Funding Creative Placemaking

While completing your creative placemaking project you may need to secure additional funding—you might be surprised by the volume of potential supporters available to you and your organization.

Review these new resources with your partners and talk with them about who among their regular contributors might be available to support your work.

WATCH:

Funding Your Project
Oftentimes in creative placemaking, we think that funding needs to come from traditional arts sources.  But when you are planning your project, it pays off to think outside the box. What are the problems you are trying to solve and how are those generally funded. In this video, Lynne McCormack of Local Initiatives Support Corporation shares some funding sources to consider when you are beginning your work.

Things to consider:

✔ What are the goals of the project that might interest non-arts funders?
✔ Where do your partners from other sectors typically find funding?
✔ Does the community/neighborhood have funding sources?
✔ Would it be helpful to have a brainstorming session about potential sources of funding with partners? Community residents?

Funding your project

Generally, the amount of earned revenue for arts nonprofits is not enough to keep the organization operational. Contributed revenue from grants, donations, and other funding sources keep them in business so they are able to fulfill their mission. This forces nonprofits to think like businesses when it comes to raising money and also to double down on their donor cultivation and marketing tactics. However, earning too much from unrelated business activity can bring about unwanted penalties from those seeking to challenge their charitable status. The following graphic accessed from Americans for the Arts breaks down the funding arts for nonprofit arts organizations.

Contributed revenue channels

• Individual Support: individuals contribute eighty percent of all philanthropic dollars, and this number rises to eighty-seven percent if you include family foundations. With the right perks, donation tiers also give leeway to a larger amount of individual donations which certainly add up.
• Corporate Support: this could look like anything from the local hardware store advertising in your event program to an airline underwriting a major tour by a dance company. The important message to communicate when appealing to a business is what tangible benefit they will get from the arrangement: visibility, access to a demographic, or something similar.
• Fellowships/Grants/Awards: these are awarded toward the completion of a specific work, a series of works or other projects. Oftentimes, they are made through a sponsoring organization: a fiscal conduit, foundation or venue such as a gallery or performance space. The quality of the work and its alignment with a funder’s guidelines are primary considerations.
• Government Support : this includes all funds apportioned from public tax dollars toward the arts, including local and state arts councils as well as your mayor’s office. Government grants can include project grants, commissions and general operating support to organizations.

Resources from partners

• Local LISC office and other local offices of national development intermediaries
• Community development agencies
• Municipal agencies
• Neighborhood association
• Local businesses
• Local arts council
• Artists
• Local and national foundations

Non-arts sources

Below are some potential non-arts sources. Not everyone will be familiar with these sources, but if they are viable options for your project then at least one partner should learn about them to teach others on the team how to approach the funders.

In-kind contributions
The United States Federal Elections Commission defines in-kind donations as non-monetary contributions. Goods or services offered free or at less than the usual charge result in an in-kind contribution. Similarly, when a person or entity pays for services on the committee’s behalf, the payment is an in-kind contribution. An expenditure made by any person or entity in cooperation, consultation or concert with, or at the request or suggestion of, a candidate’s campaign is also considered an in-kind contribution to the candidate. Below are a few examples of in-kind donations:

• Time — Nonprofit organizations and programming rely on volunteers to organize and conduct classes, programming, and events. Some volunteers may have professional skills that they can volunteer during a specific series or project. For some grant projects, just one hour of volunteering per week means the difference between completing the project or not.
• Stocks — These are technically monetary donations, but not really. While stocks can certainly fund programs in the long run, they can work towards the security of a nonprofit long-term. The organization will profit over time with the growth of the stock and the donor writes the donation off on their taxes
• Cars — Cars are considered tax-deductible in-kind donations, and usually are worth more than the average monetary donation. The receiving organization has the opportunity to either auction/sell the car for cash that can be put towards a project budget or utilized for the organization’s everyday use
• Collections — Stamps, baseball cards, or even novelty plate collections can be donated to a nonprofit. From there, your organization can get the collection appraised by an authority (such as a stamp dealer) and your donor can deduct the fair market value of their collection

Other sources of funding
Consider: Who are your partners who regularly work on goals related to the project goals? What are the funding sources they tap? Talk with them about whether those sources could be approached for this project.

