Ruby Lerner: In the mid-'90s, the National Endowment for the Arts pulled the plug on most grants to individual artists. Organizations in the private sector, recognizing that this left very little support for artists, began to hold meetings to discuss what could be done. At that time, I was running the Association of Independent Video and Filmmakers, which no longer exists, and I attended many of those meetings. There was a lot of talk but nothing happened until Archibald Gillies, then president of the Andy Warhol Foundation for the Visual Arts, convinced his board to make a three-year, $400,000 commitment to create a support organization. But the board would only agree to fund the project if Arch could find additional partners. He traveled across the country and talked to large foundations, small family foundations, individuals — anybody who'd let him in the door — and was able to raise some interest in the idea by framing an approach that mirrored what was happening in the venture philanthropy world. Venture capital had been around for a long time, but people in the nonprofit community were just beginning to understand how it worked. They were also picking up on the energy that was generated during the dot-com boom. I think foundations and individuals alike found the idea of experimenting with the venture philanthropy model in the arts field compelling.

PND: What most piqued their interest?

RL: Venture capitalists don't just write somebody a check and say, "Send us a report at the end of the year." They are there throughout the building of a business to provide money as benchmarks are met. For an arts enterprise, that approach seemed logical and totally translatable to me — and obviously to the Warhol Foundation, which launched Creative Capital as an independent entity in 1999 with support from twenty-one other funders, including the Ford, Rockefeller, Nathan Cummings, Tremaine, William and Flora Hewlett, and James Irvine foundations and many individuals. Today the Doris Duke Charitable Foundation is also a major funder.

Arch Gillies hired me as Creative Capital's first president and CEO. Given the venture capital model we had decided to adopt, certain actions were obvious from the outset. Like venture capitalists, we told artists, "You've got a great idea, and we want to give you the support — not just for this project but to sustain your career over the long term." But as our program has evolved, the artists have taught us everything else.

PND: Creative Capital treats artists and their projects as small businesses. Do you offer loans or grants?

RL: Technically they're grants, but what we're really providing is risk capital. Like any investor, we hope to get a return, though we define return in a lot of ways. We have a contract with every artist. If the project actually makes money for the artist, we make money, too, because we're at the table. We've actually had a few film projects pay us back.

PND: Describe how the financial payback works.

RL: Let's say an artist plans to complete a Creative Capital-approved project in three years for $100,000. We'll give that project $10,000 up front — 10 percent. For us to get our money back, the project has to earn $100,000, but everything counts toward that — the artist gets a fellowship, for example, and uses part of it toward the work. If the artist gets to the $100,000 break-even point, we receive whatever percentage of the total budget we contributed — in this case, we would get ten cents of every dollar until our $10,000 had been repaid. Then the percentage would drop to half, so we would get 5 percent of every dollar after that.

PND: Are most artists able to draw up a detailed budget?

RL: Sometimes. Artists who work in film and theater are often good with budgets, whereas visual artists find them harder. For example, they may not factor in hiring other people to work with them or using their home as an office. We have to know that the people creating the work will be adequately compensated before we come into the project as a financial partner. But if an artist submits a budget to us that says essentially, "I'm going to work on the project for the next five years for $500" and builds in nothing for themselves, we send those budgets back and insist that they value their time appropriately. Of course, we don't expect a 26-year-old to value their time the same way a 55-year-old would, but we do expect some reasonable valuation on their time. The first couple of years, we hired somebody to work with the artists on real budgets — now we do it in-house — and the artists told us it was the most depressing thing they had ever done. They'd never realized how much it was costing them to develop their work.

It took us a long time to come up with a contract that we felt was fair to both the artist and the organization. Of course, we don't want to be chasing somebody around for our share of the $25 they made on last weekend's poetry reading. But if we invested in something that made it to Broadway and stayed there for many years, why shouldn't the organization benefit on behalf of the next generation of artists?

PND: How is your program structured?

RL: Our core program has evolved into a four-part system that combines modest amounts of money with support services, professional development assistance, and promotional support. The program is multi-faceted, integrated, and sequential, with logical points of intervention through the project's life so artists can take advantage of different types of support at different times.

The first component is support for the project, which consists of money and back-up services. A typical Creative Capital grant runs around $35,000 to $37,000 — $50,000 is the most an artist can receive from us over the lifetime of a single project — and anybody who has been approved to receive a grant gets an initial award of $10,000. At any time, they can also request up to an additional $5,000 for "strategic support" related to their personal goals, not to the project itself. For instance, artists sometimes need to buy health insurance or a new computer, get out of a bad day job, take some classes, or hire a part-time assistant. We believe that if those kinds of issues and needs aren't addressed, the person's creativity is affected.

