One of the key findings from IP’s recent research on the state of giving for writing and literature was funders’ tepid support for literary nonprofits in relation to other artistic disciplines.
Long before the pandemic struck, grantmakers tended to prioritize other fields, driven by the belief that literature is more commercially viable. Literary organizations also tend to be less visible to the general public, making them less of a magnet for funding from deep-pocketed donors who serve as a philanthropic backbone for large museums and theater organizations. COVID-19 exacerbated these challenges and underscored the importance of funders like the Mellon Foundation, which threw the field a critical lifeline with 2020’s Literary Arts Emergency Fund (LAEF).
Now, over two years later, a new 2022 Impact Report from the Academy of American Poets (AAP), the Community of Literary Magazines & Presses (CLMP) and the National Book Foundation (NBF) crunched the data from 410 literary arts nonprofit respondents that applied to the Literary Arts Emergency Fund. Its findings present a state of affairs that’s eerily reminiscent of the pre-pandemic status quo.
The good news is that, according to the report, organizations have remained resilient and effective, having reached over 8.9 million individuals in person and 211 million online, despite spending only $1.11 per individual served. “One imagines how much more the literary arts field could offer if organizations and publishers, especially those led by and serving historically underrepresented groups, were strengthened,” said AAP President and Executive Director Jennifer Benka, CLMP Executive Director Mary Gannon, and NBF Executive Director Ruth Dickey, in a joint response to questions via email.
The bad news is that this “doing more with less” approach isn’t sustainable, and most applicants lacked cash reserves to ride out the next calamity, according to the three nonprofit leaders. “All told, the nonprofit literary arts field is financially vulnerable and could be in jeopardy of losing jobs and serving fewer writers, readers and communities should another crisis like the recent pandemic emerge, particularly without additional emergency financial support.”
“There continues to be little to fall back on”
The LAEF report provides a robust look into the machinations of nonprofit literary arts organizations and publishers. Authors lay out the full breadth of the field’s geographic reach, the extent to which organizations employ writers and award prizes, and leaders’ efforts to serve underrepresented individuals. I encourage you to check out the full report, but there are a few big challenges facing literary nonprofits that I found worth highlighting.
First off, nonprofit literary organizations are disproportionately small. Of the 410 organizations in the LAEF report’s data set, 87% had annual operating budgets of less than $1 million, while 76% had budgets of less than $250,000. BIPOC-led literary organizations were smaller, with 2021 median expenses of $85,000. Only 26% of organizations had more than three paid staff.
Nearly three-quarters of the LAEF fund’s 2021 applicants received COVID relief funding from grantmakers or Uncle Sam in 2020 and 2021. However, fewer than half of applicants with budgets under $50,000 had received any funding at the time they applied, suggesting that some smaller organizations slipped through the cracks.
Smaller groups are also generally more vulnerable financially, even if they did receive emergency funding post-2020. Applicants that received relief funding mostly used it to support struggling writers. For example, respondents paid poets and writers 10.3% more in publication fees and prizes in FY2021 compared to FY2019. Of course, in a world of finite resources, this also meant that most organizations were unable to use funding to shore up their cash reserves. In what is the most alarming stat in the report, a combined 80% of applicants had insufficient cash reserves (37%) or no cash reserves at all (43%). Despite some slight improvement from FY 2020 to FY 2021, the authors noted that “it is clear that there continues to be little to fall back on in times of crisis.”
There are other indicators that, beyond the literary arts field, COVID-era relief funding didn’t necessarily make recipients more secure going forward. A November report from the Center for Effective Philanthropy found that 37% of respondents whose organizations received a MacKenzie Scott grant did not think the funding would “significantly strengthen the long-term financial stability of the organization.” Some leaders attributed this to the need to make trade-offs between pressing priorities like COVID response and shoring up long-term financial stability.
Worries about individual donors
The report also looked at how the pandemic contributed to organizations’ precarious finances. Sixty-three percent of respondents said that “technology platforms and subscriptions” was their top unexpected expense, followed by “staff additions, including contractors” (54%) and “improvements toward staff support and retention” (42%).
This is actually an encouraging statistic, as it suggests that organizations responded to growing demand for digital programing and other activities throughout the crisis. At the same time, however, these unplanned expenses put a strain on the bottom line — 29% of 2021 applicants that received relief funding faced a budget deficit for that fiscal year.
One big question moving forward is the extent to which organizations’ need to cover unforeseen tech expenses and hire new staff become permanent line items in organizations’ ledgers. If so, it will naturally force leaders to drum up more revenue to cover the costs. Unfortunately, when asked which revenue streams would pose the biggest challenge over the next three years, respondents cited “individual donors” (59%), followed by fundraising events (45%) and “foundation funding” (37%). (Respondents could select up to three responses.)
These concerns may sound familiar. Long before the crisis struck, leaders at arts organizations writ large worried that individual donors would divert their support toward causes with more quantifiable impact. The pandemic has magnified these concerns, as organizations in fields like public health, racial justice, and education increasingly vie for donors’ attention. Donors may also fall back on the idea that organizations can stay afloat by cobbling together earned revenue from events, subscriptions, book and magazine sales, advertising, and, where applicable, endowment revenues. Lastly, nonprofit literary leaders are rightfully worried that an expected recession will compel individual donors to dial back support.
On the bright side, we know that a segment of arts donors appreciate data and metrics quantifying the field’s impact. This is where the LAEF’s data will come in handy for literary arts leaders looking to “make the case” to donors in the new year.
“We hope this report will be a tool that literary arts organizations and publishers can use to help educate donors and funders in their communities about the unique contributions the literary arts field makes, including their own, and to demonstrate that it needs more support,” Benka, Gannon and Dickey stated. “We hope to serve as a resource and advocate to philanthropy, encouraging greater funding for the nonprofit literary arts in our country, and keep fundraising to support this work.”