By Germaine Williams

The admonition to tighten your belt means little for most arts nonprofits.  For small arts organizations in particular, the idea of eliminating nonessentials and operational waste to weather hard times ignores the realities of a meager existence. However, it is also undeniable that the current global financial crisis poses a complex threat to the region’s arts sector. Local arts funders are working together and with grantees to understand the impact of the financial crisis and to devise strategies to insure that long-term investments in the region’s cultural vitality are not lost. While all foundations are grappling with the implications of major decreases in assets, for a few the impact of the financial crisis on grantmaking budgets will not be felt immediately. Many funders base their annual grantmaking budgets on investment returns averaged over twelve quarters.  This means that grantmaking budgets can be based on three years of financial performance, effectively smoothing market fluctuations and softening the blow of downturns. Decreases in grantmaking budgets for foundations using this method may not manifest until 2010.  Even with this momentary cushion, knowing how to respond is a daunting challenge in light of the fact that no one knows how long the recession will last or how deep it will go.

What is clear now is that the arts sector must devise meaningful strategies, at the organizational level and sector-wide, that go beyond the common sense of containing spending.

Seek partnership. Though collaborations are labor-intensive and difficult to establish, they can begin with a simple email, blog post, or chance meeting, and can run the gamut from formal mergers to shared office space to bulk purchases of office supplies; each strategy can contribute to immediate cost savings and add to long-term sustainability.  Funders must continue to work together to make resources available to help organizations plan and execute cost-saving collaborations.

Seek technical assistance. Navigating difficult financial straits can undo the most experienced manager.  In the current environment, realistic cash flow projections and scenario planning are crucial management tools. GPAC, The Bayer Center for Nonprofit Management (BCNM) at Robert Morris University, and the Greater Pittsburgh Nonprofit Partnership can connect organizations with expertise to help prevent the wrong turn that sinks the ship.

Seek help. In a recent study executed by The Forbes Funds at The Pittsburgh Foundation, requests from “first-time households” was identified as a distinguishing characteristic of the recent rise in human services demand. Without hesitation or shame, cultural workers with low to moderate income levels should draw on resources for food, housing assistance, utility costs, transportation, and other essentials available to the community through the Department of Human Services and other agencies.

Beyond these, we must affirm the arts’ capacity to help the community weather the storm. The arts can bolster the psyche of the region, staving-off the depression that often accompanies economic downturn.  No, you cannot eat the art, but art can feed the collective soul.  Now more than ever, arts organizations must make their presence felt and act as a sustaining force for the community.  In the response to Hurricane Katrina, artists and arts organizations played a duel role: they helped to raise donations of food and clothing and were resilient evidence of the vibrant creative traditions that so define the people. With smart management and collaboration, we can weather this crisis and affirm the value of the arts to the region.

This article was published in the recent edition of the Greater Pittsburgh Arts Council Update Newsletter. Germaine Williams is Program Officer for Arts and Culture with The Pittsburgh Foundation.