It was a staggering survey result: Last May, Calgary Arts Development went to the city’s non-profit arts organizations with a questionnaire, trying to get a handle on the impact of COVID-19. Of the 140 that responded, nearly half – 48 per cent – said they were going to run out of cash by the end of the calendar year.
“By some grace we did not see that happen,” says Patti Pon, president and CEO of Calgary Arts Development, the city’s arts funding body. She cites emergency help from governments and the arts organizations’ adaptability. “Our interest is not to see that anticipated outcome come to be.”
But from May to August, staff positions had dropped by more than 50 per cent; some companies were down to zero staff.
And Pon knows some organizations can only hold on for so long. “We risk seeing a lot of arts companies close in 2021,” she says.
Recognizing this, Calgary Arts Development will introduce a program next week to help arts organizations navigate the difficult road toward winding down. Organization Structural Grants (OSC) is a one-year program meant to provide support to companies deciding they need to make a structural change.
“It could be about merging, it could be about collaborating and it could be about closing,” says Pon. “We want to walk with you. We don’t want to just hang you out there and say, ‘Well, see ya.’”
Of course, nobody wants an arts organization to fail because of COVID-19. But Pon is putting realism ahead of optimism, and responding to findings that suggest closings are inevitable.
“In the U.S. and England, some are forecasting that up to one-third of all charities will not recover from the pandemic. They will close their doors,” a restructuring and insolvency guidebook for charities and non-profit organizations prepared by the Edmonton-based Muttart Foundation with Miller Thomson LLP reported in December. “There is no reason to believe that the situation will be any different in Canada.” Last week, Muttart released a self-guided workbook to assist with non-profits shutting down called “It’s Time to Go.”
Calgary-based IntegralOrg, which offers consulting services to charities and non-profits, has also been studying the impact of the pandemic on non-profits.
“We haven’t hit the worst of it yet; we’re not done this yet in any sense,” says IntegralOrg’s president and CEO Mike Grogan. He points out that non-profits often lag behind the rest of the economy when it comes to recovery, and that arts organizations have been particularly hard hit.
Their business model generally relies on public funds, contributed revenue – donations, sponsorships – and earned revenue, such as ticket sales. “All very precarious,” says Pon. Exacerbating this is the devastation the arts sector has faced because of the ban on public gatherings. “It’s a double whammy of impact,” she adds.
Calgary Arts Development has earmarked $150,000 for this new program, which will offer help to arts organizations in three phases.
In phase one – exploration – up to $5,000 will be available to help arts groups explore the possibilities of structural change. In phase two – experience – grants of up to $15,000 will be available to help companies secure assistance or expertise around a decision to close or merge. Hiring an accountant, for instance. And in step three – execution – grants of up to $20,000 will be available for companies actually making the move to amalgamate or fold.
“We want to hospice with care for any closures,” says Pon. And she is adamant that they not be remembered simply as companies that died during the pandemic.
“[We want] to ensure that the contributions of these organizations are acknowledged and preserved; that we remember the shoulders on which we stand as we go forward as a community.”
The grants are not intended to be any sort of bridge financing, but a bridge to a different reality. That might include an inventive collaboration or partnership, rather than a conventional merger or dissolution.
Pon says she sees it as a service to the community her organization was created to serve.
“We should be your allies, we should be your co-conspirators in whatever you consider. That doesn’t mean we won’t undertake hard conversations with you,” says Pon. “We want you to make decisions that make sense for you and the work you’re doing. And sometimes that’s not about limping along and hoping that you can get to the next grant or next donor. Nobody wants that.”
Full guidelines for the program are scheduled to be released Feb. 8 and applications will be taken for one year.
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