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Arts and Culture
Case for Change Capital in the Arts
To help build audience demand, cultivate new contributors, and update cost structures, arts organizations need to create sustainable business models that ensure their long-term artistic relevance and excellence, while grantmakers need to align their funding more closely with innovative audience development strategies, a new report from the Nonprofit Finance Fund argues. Case for Change Capital in the Arts (20 pages, PDF) points out that, as a result of misguided financing, accounting, and reporting practices, many arts groups are "mis-capitalized" — often operating with only enough unrestricted revenue to cover program and operating expenses — leaving them unable to fulfill their missions or adapt to changing audience demand and/or economic conditions. The report outlines the principles of improved capitalization for funders and nonprofits and takes a closer look at Leading for the Future: Innovative Support for Artistic Excellence, an initiative funded by the Doris Duke Charitable Foundation to provide "change capital" to ten arts organizations working to adapt their programming, operations, and finances and increase reliable net revenue.
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