Course Corrections

A Community Foundations Report

Kathleen Cerveny

"Return with me now to those thrilling days of yesteryear

Remember the ‘70s? The near delirium generated by the NEA's Advancement program and the dollars that flowed from local and na-tional funders alike to build the arts in almost every city? Cities saw the arts as an engine of economic development and new vitality for declining urban centers, and were building shiny new performing arts centers. Local funders invested in the growth of their arts organizations as never before, hoping to raise them to national stature. A heady time — but one lacking foresight in some key areas that have caused challenges since then, challenges that arts funders have tried to address for several decades.

Cleveland was at the forefront of the performing arts boom of the 1970s and ‘80s. In what has become an urban legend, an emergency “midnight” meeting of the Cleveland Foundation's board authorized the first-ever program-related investment, or PRI, by a commu-nity foundation, halting the advance of the wrecking ball (scheduled to swing the next morning) and saving four magnificent theaters in our downtown. We set up a nonprofit operating entity, transferred ownership to the county, and over several years the community restored the theaters to splendor. The Foundation, on behalf of a group of local performing arts groups, secured the largest (at that time) grant the NEA had ever made to help these small organizations (opera, ballet, theater, chamber orchestra, dance presenter) grow into mid-sized organizations, which they did almost overnight. Most had been performing in high school auditoriums, with offices in people's homes.

Year after year we showered resources on these groups to increase the quality of their artistic product: more dancers on contract, ex-travagant costumes and sets, New York actors and directors, etc. And it worked. People came back downtown. The Playhouse Square phenomenon continues to be studied as a model. Our downtown theater and dance companies and our opera company began to be no-ticed and Cleveland became a tour stop for the world's best dance companies. For a while.

By the late 1980s, the debt had begun to pile up and local funders were getting weary of the continuous “bridge funding,” emergency requests, and rescue campaigns. What was the problem? Why didn't the businessmen on these organization's boards take their orga-nizations in hand? Was it true that the arts are just irresponsible and incompetent?

We felt there was more to it than that.

The Cleveland Foundation's mission requires us to be a resource to the community and provide leadership on key community issues. A device we often use is a study commission, comprised of local leaders from a variety of sectors and outside experts. Foundation staff members participate, but the commission operates independently of the Foundation itself. The study commission then makes rec-ommendations back to us and we decide if there are ways we can address the problem, often convening others in the process. So that's what we did, launching the Cleveland Foundation Study Commission on the Performing Arts in 1995.

The Study Commission's 1996 report identified three critical faults in the system:

• While artistically nurtured, no attention was paid to the operational needs and the quality of the management. Groups were brought to full scale with no working capital or endowments, and without sufficiently skilled staff to manage the rapid growth.
• The dramatic increases in operating costs as a result of initiatives begun with NEA Advancement support were not recognized. (It's one thing to perform in a high school auditorium, with volunteers running the lights; quite another to play in a 3,000 seat union house and rent office space downtown.)
• Finally, the research showed that Cleveland was almost alone in having no source of local public support for its arts, and no advocacy or umbrella agency to represent the sector. In Cleveland the arts truly were by and for the rich.

The Commission's thirteen recommendations boiled down to:

• Funders should provide annual operating support, but require best-business performance in exchange, and
• Cleveland needs a comprehensive cultural plan, a strong representative for the sector to implement it, and a source of continuing local public support.

A great benefit of being a community foundation is that we have what we call “patient money.” We can set long-term goals and work incrementally over time to achieve them. Responding to the Commission's recommendations became the framework for our strategic grantmaking in the arts from that time until the present; nearly ten years of focused work.

Because we knew organizations could not begin operating accountably without the opportunity and support to build the management, human, and financial capacity to do so, we created an $11 million capacity-building program to strengthen the financial, manage-ment, and governance resources of more than a dozen small and mid-sized organizations. It lasted five years. Many thrived, some did not and we learned a lot: readiness is all, crisis trumps everything, and, even in ideal situations, it takes a long time to build lasting capacity. Using what we learned, we then launched an advancement program of our own — but one focusing strictly on the balance sheet, leadership skills, and operational sophistication. This program ends this year. At this writing, all participants are debt free and have exciting growth prospects ahead.

To deal with the planning and public support challenge, we used our influence to convene and convince other funders and community leaders. Together we created a new organization charged with research, cultural planning, and developing supportive public policy. The Community Partnership for Arts and Culture (CPAC) was launched in 1998, first as a project under the fiscal sponsorship of the Cleveland Foundation. Massive research was undertaken, a “ground-up” cultural plan was published in 2000, and CPAC became a separate nonprofit. Cross-sector leadership formed the board (business, labor, politicians, arts, education, religious leaders, etc.). Foundation staff has remained advisors to this group from the beginning.

Between 2001 and 2006 these leaders and others moved the policy agenda in Cleveland forward, and a remarkable number of complex political, legal, and advocacy actions over that period have paved the ground for a ballot issue that will be placed before voters this November, with the endorsement of the county commissioners, the mayor and city council. We'll share the news of the voting results with colleagues at GIA's conference in Boston in mid-November. Doubtless, the results will have an impact on our arts grantmaking going forward.

But either way, the arts are on the community's agenda now, and the dialogue about planning, strategy, accountability, and steward-ship for the arts has changed dramatically. The quality of proposals we receive from our established institutions is much higher and we see evidence that the arts are increasingly being viewed as a strong partner and a critical sector in the future health of the community.

Kathleen Cerveny is program director for arts and culture programs and initiatives, the Cleveland Foundation