ii i _/Vrrt `ir G T uz,- aizcr! BY TOM MATHER This study was supported by grants from the Governor's Business Council on theArts & Humanities, The Mary Duke Biddle Foundation, and the Weaver Foundation. 2 NORTH CAROLINA INSIGHT Summary Public funding for the arts has come under increasing scrutiny in recent years, particularly at the national level, due to the federal budget deficit and the controversial nature of some artwork funded by federal grants. Such concerns led Congress to cut funding for the National Endowment for the Arts (NEA) by nearly 40 percent in FY 1996, and Republican leaders in the U.S. House of Representatives have pledged to eliminate all NEA funding by 1998. To assess the impact of these cuts in North Carolina, the N. C. Center for Public Policy Research studied trends in public and private support for the arts since 1980, focusing particularly on the past five years. This report also builds on the Center's 1983 study of the arts in North Carolina, its lookat the impact of 1981-82 federal budget cutbacks in the state, and its 1985 directory to corporate and foundation giving. The Center's new study found differing trends in government funding for the arts. Federal support for the arts has declined steadily in North Carolina since peaking in FY 1990. NEA grants in the state for FY 1995 totaled $1.3 million, less than half the amount in FY 1990 - even before the latest cuts. State and local government funds for the arts in North Carolina have increased substantially in the 1990s, more than making up for cuts in federal funding. State funding for the arts totaled $14.1 million in FY 1996, a 40 percent increase from FY 1991 (22 percent when the dollars are adjusted for inflation). Most of the growth in state funding has been from special appropriations - or direct legislative grants to local arts groups, rather than to state arts agencies (which also fund local arts groups). Local government support grew even faster, with funding in FY 1995 totaling $7. 1 million - more than double the amount in FY 1990. But much of the increase in local funding has occurred in a few metropolitan areas, such as Charlotte, Raleigh, and Fayetteville. Private giving to the arts in North Carolina has increased modestly since the early 1990s. Arts grants from private foundations in 1994 totaled $12.9 million, a 14 percent increase from 1991(5 percent when the dollars are adjusted for inflation). Independent foundations accounted for nearly two-thirds (63 percent) of those foundation grants to the arts in 1994, but corporate foundation giving has been growing at a faster rate. Local arts groups face differing fund- ing trends. Funding for 10 united arts funds in North Carolina's larger metropolitan areas totaled $15.4 million in FY 1994, a 37- percent increase since FY 1991(26 percent when the dollars are adjusted for inflation). But support for local arts councils , based on a sample of 15 groups in smaller communities across the state , has been less steady - growing just 7 percent from FY 1991 to FY 1994 (but a 2 -percent drop in inflation-adjusted dollars). Private support increased by 20 percent (10 percent when adjusted for inflation) at the larger united arts funds during that period and 14 percent (5 percent when adjusted for inflation) at the smaller local arts councils. NOVEMBER 1996 3 o, you say you want a devolution? Cutbacks in NEA funding could be causing a Well, that's what has been going on ripple effect in funding at other levels of govern- with public support for the arts over ment. From FY 1991 to FY 1996,28 state leg- the past five years. North Carolina's islatures - including the N.C. General Assem- share of federal grants from the em- bly - decreased their funding for the lead arts battled National Endowment for the Arts (NEA) has agencies in their states.' (See Table 2 on p. 15.) declined steadily since 1990 - particularly in bud- Total legislative funding for state arts agencies gets for the last two fiscal years. Meanwhile, the dropped 12 percent during that period, or 23 state and local governments have steadily increased percent when adjusted for inflation. Funding their support for the arts. That, along with growing cutbacks exceeded 30 percent in 11 states - support from private sources, has resulted in a sub- Alaska, Hawaii, Illinois, Maine, Montana, New stantial increase in total funding for the arts in the York, Rhode Island, Tennessee, Utah, Virginia, state since 1990 - despite well-publicized cuts in and West Virginia. Similar cutbacks have ex- federal funding. tended to some local governments in North Yet trouble is looming for the arts. Led by con- Carolina as well, such as the cities ofBurlington, servatives