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Greater Hartford Arts Council Getting Stricter with Grants

Departing CEO Kate Bolduc Preaches Tough Fiscal Love For Local Arts Groups

By Frank Rizzo

July 31, 2011

Kate Bolduc, the outgoing CEO of the Greater Hartford Arts Council, is giving her organization a stunning parting gift.

It is the re-invention of the 40-year-old nonprofit agency best known for the money it raises and the grants it bestows to 150 arts, cultural and heritage groups in 34 cities and towns in the region

Working with the board and with input from "stake holders," Bolduc helped devise a new strategic plan for the organization in these rapidly changing technological and economic times. It puts the council in the spotlight after decades of low-key, behind-the-scenes involvement.

After being approved by the board earlier this year, the plan was unveiled at the council's annual meeting in late July.

"We were more supporters than leaders," says Bolduc.. "What you're going to see in the future is that we're going to be leading advocates for the financial success and stability of these groups."

The council will also be advocating for some dramatic changes within and among those groups as well.

"It is going to be tough love," Bolduc says. "Funding will be tied to innovation and consolidation."

The council will use a bully pulpit and its grant-making powers to motivate groups to do things differently, from collaborating in programming, to thinking of new revenue opportunities, to joining forces in the back office area where activity is duplicative, such as payroll, ticketing and some insurance needs. Perhaps even the front office could change, too, Bolduc says.

Part of it is simple economic reality.

Declines In Corporate Giving

Fundraising has changed. Corporate funding has plummeted from 58 percent of the council's annual income 10 years ago to 28 percent in the recently concluded 2011 campaign, which raised $3.3 million in cash. (That total does not count in-kind services donated, which had been counted in past campaigns. The 2011 figure rises to about $4.3 million, if you include donated services.)

Bolduc says corporate mergers and acquisitions, headquarters' relocating and CEOs' living in other states (if not other countries) contributeto the changing economic dynamic that has affected the council's campaigns. Corporate giving for the sake of giving has changed, and philanthropy now must show benefits for the businesses involved.

The corporate funding dropoff in the last 10 years was offset in part by the increased funding from individual giving in the workplace (from 14 percent to 28 percent of the agency's annual total).

The trouble is, Bolduc says, the workplace giving has declined in the last three years. That money source may be endangered further as some corporations, such as Aetna and Travelers, move to restrict fundraising to one short period, making nonprofits compete for employee donations.

In 2008, the Greater Hartford Arts Council faced a $500,000 deficit because of a dramatic decline in all donations.

The agency righted itself by reducing grants, selling the budget-draining Hartford Courant Arts Center on Farmington Avenue, renegotiating contracts, outsourcing information-technology operations, getting pro bono work by board members and moving its office to a more affordable location. Bolduc says Hartford has been very supportive in its arts, culture and heritage jobs initiative and is the only municipality that contributes to the council.

In 2009, the council had a balanced budget, and in 2010 it showed a solid six-figure surplus. Bolduc projects at least a $400,000 surplus and no debt at the end of this year. But it needs a $1 million surplus, she says, to create a comfortable reserve and to "flip the grant cycle" so it has money in hand before it delivers its funding. "We're on the right track," she says, "but there are no more big rocks to look under."

Change is happening to the council's board, which is decreasing from 80 to a voting board of 20 to 30 members who will meet monthly and take a more proactive role. Officers from this group will make up the executive board.

Resistance of Founders

Bolduc admits that while many groups are open to the changes on a theoretical level, it will be another matter to implement them in reality. This is a trend that is not unique to Hartford, and Bolduc points to Americans for the Arts, a national arts advocacy group, as leading the way in urging organizations to consolidate, partner and even merge.

Bolduc says she sees that possibility in Connecticut but adds that mergers can be complicated because of boards, endowments and other business aspects.

More distressingly, she says, some groups are digging in their heels and refusing to change. She predicts some won't survive, though she declined to name names.

Some arts, heritage and cultural groups that may be most problematic are those run by founding directors.

"Organizations with the biggest risks are the ones being run by their original founders," Bolduc says. "The issue is that the organization is so much a part of their own identity, and they don't look at this as a business model but as 'my baby' and 'I built this.'"

Business-as-usual amid changing economic times and the refusal to make practical financial compromises "will result in being out of business," she says. "Some organizations will cease operations in spite of themselves rather than consolidate."

Opportunities, Too

Though the council assists scores of small, medium and large organizations with grants for projects, jobs and community outreach, only 18 groups get the much-sought-after operational grants, and many of those grants were renewed without much challenge. Not any more, says Bolduc. The grants will now be merit-based, and groups must demonstrate the willingness to consolidate, take on partners and change to get these special status grants, which she says can be expanded as multi-year grants.

But groups who don't embrace the council's goals won't feel the bottom drop out all at once. Changes in grant giving will take place over several years, says Bolduc. Groups that create proposals for innovation and efficiency will be most rewarded.

Arts, cultural and heritage groups will also find a more high-profile ally in the council, which will be drum-beating for the arts to be placed at the "adults' table" in government, education, foundation and corporate discussions — "and not marginalized as a luxury or accessory."

The council will also be facilitating new initiatives and proposing some of its own, such as "arts" state license plate, Bolduc says. "The California Arts Council receives 60 percent of its revenue just from such license plates," she says.

"Major seismic changes are coming," says Bolduc, 48, who grew in Hartford's South End, spent 11 years as music director of the Newington Children's Theatre and served on the boards of the arts council and Hartford Stage.

Bolduc who says she is leaving the council with no plans for another job and a wish to spend some time on herself. Jay S. Benet, vice chairman and CFO of The Travelers, will serve another two-year term as board president and is committed to following through on the council's new "road map."

"But in the end, " Bolduc says, "the success of the council is going to be measured by the success of the arts community as a whole."