Federal dollars help keep Minnesota arts groups afloat during pandemic

Federal funding has helped a host of Minnesota arts organizations during a devastating time. Many organizations argue that more is needed.

Dozens of the state's performing and visual art nonprofits popped up on a recent list of employers that received loans from the Paycheck Protection Program. The Minnesota Opera, Children's Theatre Company and the St. Paul Chamber Orchestra, among others, obtained between $1 million and $2 million each via PPP, the federal government's program meant to preserve jobs during the pandemic.

Twenty-five Minnesota organizations were also awarded $50,000 grants from the National Endowment for the Arts, another source of CARES Act funds. That $1.25 million in NEA funding, announced July 1, is going to mostly midsize arts groups across the state, from the Watermark Art Center in Bemidji to the Northern Clay Center in Minneapolis.

Some arts advocates are calling for federal funding to be continued — and expanded — as most venues remain dark and projects remain on hold. About 10% of arts and culture organizations said they're "not confident" that they will survive the pandemic, according to a national survey by Americans for the Arts. The devastation has outlasted the aid.

"The crisis is deepening and lengthening," said Sheila Smith, executive director of Minnesota Citizens for the Arts. "It's been pretty terrible for the arts and culture sector for the first three months.

"But it's going to get worse."

In recent weeks, Minneapolis' two biggest art museums have reopened — but not before announcing salary cuts and layoffs that their leaders tied to the running out of PPP funds. Museums across the country have made similar trims.

The Minneapolis Institute of Art received $3.56 million in PPP loans while Walker Art Center got $1.7 million. The Walker had committed to paying all staff through May 30 but PPP money allowed it to do so through June 30.

Such federal funds are pieces of an intricate puzzle that museums, theaters and other nonprofits have been crafting since they shuttered, postponed and pivoted in March due to COVID-19.

FilmNorth shut down its offices in mid-March, just as it was wrapping up that quarter's classes. The St. Paul-based nonprofit had long talked about doing online courses but — given its filmmaking focus — had been "picky about how it looked," said executive director Andrew Peterson. "In pre-COVID, Zoom was not acceptable. Now it is."

The online courses, in subjects like screenwriting, editing and motion graphics, have worked well and proved popular, he said, with record attendance and students from beyond Minnesota. "Due to popular demand," the organization recently tweeted, it added a second section of its stop-motion animation camp for ages 11-14.

Moving online has "broadened our reach, and it's amplified our brand," Peterson said.

Still, earned revenue is down 25%, he said, thanks to lower course prices. So far, the nonprofit hasn't had to cut its staff of seven and is committed to paying its instructors. Federal funding has been key.

FilmNorth received about $48,000 in loans during the second round of PPP, which Peterson expects will be forgivable. Then, in July, good news: a $50,000 grant from the NEA. Nationwide, the NEA was flooded with more than 3,100 applications for the $45 million available.

For FilmNorth, the grant is "making up for lost revenue to keep us financially healthy," Peterson said. Other foundations and funders, too, have stepped up, backing a COVID-19 emergency fund the organization set up for filmmakers and loosening grant restrictions. The nonprofit's fiscal year wraps up Dec. 31.

"We're good until then," Peterson said. "But I don't know what 2021 looks like."

In a statement, NEA chair Mary Anne Carter said that the agency is "keenly aware that arts organizations across the country are hurting, struggling and trying to survive, and that our supply of funding does not come close to meeting the demand for assistance."

The Minnesota State Arts Board soon will be awarding almost $550,000 in special NEA funding to Minnesota organizations via $10,000 and $5,000 grants.

Across the country, about 30% of arts organizations have laid off or furloughed staff, according to the survey by Americans for the Arts. The effects could last: Almost half said that they're not sure they'll return to pre-COVID staffing levels by the end of 2021.

"Even in the crush of the recession, we didn't have these extended closures," said Ruby Lopez Harper, senior director of local arts advancement for Americans for the Arts. "It will be like nothing we've seen."

Her organization wants Congress to use the surplus expected at the PPP's end for the arts and culture sector, "to have an opportunity to apply for a second forgivable loan."

Local concert venues and lawmakers are behind another proposal — a federal Save Our Stages Act. Last Monday, Sen. Amy Klobuchar, D-Minn., touted in Rolling Stone a bill she co-authored to provide six months of financial support to independently owned music venues that expect to be shuttered through the rest of 2020.

"It's an extension of PPP — kind of like the airlines was — to get at a particularly hard-hit industry that the PPP isn't going to work for," Klobuchar argued in the piece.

Performing arts venues were among the Minnesota employers who got PPP funding. Ordway Center received between $1 million and $2 million, according to data from the U.S. Small Business Administration that gives dollar ranges but not specific amounts. So did Chanhassen Dinner Theatres. Hennepin Theatre Trust obtained $350,000 to $1 million. Penumbra Theatre got between $150,000 and $300,000.

The Guthrie Theater said it received $3.16 million in PPP in early April, when it still looked like coronavirus would be a short-term problem.

Its leaders expected the loan "would see us through the period until we were able to get ourselves up and running," perhaps in time for summer shows, said James Haskins, the Guthrie's managing director. "We were pretty quickly disabused of that myth."

In May, the nonprofit canceled months of shows and announced that it was dramatically cutting its full-time and part-time employees — by 79%, from 252 to 55.

"It's incredibly hard to go through the kind of layoff situation we did," Haskins said. But the Guthrie did its best to give employees time to plan, he said, using the PPP funds to continue paying them through mid-June. He expects that some percentage of the loan will be forgiven.

Haskins would like to see more help, more reform. But donors have been generous, he noted. When the theater canceled shows, it gave ticket-holders the option of donating their tickets back. Those donations added up to $460,000, he said.

"We're just incredibly grateful for the generosity of everyone who is interested in ensuring we're able to see through these dark times."

Jenna Ross • 612-673-7168 • Twitter: @ByJenna