Arts and Cultural Council is at a financial crossroads
05:00 AM, Feb 08, 2014
The Arts and Cultural Council for Greater Rochester has run a deficit since 2007, diminishing its net assets.
Every year, the Arts and Cultural Council for Greater Rochester administers tens of thousands of dollars in grants for financially struggling artists and arts organizations.
These days, the council could count itself among those in need. Six consecutive years of operational deficits have the council on the brink of insolvency on paper, with its assets barely outweighing its liabilities as of its last tax filing.
The circumstances have forced the council to cut staff from four to three positions, outsource some functions, rely more heavily on volunteers, tap a line of credit, and delay projects, according to board members and public financial records. The result is fewer resources for the region’s arts community.
“Things that may be wonderful to do, we may not be able to do,” the council’s board chairwoman, Grace Tillinghast, said in a recent interview at the council’s North Goodman Street office. “We have to be realistic. It’s going to be a realistic budget that will allow us to move forward.”
The grim financial outlook coincides with a transition in leadership at the council, which announced in December that its longtime executive director, Sarah Lentini, would step down in January after 14 years to “pursue new professional opportunities.”
That has left some artists to speculate on what the change means for the council’s future. “We’re wondering where it’s going next,” said Shamira Nicolas, whose pen on canvas work hangs in the council’s gallery.
“Sarah was devoted to the whole organization and when she left, no one told us why. A lot of people are in the dark.”
Lentini did not respond to a message seeking insight into her departure and the future of the council. She has been temporarily replaced by the council’s director of grants, David Semple.
Current and former council board members and artists in separate interviews cast Lentini’s resignation as a surprise. They were effusive in their praise for her tenure, crediting her with overseeing the building of corporate office and gallery space, creating a legal assistance program for artists, tirelessly advocating, and founding Metropolitan magazine, a glossy quarterly publication.
“I don’t know of another person who can move through the crowd and network for artists with the exuberance and buoyancy and knowledge that she did,” said Jane Notides-Benzing, a Rochester mixed-media artist who described securing small state grants for her work through the council.
A council press release issued two weeks before Lentini’s departure also credited her “exemplary programmatic and fiscal management” for the organization experiencing “over a decade of excellence.”
The council’s tax records, however, paint a less flattering financial portrait.
The last year the council ran a surplus, in 2006, it had nearly $450,000 in net assets. In 2012, the last year for which financial records were available, the council’s net assets totaled less than $7,400.
While the council’s liabilities did not increase substantially during those years, its assets declined precipitously, from $914,000 to $526,000, due in part to depreciation of the council’s office space.
Revenue, which includes government grants, private donations, membership dues and income from program services, also fell by 30 percent, reflecting a decline in individual giving and largesse from state legislators.
Board members also attributed some of the apparent financial distress to grant monies not having arrived before the council closed its books for the year.
“I don’t think the problem is one of mismanagement,” said Carla Palumbo, the Arts and Cultural Council’s former board chairwoman who also sits on the Rochester City Council.
“The problem is sort of a structural deficit that comes when you don’t have that influx of income that you had relied on,” Palumbo said.
The mission of most arts organizations are fairly simple to grasp. The Rochester Philharmonic Orchestra performs classical music. Geva Theatre Center stages plays.
The Arts and Cultural Council’s mission is far broader: It’s an advocate for the arts, culture and education in 10 counties.
Advocacy is difficult to quantify. The council hosts grant writing and social media workshops, rents out gallery space, hosts receptions for cultural and political leaders, maintains an online database of local artists, and holds membership showcases and an annual arts awards ceremony, among other things.
Jeanne Raffer Beck, a mixed media artist from Canandaigua, called those services a “tremendous value.” She recalled how renting gallery space from the council in 2011 helped her present her work at future shows and drove buyers to her studio. “It hugely increased my visibility in the area,” Beck said.
One of the council’s core functions is as a conduit for state and private grants, essentially acting as a middleman between artists and small cultural groups and entities with money.
The New York State Council on the Arts, for instance, relies on regional organizations like the council to funnel state grants where they are most deserved or needed.
In 2012, according to its latest tax filing and audit, the Arts and Cultural Council distributed $111,000 to groups as diverse as the Gay Alliance of the Genesee Valley to the Rochester Lyric Opera.
Health insurance hiccup
Potentially compounding the council’s financial hardships is the Affordable Care Act, commonly known as Obamacare.
For years, the council derived a steady stream of income from a group health insurance plan it offered its 500 or so members. It has been a huge benefit to struggling artists, whose premium payments accounted for about a tenth of the council’s revenue in 2012, tax records show.
That income is now a question mark as artists like Laura Wilder of Rochester defect to the state health insurance exchange set up under the federal health care law.
“Basically, I became a member initially because that was the only way I could get decent prices on health insurance,” said Wilder, who described saving money on the state exchange.
Tillinghast acknowledged that the future of the plan is up in the air. Whether there will be a market for it and whether the council can legally act as an insurance broker are questions that for now are without answers.
“For this year, we will still provide health insurance for our members,” Tillinghast said.
“Next year, heaven knows what will happen.”
Hope for the future
There are some bright spots in the council’s financial records.
Notes accompanying the council’s audited financial statements expressed confidence in what auditors called management’s “detailed plan to reduce expenses and generate revenue.”
As of last summer, according to auditors, the council had already slashed year-over-year expenses by about 10 percent and raised close to 90 percent of the revenues it had in all of 2012.
“We’re not rolling into money, but we have enough to keep moving forward,” Tillinghast said.
Board member Cindy Kaleh, who is also a Monroe County legislator from Rochester, credited some of the financial turnaround to a conscious move toward intimate fundraisers at the homes of members and arts collectors, something the council had never tried before.
“As a board, we’re open to ideas for the future and ways to put the council out there so people can see it and appreciate it,” Kaleh said, adding later, “We need to be pushing harder to show that we are an agent for change.”