Posted March 28, 2020
Local and state arts organizations say federal relief funding will help, but the crisis remains grim
The biggest help in the bill that took effect Friday is for small business loans and relaxations on charitable giving.
By Michael Granberry
From The Dallas Morning News
The $2 trillion COVID-19 emergency stimulus bill, passed on Friday and signed by the president, served as a starting gun for Dallas-area arts groups.
With immediate fervor, they pored over the fine print to see if — and when — they could cobble together badly needed money. The Senate version passed earlier had allocated relief for the arts, albeit nowhere near what was needed.
So, Friday’s first question was: “Did the House leave the Senate version intact?”
“Yes,” said Ann S. Graham, executive director of Texans for the Arts, a state arts advocacy organization. It is, she added, “an identical bill” to what the Senate passed with unanimity. “So, yes, we are at least relieved about that.”
The next big question: Does it provide relief for arts organizations in Texas?
“Clearly, the need for the arts is greater than we were able to achieve,” Graham said. “The original ask was a $4 billion ask.”
Federal emergency funds were allocated to the National Endowment for the Arts, the National Endowment for the Humanities, the Corporation for Public Broadcasting and others but netted only about $307 million.
“There’s a long way to go,” Graham said. “We know that everybody in the country is hurting. This is a great first step. Those resources to the NEA and the NEH will go out to the field, state arts agencies, state humanities agencies, so that is good. That is money that will get into communities.”
She also cited the extension of unemployment benefits, to help self-employed and independent contractors.
“That’s huge,” Graham said. “There’s no safety net right now for those workers. So, that is enormous.”
She also praised the small business loan expansion to include the nonprofit sector. The nonprofit interest rate has been reduced, she said, to 2.75%.
“We haven’t seen people go through the process yet, because the bill just passed. That’s very, very good news. What people need is help.”
The Dallas Morning News recently profiled a fiddle player, whose “gigs” have included playing for the Eagles in concert. But since the coronavirus clampdown, her work has evaporated. Such an artist can be helped by the new legislation, Graham said, by going first to the website for the Texas Workforce Commission.
She would then apply for unemployment benefits, “because that is the state agency that will be getting those federal funds to distribute.”
Here are just some of the highlights in the bill passed Friday:
- $75 million for the National Endowment for the Arts
- $75 million for the National Endowment for the Humanities.
- In Graham’s words, “Congress accepted our ask to waive matching grant requirements and to waive the requirement for grants to be project-specific.” In other words, “All these new fast-track grants will be for general operating support with no match.”
The bill also added these provisions:
- $5 billion for Community Development Block Grants to cities and counties. “Arts groups should work directly with their mayors and local economic development officials for grant support.”
- $350 billion for Small Business Administration, or SBA, emergency loans of up to $10 million for small businesses — including nonprofits (with fewer than 500 employees), sole proprietors, independent contractors and self-employed individuals (like individual artists) to cover payroll costs. This is important language: “These loans can be forgiven if used for those purposes.”
Debbie Storey is president and CEO of the AT&T Performing Arts Center, which has five resident companies, including the Dallas Opera and the Dallas Theater Center, which are, of course, not staging public shows at the moment. Nor is any other arts organization in North Texas.
Like Graham, Storey noted that, on a national level, arts communities were asking for $4 billion in relief. Instead, $75 million was directed to the National Endowment for the Arts. And yet, there are things in the bill that will help deaden the sting.
“Hopefully, the small business loans can turn into small business grants,” Storey said. “That is hugely favorable, because nonprofit arts organizations can take advantage of that. One of the things we don’t know is, is the process a competitive process? Is it a first-in kind of process? All of those questions remain to be answered. But it’s a very positive step.”
Storey called it “really encouraging” that Congress “recognized the need for arts-relief funding right now. Immediately. We are most encouraged by the potential for small-business loans. We still don’t know the process for NEA allocation, how that will work. There’s a lot of uncertainty around that at this point.”
So, to take just one organization, what is ATTPAC’s most pressing need at the moment?
“Cash flow,” Storey said, without hesitating. “It’s what we’re all challenged by. We’re all doing scenario planning. But no one knows the most likely scenario. Performing arts centers across North America, including Canada, some believe that they may be closed through the end of the year. Some believe they may be able to open in June. And a whole lot of them fall somewhere in between.”
For every month they’re closed, Storey said, “Every one of us is losing a significant amount of cash flow. And for many of us, ticket sales and subscriptions are a far greater part of our income than contributed income.”
And yet, the new bill also addresses that by noting: “An ‘above the line’ or universal charitable giving incentive for contributions made in 2020 of up to $300. This provision will now allow all non-itemizer taxpayers (close to 90 percent of all taxpayers) to deduct charitable contributions from their tax return, an incentive previously unavailable to them.
“Additionally, the stimulus legislation lifts the existing cap on annual contributions for itemizers from 60 percent of adjusted gross income [AGI] to 100 percent of AGI for contributions made in 2020.”
For large arts groups, there is no question: This is potentially huge. In other words, a potential donor could contribute to an arts organization up to 100 percent of his or her adjusted gross income.
At the moment, however, Storey said questions that can’t be answered dominate the day.
“When will it be permitted by the city,” she asked, “to create gatherings of more than 50 people? When will tours be willing to tour again? When will artists be permitted to be in our venues? And finally, when will audiences be willing to be in enclosed spaces again, and in close proximity to others? That’s the difficulty in scenario planning.”
In other words, no one knows the answers to those questions. At this point, it’s all speculation.
And if none of those questions can be answered by August or September, “Well,” she said, “We’re talking months of no cash flow.”
And in the short term, that’s the killer for everybody.