The cash-strapped Arts Center of Coastal Carolina has raised $5 million -- but it's still needs long-term, financial help from the town of Hilton Head Island, its leaders said Wednesday.
For the past 15 months, arts center board members and others have reached out to current and former board members and previous donors to raise the $5 million that will be used to pay down all of the center's $2.5 million debt and make improvements to its 16-year-old building.
"To raise $5 million is a significant achievement for any nonprofit organization, especially so for an arts organization given the current state of arts funding across the country, particularly in these challenging economic times," said Fred Beard, chairman of the arts center board. Beard helped raise the money by reaching out to potential donors.
But it could be several years before all of the money is in hand. That's because more than $2 million is in pledges and bequests, which will come only when donors' wills are executed.
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The center had help in reaching its goal from Community Consulting Services, a national consulting firm that helped create a fundraising plan. The Washington, D.C.-based firm was paid $514,000 for its work out of the center's operating budget, according to Kathleen Bateson, the center's president and CEO.
The arts center needs a large infusion of cash, both short-term and long-term.
During the most recent fiscal year, the center's net income loss was about $230,000, according to unaudited financial data provided by the center.
It also is paying off a nearly $2.6 million debt, which will be satisfied once pledges and bequests come in.
The center has been operating in the red for most, if not all, of its nearly 17-year existence when interest expense and depreciation is taken into account, according to its tax returns. It is surviving the winter in large part because of a $346,000 advance in accommodations tax money from the town of Hilton Head.
Although Bateson said the center is pleased with its fundraising success, that doesn't mean it is able to support itself.
"There's no nonprofit that can consistently raise $5 million in 15 months again and again," she said.
Long term, center leaders hope Hilton Head will help support the center.
One idea is for the town to buy the center's building and assume the costs of maintenance and the many repairs and improvements it needs. A rough estimate for those repairs and improvements, including a new roof and new exterior stucco, is $2.5 million. About $400,000 is spent annually to maintain the building, records show.
Town Council has yet to say whether that is an option.
For now, town staff is drafting a request for proposals for arts consulting services, said Hilton Head town manager Steve Riley.
The consulting firm that gets the town contract would help the town, the arts center and other arts groups come up with a plan for long-term funding. That plan may or may not include more money from the town and the town buying the arts center building.
"We certainly would like to get some help with the building," Beard said, adding that most arts centers are financially supported in some way by a university or local government. "We'd like to think we're a community asset. But for the foreseeable future, we've got to go it alone."
The center is launching the second and final phase of its fundraising campaign, hoping to raise about $1 million from people who may be willing to make smaller donations, including patrons who have attended shows and families whose children have participated in the center's educational programs. That money would also go toward debt and building improvements.