The Community ACTS Fund in Colorado

Tariana Navas-Nieves, with Tony Garcia

The Community ACTS Fund

In 2016, plans for Denver’s Community ACTS (Arts, Culture, Transformation, and Science) Fund — originally known as the Inclusivity Fund — were developed during the renewal of the Scientific and Cultural Facilities District (SCFD), Denver’s metropolitan region tax district program that supports arts, cultural, and scientific organizations. SCFD is a one-penny-per-$10 sales tax that voters passed in 1988 to save the Front Range’s oldest, most treasured cultural institutions from cuts in statewide arts and cultural funding. Approximately every ten to twelve years, it has been renewed by the vast majority of voters in the seven counties where the tax is collected, and was set to expire in 2018 if voters did not reauthorize it in 2016.

The Community ACTS Fund is meant to help smaller organizations become more sustainable and expand the communities they benefit. The district’s largest organizations, including the Denver Art Museum, the Denver Zoo, the Denver Museum of Nature and Science, the Denver Center for the Performing Arts, and the Denver Botanic Gardens, agreed to contribute $150,000 each to launch the fund. These organizations will contribute to the fund annually for a period of twelve years, from 2018 through 2029.

This is the story of how this fund came to be, all in the midst of the renewal campaign. All organizations benefiting from this tax supported its renewal, yet they passionately debated the specifics of the formula for distributing these funds. Large, mid-size, and small organizations advocated for different funding models, which meant that some would have to lose funding in order to share the wealth and support others with less access. We also describe how the Community ACTS Fund has evolved with a focus on equity through a community-driven process that has the potential to make strides toward equity in arts and cultural funding.

What is the SCFD?

With the sales and use tax of 1¢ on $10 approved in 1988, organizations throughout the seven-county Denver metropolitan area (Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson Counties) have benefited residents through the production, presentation, exhibition, advancement, and preservation of arts, culture, and science. Regional voters renewed the SCFD in 1994, 2004, and 2016.

The distribution budget for scientific and cultural organizations in the seven-county area is approximately $50 million annually. Undoubtedly, funding on that scale makes a profound impact. As a result, residents of the Denver metropolitan area support a diverse and rich cultural landscape of more than 275 organizations.

Furthermore, with the investment of 1¢ on every $10 spent in the district, the array of cultural organizations contributes more than $1.8 billion to the regional economy and employs more than ten thousand people. Support for the hundreds of organizations that receive funds has resulted in world-class facilities and programs, and unprecedented access. More than fourteen million people — four million of them kids — attend SCFD-funded programs each year, many for free or reduced rates.

This tax district model is in the national spotlight, and has been studied by many cities that wish to replicate it. It is a phenomenal model. Is it perfect? Not everyone agrees that it is.

How is the Funding Distributed?

There are three tiers of funding levels under the SCFD. By statute, Tier I is comprised of the five major regional institutions: the Denver Art Museum, Denver Botanic Gardens, Denver Museum of Nature and Science, the Denver Zoo, and the Denver Center for the Performing Arts. These are the institutions that are currently contributing to the Community ACTS Fund. Tier I institutions draw attendees from the seven-county metropolitan area and greater Colorado, and generate considerable out-of-state tourism. Tier I organizations receive 64% of the SCFD funds. Worth noting is the fact that a single Tier I organization receives more than all the Tier III organizations combined.

Tier II organizations include approximately twenty-eight regional organizations, and by statute, these organizations receive funding based equally on two factors: [1] qualifying annual income, and [2] the organization’s paid attendance. Tier II organizations receive 22% of SCFD funds. Examples of Tier II organizations include the Colorado Ballet Company, Clyfford Still Museum, and the Butterfly Pavilion. The 2020 qualifying income threshold for all organizations to qualify for Tier II is $1,748,433.53.

Finally, Tier III recipients are the majority and include about 240 small organizations with cultural and scientific missions in a wide variety of disciplines, including dance, theater, music, visual arts, literary arts, and more. The combined attendance of Tier III organizations has been equal to, or surpassed, those of Tier I and Tier II, yet Tier III organizations receive only 14% of the SCFD funds.

An example from 2015 explains of the amounts of funding that three organizations from each tier received, compared to their annual budgets:

Tier I: Denver Art Museum:

  • More than $7.3 million in SCFD funding.
  • $27.1 million budget.

Tier II: Colorado Chautauqua Association in Boulder:

  • Nearly $642,000 in SCFD funding.
  • More than $5 million budget.

