Decimated arts groups need flexible funding

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Empty seats, empty stages: The 2020-2021 season was difficult to nonexistent for much of the performing arts in the grip of the Covid pandemic, but 2021-2022 may be even harder financially, with new pressure on how donors give to the arts.

“The arts, especially the performing arts, really were the first ones out and will be the last ones back,” says Simon Mallett, executive director of the Rozsa Foundation, an arts funding group in Alberta.

Will audiences return quickly enough? Will major donors cushion revenue shortfalls and help pay the less glamorous, yet vital operating expenses, the higher insurance and cleaning costs — or will they insist on restricting their gifts to passion projects? Indeed, will the very nature of donations change?

Event-specific corporate sponsorships disappeared when festivals and performances were cancelled, and emergency government funding, which arrived to shore up gaps, is expected to taper off. “With that happening at the same time that arts organizations are trying to get back to in-person programming, that’s going to create a real point of tension,” Mallett says.

And yet, the impact of the pandemic, while severe across all the performing arts, was also varied.

Large foundations and endowments provided a lifeline for some groups.

The National Ballet of Canada, for one, got its annual contribution, which was around $3.4 million last year, from its endowment. Next year, the core contribution will be $3.6 million, and there are funds within the endowment restricted to specific activities, such as international touring, which may resume this upcoming year. The endowment is currently valued at a robust $98 million. (The ballet company, however, can’t legally tap into the larger endowment to shore up all of its expenses. The donations that make up the endowment exist as a separate pile of funds, not to be touched, but are set up to earn money for the National Ballet in perpetuity.)

Meanwhile, lost revenue from cancelled ticket sales was partly offset by the halt in production costs. And with the National Ballet’s healthy donor and subscriber base, many patrons donated the price of their tickets back to the ballet.

Emergency grants from private foundations also helped many organizations, as they redirected their art-making online. For some, such as the Toronto community arts group Jumblies Theatre, this shift online turned into one of their biggest expenses. “That was difficult and wasn’t something that we particularly had money for. These new expenses came about from completely shifting the way we work,” says Jumblies general manager Sam Egan.

Yet, Michael Trent, director of performing-arts funding at the Metcalf Foundation, notes that some mid-sized arts organizations actually found themselves with financial surpluses, given the cost savings of cancelled productions, even though many may now face an uncertain season as costs resume.

There’s been a big, huge call and a requirement for philanthropy to be as open and as unrestricted as possible … because it’s the money to keep the lights on and to keep people hired, and it is so needed.

Michael Trent, Metcalf Foundation

“There’s been no uniform outcome across the arts and culture sector from a financial perspective. It’s been very nuanced,” Trent says. Also, private funding for the performing arts, especially through family foundations, can be difficult to track since it tends not to be very public facing and is often done through personal channels, he notes.

In quieter times, outside of the pandemic, the Metcalf Foundation developed a strategy of granting funds to performing arts groups to address major hurdles. Call it innovation capital. This provides organizations the time and money to study how to improve their operations, such as better facilities for artists and staff.

Or, with the National Ballet, it has involved studying how to reach wider, pan-Canadian audiences and include more diversity in the ballet company’s artistic practise, Trent says. “They are trying to dismantle or break apart the perception of who they are, what they do and who they do it for.”

This kind of innovation — engaging in new artistic directions and staging new productions — is obviously exciting to major donors. Some will want to earmark their donations to that new work.

Conversely, asking donors to get excited about sanitising theatres is a harder sell. Unrestricted donations allow institutions to put the money where it’s most urgently needed, rather than in what catches the fancy of donors.

The arts, especially the performing arts, really were the first ones out and will be the last ones back.

Simon Mallett, Rozsa Foundation

“There’s been a big, huge call and a requirement for philanthropy to be as open and as unrestricted as possible … because it’s the money to keep the lights on and to keep people hired, and it is so needed,” Trent says.

“We’re lucky in Canada, because the public funders have great practises, in which they offer multi-year operational funding. But I would really invite philanthropists to think of how they can contribute to that, as well. There’s a continued need for unrestricted [funding]. It may feel a little unglamorous, but boy, it’s deeply appreciated.”

The pandemic only emphasized this need for nimbleness. When the crisis hit, the National Ballet struggled in the vacuum of information. Staff had to be safeguarded, yet the dancers, being elite athletes, couldn’t simply stop training. The company had to adapt quickly. This gave the National Ballet overall a new sense of agility — this for an organization that typically plans three to five years in advance, says executive director Barry Hughson.

“The financial side of it was actually a little easier to deal with, in a way,” he says, “because once we knew we had to cancel the rest of the season, there is a number associated with revenue that we knew we weren’t going to achieve. And then there was a related series of expense savings and spending decisions that became fairly clear pretty quickly.”

But the 2021-2022 season poses an entirely new series of unknowns: “I would say, going into next season, we face the greater challenge which is that we have to get back on stage,” Hughson says.
“We expect that there will be capacity limitations driven by the pandemic and what happens with Delta variants and so forth. And we also don’t know what those limitations will be ultimately. So, we’ll have the expenses of going back into the theatre before we will really understand what the earned revenue will look like. And we expect that government support will begin to wane,” he adds.
Arts organizations are generally planning for the recovery to take about three years, says Aubrey Reeves, president and chief executive of Business/Arts, a charitable group that matches businesses and arts institutions.

Costs will be higher than before the pandemic, she says. “You’ve got all the costs of PPE [personal protective equipment], cleaning, additional security, timed entry, all of those kind of things that we’ve had to add on. The cost of insurance has sky-rocketed. And then on top of that, it’s unclear how big our audiences are going to be. We have, first of all, capacity restrictions. But second of all, hesitancy by the audience itself. So, it’s very hard to know how long it will take before we are back to normal in terms of audiences.”

Because of this, she joins the call for unrestricted donations. “I would strongly encourage donors not to tie their gifts to specific things. Don’t make restricted gifts. We have learned in this crisis that restricted money really handcuffs planning for cultural organizations.”

Yet, like others in the performing arts sector, there’s a hint of lightness in her caution, a joy, maybe at the thought of artists returning to the stage.

“I’m optimistic because even though it’s been a very challenging time, cultural organizations have responded amazingly throughout the pandemic. They have pivoted and pivoted and pivoted again, remarkably well. And that’s really because ultimately we’re creative, with creative people working for us, and that’s what we’re good at,” she says.