General Operating Support
Behind the Scenes at GIA
Champ Knecht
In a previous post, I wrote about an insight I gained in putting together Grantmakers in the Arts’ year-end 2021 financials – the value in fiscal decision making of separating unrealized investment gains and losses from other revenue streams. In this post, I want to expand on another element of our budgeting process that was reinforced in 2021 – the importance of general operating support to the fiscal stability of any organization.
As I wrote last time, GIA ended 2021 with a healthy budget surplus, and a big driver of that surplus was unrealized investment gains. Another factor contributing to our performance was our success in securing general operating support (GOS) grants in 2021. However, even with that success, without the unrealized investment gains, GIA would have ended the year with a small deficit. That is because of one thing: We planned and budgeted to have an in-person conference in 2021, but because of the persistence of the COVID-19 pandemic, we had to pivot to a virtual conference.
Photo 1: IDEA Lab panel during the 2018 GIA Conference in Oakland, CA. Photo credit: Eli Zaturanski. Photo 2: Conference participants at on off-site session in an art gallery, sitting in chairs in concentric circles. Photo credit: Eli Zaturanski. Photo 3: Two Black women shaking hands during an event at the 2019 GIA Conference in Denver, Co. Photo credit: Evan Semón.
An in-person GIA conference comes with a significant amount of expenses that are not applicable to a virtual conference. There are hotel and other venue costs, catering, transportation, events costs, etc. Since a virtual conference doesn’t have any of these costs, the budget for a virtual conference is significantly smaller.
In our budgeting process GIA allocates salary, benefits, and overhead expenses to its programs in order to develop true-cost budgets. Programming the annual conference takes a large amount of the GIA programs team’s time and effort, and the annual conference budget therefore bears a significant amount of allocated costs. These costs are included in the conference budget and conference fundraising goals. In 2021, we pivoted from an in-person conference to a virtual one; that is, we pivoted from a conference with a higher budget to one that was significantly lower. However, the amount of time the GIA programs team spent in programming the virtual conference was not less than the amount of time they would have spent on programming an in-person one; I could argue that the pivot itself increased the programs team’s workload for the virtual conference. But because the budget for the conference was significantly lower, it was not feasible to include the same amount of allocated costs to a virtual conference budget. The fundraising goals were lower, and the amount of time available in which to fundraise was very compressed. The allocated costs that would have been included in an in-person conference budget but were excluded from the virtual conference budget had to be made up somehow. In 2021, GIA was able to offset those costs through a combination of increased GOS revenue and investment gains.
This reinforces the importance of general operating support grants to any organization. If GIA’s salaries, benefits, and overhead expanse (rent, utilities, etc.) were fully-funded through GOS grants, we would not have to allocate any of them to programs, including the conference. But as generous as many of our GOS supporters are, and as successful as our fundraising team has been, some of our funders are still tied to a model that prioritizes program support, over or sometimes to the exclusion of, general operating support. The importance of GOS is something that we stress in our Conversations on Capitalization and Community workshops. General operating support grants allow an organization to be flexible and resilient. GIA’s own experience in 2021 provides another example we can share to further emphasize where we’d like to see the arts funding field going.
ABOUT THE AUTHOR
Champ Knecht is Director of Operations & Finance at Grantmakers in the Arts