Tier III: Platte Valley Players in Brighton:

  • Received $16,000 in SCFD funding.
  • $40,000 budget.

For large organizations like the Denver Art Museum and the Denver Museum of Nature and Science (DMNS), which received more than $8 million, part of the funding received helps to cover the cost of free days and other reduced-price programs. In comparison, for organizations like Platte Valley Players (theater offerings) and Arts Street (helping youth by breaking the cycle of generational poverty in Denver through education, arts, technology, and employment training), which received $18,000, the funding received could allow for an expanded staff, which was 3 full-time employees in 2015.

Setting the Stage: A Changing Metropolitan Area

Since SCFD’s inception in 1988, the Denver metropolitan population has grown more than 70%, from 1.8 million to 3.1 million. Over time, the region’s residents have become increasingly diverse. This will likely continue as Colorado attracts more and more residents. Issues of equity, diversity, and inclusion have been front and center in national philanthropy conversations. Public and private arts and culture funders in the United States, including independent and family foundations, public agencies, community foundations, corporate philanthropies, nonprofit regrantors, and national service organizations, are evaluating their practices with an equity lens.

The shifts in demographics as Latinx and other ethnic and racial populations grow, social movements, and a heightened awareness of historical inequities have brought large organizations under the microscope. Research, in particular the 2011 Helicon Collaborative study examining inequities in arts funding, has found that just 2% of all cultural institutions receive 60% of all contributed revenue, up approximately 5% over a decade. This 2% of groups have annual budgets of more than $5 million, as is the case of the Tier I organizations in the Denver metropolitan region. These institutions receive the bulk of the tax revenues, while small groups run by and focused on engaging ALAANA communities, people with disabilities, and LGBTQ people do not have the same access to funding. We reflect the reality that arts and cultural philanthropy has not equitably supported our evolving cultural landscape.

How have changes in our demographics and the type of organizations that have enriched the cultural life of the metropolitan area impacted SCFD funding?

SCFD has been a national model for tax district support, and it is undeniably successful. In 2017, $57,095,123.36 was distributed among 277 organizations. How the dollars are distributed among organizations, however, has not been supported by all. The stark reality of this inequity is that all the Latino and African American organizations combined receive less than 1% of the total SCFD pot. Many representatives from Tier III organizations felt they were not a part of the conversation in the original discussion and were included only as a means of satisfying mid-sized organizations that refused to buy into the original structure. The original model did not take into account the possible changes or needs in the seven-county district.

The number of organizations that can be SCFD eligible at a Tier II and Tier III level is not limited by statute. This means that the number of organizations that are eligible for funding at these levels has increased, thus leaving each with less money from the pool, making the distribution more challenging. Not surprisingly, small organizations have for some time expressed their belief that they deserve more funding because there are now more of them, they draw about a third of the attendance in the district, and they are the organizations that are led by, showcase, and employ communities of color and other historically marginalized groups. Larger organizations feel there are other factors to consider, such as their greater reach, the tourism they attract, and their need to support large infrastructures.

Actors Jaime Lewis, Kirsten Lang, and David Wright in Taking Leave at Phamaly Theatre Company in Denver (2016). Photo by Michael Ensminger Photography.

Advocacy in Preparation for the 2016 Reauthorization Vote

The 2016 renewal process brought to the surface issues of equity among the three tiers. How do you ensure equity in a cultural community for the next decade? A multiyear process to evaluate what could potentially be an update of the SCFD included gathering stakeholder input, which was later considered by an official SCFD Task Force, which then recommended changes to the SCFD board. Members of all tiers were represented in this process. The task force recommendations did not pass unanimously, indicating continued dissent. Although the large organizations agreed to cut some funding, according to the smaller organizations, it was not enough. Certain smaller groups felt their voices were not heard, and the fact that all meetings had been closed to the public did not sit well with them. In fact, the task force members shared that they had been sworn to secrecy. Leaders of some Tier II and Tier III groups argued that when it came to their main concern — the funding formula — the SCFD board voted for a plan without community input on the numbers.

Ultimately, the public would vote on three aspects of the SCFD: [1] the amount of the tax, currently one penny (1¢ on $10), [2] the amount assigned to each of the three tiers, and [3] the sunset date. State law requires the sales tax to be renewed every decade or so, and if the funding formula does not change, the reauthorization question is sent directly to the voters. If it changes, even slightly, it first heads to the Colorado General Assembly. This offers lawmakers and voters the opportunity to evaluate the program.

