Message to Cultural Groups: Rent, Don’t Buy!

Here in New York City, the Department of Cultural Affairs has a wonderful program to help groups acquire, build and/or renovate spaces. As you might expect, when the funding source is attached to federal HUD grants, the process to qualify for this support and to work through the actual process of buying/building/fixing is lengthy as well as cumbersome. Groups are briefed and trained to go through the process with lots of warnings about how long it might take and how much effort will be required.

A few years ago, my firm surveyed 10 organizations that went through DCA’s capital funding process to receive City support toward developing a new or improved facility. Here’s what we found out:

• Even though the groups factored some delay into the project timeline, it almost always took significantly longer to complete than anticipated.
• Most groups underestimated the time required to develop new sources of earned and contributed income, and found that private funding did not increase to support the more expansive operation.
• Groups did not anticipate staffing changes as a result of new facilities; and in some cases were unable to afford new staff, leading to significant burnout among existing staff even before new facilities were open.
• Frustrated boards did not appreciate how long it would take to stabilize operations in new facilities, and did not foresee how few financing options exist to help cultural groups successfully transition into new facilities.

Despite all these challenges, we know cultural facilities are important community assets. They drive economic development, cultural tourism, community identity and lots of other good things that benefit many more people than those who simply attend a performance or exhibit. So if we don’t want cultural organizations to own their facilities, who should? My suggestion is that the public and private sectors should work together to create trusts or foundations to take control of these facilities on behalf of cultural communities.