll be closing an extra day each week to save money.
The Bechtler Museum of Modern Art says it can only afford to do a big art exhibition every other year until things improve.
A handful of smaller arts organizations are going under - or merging in hopes of keeping their offerings intact.

And while this Cultural Life Task Force will spend the next six months looking for system-wide solutions, individual arts groups need money now.

And they’re looking at you.

Find out what Charlotte's cultural institutions say it'll take for them to survive this arts funding crisis in part two of our series.

This story is produced through the Charlotte Arts Journalism Alliance, a consortium of local media dedicated to covering the arts.