Artists alarmed by proposed rule making process with the Minnesota State Arts Board

By: Sheila Regan, Freelance Community Journalist

A proposed definition for fiscally sponsored arts groups have artists and organizers pushing back 

Minnesota artist groups have been vocal against a series of changes that are happening with the Minnesota State Arts Board surrounding their grant programs, including new rule changes that these groups say will negatively affect artists and organizations. 

Among these groups is the Minnesota Artist Coalition, made up of over 100 artists and administrators, who put out a call to action and a letter writing campaign, saying that fiscally sponsored groups will be unprotected from losing eligibility from MSAB funding.

The coalition’s open letter states: 

“As the calls for long overdue change sweep every aspect of our society, we as Black, Indigenous, People of Color, and allied artist workers are meeting the moment, developing a new social contract for our funding ecology and cultural climate that cares for and sustains our artistry and lives in the state of Minnesota.”

Photo of Kathy Mouacheupao.

A video put out by the coalition features Kathy Mouacheupao (Executive Director, Metropolitan Regional Arts Council), Laura Zabel (Executive Director, Springboard for the Arts) and Drew Digby (President, Forum of Regional Arts Council of Minnesota) speaking about the changes. 

“The proposed changes would reduce the number of artist projects that are eligible for support and would eliminate the way that local communities have expressed their needs through the form of regional arts councils,” Zabel said in the video. 

Reached by phone for an interview, Kathy Mouacheupao said the new rules will make things more complicated. 

“This is a call to the state arts board to think about who historically has been funded and who hasn’t,” said Mouacheupao.  It’s a great opportunity for Minnesota to lift up artists during the pandemic. This is a time to be supporting artists more and not finding ways to make it more complicated.” 

A big issue, artists say, is confusing language. “The unclarity is the problem,” says Maren Ward, Artistic Director of zAmya Theater, which has been fiscally sponsored by Propel Nonprofits since 2018. The theater company recently submitted an application to become a 501c3 and are awaiting confirmation. Ward says during the time they were using a fiscal sponsor, they would not have been eligible for MRAC or MSAB funding.

“We have received multiple MSAB and MRAC grants during this time that have supported people with experience of homelessness to stay connected and engaged through virtual programming,” Ward said. That support also allowed the group to have a partnership with Upstream Arts, which expanded their access to people with disabilities, she said. 

But Sue Gens, Executive Director executive director of the State Arts Board, urged Minnesota artists to remain calm.

According to Gens, the board has been funding unincorporated groups that use fiscal sponsors for at least a decade, and possibly longer. “We intend to keep doing that,” she said. “I think that’s one of the most important messages that people need to hear— this rulemaking is not going to change that. 

“Unfortunately, the message that people have heard is that we are going to no longer fund fiscally sponsored projects, and that is not at all the case.”

The  proposed definition for an “unincorporated nonprofit association” proposed by the Minnesota State Arts Board in a board meeting on December 2 has a few points that have raised alarm among some in the arts community. First, the definition states that these groups are required to not distribute its income “to any unique individuals such as members, administrators, or directors.”

In addition, the definition states that any unincorporated nonprofit that makes more than $5,000, it must file a 1023 form through the IRS, which according to the IRS website, costs $600. 

The definition also requires unincorporated groups to adopt written bylaws or a constitution, and include it with its IRS application. 

Gens said the process isn’t yet complete. “We’re in the rule development phase,” she said. “Rulemaking is a very long process. In a streamlined effort, it can take six months, in a longer effort, it can take a year or two years.” With the public comment period complete, the agency will incorporate the comments into a final set of rule language, followed by an announcement to adopt the changes. “We’re still a ways off from that next step,” she said. 

Gens also said that the IRS language may very well be eliminated from the definition of unincorporated nonprofit associations, but that doesn’t change any IRS rules that remain in place. 

“The final rule language probably is going to be different than this,” she said. “That doesn’t change, though, that the fact that if there is an IRS requirement for a group when it reaches a certain budget size to do other things, those groups would still have to do that.”

In addition to outcry about fiscally sponsored groups, other critiques of recent changes proposed at Minnesota State Arts Board include Forum of Regional Arts Councils will be eliminated from the rules.

“We believe that thorough the forum we can be a stronger statewide system,” When we come together we are a statewide system— thinking holistically,” Mouacheupao said.

Finally, there’s also been push back against the change the grants that MSAB offers since the pandemic. For example, Minnesota Presenters Network formally opposed a proposal to continue Creative Support grants, in lieu of MSAB’s typical project grants

“I opposed this because the smaller amounts of money given to artists ($6000) and organizations ($15,000) don’t have enough impact to facilitate recovery in 2022-23 when this work would be taking place,” said Bobby Maher, who manages a number of musicians and artists. 

He likens the smaller funds available to artists and organizations to stimulus checks. “People are grateful for something – but they don’t pay the rent or put food on the table.” 

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