June 11, 2015
The state of the nonprofit arts sector in the United States has ignited passionate debate in recent years. PND asked Michael I. Sovern, board president of the Shubert Foundation, which recently awarded grants totaling $24 million to nearly five hundred arts nonprofits, about the role of philanthropy — and, specifically, general operating support — for performing arts organizations. Sovern is Chancellor Kent Professor of Law at Columbia Law School and former president of Columbia University (1980-93), and has served on the boards of numerous nonprofits, including the NAACP Legal Defense Fund, WNET/13, and the American Academy in Rome.
Philanthropy News Digest: The Shubert Foundation describes itself as "the nation’s largest private foundation dedicated to unrestricted funding of not-for-profit theaters, dance companies, professional theater training programs, and related service agencies." When did the foundation adopt a policy of providing unrestricted funding to performing arts groups? And why do you believe it's important for the foundation to give its grantees maximum flexibility with respect to the way they use their grant income?
Michael I. Sovern: Our policy of providing unrestricted funding was already in place when I joined the foundation's board over thirty years ago. Although the foundation was established in 1947, its formal funding priorities and guidelines were created in the 1970s, which is when the focus on unrestricted funding for professional theater companies — with a secondary focus on professional dance companies — began.
We have reviewed the policy from time to time but always have come up with the same answer. Each of the many performing arts organizations we support is wrestling with issues specific to its own location and circumstances while also facing challenges that are common across the industry. We believe that the administrators, artists, and boards of our grantees know best where the funds we provide should be directed. Our confidence is buttressed by our multi-faceted approach to the evaluation of each company — one that considers the artistic, fiscal, and administrative aspects of the organization. This careful annual review helps us to feel comfortable with awarding unrestricted grants.
PND: Why do you think so many arts funders are reluctant to provide general operating support?
MS: Some donors want to see the specific impact of their contributions immediately. Some enjoy exercising control. Fresh initiatives are more exciting than paying the electric bills. But the quest for earmarked support can draw an organization's attention away from its central mission. Time and energy that could be spent strengthening the company may be diverted, possibly to the detriment of the overall health of the organization. A search for replacement funds to continue the projects or programs can drain resources while often yielding minimal results. The impact on the bottom line of the organization and the toll on the company itself may well prove that the pursuit of these funds was a mistake.