One of the exciting moments in the life of a young, small or mid-sized arts organization is when it receives its first, large foundation grant. This grant, a recognition of the good work already being performed, typically allows the organization to expand its programming. New staff may be hired, new space may be rented, and sometimes even a building is purchased. But in virtually every case, the infrastructure of the organization is expanded.
The sense of validation that accompanies the awarding of the grant can be moving and life affirming. After years of struggle, a major funding body has recognized your work. The promise of things to come is almost as exciting as the initial grant.
But as exciting as this moment is, and as helpful as it is to have guaranteed funding for a number of years, there is also a hidden pitfall that too many arts managers ignore: the grant will end.
Too many organizations that receive this first big grant build the infrastructure to support their new, increased programming without thinking about the day the grant period ends. It seems so far off, after all.
But the day does come when the grant is over and most foundations do not renew their grants automatically. Most organizations don't have a plan to deal with the reduced level of income and don't think about it until that day arrives. By then it is too late. The organization has built an infrastructure but no longer has the foundation grant to support it. All too often, programming has to be slashed, staff has to be laid off and not infrequently, the health of the organization is placed in jeopardy.
This can be a traumatic moment for any arts organization.
I have long lobbied foundations to make their grants to smaller organizations in the form of challenge grants. A challenge grant must be matched by other contributions, often by new gifts or increased gifts from existing donors. By forcing the organization to build a new, larger donor base during the grant period, the transition when the grant is over is eased. The foundation's money might be gone but the new donors attracted by the match help fill the void.
But many foundations simply do not want to do the oversight work required of administering a challenge grant. And if the foundation is not far-sighted enough to give a matching grant, the organization must be disciplined and smart enough to create its own challenge grant. The senior staff and board must use the grant period to build its donor base. A serious, concerted effort to attract new donors must be pursued. The foundation grant gives the organization an imprimatur that can attract new donors.
It is so easy to relax after winning the first big grant and to allow the nascent development effort to lie fallow. But you do so at your peril. It is never fun to get smaller, especially after the successful conclusion of a grant.