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The Perfect Storm: Advocates Focus on Positioning the Arts as a Way to Escape Economic Gloom

Artwork from the Decatur Illinois Post Office WPA mural.
WUIS/Illinois Issues

One of President John F. Kennedy’s last speeches before his assassination described poet Robert Frost as possessing fidelity that strengthened the “fibre of our national life.” That speech, on October 26, 1963, at Amherst College in Massachusetts, went beyond honoring a single poet, however. Nestled in his message was Kennedy’s take on the arts as part of the nation’s strength, morality, wealth, wisdom, power and purpose.

“I look forward to an America which will reward achievement in the arts as we reward achievement in business or statecraft. I look forward to an America which will steadily raise the standards of artistic accomplishment and which will steadily enlarge cultural opportunities for all of our citizens. And I look forward to an America which commands respect throughout the world not only for its strength but for its civilization as well. And I look forward to a world which will be safe not only for democracy and diversity but also for personal distinction.”

His words move Benne Wilde every time. She’s managing director of Prince Charitable Trusts in Chicago, which partners with the John D. and Catherine T. MacArthur Foundation to financially support the Chicago-area arts community. The grants help agencies, for instance, keep the lights on or start a new program.

Personally, Wilde says, Kennedy’s comments about the arts move her because they talk about what it means to be an American and the strength of this nation. “And it’s not just in the things we think of as strength. It’s in the strength of our souls as well, and the arts help us understand, see and explain that to each other.”

The speech also underscores the mission of the Prince Charitable Trusts to support the arts, particularly now, when arts organizations throughout the state are bracing for what advocates describe as a perfect storm.

Artwork from the Decatur Illinois Post Office WPA mural.
Credit WUIS/Illinois Issues
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WUIS/Illinois Issues
Artwork from the Decatur Illinois Post Office WPA mural.

Consecutive years of state budget cuts are combining with depleting funds from local governments. Meanwhile, energy costs are increasing, and the private sector could reduce its charitable giving as the national economic downturn plays out next year. Advocates particularly worry about small- and medium-size arts organizations outside of Cook County, where fewer resources are available. The ultimate fear is a deepening of the haves versus the have-nots, especially when the arts have potential to revive the nation’s spirit and contribute to its economy.

Despite months of national economic turmoil, the arts in Illinois aren’t doomed. Advocates are more determined than ever to build support and to avoid being the first to walk the plank in another year of budget cuts. Instead, advocates aim to rebuild the arts as a safe haven for individuals who appreciate their intrinsic value and the escape they provide from ominous economic storms.

Funding of the arts

Arts organizations of all sizes already run on shoestring budgets. Some downstate agencies have as few as one-and-a-half staff members. They carry out marketing plans, recruiting efforts, community programming, art shows and performances. But as their operating expenses increase, the amounts they receive from state and local governments are decreasing. 

The state funds the arts through the Illinois Arts Council, a 43-year-old agency that offers financial support for the arts. Chaired by Shirley Madigan, wife of Illinois House Speaker Michael Madigan of Chicago, the council primarily is funded by the General Assembly and the governor. It gets a small percentage of its funding from the federal arts agency, the National Endowment for the Arts. 

This year, the Illinois Arts Council is operating with $4.5 million less from the state than last year, when its $19.8 million budget remained the same as the year before. While about 45 other states received greater state support, Illinois’ decrease is a “devastating blow to the arts infrastructure in our state,” says Ra Joy, executive director of the Illinois Arts Alliance and Foundation. 

The alliance advocates for more public funding for the Illinois Arts Council. This year, it seeks $24 million for the council to help Illinois reap economic, cultural and educational rewards of the arts. In the alliance’s survey of arts organizations this year, nearly three-fourths of the 435 respondents report that they will offset the loss of state funds by scaling back the number free arts programs, educational efforts and staff members. 

Thirty-seven percent of the respondents report that they’ll seek additional support from corporate contributions, private foundations or individual donors. Those all could be affected by the economy in different ways, too. (See Artful alternatives for more on foundation and corporate giving.)

