I don’t know if it has any repercussions on arts organizations yet, but the Chronicle of Higher Education (subscription required) reported yesterday that Wachovia Bank had resigned as a trustee of Commonfund, which manages funds for non-profit organizations including universities, endowments, healthcare organizations and performing arts organizations. In resigning as a trustee of the Short Term Fund (which it should be noted, is only one of many funds), Wachovia froze the assets of nearly 1000 universities. At first people could only withdraw 10% of their funds, now it is 26% but access to full funds isn’t expected until 2010.

The problem for colleges and universities is that many of them use the fund for operating expenses, including payroll. There is concern that they will not be able to pay employees or bills in the next few weeks. Financial Week says Commonfund has been having a hard time finding a trust bank to take over given that most of the candidates have either failed in recent weeks or are being bought up by others.

While many arts organizations have had their finances profoundly impacted over the last few weeks, what I have read has mostly been in relation to endowments rather than short term funds. The endowments Commonfund administers are in different funds which are apparently not impacted. Given that colleges and universities had placed their money here on the belief, as Financial Week quotes, it was a conservative, safe move, there is a good chance some arts organizations may have invested there with the same intent to use it as a source of operating funds and are looking at some tough times ahead.

At least one college representative said they were okay for now since they had recent the tuition receipts to draw upon. Unless an arts organization has a good subscriber base or has received a large grant recently, they may not have the same security available. Regrettably, many organizations who didn’t invest in this particular fund may find it difficult to conduct business due to the reduction in value of investments and endowments and, of course, reduction in patronage from groups and individuals who have faced these same events.