Sunday, July 5, 2009

Arts Council of Indianapolis Misleads Parks and Recreation Committee Regarding Its Administrative Expenses

Over the weekend, I had the chance to review the video July 2, 2009 meeting of the Parks and Recreation Committee of the Indianapolis City-County Council.

The Committee considered a request of the Arts Council of Indianapolis that be allowed to reallocate money previously given to it by the Council due to the fact that the Arts Council would not receive an expected grant from the Capital Improvement Board.

There was probably nothing wrong with the proposal. The grant had already been made so it was water that, unfortunately, had already passed under the bridge. The Arts Council was just asking to move around money it had already been given.

What was wrong, however, was the tall tale new Art Council President David Lawrence told the council committee.

Councilor Michael McQuillen asked how much of the Arts Council budget is taken up by administrative costs. It's a darn good question. After all, the Council is the funnel through which the city is passing out money for the Arts. If the Arts Council is consuming the money in its own administrative costs, then it would suggest that taxpayers are not getting their money's worth using this private entity to distribute tax dollars.

New Arts Council President David Lawrence responded that the Arts Council only spends 18% on administrative costs. Wrong. In actuality, according to the Arts Council's 2007 tax return, administrative costs for the Arts Council are over three times that figure, nearly 57% of what the Arts Council takes in, it pays out for administrative costs. If you just compare those administrative costs to how much the Arts Council gets from taxpayers, the figure soars to over 90%.

In its 2007 tax return, the Arts Council received $3,082,284 from government and $1,578,947 in direct public support. Total revenue of the organization in 2007 was $4,888,354. As a side note, the Arts Council, which is constantly claiming poverty, reported $9,645,999 in accumulated assets.

Administrative expenses on the return total $2,784,836. This includes $1,038,608 spent on salaries and benefits for their 19 employees. The former President of the Arts Council, Greg Charleston alone pulled down $170,391 in compensation.

Being a non-profit corporation does not mean the people who run the organizations don't profit. The Arts Council of Indianapolis and the other non-profits receiving grants from government need to be more open and honest about their administrative costs, including lavish salaries and benefits they pay themselves after picking up a check from the taxpayers. It is time the Indianapolis City-County Council stops handing out our tax money to organizations whose primary interest is enriching themselves.


Jon said...

So why didn't the governmental entity providing the funding ask about the administrative costs? Should that be part of their administrative oversight?

Paul K. Ogden said...

The Council provides the funding, though the Arts Council gets money from other government sources. The Councilor did ask the question about adminstrative costs. He probably didn't have the facts and figures in front of him to ask follow up questions. I'm just thrilled anyone bothered to ask a good preliminary quesiton like that.

But, yes, there needs to be constant oversight over these organziations. That would be not only the council asking quesitons, but the executive watching to make sure the dollars are properly spent. I'm not optimistic that the Ballard administration will
do a good job on that score, however. The Mayor seems to have no interest in the misspent tax money.

M Theory said...

Next time they start their hysteric whining about "the children", I will make it clear that I main problem is not the the 43% that gets to the kids and local artists, my biggest issue is that 57% that goes to the administrators and their fancy offices.

Paul K. Ogden said...


You're exactly right. While the opposition to arts funding has a lot of merit, let's take on the high administrative costs of groups like the Arts Council. That's something that is an even easier target. You're right...most of the money doesn't make it to the artists.

M Theory said...

I get angry every time I think about those arts administrators acting all high and mighty when they aren't.
Do you remember Lisa Sirkin? She's the communications/marketing company owner from Fishers who decided she was going to "SAVE INDY ARTS" and launched all that social media to save her arts admin friends jobs and ultimately her own pricey contracts with them.