People who work in the arts live in a perpetual state of aspiration and hope. We balance our budgets by projecting income that we “need” instead of income that we “expect.” Grantmakers in the Arts has spent four years focusing on the capitalization of arts organizations at GIA and other national conferences; through our web conferences, blogs, articles in the GIA Reader; and at our workshops for funders entitled Conversations on Capitalization and Community. Capitalization is defined simply as the resources an organization needs to accomplish its mission. The entire nonprofit sector operates in a business environment that is chaotic. It is the unpredictable nature of contributed income that makes the job of resource identification so difficult, requiring extreme cynicism and practical thinking by those trying to project budgets for the future.
This idea of projecting income in a chaotic marketplace is as important to the smallest of organizations as it is to the largest museum or opera company. Understanding how much money you need to exist and then understanding where that money will come from – this is the foundation of a good business model.
There is a false hope within the nonprofit world that all organizations, and even artists for that matter, can be saved by a good grant writer, that all we need to do is find a foundation and write a grant. The reality is that most organizations (and artists) are funded by only a small percentage of America’s foundations. About 10% of all foundation giving goes to the arts and one can probably predict without doing much research that the bulk of funding goes to institutions in urban centers.
But what nonprofit leaders often forget is that fundraising is always about relationships and no one can build better relationships than a relevant arts organization in a small rural community. The practice of building credibility, trust and a good track record is at the core of securing resources. Funders are like bankers; they want to know you will do what you say you are going to do before they are willing to give you the money to do it. With that in mind, organizations in small towns turn to their audience, neighbors, and main street businesses to support them. Unless you are doing extraordinarily unique work, your organization is not likely to be supported by private or corporate foundations. It is likely to be supported by the local or county arts agency, the state arts council, local businesses and the people who attend your events. These are also the folks you can count on most to be consistent supporters and not part of the more “chaotic market” of nonprofit funders.
The philosophy of fundraising usually works like this: it’s like dropping a stone into a pond and watching the ripples spread outward. The stone is your organization, and the more powerful your program is both in impact and artistic expression, the larger the stone. The larger the stone, the farther out the ripple effect. The ripple effect illustrates the proximity of those willing to fund your organization. For most small organizations, it stays within the confines of community or maybe county, but if the impact is greater, the funding opportunities are greater and the circles continue on past the first couple rings. So don’t look too far beyond your own community for the kind of support your organization needs. It’s easy to think there is some foundation out there that will save you or boost your income. In reality this is hardly ever the case. This is the “there’s no place like home” syndrome—raising money in your own community where you have built an audience, provided relevant programming and been a community participant ensures stability and ownership. No one can do this more easily than folks who live in small cities and towns.