“We were concerned at that stage, even before this incredible downturn in the economy, about the impact that this would have,” Joy says, “and [we had] a concern that this continued depressed funding level would lead to a state of arts haves and have nots.”

Organizations outside of Cook County have fewer options because there are fewer foundations and a lower concentration of corporations. The alternatives for funding are limited, says Terry Scrogum, executive director of the Illinois Arts Council. When the state reduced its funding one year, he says organizations did special fundraising. But the second year raises new factors, especially now, when the economy has tanked.

Downstate differs

https://illinoisissues.uis.edu/archives/2008/12/images/storm3.jpgIn the heart of Illinois, Bert Gray says he has no intentions to slow the fundraising campaign of the Decatur Area Arts Council. While his organization doesn’t receive as much from state government as other smaller agencies, the amount it does get plays an important role for arts activities in the region. 

So when the amount of state funding for the council’s operating costs dropped from $21,000 four years ago to $13,000 last year, the organization had to adjust for 38 percent less. “That’s the piece we ask for to keep the lights on and the doors open,” Gray says. “With that loss, that has meant that we have to raise more money locally to keep our level of service the same or growing.”

Grants for operating costs make up one of the biggest chunks of money awarded by the Illinois Arts Council. The number of grants awarded in the past four years has fluctuated between 1,460 and 1,680, but the dollar amount has decreased. Organizations that used to qualify for grants of up to $30,000 now qualify for a maximum of $16,000.

Scrogum says regardless of the amount of money available to dole out, the council still receives the same number of grant requests, if not more. “I wouldn’t ever want to imply that the 30 percent cut to our budget for two years was somehow the precipitating factor for all of these issues,” he says. “It’s not. However, it certainly is coming at a time when there are a lot of other factors that are sort of piling up on top of it, which I believe will exacerbate the situation.”

Decatur’s council also receives money from the Illinois Arts Council to pass through to local artists and organizations. The requests topped $33,000, but the Decatur Area Arts Council could award only $14,500. That means less support for such activities as helping a local high school pay royalties to perform a play more than once or helping to put on a central Illinois jazz festival, Gray says.

“What little help was being provided is now littler. But for some, that little help is the make or break for whether they can do the program or not.”

In downstate Jackson County, Nancy Stemper is executive director of the Carbondale Community Arts organization, a smaller agency that relies on a diverse funding mix. Stemper has a part-time assistant and a couple of volunteers. They run the organization out of the attic of a house where the Carbondale Park District is headquartered. And they hope to move into a new arts center with the help of a local theater company. That would allow the agency room to grow and serve as a regional ambassador of sorts for the Illinois Arts Council. But the new home would require millions of dollars and a lot of optimism in a capital campaign. “Everyone in this town is being so cautious that the fundraisers for their projects have pledged not to go ahead until they know that there’s not only the money for the project but money to support the facility after the project’s complete,” Stemper says.

It might help that her Carbondale agency expects a slight buffer from the immediate impact of the economic downfall. The city matches 25 percent of the organization’s state funding. But that penny might be pinched, too, as the city receives more requests for aid from various community programs. 

The buffer also could give way later in the year because going to one funding source to make up the deficit from another can last only so long. “Pretty soon, there are no places left,” Stemper says.

Local budget cuts, too

In the northwest Chicago suburbs, Camille Wilson White already knows local funding for the Oak Park Area Arts Council is falling for a second year. After a 33 percent cut in funding from the Village of Oak Park last year, Wilson White is looking at potentially 10 percent less from the village next year. That’s a $25,000 cut to a $250,000 budget.

“That’s mega huge for us,” says Wilson White, the executive director of a two-person staff. “While there are only two of us, we have more than quadrupled the amount of services that we offer to this tri-village area,” referring to Oak Park, River Forest and Forest Park. 