Important funding terms

• National Endowment for the Arts — an independent agency of the United States federal government that offers support and funding for projects exhibiting artistic excellence
• Local and national foundations — nonprofit nongovernmental entities not limited to community foundations, endowments, and charitable trusts that utilize donated assets and income to provide social useful services
• State/local arts council — a government or non-government organization dedicated to promoting the arts; mainly by funding local artists, awarding prizes, and organizing arts events
• Local corporation — a moderate size business, company, enterprise, or organization located in a local area of a country that provides commodities, goods, products or services
• Low-Income Housing Tax Credit (LIHTC) — provides a tax incentive to construct or rehabilitate affordable rental housing for low-income households; it also subsidizes the acquisition, construction, and rehabilitation of affordable rental housing for low- and moderate-income tenants.
• United States Environmental Protection Agency’s (EPA) Brownfields Program — provides direct funding for brownfields assessment, cleanup, revolving loans, environmental job training, technical assistance, training, and research; also collaborates with other EPA programs, other federal partners, and state agencies to identify and make available resources that can be used for brownfield activities
• United States Department of Housing and Urban Development (HUD) Opportunity Zones — an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment; localities qualify as Opportunity Zones if they have been nominated for that designation by the State and that nomination has been certified by the Secretary of the U.S. Treasury via their delegation authority to the Internal Revenue Service
• New Market Tax Credits (NMTC) — attracts private capital into low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDE’s)
• Economic Development Administration (EDA) Small Business Development — provides small business owners and entrepreneurs in New York with the highest quality technical assistance including; confidential business counseling, training, and business research
• Bonds — a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental)
• State legislative grants — government grants made to support the national legislative agenda through assistance to individual state organizations
• Special districts — independent, special-purpose governmental units that exist separately from local governments such as county, municipal, and township governments, with substantial administrative and fiscal independence
• District Improvement Financing (DIF) — a locally-enacted tool that enables a municipality to identify and capture incremental tax revenues from new private investment in a specific area and direct them toward public improvement and economic development projects
• Tax Increment Financing (TIF) — a tool used by municipal governments to stimulate economic development in a targeted geographical area
• Community Development Block Grant Federal/Local — provides annual grants on a formula basis to states, cities, and counties to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low- and moderate-income persons
• Tax Stabilization — a tool used to promote economic development by providing an incentive for commercial and industrial development within a town; this can lead to commercial interest in locating new operations in the town as well as expansion of facilities by existing commercial users, thereby increasing employment opportunities
• Department of Public Works — a department of government that facilitates the combination of physical assets, management practices, policies, and personnel necessary for government to provide and sustain structures and services essential to the welfare and acceptable quality of life for its citizens
• Department of Parks — a department of the government responsible for maintaining the city’s parks system, preserving and maintaining the ecological diversity of the city’s natural areas, and furnishing recreational opportunities for city’s residents and visitors
• Department of Planning — a department of government responsible for setting the framework of city’s physical and socioeconomic planning
• Revolving Loan Funds (RLF) — a gap financing measure primarily used for development and expansion of small businesses
• Community Specific Grants — non-repayable funds or products disbursed or given by one party (grant makers), often a government department, corporation, foundation or trust, to member(s) of a certain community
• Tourism agencies — government departments responsible for promoting and developing tourism from other countries to the home location of said government
• Loans — an entity that is borrowed, especially a sum of money that is expected to be paid back with interest
• Guarantees — a formal pledge to pay another person’s debt or to perform another person’s obligation in the case of default
• Credit enhancement — a method whereby a borrower or a bond issuer attempts to improve its debt or credit worthiness; through credit enhancement, the lender is provided with reassurance that the borrower will honor its repayment through an additional collateral, insurance, or a third party guarantee
• Social Investment Capital — a form of investment funding that is usually funded by a group of social venture capitalists or an impact investor to provide seed-funding investment, usually in a for-profit social enterprise, in return to achieve a reasonable gain in financial return while delivering social impact to the world
• Microenterprise Development (MED) — a government program that helps U.S. Office of Refugee Resettlement-served populations gain financial independence by providing loans and training to help them start, sustain, or expand a small business to support themselves and their families
• Crowd Source Funding—the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet (examples include; KIVA, Kickstarter, and iobi)

ASK FOR SUPPORT
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Additional Resources

Curated for you by the LISC team, the resources below provide models of best practice, insights from our Resource Team, and other extras we hope will be useful to you as you navigate your creative placemaking projects.  

ENGAGE: 

Creative Placemaking Public Resources Guide, National Assembly of State Arts Agencies 
Produced by the National Assembly od State Arts Agencies, The Creative Placemaking Public Resources Guide is a robust digital resource for creative placemakers navigating federal funding opportunities. Click through the website for application tips, a database of federal resources, and relevant case studies. 

WATCH:

How to Financially Make the Most of Your Our Town Project
How do you leverage your Our Town Grant dollars into a bigger project that’s sustainable? (And maybe even profitable!) Join us for a working meeting on how to leverage your Our Town Project into a brand new CP project. In this session from the November 2020 Learning Lab for Our Town Grantees, Sarah Thompson Allan presents methods on how to best foster and grow funding partnerships, as well as strategize ways to bring new funders or revenue streams into your CP project, i.e. health funders, housing funders and more! We want this to be very interactive, so please bring any questions you might have about growing your CP project, possible places to look for new funding, etc. Any and all questions are welcome.

Managing Your Our Town Grant Award
Now that many of you are underway with project activities, you may find yourself wondering… “How do I access grant funds?” or, “Wait, what if my project changes?” or, “Ahh! When are my final reports due?” Don’t stress! In this session from the November 2020 Learning Lab for Our Town Grantees, Katherine Bray-Simons presents a brief, painless overview on the basics of managing a NEA Our Town award, and answers questions from the group.