STRUGGLING TO SURVIVE
Pandemic casts shadow on Connecticut nonprofits’ financial future
STAMFORD — In the past couple of years, Franklin Street Works had tried to stabilize its finances with new initiatives. But the reforms came too late to withstand the disruption of a pandemic.
Last month’s permanent shutdown of Franklin Street, one of the state’s leading contemporary-art spaces, highlighted the financial vulnerability of many Connecticut nonprofits during the coronavirus crisis. While new government aid programs and funding drives launched by the likes of Fairfield County’s Community Foundation have provided relief, the long-term prognosis remains ominous for a large number of nonprofits.
“The demands of what’s happened with COVID-19 have just exacerbated the challenges that nonprofits were facing,” said Juanita James, CEO and president of Fairfield County’s Community Foundation, which has donated to Franklin Street in recent years. “They were already challenged by state budget cuts and increased demand for services — and then you add to that this virus. It put an extreme strain on the entire sector.”
Incomplete transition
Franklin Street’s shutdown ended a nine-year run for an organization founded by Stamford lawyer Kathryn Emmett. Her other roles include serving as the city’s legal affairs director.
Based in a repurposed downtown Victorian row house at 41 Franklin St., the home base comprised three main gallery sections. It stood next to the Stamford Art Association and down the street from the University of Connecticut-Stamford’s art gallery.
Under founding creative director Terri C. Smith’s leadership, it originated 34 exhibitions, developed 130 educational programs and worked with 415 artists and more than 25 guest curators.
Despite the breadth of its programming, Franklin Street grappled with tenuous funding.
While it garnered grants from groups including the Andy Warhol Foundation for the Visual Arts, it could not have counted on receiving more Warhol funding this year because the foundation prioritizes new applicants. And if it had been allotted another Warhol grant, it would have only accounted for a fraction of its exhibition budget.
It had also received funding from other groups including Fairfield County’s Community Foundation, which gave $13,000 between 2016 and 2018. FCCF’s support was limited because it primarily supports nonprofits in other areas.
“The arts part of our portfolio has always been the smallest part of our portfolio,” James said. “Our support for the arts has been fairly steady over the last number of years, but it hasn’t been growing.”
Financials for 2018, the most recent year of data available for the organization in online Internal Revenue Service records, showed Franklin Street’s predicament. That year, its expenses and disbursements exceeded its income by about $52,000.
“We were always tight on funding. It’s a shoestring budget,” said Sharon Chrust, Franklin Street’s board president and a professional art appraiser. “Especially since our model is really to be open to the community. We never charged for entrance to the museum and never charged for any of our programming. We were 100 percent donorfunded and obviously some grants.”
To cultivate more potential donors, Franklin Street had launched in 2018 the subscription-based Art Engaged program. The initiative featured tours of other institutions such as the Brant Foundation’s art centers in Greenwich and Manhattan; Magazzino Italian Art in Cold Spring, N.Y.; Dia in Beacon, N.Y.; and MOMA PS1 in Queens, N.Y.
“It was growing nicely, but that amount of time isn’t enough time to move those folks from $250 a year (in memberships) into $1,000-ayear donations,” Chrust said.
“If they’d been with us a little bit longer than some number of months, they might say, ‘I’m willing to give my charitable donation to Franklin Street Works.’”
When the coronavirus crisis hit — entailing a closing of its gallery and disrupting fundraising plans — the financial challenges became insurmountable.
Cutting operating expenses would not have helped much since the organization was already operating with only two full-time staff members and one part-timer, according to Chrust.
“Many of our donors and our board were hit by the economics of shelter-in-place and loss of income,” Chrust said. “It was just too difficult a time for us to find new donors and reach out to past donors. We couldn’t figure out another way around it.”
Effective oversight?
Chrust said she did not have many regrets about Franklin Street’s management, although she said she wished Art Engaged had launched earlier.
Some arts leaders in the area criticized the board’s role. Fernando Luis Alvarez — who owned a former gallery of the same name, on Bedford Street, a couple of blocks from Franklin Street — said board members might have alienated “true collector-patrons who are the ones who truly care about the community when it comes to arts organizations.”
He also took exception to Franklin Street’s acceptance of support from the nowbankrupt OxyContin maker Purdue Pharma. In June 2018, Alvarez was arrested after co-leading a protest outside Purdue’s downtown Stamford headquarters, in which a massive spoon that was stained to represent burnt heroin was dropped in the building’s driveway.
Franklin Street received
in-kind printing services from Purdue that allowed the organization to provide “professionally designed” exhibition catalogs that were free for visitors, according to Chrust. The donated printing never exceeded $1,000 per year and Purdue did not give money to Franklin Street, she said.
At the same time, Chrust said that Franklin Street tried to reach out to collectors through e-newsletters, program promotions, event invites and fundraising letters. In addition, she cited partnerships with the neighboring Avon Theatre and Ferguson Library and Ridgefield-based Aldrich Contemporary Art Museum.
“We also asked the Fernando Luis Alvarez Gallery to collaborate with us on many occasions, including having a cocktail party with an exhibition tour for his collectors who were regional and local art collectors,” Chrust said. “But nothing ever materialized.”
Alvarez responded that “in due respect to their efforts, such an idea never materialized because our top collectors and patrons were thrown aback because they found the organization to be highly involved in Stamford politics.”
Adapting to new era
Financial struggles will not soon abate for many of the area’s nonprofits. The shutdown in March of the Stamford-based Business Council of Fairfield County, which had operated for 50 years, marked another significant departure.
In the past few months, however, key sources of new aid have emerged.
The federal Paycheck Protection Program has allocated about 570 loans, each worth between $150,000 and $5 million, to Connecticut-based nonprofits.
Stamford-based Americares received a loan between
$2 million and $5 million, helping to retain 186 positions, according to Small Business Administration data.
Americares officials said they expect donations to decline in the next year because of the economic downturn. They do not yet know the full impact because two-thirds of the organization’s donations are made in December.
“Without PPP funding, Americares would have to cut essential programs that provide medicine, medical supplies and health programs for families in poverty, including the newly unemployed,” Americares said in a statement. “It would also hinder our ability to respond to the COVID-19 pandemic. Americares is providing critically needed protective gear, training and mental health support for frontline health workers so they can continue their lifesaving work.”
Citizen donors have also stepped up. In March, Fairfield County’s Community Foundation launched its COVID-19 Resiliency Fund, which has raised about $2.4 million. It has distributed about $1.9 million of those funds, supporting 154 nonprofits across every city and town in Fairfield County.
In total, FCCF has raised about $9 million since February. The total includes proceeds from other initiatives such as the approximately $1.7 million raised through its most recent Giving Day.
“Donors in Fairfield County are generous,” James said. “But private philanthropy cannot replace all of the other resources and funding that our economy needs and our nonprofits need in order to be successful… All of the elements have to work together. One sector can’t completely substitute for all of the others.”