As arts funders scramble to cover terminated federal grants and worriedly purge diversity, equity and inclusion operations, the recent memory of a more stable philanthrosphere still exerts a powerful pull. But when it comes to the state of arts funding, Grantmakers in the Arts President and CEO Eddie Torres argues that yearning to go “back to normal is an illusion and a trap.”
In a recent blog post, Torres documents how cultural organizations entered 2025 in a “state of extreme vulnerability” in the wake of moves to dial back pandemic-era measures, such as flexible funding, multi-year support and relaxed reporting requirements. These shifts throughout 2024 “left the national cultural field very vulnerable just as the new federal administration began.”
SMU DataArts research paints an equally discouraging picture. In 2024, “the latest year for which we have financial data, we saw a 30% decline in average contributed revenue — signaling that funding was contracting even before these new cuts,” said SMU DataArts President Jennifer Benoit-Bryan in an email to IP. “Anecdotally, our recently released findings on revenue losses and funding uncertainty have resonated strongly with arts leaders across the country.”
It remains to be seen how arts funding leaders respond. For Torres, a crucial step is to resist the urge to embrace a pre-pandemic “normal” that, in reality, was inherently flawed.
“Funders returned to their prior norm of inflexible funding that left organizations without sufficient savings to weather unexpected crises,” he told me. “This vulnerability has come to be seen as ‘normal,’ simply because it’s typical. That doesn’t make it healthy.”
An overview of post-pandemic arts funding trends
Grantmakers in the Arts is the only national association of public and private arts and culture funders in the U.S. It supports arts grantmakers through conferences, workshops and webinars; publications; research and policy work; and communication tools. GIA has nearly 300 members — a mix of foundations (roughly 50% of its membership), nonprofits that raise money to make grants (about 25%) and public agencies (also about 25%) — representing approximately 1,000 individuals.
GIA has tracked the arc of post-pandemic support for the arts, underscoring the extent to which the public and private sectors are intertwined.
FY2022 was a “watershed moment for public arts funding,” GIA’s “Public Funding for the Arts 2022” reported. Federal, state and local funding for the arts totaled $1.85 billion, with the National Endowment for the Arts seeing a 7.5% increase in appropriations from FY 2021 to 2022.
When the federal government’s time-limited investments began to run out, private funders, buoyed by a strong stock market, stepped up to fill the gaps. Grantmakers also prioritized increased flexibility and investments in equity. GIA’s community “was doing everything we recommend in our Nonprofit Financial Health Workshops and embracing equity in inspiring ways,” Torres told me. However, in 2024, “these changed practices seem to be slowing.”
Fortunately, it’s not all bad news. SMU DataArts found that pandemic-era support from Uncle Sam and philanthropy resulted in median working capital across the sector rising to 6.75 months of expenses in 2021. Median working capital dropped to 4.25 months by 2024, but it has yet to fall below 2019’s figure of 2.33 months, suggesting that some nonprofits are in a more secure financial position compared to before the pandemic.
“These extra savings have likely provided many organizations with a longer runway to adjust to ongoing funding pressures, but they may also delay some of the effects of funding losses in terms of reductions and closures,” said Benoit-Bryan. “The strategy decisions made by organizational leaders and philanthropy will be essential in determining how the sector fares as [the] financial cushion continues to erode.”
Why are arts funders backtracking on grantmaking flexibility?
Torres’ post notes that while 56% of GIA member survey respondents increased general operating support in 2020, that figure had dropped to 43% in 2024. “Increased support for flexibility” remained flat, at 45%, after peaking at 80% in 2020. The percentage of respondents who implemented “relaxed reporting requirements” decreased from 69% to 29% from 2020 to 2024. And at 33%, the percentage of respondents who cited an “increased embrace of multi-year funding” decreased for the first time, year over year, since the pandemic started.
An even-handed interpretation of the data may suggest that members’ “adoption of responsive grantmaking has reached such high levels that further increases are unlikely,” Torres writes. Funders appreciate the importance of being flexible, but they have their limits. I imagine some don’t feel comfortable transitioning 100% of their grantmaking budget to unrestricted support. Others would prefer not to do away with reporting requirements entirely.
Some funders may also have been frustrated by their inability to link unrestricted support with quantifiable metrics. Others may have dialed back multi-year support because it hampered their ability to fund grantees navigating the current political turmoil. If there’s any truth to these hypotheses, it would mirror funders’ pre-pandemic rationale for not enthusiastically embracing trust-based grantmaking practices.
As funders started transitioning back to “normal” funding practices, they also began strategizing around how to maintain their giving “while dealing with the potential threats of legal action by private citizens, like with the Fearless Fund, and directly by the government,” Torres said. Data suggests funders altered their approach in response to these threats. According to GIA’s members, increased support for organizations of color in 2024 — 50% of respondents — slowed for the first time since 2020. “This could be the desire to return to pre-pandemic practices, to avoid political heat, or a blend of the two,” Torres said.
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Establishing a “long-term vision” for the arts sector
GIA’s survey surfaces critical short- and long-term questions. First, with arts organizations still reeling from federal cuts and the House’s proposed FY26 appropriations bill set to cut federal arts and humanities funding by 35%, is there any evidence to suggest funders have pivoted back to a more flexible grantmaking approach?
“The short answer is not yet,” Torres said, directing me to a GIA spreadsheet tracking funders that have publicly announced continued and even expanded support. “MacArthur Foundation, Kenneth Rainin Foundation, Jerome Foundation, Bonfils-Stanton Foundation, Marguerite Casey Foundation come to mind.” He also cited the Andy Warhol Foundation for the Visual Arts and Helen Frankenthaler Foundation’s joint commitment to provide support to cultural organizations that lost National Endowment for the Arts funding.
But emergency funding and more grantmaking flexibility, however welcome, don’t address the ecosystem’s fundamental structural shortcomings. “The only way to prevent our national cultural community from continuing to ricochet from crisis to crisis,” Torres wrote, “is to collectively establish a long-term vision and pursue it together.”
On July 24, GIA kickstarted this process, convening what will be one of many in an ongoing series of convenings among its members. “The initial discussion focused on a vision in which artists are valued as part of a healthy ecosystem,” Torres told me. “GIA’s participating members focused the discussion largely on public support for artists as part of public support for community health.” In this “ideal future,” artists are valued as public servants and cultural health is supported along with physical, psychological and emotional health.
The good news is that GIA predicts private giving will rise in 2025. “Those increases,” Torres said, “appear poised to focus on support for legal advice, communications, safety and security, etc. This will help organizations respond to threats and attacks.” The bad news is that the increased funding “may not decrease their vulnerability.”
To create a more secure climate for organizations, GIA recommends that funders continue the flexible giving strategies that shepherded organizations through the pandemic and increase advocacy support for changes to public policy. “GIA recognizes that these recommendations beget difficult choices,” Torres said. “I worked as a grantmaker for 10 years and made every mistake imaginable. Decision-making is fatiguing as is being criticized.”
Sustained and flexible philanthropic investment in the arts sector clearly beats the alternative. But as the arts stakeholders sketch out a “long-term vision” for the sector, these practices must be supplemented by an advocacy-driven public policy that recognizes the importance of the arts in American life.
“Foundations making up for government divestment is a mathematical impossibility,” Torres said. “The government simply has more money than institutional philanthropy. Even foundations that increase their payouts can only make a marginal difference in the face of government divestment. For that reason, the threat to nonprofit organizations is existential in that some may be forced to close.”
