This past March, COVID-19 shut down much of the country and arts and culture organizations with it since you can’t really fill concert halls, theaters, museums, and classrooms without putting your patrons (and staff) at risk.
But now it’s August, and rather than seeing the improvement and steady re-opening that many of us originally expected we are instead witnessing rising case numbers and recommendations to tighten up distancing policies and keep facilities closed. Of course, this means that the short-term plans that many arts and culture nonprofits created to get them through a few months of closure and loss of revenue are now starting to look short-sighted.
If your org only planned for a 3-6 month closure, then what do you do now?
How will you make up lost revenue?
Can you afford to still pay staff?
Did funders award grants for programs that didn’t happen or are not rescheduled for next fiscal year?
And the biggest question of all: If you got grants for programming, but now need that money for operating just to keep going through this crisis, will your funders allow that or will they want their money back?
These questions loom large in most of my clients’ minds and in the minds of many of the readers I have heard from lately. So today I want to take a closer look at how to broach this subject with your grant funders and what your best options may be based upon their responses.
Do a little homework before you talk with funders.
Namely, I would suggest putting together several contingency plans for how you plan to deliver programming, events, services, and handle things like staffing, paying bills, and budgeting. I would suggest creating 3 separate plans: one for if closures and restrictions need to be maintained for another 3 months, one for 6 months, and one for 1 year. Or you could create a more intricate plan with phased re-openings and contingency plans based upon several contexts. You should do whatever makes sense for your organization.
The bottom line here is that you want to be able to tell current and potential funders that you have a thorough, well-thought-out plan that details what you can or can’t deliver in terms of programming, alternate plans that could be implemented virtually, and what your sustainability plan is for the organization through this tough time.
Take stock of high-priority needs
After you’ve put together plans you’ll probably start to see several needs emerge that look a little different than the needs in your typical fiscal year. I would guess that the bulk of it’s going to be operating, too. Now, I don’t know a single arts and culture nonprofit that doesn’t need some operating funds in a normal season, but this year that need will likely be larger and even more vital than normal to long-term survival. For example, if in a normal year your grant funding breaks down to 70% program or project support and 30% operating support, then you may see those numbers completely switch.
Either way, make sure you have a document or spreadsheet that, along with the emergency budgets you created, lays out exactly what you need in order to keep the organization going and to deliver whatever programming may be possible during this time. With that done, also make sure you look at what these funds will consist of. For example, how much will come from grants? How much will come from donations or sponsorships? Will you implement some new donation campaigns? Do you have an endowment from which you could pull funding to get you through?
Outlining all of these details is necessary in order to determine the absolute lowest amount you might need to raise through grant awards in order to make your plans work.
List out current funders and what they’re funding
Now it’s time to take a look at your current grant awards and see what these funders have agreed to fund, what each funding period is, and how much they have awarded. I would recommend creating a spreadsheet (if you don’t have one already) or using my Master Grants Planner to lay this out.
Take a look at the needs you identified in the section above. How well do these awards match up with your actual needs? Where are there deficits? Where are there awards that no longer make sense (either because that program/project has been cancelled, postponed, or changed significantly)?
Once you’ve created this list you should have a better idea of how your current grant situation lines up with your needs and what the actual funding gap is that you will need to fill.
Create a plan for conversations
Using the list you’ve created, you should be able to go through and see which funders you need to have conversations with. If a funder awarded a grant for a program or project that will still be happening as originally planned, you may be able to leave that funder off your conversation list. But you will definitely need to speak with every funder who has made an award for a project or program which has been canceled, postponed, or has changed significantly from the original proposal.
In the case of items that have been canceled or postponed to another fiscal year, it may make sense to either ask the funder to convert their award to an operating award or to change the terms of the award so that it can fund something that is needed in this fiscal year. For example, if a funder cannot or will not convert their award to operating, then maybe this would be a good time to ask for funding to cover technology costs that could help your organization be better positioned to deliver programming and services through virtual platforms.
Of course, if a funder cannot honor that request, you can always ask for the award to be allocated to next fiscal year when your org may have a better shot at pulling off the program or project that they wanted to fund.
Expectations are so important when preparing for conversations with grant funders. Go into this with your eyes open and know that even if you have a great contingency plan, some funders may still be unable or unwilling to change their grant award in the way you request. Many funders have strict guidelines and policies that determine the awards they make and will be unable to bend these without subverting their raison d’etre. And if that’s the case, we have to respect it even if we don’t like it.
This is also why the above sections where you create thorough plans (which hopefully include worst-case scenarios), are so important in the event that you get some disappointing responses from your grant funders. In fact, it would probably be a bit foolhardy to expect that you won’t get at least a few of these responses.
Of course, you may be a seasoned development professional who already understands this. But your colleagues and board members are likely not. Engaging in a bit of education and conversation around this topic may be wise to help manage their expectations prior to these funding conversations.
Start making calls/emails
It’s now time to start making calls. I recommend actually having a phone or video call conversation with your grantmakers. However, everyone’s work situation is different right now, so in some cases it may have to be done via email. Regardless, get in touch, get these conversations on your calendar, and respect the needs of each funder and their staff.
When you have these conversations, it’s vital that you be completely honest and transparent about what your organization’s needs are, how urgent they are, and what your capabilities are during this time. Don’t promise you can pull something off that is unlikely. But conversely, don’t make your situation seem overly dire if it isn’t. Just be honest.
Present each funder with a copy of your contingency plans and budgets so that they know what you plan to do and what changes might be made as the situation changes. This will also underpin their perception of you and your organization as transparent, trustworthy, and well-prepared (in other words, a good investment).
Once you’ve talked to everyone, do this…
You’ve spoken with all of your funders and have received responses from them as to whether or not they will convert their award to operating, reallocate the award to next fiscal year, keep the funding in place, or withdraw it entirely. Here’s what you do next:
- Revise your plans and budgets based on this new knowledge
- Look at where you still have funding gaps – create a plan for filling them
- Consider engaging in some more in-depth grant research and strategy than you may normally do
- Consider implementing a one-time donation campaign to help fill the holes in your budget
- Consider creating new, virtual revenue streams to help get by (virtual concerts or exhibitions, online classes, livestream events, or even subscription boxes for your patrons to purchase and receive each month with activities they can do at home, etc.)
And most importantly, create a plan for the next 6-12 months to keep your funders up-to-date on new changes, challenges, and successes. Staying top-of-mind and communicating regularly with grantmakers is even more important now than it normally is and trust me, if you make the effort to do this you will already be ahead of many nonprofits who haven’t made this a priority.
Hopefully this helps you and your nonprofit get organized and ready to weather whatever the next year holds for our world and for the nonprofit sector. It may not be easy, but we need arts and culture in this world so please hang in there and know that what you do is incredibly important.