An abundance of high-quality arts and cultural organizations has helped define Philadelphia's identity as a leading place to live and work as well as visit. The William Penn Foundation has a long history of supporting the arts and culture sector. Our support remains steadfast while we continually try to assure that our funding approach is meeting the needs of the sector given the ever-changing environment in which cultural organizations operate.
In 2015, the Foundation released a white paper, authored by the consulting and research firm, TDC, entitled Capitalization, Change and Investment: Does Growth Equal Gain?, and we used the findings of the study to help us determine how to best fund the sector going forward. A key finding of the study was that, similar to other cities, nearly 70% of arts and cultural organizations in the region are in poor financial health due in large part to intensifying competition for donors and audience amid a decline in paid attendance.
To ensure the long-term viability of our artistic assets, we must ensure that our arts and cultural organizations are financially healthy, effectively managed, and well-positioned to capture the opportunities and weather the challenges of building and sustaining audiences during a period of significant demographic change and behavioral shifts.
Undercapitalization makes it difficult for arts groups to produce the highest-quality artistic programs and take artistic risks. High-quality, innovative programming is necessary to attract and hold an audience, and an organization must have the resources to understand audience preferences, identify potential audiences, and test new marketing and programming. These challenges are distinct yet inextricably intertwined – becoming sufficiently capitalized to sustain an artistic mission, and successfully competing for audiences in a time of turbulent audience behavior.
The William Penn Foundation will focus on supporting organizations that are artistically strong, that contribute to the region's overall cultural diversity and that have sufficient organizational and financial capacity to thrive in a very competitive environment. We know that a priority need for such organizations is predictable core funding for programs and operations, and unrestricted funding is the greatest need of all. In order to help arts and cultural organizations better address their capacity needs, we have retooled our approach to core support, as follows.
What We Fund
We fund organizations whose principal mission is arts and culture.
Three-year support for arts and cultural organizations that meet our criteria of artistic and organizational strength awarded in unrestricted funds so as to give grantees the flexibility to meet their unique needs. Funding may be used toward any purpose that advances the mission of the organization, as determined by the grantee organization.
Annual benchmarks will be established by the applicant organization and approved by the Foundation, and funding will continue so long as the grantee successfully meets the benchmarks and continues to provide high-quality work consistent with the Foundation's programmatic goals.
Organizations recommended for funding will have their grant amount determined by their budget and financial health, based on their most recent audit or financial review submitted with the Inquiry Form. In no case will William Penn's support be greater than 20% of an organization's annual operating budget, as determined by its most recent audit.
Budget ranges have been broken down into ten ranges, with the smallest range being budgets of $100,000 or less and the largest being budgets of $17,500,001 and above. Each budget range has a corresponding annual grant size.
The Foundation also wants to recognize those organizations demonstrating good financial health. Additional funding of 25% may be added to the annual grant amount when an organization has three or more months of liquid unrestricted net assets at the end of its last fiscal year AND surpluses that total no less than 5% of expenses for the last two fiscal years.
The following chart outlines the budget range breakdown and corresponding grant sizes and potential added funding for financial health:
|LOWER LIMIT BUDGET||ANNUAL BASE GRANT SIZE||ANNUAL FINANCIAL HEALTH BONUS ADDED TO BASE GRANT, WHEN APPLICABLE|
In all cases, however, the ultimate grant award and the allocation of a financial health bonus is at the discretion of William Penn's internal review team. There may be cases in which an organization's particular circumstances call for a different amount or grant structure.
Business Model Transformation
A limited number of organizations may be considered for funding of costs associated with a comprehensive restructuring of their business model designed to increase financial sustainability and build audiences. This could include re-engineering the operating model, facilitating a merger or strategic alliance, repurposing fixed assets, etc.
Requests for business model transformation support will be considered on a case-by-case basis and follow a separate application process. Organizations interested in applying for business model transformation support should contact the Creative Communities staff.
Baseline Eligibility Requirement
According to the audited financial statements, an organization having two or more months of negative liquid unrestricted net assets in their most recently completed fiscal year, or having between one to two months of negative liquid unrestricted net assets and an operating deficit greater than 5% of operating expenses will not be considered for funding.
- Positive liquid unrestricted net assets represent funds available to support operations and are calculated by subtracting the net equity position of the fixed assets from unrestricted net assets. Net equity is the net fixed assets (capitalized assets less accumulated depreciation) less associated debt; this represents the amount of organizational capital locked up in non-liquid investments and therefore not readily available to support operations.
Unrestricted Net Assets -
(PPE* - PPE Debt)
|*PPE: Property, Plant & Equipment|
(An optional Self-Test Tool is available that allows an organization to test its financial eligibility.)
What We Do Not Fund
Organizations having the following characteristics are ineligible:
- Not having an audit or, at minimum, a financial review for the five most recently completed fiscal years.
- Using a fiscal agent to apply.
- Located outside of the following six counties: Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in southeastern Pennsylvania, or Camden City, NJ.
- Do not have at least one full-time paid administrative or artistic staff person in place.
- Less than five consecutive years of ongoing operations and programming (in the related discipline, when applicable), including the most recently completed fiscal year.