The bill recommended to the House Finance Committee, which residents eventually voted to pass, made slight changes to the formula. If the district collects up to $38 million, Tier I groups receive 64%, 1.5% less than they do now. Tier II is bumped up 1%, to 22%; and Tier III increases half a point, to 14%. In the case that tax revenue exceeds $38 million, which it likely will, Tier I funding decreases from 64% to 57%, Tier II increases from 22% to 26%, and Tier III from 14% to 17%. While these shifts may seem small, the SCFD office argued that Tier I would be losing $37.3 million, and Tiers II and III would receive up to $22 million and $15.3 million, respectively, over the next twelve years.

Critics, like the CAST3 (Committee to Advance and Support Tier 3s), argued that this funding structure was not equitable, considering that Tier I groups benefit from two-thirds of SCFD tax revenues and they serve only slightly more than one-third of the region’s arts and cultural audience. Tier II and III groups argued that Tier I organizations were no longer in the funding crisis that necessitated the creation of SCFD in 1988, and now that they have stabilized their finances, SCFD dollars should be spread between the three tiers more equitably.

The SCFD board’s response to its critics was focused on the potential risk of questioning the SCFD, which they felt could alienate the lawmakers and voters who would ultimately decide whether the tax passed. Their message was that the arts and cultural community must work as a unified front so as not to risk the district. In other words, asking for a change in the funding formula would put the whole reauthorization at risk.

To appease leaders from Tier II and III, the SCFD board agreed to entertain alternative funding models. Various funding proposals were presented, and Friends of Arts and Cultural Equity (FACE) — the nonprofit advocating for a change in the formula in favor of Tiers II and III and representing more than eighty Tier III organizations — got five hundred signatures for an online petition supporting an alternative proposal that would bring more tax revenues to Tier II and III groups. SCFD’s board, however, rejected them all, urging those that did not agree with the board’s recommendations to unite behind the status quo reauthorization plan that it finally brought before lawmakers in January.

The funding bill was introduced at the beginning of the 2016 legislative session as a bill that would garner bipartisan cooperation and wide community support. Only a handful testified against it. Some Democrats rallied to the critics’ cause and voted against the reauthorization, to send a message to the Democratic majority in the house that the bill needed to be modified to address the concerns of racial and geographic inequity raised by Tier III organizations. Unsurprisingly, opposition also came from some social and fiscal conservative Republicans, who criticized SCFD as a waste of taxpayer’s dollars.

The bill overwhelmingly passed the Senate in February with strong bipartisan support and headed to the House, where it was approved and sent to the governor’s desk, and finally to voters in November.

Jose Rosales and Alisya Rodriguez dancing at The Fiesta Colorado Dance Company de Jeanette Trujillo-Lucero during the Celebrate Culture Fiesta Celebration in Downtown Civic Center Park (2013). Photo by Jeanette Trujillo-Lucero.

Turning Point

House Majority Leader Crisanta Duran became a champion for Tier IIIs and made a commitment to explore amending the bill to address the funding formula concerns. As a potential amendment became possible, SCFD leadership realized they would have to compromise with FACE and Tier III leaders in order to come together and champion the bill in the house.

In negotiations, SCFD proposed a new inclusivity grant program, and what became the Community ACTS Fund. The intent for the $750,000-a-year grant from the Tier I organizations was to address racial, cultural, disability, gender, sexuality, and class disparities in arts funding in the metropolitan area. The grants would be distributed to Tier III organizations to support capacity building. Duran and representatives of the Tier III support group ultimately agreed to the offer in exchange for leaving the bill as it was. Some members of the Tier III support group currently serve on the Community ACTS Fund board, responsible for establishing funding guidelines and eligibility criteria.

House Representative Crisanta Duran, in a press release after the bill was approved by the senate, said, “The new grant fund is an incredible victory for smaller organizations and all who benefit from their community involvement.” After reaching this agreement, a memorandum of understanding from each of the Tier I groups was sent to SCFD, pledging to fund the grant program at $150,000 a year. In November 2016, voters overwhelmingly decided to extend the cultural tax through 2030 with the following provisions:

  • All revenue up to $38 million: Tier I gets 65.5% Tier II gets 21% Tier III gets 13.5%
  • Any additional revenue over $38 million: Tier I gets 64% Tier II gets 22% Tier III gets 14%
  • If approved, the new shares would funnel a bit more money to small and mid-sized groups starting in 2018:

  • All revenue up to $38 million: Tier I gets 64% Tier II gets 22% Tier III gets 14%
  • Any additional revenue over $38 million: Tier I gets 57% Tier II gets 26% Tier III gets 17%
  • Move Ahead to November 2017

    One year after the reauthorization, the SCFD board appointed sixteen members to the Inclusivity Fund Advisory Committee,1
    now renamed the Community ACTS Fund. This advisory committee, comprised of a diverse group of community members and arts and cultural leaders based on gender, race, ethnicity, sexual orientation, disability, and geography, was charged with developing guidelines and rules to implement the new fund. By the end of 2018, the committee also had to select a foundation to hold the funds and determine how the funding of the grant program would be allocated. The goal was for the grant program to award the first grants by 2019.

