Small City Or Small Arts Org, Getting Grants Is Tough

According to a recent piece on CityLab, smaller cities and towns have much in common with smaller non-profits when it comes to applying for grants.  They both have great need but lack the staff and resources to effectively compete for grants.

Citing the case of Jackson, MS which has been in a state of distress since 2022 when their water infrastructure failed due to flooding, the article quotes the former chief administrative officer, Robert Blaine about their lack of capacity to secure grants:

Robert Blaine, now at the National League of Cities, said one of many issues that impeded the city’s efforts to fix its water crisis was its inability to compete for and win grants due to a lack of staff to complete applications. “We really, really needed the funds, but we didn’t have the competency, we didn’t have the capacity to be able to apply for it,” he told Streetsblog in 2023.

The article mentions there is a lot of funding available from the federal government that isn’t getting spent due to this lack of capacity. Many non-profits are stepping up to help by offering training to cities about how to go about securing grants, most of which require a lot more data than most non-profit arts and cultural organizations are required to gather. Some non-profits have assembled former employees of different federal agencies or former municipal grant writers to provide advice and read drafts of grant proposals.

Additionally, the Inflation Reduction Act provided funds for technical assistance to help states and municipalities complete grants including funds to gather the required data in addition to writing the grant proposal. Since it benefits states to have their cities secure funding for projects, some states also provide technical assistance.

Though it sort of sounds like the “you need experience to get a job, but you can’t get experience without a job,” paradox to be required to write a grant to get the funding to hire people who are good at writing grants. I did appreciate the flow chart on the Colorado grant writing assistance program that shows that if your application is denied, you can modify and resubmit. Also, they appear to commit to reviewing applications within 14 days so cities will be able to maintain some momentum. I think a lot of non-profit cultural entities wish that sort of do-over opportunity was available to them with their own grants.

According to a staff member of one of the non-profits helping cities write grants, there is a similar situation to arts and culture non-profits where those with the most direct interaction with communities in need of assistance are often those without the capacity to secure the grant funding they need:

“I always look at the grant world like a spectrum,” said Relf. “At one extreme, you have organizations that know how to write grants, and they win grants, but they’re not really in the community doing the work. And then you have these organizations that have a heart for the community. They’re there every day. They just don’t have the capacity to write the grants.”

Donors May Be Adding Inefficiencies To Fundraising

Seth Godin recently made an interesting post about non-profit fundraising, in particular the inefficiencies that exist in the process that can’t be fixed by technology, because it can, but rather the expectations of the donors.

Along the way, it’s not unusual for a nonprofit to spend 50% of the money they raise on the expense of raising more money. That’s not because they’re inefficient, it’s because we are.

We demand a gala, or an emergency, or artfully written fundraising letters. Donors want personal attention from the folks who are ostensibly doing the front line or strategic work of the nonprofit, and treat regular donations as an exception, not the standard.

When the internet arrived, it dramatically lowered the transactional costs in a wide variety of industries. You can buy an airline ticket yourself faster and with less intervention than through a travel agent. You can buy stocks for transaction fees that are a tiny fraction of what a broker used to charge. But creative and effective nonprofit fundraising has been stuck in a cycle of risk, galas and uncertainty.

This reminded me of a letter that appeared this summer in the Chronicle of Philanthropy where a donor said he was going to stop giving because he wasn’t getting the communication and attention he expected. He made a follow up post this February which contains a link to the original letter. The original letter garnered a lot of pushback from the non-profit community, including some satiric criticism written by Vu Le While the donor says in his follow up he has learned more about the challenges non-profits face in regard to fundraising, he still seems to expect a lot of what Godin says keeps fundraising costs high for non-profits.

There Is A Group Naming Names And Advocating For Better Funding Practices

Around the start of the year, the group Crappy Funding Practices was created on LinkedIn. Vu Le who writes the Nonprofit AF blog had started calling out the problematic practices of funders on Twitter a few years ago, but with the help of some volunteers, they decided to expand the scope of their activities and started to solicit submissions of bad practices non-profit staff have run up against.

A lot of what they call out are things like onerous reporting requirements or twenty page applications requiring world changing results in return for $5000 grant or prohibitions on fundraising for a quarter of the year. And even an instance where you had to pay $100 to attend a luncheon to learn if you received a grant.

One of the very worst examples were the requirements from a foundation supporting classical music.

The team also praises some positive funding practices like the Minnesota Council on Foundations which offered tools for other funders to use in order to reduce barriers for grant seekers. The Fairfield County Community Foundation got a shout out for acknowledging that they listened to feedback from grant seekers and had revised their processes.

Even though the page has only been operating for about four months, a writer from Inside Philanthropy took notice and reported on the page, the problems it was addressing, and the change that is slowly taking place as a result.

I expect that the profile of the group will continue to rise over coming months and years. Hopefully that will result in some industry wide changes that will make the process easier and more equitable for grant seekers.

As the article mentions, none of these problems are new. They have been acknowledged as hurdles in the granting process for years and years, but most funding organizations haven’t really worked at making changes to remove barriers for applicants. Vu Le started calling people out by name out of frustration. The group of volunteers behind Crappy Funding Practices has helped expand on this effort out to act as an advocate for non-profit grant seekers rather than out of spite. Though I imagine there is some angry frustration at the base.

I post about this not so much to encourage people to submit funders you dislike as to let people know that there is an organized effort to advocate for better conditions on your behalf. That said, if there are organizations whose practices and requirements are burdensome, you may want to consider completing their submission form.

Examples of Great Funders can be submitted here.

Benefits Of Incorporating Your Arts Career

h/t Artsjournal.com for linking to a really valuable article on Observer about considering creating a limited liability corporation (LLC) if you are an artist.  I recently created a post on ArtsHacker summarizing some of the ways in which an LLC protects artist’s personal assets in the case of lawsuits and in some cases, divorce proceedings.

This excerpt from Observer article summarizes how an artist would operate after forming an LLC:

….but most artists operating as one-man shops set up limited liability companies, according to Powers, where the LLC is the employer and the artist is technically the employee. When a sale or commission is made, the money is paid directly to the corporate entity, which then pays the artist, either in a lump sum or in increments (as a salary), and the artist pays taxes on that money as ordinary income. But not all the money transfers directly through to the artist. The corporate entity retains some cash to purchase art supplies, health insurance, workmen’s compensation to protect employees who may get injured during transit or installation, commercial premises and liability insurance—and, assuming the artist is successful enough, to hire employees or consultants.

The article discusses a number of legal scenarios an artist might find themselves in which the buffer of an LLC would be beneficial. More than just providing legal protection, they also note that forming an LLC would allow the artist to solicit investment to support their work.  Take a look at the ArtsHacker post or go straight to the article to learn more.

 

Should Your Work Be Protected By An LLC?