Rent! (and salaries, and programming)

This story was sparked by a quiet moment in a well-lighted downtown park — a park that has benefited some from the recent years of prosperity our city has experienced along with the rest of the nation. The much-needed lamps ringing the small walking path are so new they still look tacked on and naked, like decorations in a mini train set or fresh shrubs in a newly erected subdivision. The large crescents of dirt where the landscaping was razed not long ago in a short-sighted effort to discourage illicit behavior still look raw and bereft, and the grass thins out into trash-strewn dust at the curb. But the central lawn is a lush emerald green. On a breezy fall night, my neighbor, who works for a local performing-arts organization, and I walked our dogs through this half-completed renaissance. As he talked about his concern that the economic downturn would endanger organizations like his, the park itself felt like a metaphor for our present arts-funding environment: stranded together in the almost-dark, having come so far, and wondering if a global recession will deny us the resources to complete our grand plans.

“I haven’t seen or haven’t witnessed or heard of impacts yet, but we’re all worried, because of what’s going on globally,” Office of Cultural Affairs Director Felix Padrón told the Current last Friday. “It’s definitely in my opinion going to trickle on down home. To what extent, I’m not sure. I think that mid-size and small agencies, those agencies that rely heavily on, for example, ticket sales and admissions, I think you’re probably going to see an impact there, because people are going to evaluate or prioritize where they are going to spend or what they are going to buy.”

Jump-Start, San Antonio’s 20-year-old avant-garde theater company, is the poster artist for a mid-size creative organization. It primarily produces original local work, and gets approximately 25 percent of its funding from the City, another 20-30 percent from foundations and corporate grants, around 5 percent from individual donations, and the remainder from contract fees from schools and community groups. Education Director Steve Bailey looks a little pensive these days, and he concedes he’s worried about how the economy will affect Jump-Start. “In our last couple of meetings we’ve had discussions: How do we be careful in this time? How do we be careful we’re setting ourselves up for success?” he said. “They do say that in tough economic times, you may lose foundations and other kinds of things, but studies have shown that individual giving tends to maybe not reduce as much.” But Jump-Start, he noted, like many of the arts organizations that make San Antonio rich and interesting, “the nature of the work we do, and the nature of the kinds of folks who work with us, we’re not as attractive to what you might call moneyed people at this point.”

Like Jump-Start, San Antonio’s other arts organizations get their funding from a variety of sources that can be loosely categorized as public, non-profit, corporate, individual, and contractual. While it’s likely that each of those areas will feel pinched over time, non-profits were quick to acknowledge in conversations with the Current last week that circumstances have changed for the worse.

“Most foundations tend to give away about 5 percent of the average value in their fund for the preceding 12 months,” said Palmer Moe, managing director of the Kronkosky Charitable Foundation, which awarded more than $26 million to arts organizations and museums in 2008, including $350,000 to Bexar County arts groups ranging from San Anto Cultural Arts to the symphony and opera. “So when the average market value goes down, the amount available for both expenses and distributions ... would go down.” The problem is compounded in a city where many of the arts organizations don’t have the cushion of a hefty endowment.

“The ones that I think have the big endowments that I think will be comfortable would be SAMA, and the McNay,” said Moe, “but most of the other organizations in town don’t have endowments.They’re dependent on their annual fundraising.”

Reggie Williams, president of the San Antonio Area Foundation, a community foundation that gave $125,000 to arts and culture intiatives in its 2007-08 cycle, mostly in small program grants of around $10,000, isn’t sugar-coating the news, either. “The fact is that one of the sad parts about being a foundation is that when there’s a downturn in the economy, all of the non-profits need it more, and it’s just natural, because we are supported by the same economy, when they need it more, we seem to have less to give.”

Williams estimates that the Area Foundation will give about 10 percent less in its discretionary-funding category during the next cycle — approximately $2 million compared to $2.2 million this year.

That’s the sunshine. The San Antonio Area Foundation also administers donor-advised funds, in which the grantors participate directly in the funding decisions — “their recommendations will be coming to us based on how they see their funds stacking up,” said Williams, “and I would assume that from looking at what’s gone on in the past that the income won’t be as great, so they will be motivated to not give as much.” — and manages portfolios for endowed organizations. The latter, says Williams, are in the toughest position of all. “They actually depend upon the income for their operations,” said Williams. “And whenever there’s a downturn — we’re one of those, by the way — you have less for your operations. ... We’re just like everybody else; we’re in double-digit losses.”

While private-sector funds are in flux, government-supported arts funds could be a source of some stability — at least in the short term, says Padron.

“We’ve been extremely, extremely lucky, and I think the reason, for the most part, is most of our funding `comes from the Hotel-Motel Occupancy` Tax, which is a pretty stable fund,” said Padrón. “A lot of cities depend on general-fund dollars ... so if revenues are not coming in as a result of tax collections and house sales and all of this stuff, the revenue’s going to go down, and usually the arts are the first thing to go.”

The HOT revenues are dependent on actual hotel-motel rental income, of course, but Padrón said that next year’s projections – based in large part on conventions that are booked in the Alamo City – look stable enough to meet the current two-year arts-funding cycle. He is somewhat concerned, however, about the 2010-11 cycle. The Current is, too, since Mayor Phil Hardberger, who led the push to increase the City’s HOT allotment for the arts to the maximum 15 percent, will be term-limited next spring, and District 8 Councilwoman Diane Cibrian — a candidate for Hardberger’s seat — confirmed that during this most recent budget round, the City considered tapping the HOT fund to expand the convention center, diminishing the overall pot of money from which the arts gets its allowance. The move was deferred this fiscal year, but look for it to resurface next round. (For the record, Cibrian says she does not favor cuts in arts funding.)

