Opinion: Was Funding for National Philharmonic Unsustainable?
A look at Montgomery County grant funding for nonprofits
Editor’s note: The views expressed in MoCo Politics are the writer’s and do not represent the Bethesda Beat staff.
Last week, National Philharmonic announced it was closing and blamed the County Council for refusing to provide $150,000 in operating support. In her response, Council President Nancy Navarro claimed that the county had provided the orchestra $2.5 million over the last decade and said, “As the county begins to look at equity across all our investments, this level of investment isn’t sustainable for one organization over the long term.” Is she right?
To assess the council president’s response, let’s look at county grant funding for nonprofits. There are three prominent pots of money: funding to arts organizations by the Arts and Humanities Council of Montgomery County, community grants provided by the county executive and county council as part of the regular budget, and grants provided by the Montgomery Coalition for Adult English Literacy (MCAEL) to promote English literacy. The county’s cable fund also subsidizes one nonprofit.
The chart below shows combined growth in these four funding sources from FY12 through FY19. Over that time, grant funding has roughly doubled from $10.2 million to $21.6 million. The majority of funding ($12.3 million in FY19) comes from the community grants program, while arts funding ($5.5 million in FY19) is second.
But some organizations draw from more than one pot. Several claim funding from both community grants and MCAEL while others combine funding from community grants and the arts council.
The table below lists the organizations that have received the most money from arts council grants, community grants, MCAEL grants and cable fund nonprofit funding from FY11 through FY19. (MCAEL funding in FY11 is not available. FY20 funding data is incomplete as of this writing and not tabulated.)
Let’s note that this data does not include the many millions the county spends on corporate welfare, marketing organizations like the county’s economic development authority and visitors bureau or service contracts built into department base budgets. If it did, the list below would look different and more organizations would exceed National Philharmonic’s funding.
But corporate welfare, marketing activity and service contracts are conceptually different from nonprofit grants. In assessing the council president’s statement, let’s be conservative and stick with the latter.
Montgomery County Television, which runs the county’s cable access channel Montgomery Community Media, blows everyone else away. That’s because it gets money earmarked from the county’s cable fund, which is financed by charges paid by cable subscribers.
This might be the sweetest honey pot in all of county government. Whereas other arts and nonprofit organizations are forced to compete for other limited grant funds, Montgomery County Television gets direct funding from a source unavailable to those other groups.
Among the rest, Casa de Maryland and Catholic Charities are the leaders. Both organizations receive grant funding from community grants and MCAEL and have seen huge increases over the years. Casa received $340,620 in grant funding in FY12, which grew to $838,466 in FY19. Catholic Charities received $171,820 in grant funding in FY12, which grew to $743,920 in FY19.
National Philharmonic ranks 11th on this list with $1.99 million in grant funding from FY11 through FY19. That includes a one-time supplemental appropriation of $250,000 in FY16. Of that amount, $200,000 went to back rent owed to the Strathmore Hall Foundation, $26,000 was to replace a reduction in arts council funding and $24,000 was to pay a consultant to develop a “comprehensive strategic plan.”
Aside from that money, county support for National Philharmonic has actually been declining in recent years while total grant funding has doubled. The orchestra’s arts council grants have fallen from $267,970 in FY11 to $107,145 in FY19. (The orchestra also received a community grant worth $49,700 in FY19.)
It’s noteworthy that the county has paid more in grant money to the Baltimore Symphony Orchestra ($2.8 million between FY11 and FY19) than it has to National Philharmonic ($1.99 million). That’s probably because the Baltimore orchestra often performs at Strathmore.
Will we continue to subsidize Baltimore’s orchestra while we allow ours to close? According to a recent audit, Baltimore’s orchestra may not survive the year. If it does not, could we divert our funding of Baltimore back to National Philharmonic?
Even when restricting our comparison to other arts organizations, National Philharmonic is not the funding leader. Olney Theatre received capital grants of $650,000 in FY19 and $250,000 in FY20. Round House Theatre received capital grants of $250,000 in both of those same years. Olney Theatre’s total grant receipts were $1.1 million in FY19 and Round House’s were $705,740.
Strathmore Hall Foundation, National Philharmonic’s landlord, received more than a half million dollars in FY15, FY18 and FY19. In comparison, National Philharmonic attributed its closure to a $150,000 funding gap.
It’s certainly true that orchestras around the world are having funding problems, including in Baltimore. But arts organizations and nonprofits generally are economically fragile despite the good work that they do.
Montgomery County government supports a network of dozens of nonprofits, many of which receive tens of thousands of dollars or more every single year. How many of them would fold without county support?
The council president’s statement mentions sustainability. Forget about nonprofit funding. If anything is unsustainable, it’s the county’s recent practice of diverting $60 million to $90 million a year from retiree health benefits to fund its operating budget. Moody’s called that “a credit negative.”
Meanwhile, Moody’s had nothing to say about funding National Philharmonic or other nonprofits. It’s also unsustainable to lose businesses and have minimal job growth. When news of that broke a couple of weeks ago, there were no press releases from the county discussing sustainability. In fact, there was not much of a reaction from the county at all.
County leaders should just be honest about it. They simply did not want to give National Philharmonic more money than it was already getting. They would prefer to use that money for other things.
As our elected representatives, they have every right to make that decision. And if you don’t like it, remember that when you vote.
Adam Pagnucco is a writer, researcher and consultant who is a former chief of staff at the County Council. He has worked in the labor movement and has had clients in labor, business and politics.