The local council plans to cut back by freezing salaries, canceling its annual meeting, reducing the amount of grants given and cutting in half the size of a program, Off the Wall, where teenage artists work as apprentices for professional artists for six weeks and create murals for community spaces. 

But cutting programs will have to complement finding new sources of revenue, Wilson White says. “I’ll be looking everywhere because we have a great membership. We have almost 600 members, but also, membership is a little down this year because, guess what, there’s a thing called a recession going on.”

The politics of art

The state budget cuts — and the reasons behind them — add one more layer of complication to the perfect storm of budget problems and economic declines. Politics in the state Capitol have challenged all advocacy groups, including the arts, in regaining the state support previously committed to their causes. The Illinois General Assembly approved a budget that Gov. Rod Blagojevich says was $2 billion out of balance, so he cut $1.4 billion. The legislature restored some of that money, but the plan has been stuck in political limbo since the fall.

Intertwined in the budget games is a political rivalry between Blagojevich and Speaker Madigan, which has become personal. Many Statehouse insiders speculate that this year’s $4.5 million drop in state funding for the Illinois Arts Council is a direct shot at the speaker’s wife, who chairs the council. The governor’s budget office denies those allegations.

Joy, a former staff member for U.S. Rep. Jan Schakowsky in the 9th Congressional District, has been in the thick of the turbulent atmosphere at the Capitol. He only brushes the surface of his frustration. “My line on that is that I’m an artist and an arts advocate and not a theater critic. I will say that I’m familiar of the politics of Karl Rove and Tom Delay. But nothing has prepared me for the level of animosity and gridlock that unfortunately exists in state government. And I’m hopeful that things will improve in the very near future.”

 

Artful alternatives

Donations to the arts by foundations also could be in jeopardy after this year’s economic downturn, although it depends on the situation. For instance, the international John D. and Catherine T. MacArthur Foundation based in Chicago announced that it would not decrease the number of monetary awards to Chicago-area grantees; it would increase them from 180 to 200. It also created a new $1 million fund to enable its Chicago grantees to increase their international connections. 

The MacArthur Foundation funnels money to the Chicago arts community through two partners: the Richard H. Driehaus Foundation in Chicago for organizations that operate on $500,000 or less, and the Prince Charitable Trusts in Chicago for organizations that operate on between $500,000 and $2 million. 

Smaller foundations wouldn’t be able to do that, however. Foundations are beholden to the size of their endowments. Federal law requires that they give out 5 percent of their assets, or their net worth, every year, with variations of how to meet that requirement. And when the stock market decreases, so do the endowments. When assets shrink, the amount available for grants shrinks, too.

The Driehaus Foundation meets the 5 percent requirement by averaging three years together. So while 2008 assets decreased, they increased in 2006 and 2007. The net increase will help soften the blow, says Peter Handler, program officer for the foundation. While the amount available for grants in 2009 will dip, “the decrease in our grant budget will not be as precipitous as it otherwise might be.”

But no one really knows when the other shoe will drop. Handler says the Driehaus Foundation may not know the outcome of the economic downturn for a year or two. During a previous slowdown, the foundation’s assets plummeted from about $95 million in 1999 to $44 million in 2001 and 2002, causing the amount available for grants to drop by about half in those three years, he says.

Foundations nationwide realize that they likely will have to change their strategies this time around. The Foundation Center, a philanthropy think tank based in New York, issued a research advisory after the banking crisis peaked in September that says the outlook for foundation giving may not be as bleak as some fear. According to Steven Lawrence, senior director of research, foundation giving historically has remained stable during previous recessions and economic crises.

Benne Wilde, managing director of Prince Charitable Trusts in Chicago, says one idea is to change the way in which the foundation helps local arts organizations. Because cash flow can challenge arts organizations — they have to pay for shows before the ticket sales roll in — they often use lines of credit to help finance productions. “It’s possible that some foundations could set up loan funds for cash flow problems,” she says, although she doesn’t think that’s something Prince Charitable Trusts would do. 