such as Sen. Jesse Helms (R-N.C.), the Gastonia, Wilmington, and Winston-Salem and U.S. Congress cut funding for the National Endow- the counties of Forsyth, Guilford, Moore, and ment for the Arts by $62.5 million (39 percent) in New Hanover. its budget for the 1996 fiscal year. Leaders in the U.S. House of Representatives say they want The ripple effect from NEA cutbacks already to eliminate all NEA funding by FY 1998, and may have begun in North Carolina. In 1995, the Senate leaders - although not seeking to eliminate N.C. General Assembly - although increasing its the agency - would like to cut funding dramati- overall funding for the arts - repealed a 1988 law cally.' The loss of NEA funding could have far- that had required the state to set aside funds (0.5 reaching effects on the arts because: percent of construction costs) for the acquisition of public art for new buildings.5 House Speaker NEA funding totaled $162 million nationwide Harold Brubaker (R-Randolph) says the repeal of in FY 1995, about 15 percent of the $1.1 billion the public arts program was the first step in a re- in total funding for the arts from federal, state, view of legislative funding for all arts programs in and local governments in the United States. the state. "That kind of shows the direction that Although government funding is small compared this assembly is heading," Brubaker says. "I think to private donations to the arts (estimated at $9.96 the whole area will be closely scrutinized in terms billion in 1995), the NEA has been the largest of cutting back. single donor to the arts since 1976.2 "When we have other pressing needs, such as NEA grants play a big role in leveraging addi- funding for text books and the construction of tional contributions from states, local govern- school buildings, this whole area has to be re- ments, and private donors. That's because examined.... We just have to prioritize. In our the federal agency requires that its grants be minds, it's more important to make sure that there matched by funds from other sources. Plus, NEA are supplies in the classrooms." (See related grants often function as seals-of-approval article, "Troubled Times for Art in Public Build- for proposed art projects, stimulating dona- ings," on p. 8.) tions from other sources. Private giving to the arts in the United States has Has North Carolina Followed the leveled off since 1990, after rising substantially National Trends in Funding for the Arts? during the 1970s and 1980s. Estimated private hat are the potential impacts in North donations actually dropped - when numbers Carolina from cutbacks in federal spend- are adjusted for inflation - from an estimated ing on the arts? Have state and local governments $10.23 billion in 1992 to $9.96 billion in 1995, followed the federal government's lead in scaling the latest year for which nationwide data are back their support for their arts? Are donations from available.3 (See Table 1 on p. 7.) private foundations, corporations, and individuals likely to make up for any shortfalls in public fund- Ton: Mather is the associate editor of North Carolina Insight. Former Center interns Jennifer Lehman and John Charles ing for the arts? The N.C. Center for Public Policy Bradbury helped compile data for this report. Research tried to answer such questions in this 4 NORTH CAROLINA INSIGHT Noble Brachens of Mars Hills making a hooked rug. study, "Arts Funding in North Carolina: Trends in obtaining records on spending by the National En- Public and Private Support." dowment for the Arts, the N.C. Department of Cul- In conducting this study, the Center set five tural Resources, and city and county governments. goals: (1) to assess the likely impact of federal Although information on private funding is less budget cuts in North Carolina; (2) to get a total pic- readily available, the Center obtained reliable esti- ture of funding for the arts in the state, including mates of private support for the arts by examining both public and private sources; (3) to examine arts tax records filed by independent, corporate, and funding from all levels of government - local, community foundations in North Carolina. The state, and federal; (4) to show trends in funding for Center compiled additional estimates of private the arts over time, while focusing particularly on giving by examining financial records for the N.C. the past five years; and (5) to follow up on the Museum of Art, the N.C. Symphony, and local arts Center's previous studies of the arts, the impact of councils and united arts funds across the state. federal budget cuts, and corporate and foundation Overall, the Center's research reveals some sig- giving.