TheFund, which has collected and distributed almost $365,000 in local arts funding since its inaugural 2005 campaign, solicits paycheck donations through the workplace. Like a United Way for the arts, it pools small donations from many individuals. The 2008 cycle is underway, and they won’t have final numbers until “several months into the new year,” says President Rod Rubbo. “I think we’ll be the same, maybe slightly down,” said Rubbo, but he’s reluctant to attribute that to economic turbulence. “Any differences we’ve seen down have been mostly due to campaign structure: timing, problems within the corporation itself — needing to find another date, or postpone to another time, things like that.”

One of those workplace reschedules, though, was SA’s Toyota Tundra plant, which announced a temporary shutdown in July while the company waited out a truck backlog — a move that in retrospect looks like the first harbinger of tough economic times to come. It’s firing up the production lines at reduced capacity this fall in the shadow of a 59-percent drop in Tundra sales from the previous year, according to the San Antonio Business Journal. Nonetheless, Rubbo remains cautiously optimistic. “Everybody’s going to face choices, but the message of the united arts fund is that it takes a little bit from a lot of people.”

Even if Rubbo’s correct, and SA’s working folks sign up in increasing numbers to give $1-$2 per paycheck, at theFund’s current grant levels — up to 1 percent of the organization’s operating budget if it’s more than $1 million; up to 2 percent if it’s under $1 million — they can’t carry San Anto’s arts through the valley alone. Which means tough decisions in other sectors, especially when it comes to the city’s record number of current capital campaigns. The Witte, the Alamo, the Alameda, the Briscoe Western Museum, the Bexar County Performing Arts Center, and the San Antonio river improvements are all following on the heels of the McNay’s successful $50-million new-building drive, with the combined push exceeding a quarter of a million dollars. “There are a lot of capital campaigns that are going on simultaneously for very specific and very good causes,” said Padrón. “Especially with all those propositions that passed in march — including the performing-arts center, the Alameda, the Briscoe Museum — they got a portion in the bond, but it was contingent on them also raising additional dollars.”

Williams at the Area Foundation says that their allocations will not change in response to the economy, but faced with diminished funds, the Kronkosky Foundation will focus on operations, says Moe. The Kronkosky board meets six times throughout the year, so it’s too early to call the outcome, but “a fairly high percentage of our grants go to capital programs to build facilities and that sort of thing. And my guess is we will lower that type of giving so that we can continue at a comparable level on our support of operations,” said Moe. He doesn’t expect to be alone, either. “I think the number of capital campaigns out there is staggering, actually. But I think the capital campaigns are going to have difficulty. I think people are nervous, and with the decline of two significant assets in this community, oil and gas and stocks, I think that the availability of funds, particularly for capital campaigns, and probably for operating costs, too, will likely be less next year than they have been.”

Bruce Bugg, trustee of the Tobin Endowment, which funds local and national theater programs among other things, says that the endowment operates on a “long-term time horizon” and doesn’t plan to make any short-term funding adjustments. And as for the $32-million performing-arts center campaign, which he also chairs, Bugg is bullish, at least publicly. “The donor community realizes this is a ‘transformational’ event in San Antonio’s history, and I’m confident this community will respond to the need for this performing-arts center, as did AT&T, which has donated $5 million to the capital campaign,” he responded via email.

Witte Museum President and CEO Marise McDermott is also taking the economic uncertainty in stride. “What we’re hearing from our fundraising council `about the Witte’s capital campaign`, really, it will take a little longer, but it will happen,” said McDermott. “There’s still money out there, still passion out there.” She adds that the silver lining of the current deflation in oil and other prices means that the projects themselves may cost less in the long run, “so it’s a little bit mitigated that way.”

The Witte itself is also making some adjustments. “One thing that we did do: for the first time in many years we have a smaller budget than we have had in the past,” said McDermott, but visitors to the museum probably won’t notice the difference. They’ve booked shows that are less expensive than the wildly popular Our Body: The Universe Within, but still impressive she says, including Genome: the Secret of How Life Works.

But our small to mid-size arts organizations may be the canary in the coal mine. “I don’t see anything rosy in the future,” said Blue Star Executive Director Bill FitzGibbons, who nonetheless held out hope that this year’s Arts & Eats numbers — down slightly from last year — reflected anxiety over Tuesday’s election as much as economic trouble. “If I had my druthers, we would have had Arts & Eats after November 4,” he added, but regardless of the outcome, in the immediate future, “I think people are going to have to work harder and smarter.” FitzGibbons says Blue Star is developing a business membership level, using more part-time staff, and opening up new revenue streams through educational programming.

If there is reason for some cautious optimism, it could be justified on the general agreement of the Current’s various interview subjects that San Antonio’s expectations for arts funding and programming have matured along with its lead organizations over the past 20 years.

“I want to believe that the arts have been positioned at such a level, a level of recognition, and a level of recognizing its value from an economic-development standpoint, that I think it’d be hard for anyone to think of it in any less terms, in my opinion,” said Padrón. It’s an argument FitzGibbons seconded with numbers from a study Blue Star recently completed with the San Antonio Business Journal. During its 20-year existence, the organization has received a total of $2 million in City arts funding, while during the past decade, its surrounding King William/Southtown neighborhood has yielded $50 million in property-tax revenue through increased property values alone — an increase that FitzGibbons and others argue was catalyzed in large part by Blue Star. The message he hopes will stick in the minds of individuals, corporations, foundations, and elected officials: the arts are a good long-term investment, even when the market’s down. •