The foundation is considering helping the entire sector by creating a collaborative Web site, where all types of arts organizations could publicize their performances or galleries or community events. Audiences would have a one-stop shop to book their entertainment, helping them decrease their marketing costs.

While foundations and arts have survived previous economic depressions, recessions and everything in between, the banking crisis this past fall is a new kind of storm. This year’s economic downturn is so complicated and deep-rooted that grant makers nationwide are putting their heads together to figure out how to approach 2009. 

“We’re all thinking about it,” Wilde says. “We’re all trying to figure out: What is the most valuable role that foundations can play here? We can’t solve all the problems. We can’t replace all the money that’s lost, but we certainly can try to be as strategic as we possibly can and work together, try to minimize the effect.”

Handler says one message to grantees is: Don’t stop asking for money.

Corporate giving

Another silver lining for the Chicago arts community is that at least one corporate sponsor is unlikely to decrease the amount of money it gives to arts and culture. The worldwide Boeing Co., which manufactures jetliners and military aircraft, operates a “global corporate citizenship” program that donates through grants, volunteerism, service on local advisory boards and sponsorship of events. It’s contributed an average of $10 million since the Fortune 500 firm established its headquarters in Chicago about seven years ago.

Part of Boeing’s financial giving comes from its profits. Another part comes from employee donations. The corporation in the past has not decreased its monetary giving during economic downturns, not even when profits sunk after the 9/11 terrorist attacks, says Angel Ysaguirre, Boeing’s director of global community investing. 

“That’s probably not going to change. What might change is the way we might look at those organizations. The question is not necessarily whether we give to the arts, but how do we give to the arts?”

Hypothetically, Ysaguirre says, that could include giving $10,000 to an event to help pay for operating costs rather than buying a table at that event. “That way, the organization doesn’t spend $1,000 of that $10,000 by feeding us at an event. So, it’s a way that we can still use the resources that we have but tweak it in a different way so that the organization sees some benefits to their overhead costs, which are obviously going to be important costs for them to think about.” 

Regardless of the economic climate, however, Boeing always considers ways to partner with local organizations to meet their needs, says Nora Moreno Cargie, Boeing’s director of global corporate citizenship in Chicago. The current economic downturn simply requires more creativity. “Part of our role right now is to be good listeners,” she says.

Bethany Jaeger can be reached at capitolbureau@aol.com.

 

 

Artistic impression of the Great Depression

No one would go on the record to say the United States is experiencing another Great Depression, but arts advocates are quick to point out that art played an important role during that era. And they intend to maintain that role during this economic slump.

“It was the arts that kind of kept people’s spirits up,” says Benne Wilde, managing director of Prince Charitable Trusts in Chicago, which donates to the arts. “And that’s some of the most important legacy that’s left from that period.”

See the following online resources from the Library of Congress, connecting to sites about the artwork created as part of the Work Projects Administration.

NEW DEAL PROGRAMS: SELECTED LIBRARY OF CONGRESS RESOURCE
The Federal Art Project online materials:
- WPA posters
- Fine Prints by Federal Art Project Artists
As well as external collections

ILLINOIS STATE GUIDE
The Library of Congress’ American Memory collection related to Illinois

A HISTORICAL GUIDE TO ILLINOIS WPA PROJECTS – image
“Illinois: A descriptive and historical guide”
Federal Writers Project

MANUSCRIPTS FROM FEDERAL WRITERS’ PROJECT

POSTERS OF THE WPA
“By the people, for the people: Posters from the WPA, 1936-1943”

WPA LIFE HISTORIES FROM ILLINOIS
All Illinois titles

THE AMERICAN FOLKLIFE CENTER
“Biographies — Art, culture and government: The New Deal at 75”
- Includes former Sangamon State University chair of the history department
- Includes books published by the University of Illinois Press, including the forthcoming book, All I Got Is Gone: Roots Music Photographs From the Great Depression, by Rich Remsberg of Massachusetts.

 

Illinois Issues, December 2008

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