    By the end of 2018, the advisory committee had worked tirelessly to develop governance for the committee and the future group that would be responsible for the implementation of the fund, had researched best practices with an equity focus, and had determined eligibility criteria. In August 2018, the community foundation Mile-High United Way was selected to assist in the administration of the granting process, working in partnership with the advisory committee. At the beginning of 2019, the committee’s organizational structure changed to a self-perpetuating board to provide fiduciary and implementation oversight of the fund.

    The board, which includes members from the original advisory committee as well as new community representatives, renamed the fund the Community ACTS Fund and created an application process designed to eliminate barriers to participation for the applicant organizations.

    The Community ACTS Fund application process was launched in May 2019, with a target of issuing the first round of grants in the fall. Eligible organizations are those that state in their mission that they focus on communities of color or other historically marginalized groups, including people with physical and mental disabilities, older adults, low-income populations, veterans, LGBTQ, and geographically under-resourced areas. If this focus is not articulated in their mission, organizations must show that more than 50% of staff or the board of directors are representatives from the aforementioned communities, and that more than 50% of their activities engage these communities. The ACTS Fund is also meant to provide multiyear support to ease the burden on applicants of having to reapply for funding and not being able to budget beyond a year.

    To make the process as simple as possible, the board asked applicants for a letter of intent, which allowed them to narrow down the list and select candidates for additional questions. The candidates invited to answer additional questions also received a $1,000 stipend to cover staff time to complete the process.

    Since all of these organizations have been SCFD eligible for at least ten years, there was no need for an additional in-depth evaluation. Furthermore, most of these organizations have been in existence for decades.

    Invited applicants needed to respond to the following questions with short answers:

    1. Amount requested.
    2. Share how funds will be used toward the capacity building goal(s) of your organization. (That is, what will your organization do with the money received?)
    3. Include a proposed budget for the capacity-building work.
    4. How will your organization benefit?
      • What will change in your organization’s capacity (the way the organization is run) as a result of receiving funding in the short-term (i.e. in 1–2 years)?
      • What will change in your organization’s capacity (the way the organization is run) as a result of receiving funding in the longer term (i.e. 3–7 years)?
    5. Leadership: Within your organization, are there staff or board members who self-identify as the historically marginalized or under-resourced community(ies) that you engage as part of your work?
    6. Meaningful representation: Beyond staff/board, share the ways in which you involve members of the historically marginalized or under-resourced community(ies) that your organization engages in programming, decision-making, strategic planning, or other aspects of the organization.
    7. Optional attachments: Are there things that you think we should know about your organization or support information that you would like to share?

    The goal of the Community ACTS Fund is to support capacity building rather than programming. The ACTS Fund board heard how the model of increasing programming as a means of increasing revenue has actually been detrimental to the financial health and stability of small organizations. We are programmed out. We don’t have the capacity to do more. We need resources to be able to do what we do best, which is authentically engaging our communities. This is some of the feedback we heard from small organizations. At the heart of it all, the Fund makes this statement: “As an organization, you know what you need best, not us. You are among the group of organizations that historically have been underfunded at a national level. What can we do to support you to do what you do best? What will allow you to continue to elevate the voices of those that have not been heard?”

    At the beginning of the reauthorization process, the discussion of equity and the disproportionate distribution of funds was in many spaces only whispered. Some expressed their discomfort in using the term equity. One argument was that the SCFD had a different diversity lens, and race and gender were only a part of it. In many ways the evolution of the SCFD, the reauthorization process, and the Community ACTS Fund has run parallel to national conversations about funding inequities. By underscoring where dollars are going, we create a larger discourse on equity. And this discourse is both healthy and necessary to achieve equity. Tier III organizations would say that survival should not be their goal. They should have the opportunity to move out of the margins and thrive, as the larger Tier I institutions were able to do when faced with funding challenges in 1988. If the reauthorization process were taking place today, it might be a different conversation, which could portend what the conversation might look like the next time the SCFD reauthorization process takes place, in 2030.


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