Repairing Trust

It's 8 am on a recent Thursday, and Cynthia Kirk is tired.

As communications director for the Oregon Cultural Trust, Kirk has called this early-morning meeting with other arts leaders to discuss ways to improve marketing of the trust, which parcels out grants to Oregon's arts and culture nonprofits and a network of cultural tribes and coalitions.

"A rising tide floats all boats!" she cheerfully reminds the five other arts leaders at the meeting in Portland's World Trade Center.

In its most recent round of grant awards last week, the trust divided $1.1 million among 54 arts and culture nonprofits such as Portland Center Stage and Third Angle New Music Ensemble. For a small nonprofit such as the Portland Youth Philharmonic Association, even its seemingly small grant award of $5,000 can mean the difference between launching a new outreach program to Latinos or not.

But the question many arts leaders across the region are asking about the trust, three and a half years after its launch, is whether its tide is really rising high enough to support all those boats.

The trust is more than $70 million behind on fundraising projections, hasn't received a dime of the millions promised from the sale of state lands and faces questions about its leadership from arts administrators.

All that adds up to place the Oregon Cultural Trust at a crossroads that could mean an uncertain future for the organizations dependent on its funding.

As the result of a legislatively appointed task force on cultural development, the Oregon Cultural Trust began in 2002 to "protect and stabilize Oregon's cultural resources, creating a solid foundation for the future."

Independent arts marketing consultants outlined the trust's ambitious goals in a 1999 report, "The Culture of Oregon." That report includes heady quotes from some of Oregon's highest-profile artists. Tad Savinar, a visual artist and writer said, "It is imperative...that we invest and empower the creative paths that explore, explain and enhance our lives."

One former task force member, ex-Sen. Lee Beyer (D-Springfield) recalls those optimistic statements and financial projections with a hearty laugh. He now says the fundraising projections were "stratospheric."

The task force proposed a 10-year, $218 million fundraising goal. About half—over $114 million—was to come from individuals and corporations, with another $102 million from state land sales. And $1.5 million would come from sales of an artist-designed license plate.

The license-plate sales have shown steady growth, up to about $20,000 a month in revenue. But the other assumptions have fallen far short.

Having raised a total of $7.5 million over three and a half years, and having granted out $3.5 million of that, the trust's endowment currently stands at $4.6 million, including accrued interest. That's more than $70 million shy of the original projections.

"The trust was simply founded on a set of assumptions that haven't panned out," says Eugene R. Gregory, vice president for development of the Oregon Symphony.

"The original purpose," according to trust executive director Christine D'Arcy, "was to front-load the endowment from the land sales. We overestimated the degree to which the land sales were feasible."

In fact, not a dollar has yet come from state land asset sales. The single land-sale transaction designed to benefit the trust nearly did come through. In 2003, the trust received about $3.5 million after the state sold land in northeast Oregon from Space Age Industrial Park in Boardman.

But the state took back that money to help balance the state budget. D'Arcy calls the decision a "disappointment" but says the trust did not oppose it "out of fear that the state might choose to dissolve the trust entirely."

"We had momentum," Gregory says. "Then we got the rug jerked out from under us."

Several arts leaders say the financial overestimation led to a much smaller pool of grant awards than they originally thought would be available.

In the trust's latest, $1.1 million round of grants, the 54 awards represented one-third of all applicants to this recent round of funding.

That's comparable to what's awarded by cultural trusts in other states, but does leave a smaller share of revenues stored in the Oregon trust's endowment.

One of the most widely praised components of the trust is its state tax-credit incentive. If you donate to an arts nonprofit and make a matching donation to the trust, the matching donation earns you a dollar-for-dollar reduction of your state tax bill, capped at $500 per individual and $1,000 per couple.

Jennifer Wijangco, deputy director of Texas Cultural Trust and a former Eugene resident, says that incentive makes the Oregon trust unique. But the enticement has motivated only 7 percent of donors to arts organizations to also make matching donations to the trust, hence the need during a tough economy both to improve the marketing of the trust and the education of donors by the arts groups about the tax credit.

D'Arcy, executive director of the Oregon Arts Commission since 1994, also assumed directorship of the Oregon Cultural Trust in 2003. Some wonder if holding two posts leaves D'Arcy stretched too thin.

"I don't know where the leadership is coming from," says Victoria Frey, executive director of Portland Institute for Contemporary Art, which got $15,000 from the trust for its Time-Based Art Festival.

"The Trust needs a champion," Beyer says. "Chris does a great job, but not at the level the state needs."

D'Arcy's response: "The trust does not have 'a' champion—we have a team of leaders...working to expand access to culture every day."

Howard Lavine, Gov. Ted Kulongoski's arts and culture policy advisor, disagrees with D'Arcy's detractors, saying, "She's one of the best in the country, and the governor certainly feels the same."

Paul King, a co-founder of White Bird Dance, which recently got its first trust award, $4,000, for a choreographer residency, says his group proudly promotes the trust. But he adds, "We also continue to worry about the trust's future." King isn't alone.

"The OCT promotes conversation about Oregon's stature in cultural philanthropy, and this is a beneficial thing," says Tom Cirillo, executive director of Portland Baroque Orchestra. "But at the moment, they're falling short."

WWeek 2015