Key Challenges with the Proposed Arts Grantmaking Legislation
Overview
The proposed legislation aims to stabilize arts funding by tying general operating support (GOS) grants to an organization's budget size and creating statutory rules around eligibility and award size. While this bill offers structure, several key concerns must be addressed to ensure fairness and continued equity, particularly for small and mid-sized arts organizations in D.C.
Key Concerns
1. Rigid Expense Formula Penalizes Community-Driven Orgs
(a) Issue: The proposed formula bases grant size on the average of the past two years' IRS 990 filings.
(b) Concern: This structure undervalues organizations with strong in-kind support (like volunteer labor or donated space) and those experiencing growth or instability not captured by recent 990s.
(c) Example: A neighborhood theater that gets free space and donated materials might look “small” on paper but have a big impact. This bill could shrink their funding unfairly.
2. New Eligibility Rules May Exclude Valuable Local Partners
(a) The bill restricts eligibility to:
(1) Nonprofits with under $100 million in expenses
(2) Primary arts/humanities mission
(3) 51% of programming in D.C.
(4) An active board
Concern: These rules could disqualify regional partners or multi-discipline nonprofits that serve D.C. residents effectively but fall outside strict definitions.
3. Funding Formula Caps and Floors Create Arbitrary Limits
(a) Caps: No organization can receive more than 1% of the total GOS budget.
(b) Floors: No organization can receive less than 0.075%, unless that would exceed 50% of their own average expenses.
(c) Challenge: These artificial ceilings and floors don’t allow for true panel discretion or reflect real-life need.
4. Supplemental Funds Are Competitive—But Unclear
(a) After base funding, any extra GOS money becomes competitive supplemental funding.
(b) Applications are paneled by budget size and evaluated on:
· Quality of programming
· Charitable work
· Diversity in leadership
· Economic impact
Concern: These subjective factors are valuable, but the bill places juried panels behind funding allocation.
Summary
This legislation is a step toward codifying equity, but it risks harming the very organizations it seeks to protect by relying too heavily on financial formulas instead of mission impact. We urge reconsideration of:
· Formula flexibility
· Clear metrics for supplemental funding
· Safeguards for smaller and community-rooted groups