In addition to that $15,000, we offer follow-up project support of up to $20,000. In the same way that venture capitalists want to stay involved in a business that's moving forward, we want to give additional support for the production of the project. That brings our total investment to $35,000. At the end of the project, we'll invest up to $15,000 more for the opening or premiere and for promoting the work beyond the premiere.

The second component of the program is support for the person beyond the project. When artists finish their projects and leave us, we want them to be able to sustain themselves long-term, so we help them build skills in areas like public relations and marketing, fundraising, and especially strategic planning. Colleen Keegan, who does strategic planning and executive coaching in the corporate world, adapted her work for our grantees, and with her training, their lives start to change. They get out of debt, bad jobs, bad relationships. They might even buy a piece of property.

The third component of our program is all about relationships and nurturing the community of artists we've funded. We bring our artists together for a six-day retreat so they can take our professional development workshop and become resources for each other — hopefully, for the rest of their careers. Midway through the retreat, the artists meet with the previous class of artists, as well as outside resource people who have been invited, including programmers, performing arts presenters, people who acquire work for cable television or film festival programs, publishers and agents, and, ideally, a couple of international folks. The current grantees make brief presentations about their projects to the group and then meet individually with the resource people.

The final component of the program is engaging the public. We're not a presenter or a producer, so we try to accomplish this by being an information provider. The retreat is one way we get information out to curators, people who offer public venues, and others. We also profile our grantees and their projects on our Web site and feature them in electronic and print mailings that reach about twenty-two thousand people.

PND: How successful has that been?

RL: Initially, we thought our job would be done if we could just get the work through production. Then we could turn it over to a venue, and they would do the rest. But we learned from our artists that after an opening or premiere, they were disappointed in what the venue was able to do for them. Sometimes the artist had illusions that the venue would do something it lacked the capacity to do; sometimes the venue promised, in good faith, to do things it couldn't deliver. In both cases, we were dealing with an expectation-disappointment curve.

PND: How did you address that challenge?

RL: We brought the artists and the venues together as early as possible for "stakeholder meetings," which enabled the artists to talk about their goals for the launch and to learn from the venues what they realistically could do to promote the event. I call these meetings "rendezvous with reality." Once everybody is on the same page, we can tell the artist, "It's great that you want to accomplish A through G, and isn't it fabulous the venue's going to help you with A through D? Now, if you'll put together a plan for A through G, we'll give you some money to accomplish E through G." This has allowed artists to conduct outreach campaigns to special constituencies, take out ads in publications like Art Forum, and hire their own publicist to work with the venue's publicist.

We've learned that the impact of an artist's work will most likely occur after the opening or premiere, either through a tour or some kind of distribution, but the premiering venue often has no interest in whether the project moves forward or not. Or sometimes the artist is ready to move on to a new project. But even if another project is already in the works, by providing a little money, we can encourage the artist to hire someone to look into other venues, tour possibilities, distributors, international television opportunities, and so on.

We understand that no one will take advantage of everything we offer, but if we give the artists enough of a menu, everyone can find something of value.

PND: What's the typical length of time you'll offer support for a project?

RL: We'd love for a project to be completed within three years, but we've also learned to be patient. Recognizing that artistic work has a tendency to morph or become an extension of the original idea, our structure allows artists to grow their projects. But our program is set up in three-year cycles, with the first two years devoted to active grantmaking. In the first year of the cycle, grants are awarded to forty artists for projects in film, video, and the visual arts. This year we got 2,535 proposals for the awards that will be announced in January. In the second year, grants will go to more than forty artists for performing arts, literature, and emerging fields. The third year is devoted to follow-up meetings with the artists, allocating additional funding where needed, and promoting the completed projects. We're now looking into seeing whether our model will work for other organizations or communities.

PND: You've said that it's important for Creative Capital to find an artist at the right moment in his or her career. When is that?

RL: We're looking for artists who are at a point in their careers where they can take advantage of what we offer. On our application we ask, "How do you hope the project you're proposing will be catalytic for you?" A Creative Capital grantee could be someone in their early thirties who is building a body of work but needs more tools to get to the next level, or somebody at mid-career who has an outstanding body of work but may not be the hot kid on the block anymore, or a regional artist who's doing amazing work but is unknown nationally. It might also be a mature artist who is thinking about legacy issues — documenting his or her work, creating a catalog, having a retrospective. Or it could be an artist who has been working steadily but has been forgotten. I've seen this happen to women, people of color, and those from marginalized communities. Any of these situations represent great moments for us to enter the picture. But if an artist simply wants money to make the next project, it's not a good fit for us. That's what traditional fellowships and project grants are for. We expect a higher level of engagement.

PND: Does Creative Capital offer programs for artists who are not grantees?