- Less than five consecutive years of data profiles in the Cultural Data Project (DataArts), including the most recently completed fiscal year.
The following types of organizations/uses are ineligible:
- University-affiliated cultural organizations
- Museums not accredited by the American Alliance of Museums
- Choruses that do not have either a paid professional core of at least 12 singers or 25 percent of the singers in the chorus, whichever is less; or are not fully professional, paying all of its singers all of the time (minimum payment to singers must be twice the federal hourly wage for each hour singers are contracted to rehearse and/or perform (based upon an average of combined rehearsal and performance hours per production). (Professional chorus standard per Chorus America)
- Theatres scheduling less than 30 hours of rehearsal time for primary production activities and whose annual budgets comprise less than 20% for artist compensation (including but not limited to actors). (Professional theatre standard per Theatre Communications Group)
- Churches, synagogues, or other religious institutions
- Government agencies
- Presses or publications
- Organizations that are not professional nonprofit arts or cultural organizations
- For arts organizations, organizations that do not regularly engage and pay artists
- Community arts organizations whose programming is less than 80 percent arts production/presentation
- Rehabilitation or arts therapy
- Public television and radio
- Video/recording/online organizations
- Youth-centered or youth-composed organizations
- Arts education organizations (arts education organizations may be eligible for funding under the Foundation's Arts Education program.)
Click here for frequently asked questions about the grant process.
Evaluating Proposals and Grants
How do we select grantees?
An internal review team composed of board members and staff reviews all submissions and makes recommendations for funding to the full board of the Foundation. Each application is reviewed on its own merits, but in the context of the applicant pool. We fund organizations that demonstrate high-quality programming and management and financial viability. In addition, we consider the following criteria as part of the selection process:
- An ongoing and demonstrated commitment to excellence, innovation, and audiences, as informed by mission and vision.
- Strength of staff and board leadership and evidence of capacity to carry out the proposed work.
- A history of planning and disciplined implementation.
- Demonstrated understanding and trends of the audience/constituency served.
- Articulation of the role played in creating a sense of place and civic engagement in their community (as the organization defines community).
However, it should be noted that not all applicant organizations that meet the eligibility criteria will be recommended for funding because the Foundation receives many more applications than it is able to support.
Organizations that otherwise meet the eligibility requirements but currently have a core support grant should check with the Creative Communities staff before applying.
How do we measure success?
Annual agreed-upon outcomes will be determined by the applicant organization and the Foundation during the proposal review. Outcomes will be specific to the organization based on mission and other key factors. Outcomes will be assessed annually. Funding continues so long as the grantee successfully meets the benchmarks and continues to provide high-quality work consistent with the funding guidelines.
Organizations that meet the eligibility requirements must apply for core operating support first through an Inquiry Form. (Requests for business model transformation support will be considered on a case-by-case basis and follow a different application process. If you are interested in applying for business model transformation support, please contact the Creative Communities staff.)
Step 1: Submit an Inquiry Form
Submit an Inquiry Form, audits for the three most recently completed fiscal years, and a three-year annual operating budget spanning the fiscal years to be covered by the requested grant. Additionally, an operating budget for the most recently completed fiscal year and the current fiscal year should be submitted. Also submit an applicable strategic, business, and/or financial plan if available. Please do not submit work samples unless requested by the Foundation.
NB: Organizations must have their Cultural Data Profile (DataArts) up-to-date for their Inquiry Forms to be considered.
An internal review team composed of board members and staff will review the Inquiry Forms to determine eligibility and competitiveness given the applicant pool. Based upon this assessment, full proposals will be invited for the most promising applications.
Step 2: Submit a full proposal
Upon invitation, submit a full proposal and standard Foundation submission documents. There may be additional materials requested based on the Inquiry Form review. Please do not submit work samples unless requested by the Foundation. During the proposal review, the annual benchmarks/outcomes of the grant will be finalized by the applicant and the Foundation.
The following table is provided to help eligible applicants for core operating support understand the schedule:
The application period is currently closed.
Frequently Asked Questions
Please see our Grants Overview page for general FAQs.
Q: How has funding of arts and culture changed from the previous guidelines?
A: The Foundation continues to fund core support for arts and cultural organizations, but now grants will be awarded as unrestricted funds with an even greater emphasis on supporting organizations that are artistically, financially and organizationally strong and that are thus best equipped to enrich the region’s cultural offerings.
Q: Are organizations required to use the financial eligibility self-test tool?
A: The Foundation strongly advises organizations to utilize the tool to determine their eligibility, but doing so is optional.
Q: In the past the Foundation has funded capital projects for arts and cultural organizations. Will the Foundation continue to do so under this new funding approach?
A: If an organization is undertaking business model transformation and a capital project plays a central role in business model change, capital projects will be considered and can be included in the request for funding.
Q: Can/should I schedule a meeting with a program staff person before submitting an Inquiry Form?
A: Prior contact with a Program Staff member is not required. Organizations considering requests for business model transformation should contact their program staff person before submitting an Inquiry Form.
Q: Should we submit work samples?
A: The staff will ask for work samples if they are needed.
Q: Who is on the internal review team?
A: The review team is composed of board and staff.