by Graydon Royce
Star Tribune, November 19, 2002

Minnesota's reputation for supporting the arts faces significant challenges, according to a report released today by the Minnesota Council on Foundations.

Grantmakers and nonprofit groups indicated at least a cyclical dip in arts funding, as well as a possible trend away from the patterns that have consistently put Minnesota above national averages for cultural philanthropy.

The soft economy has reduced the amount of money foundations and corporations can give, one of many trouble signs cited in the report. Small arts groups worry that unprecedented capital and endowment campaigns by large institutions could exhaust contributors' purses. And the aging generation that helped finance the arts boom of the 1960s and '70s in Minnesota hasn't been replaced by younger patrons.

The Bush Foundation, which made $3.4 million in arts grants last year, has been telling grant-seekers it lacks the giving capacity it had a year and a half ago.

"It's investment-related," said program officer Nancy Fushan. "We're all hoping there will be a turnaround, but we can't predict how fast the growth will be."

The Jerome Foundation, too, has altered its funding patterns, cutting its grantmaking budget by 10 percent last year and by 5 percent this year, for a total of about $650,000, said president Cindy Gehrig.

One impetus for the council's study was a noticeable drop in arts philanthropy in 1999, compared with 1997. According to the group's biennial "Giving in Minnesota" report, 13 percent of total grant dollars went to the arts in 1999 -- equal to the national average -- down from 17 percent in 1997. Figures covering 2000 and 2001 will be released in January.

"I don't think we can answer whether this is cyclical or whether there is something bigger going on until we get a chance to look at the next set of numbers," said council president William King. Beyond the numbers, he said, the council report attempted to gauge perceptions among funders and nonprofits about the current grantmaking environment.

Dance is hardest hit

For example, grantmakers believe the dip in funding affects small arts groups more than large ones. They see dance as the worst-funded of the arts, in part because no troupe has a very high profile, as the Guthrie does in theater or the Minneapolis Institute of Arts does among museums.

Arts groups outside the metro area are not funded adequately, the report says, and funders and nonprofits believe corporate support has declined. Corporations contributed 47 percent of arts-philanthropy dollars in 1999, down from 54 percent two years before -- but it was still the largest category of support.

Mergers and relocations have affected that total, as has the nature of corporate giving, which sometimes takes the form of marketing support for a specific project rather than of general operating money.

"It's been very difficult to get corporate engagement except on the community level," said Craig Harris, executive director of Ballet of the Dolls, which has been trying to revive the old Ritz Theater in northeast Minneapolis.

The Dolls for several years received $50,000 in cash and other support from the Dayton-Hudson Foundation, in part because artistic director Myron Johnson worked with the department store on its annual Fash Bash party. That funding was discontinued in 1999, when the renamed Target Foundation changed its priorities.

Harris will soon test the corporate waters again. The Dolls received a $500,000 grant from the McKnight Foundation for its Ritz project, part of it earmarked as an incentive to draw corporate sponsors. Small businesses from the neighborhood have stepped up, but it's too early to tell whether larger companies will join in.

Don Sommers, development director for the Jungle Theatre in south Minneapolis, said corporations frequently talk about the need to focus their donations.

"There's certainly been more general interest in leveraging corporate donations in a way that provides the donor with certain benefits, whether that's aligning corporate visibility with organizations that address particular issues, or examining ways that a donation can support a company's marketing strategies," Sommers said.

Capital campaigns

Cultural institutions in Minnesota were seeking a record $550 million in capital and endowment campaigns last year, according to the report. That figure continues to worry small arts groups and some large funders.

Neal Cuthbert, arts program director for McKnight, said the ambition of those campaigns gave him pause, but not because the money fueling them would otherwise trickle down to smaller groups. Rather, the large campaigns will need to work harder in a tight economy, he said, which could affect the fundraising of smaller outfits.

"The big X factor is the individuals," Cuthbert said. "Individuals can go into their assets in a way that institutional funders can't. You just don't know the will and capacity of the individuals who are involved in those campaigns."

His comment bears on another concern mentioned in the report: the loss of "strong individual donor leadership in Minnesota with the passing of generations." King sees evidence of that concern in the growing number of grant applications for audience development, which is geared toward increasing not only the number of patrons, but also donor bases.

"Arts organizations have traditionally had strong support from wealthy donors, and as those individuals age and pass away, the question is whether that same level of relationship is going to be there," King said.

It's not just the Daytons, Pillsburys, MacMillans and McKnights, he said, but the baby boomers who have invested well and should have philanthropic resources in their coming retirements.

-- Graydon Royce is at groyce@startribune.com.

Copyright 2002 Star Tribune. Republished here with the permission of the Star Tribune. No further republication or redistribution is permitted without the express approval of the Star Tribune.

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