In the Long Term

October 8, 2015

As Mile Zero Dance (MZD) prepared to close out its fiscal year in the summer of 2013, the Board of Directors and staff surveyed the books, taking stock of the group’s financial situation.

Nearly 30 years into their tenure as purveyors of contemporary dance and unique site-specific performances in Edmonton, the organization still exists on a month-to-month lease for their space – the bright, newly renovated upper floor of the Artery building on Jasper Avenue. Known as Studio E, the venue is serving them well, but the question of long-term security – and the possibility of a space to call their own – weighs on everyone’s mind.

“One of the biggest issues in performing arts, especially dance and theatre, is access to space,” explains Mile Zero’s Board President, David Garfinkle, noting that not only is the amount of space needed greater than conventional retail or business, but also that spaces for arts groups often need to be specialized – be that with sprung floors, dressing rooms, set-building facilities or storage space, not to mention an actual performance venue.

Mile Zero had paid to install a new floor at the Artery, and though on good terms with the building owners, the situation was not ideal. Running on a budget of under $200,000 annually, Mile Zero’s ability to thrive in the unpredictable milieu of arts funding was tenuous; the goal was to take steps to owning a space, securing their spot in the future of Edmonton’s cultural scene. As it happened, Mile Zero had been saving diligently for a number of seasons, and found themselves with a pot of $10,000 to spend.

“We were saving for a rainy day or a cushion, but as far as saving for leverage or as an investment we didn’t really know how to do it,” notes Mile Zero Artistic Director, Gerry Morita – joking that they achieved the surplus by squirreling away her own dance fees for the decade that she’s held her position. “David helped us to find this opportunity as a way to invest our money that’s not just putting it under the pillow.”

“There were two approaches we knew of; one was a facility capital fund, the other was an endowment fund,” says Garfinkle, who brought his experience at the board level of Vancouver’s arts scene to Edmonton two years ago.

At that point, Mile Zero sought out advice from Edmonton Community Foundation (ECF), which helped advise the group on bylaw amendments, legal parameters and paperwork to establish their endowment fund. It turned out that Mile Zero was also a prime candidate for the Endowment Incentive Program through the Canadian Cultural Investment Fund, which matched the group’s endowment contribution by 88 per cent last year – essentially doubling their initial $10,000 deposit.

“The idea of an endowment fund is like planting a tree rather than giving somebody a bushel of apples,” explains Kathy Hawkesworth, Director of Donor Services at ECF. “I think the sense of an endowment is that you are here for the long term and planning for the long term. Especially for small organizations, that’s a huge philosophical step to be thinking strategically, and that gives them a business sense of this is not a ‘here today, gone tomorrow’ kind of place.”

As such, Mile Zero’s initial endowment money can never be cashed in, but the group sees a small return on interest, usually from three to five per cent in any given year, in perpetuity. As their fund grows from year to year, it also expands their leverage in approaching potential supporters.

“I think the sense of an endowment is that you are here for the long term and planning for the long term. Especially for small organizations, that’s a huge philosophical step to be thinking strategically, and that gives them a business sense of this is not a ‘here today, gone tomorrow’ kind of place.”

“To have the means to [sustain a building] – as opposed to buildings that get built and then all of a sudden artists can’t afford to operate them, which seems to be a syndrome – we want to be available and set up for any funder that wishes to help us in these goals. We want people to know that we’re going to be here long term, and that the company will exist and will be supporting contemporary dance creation in this city,” says Morita.

Though it can be scary for an arts group to take that “rainy day” money out of operational funds, dancers tend to leap if they’re going to jump at all, and Mile Zero’s plunge into the endowment pool was met with enthusiasm.

“It was exciting,” says Morita. “I didn’t realize what a unique situation we had in Edmonton. It makes me so proud to be here, to hear how Edmonton is innovative not just in arts and culture, but in the business and philanthropy side. It’s inspiring.”

She adds that through ECF she was able to !nd support from peers in the arts community that had also chosen the endowment route. Groups like Film and Video Arts Society (FAVA), Nina Haggerty Arts Centre, Cosmopolitan Music Society and Walterdale Theatre also have endowments set up at ECF. Though on the smaller end of operational budgets, these arts groups have benefited from earnings on their endowments, and also have better financial security for their facilities.

“So many of us are just tied to the current needs,” notes Hawkesworth. “You don’t want to give up today dollars for tomorrow dollars, but you have to see that you can have both. the magic of an endowment is felt over time: Once a fund is 15 or 20 years old it has granted back that original gift, but it’s also still there and it’s still growing.”

“I think it’s really important for artists and small arts organizations to look forward 10 years and consider what has happened to similar organizations in the U.S., and to take steps now,” adds Morita. “I think it’s important for us to be proactive in the long term and not only reactive to funding scares.”

Garfinkle notes that arts organizations are in a unique position where their creative strength – their business, essentially – lies in the confidence and ability to take risks. Without a long-term crash pad in place, a group like Mile Zero may be reluctant to program with the verve and iconoclasm they are known for, as in their take-over of downtown parking garages or aging heritage buildings like the Freemasons Hall or the Ortona Armoury. Even the sustainability of their Salon Series and Artist-in-Residence Program, both of which have offered dozens of artists the opportunity to experiment, can be in question on a month-to-month basis. Now, with a publicly recognized endowment strategy, Mile Zero’s financial muscles will only strengthen into the future, leaving the creative process less restrained.

“The artist has to be able to explore and be sensitive to things that aren’t easily quantified,” says Garfinkle. “The strongest argument for an arts group to have an endowment is that you need to have a wellness condition in your life in order to handle change.”