Released: June 8, 2023
Tennessee Nonprofit Arts & Culture Recovery Fund –
Round 2 (Final Round) Allocations
Under the American Rescue Plan Act, the State of Tennessee is receiving $3.725 billion in funds awarded via the US Treasury “Fiscal Recovery Fund” (“FRF”). The availability of onetime FRF funds presents a significant opportunity for Tennessee to: (i) Continue its response to the COVID-19 pandemic and its secondary effects; (ii) Invest in initiatives that support a strong economic recovery; (iii) Strengthen state fiscal stability by reducing demand for state taxpayer dollars to fund existing initiatives or priorities.
To support the development of a comprehensive plan for Tennessee’s Fiscal Recovery Fund, Governor Lee invited state agencies and stakeholders to submit proposals for consideration by the Financial Stimulus Accountability Group (FSAG) for inclusion in the Tennessee Resiliency Plan. The plan summarizes proposals that have been considered and recommended for expenditure by the Financial Stimulus Accountability Group (FSAG).
All proposals were subject to a process of review by the Department of Finance & Administration (F&A) and the Governor’s Office for fiscal impact, eligibility, and alignment with state priorities. Proposals were then submitted for feedback and discussion with the FSAG. Among the first portion of spending priorities that were recommended for funding by the FSAG included urgent needs and opportunities for Tennessee including: Sewer, Water, and Broadband Infrastructure initiatives; capital investments to improve the resiliency of state and local public health systems; continuation of the state’s Hospital Staffing Assistance program; and immediate support to Tourism, Agriculture, and Arts and Culture Industries.
These recommended proposals were posted for public comment through October 30, 2021 prior to final approval. A total of 127 comments were received for the Tennessee Resiliency Plan including 52 comments, all in support of Tennessee Arts Commission inclusion in the plan.
The Tennessee Arts Commission: Tennessee Nonprofit Arts and Culture Recovery Fund proposal was approved on November 18, 2021 authorized to provide non-recurring funding to address severe pandemic-related economic harm to Tennessee’s nonprofit arts and culture industry. The fund was authorized to provide grants to over 200 eligible arts nonprofits to recover and deliver arts and culture services benefitting local economies and quality of life in every TN Senatorial district. Among other requirements, eligible applicants must be Tennessee arts nonprofits that have suffered pandemic-related loss and with a history of federal grant administration with the Tennessee Arts Commission. The requested and approved amount was $80 million in federal relief funding over a three-year period for grants to eligible nonprofits and contracted services for monitoring grants of $100,000 per year.
The Commission authorized 2 rounds of funding and obligations over three fiscal years as shown below. The largest share of funding was awarded in Round 1 to respond to the urgent need. In Round 1, the Commission obligated $73.5M – $72M federal and $1.5M state to 154 nonprofits. $7.7M federal funding was reserved for Round 2 funding open to nonprofits that did not receive funds in Round 1, including those with a need to develop a track record of federal funds management for eligibility.
Tennessee Nonprofit Arts and Culture Recovery Fund Obligations
II. Round 1 Allocations approved March 23, 2022
Total documented pandemic revenue loss for eligible TN nonprofit arts and culture applicants for March 2020 – November 2021 period was $179.1M, well beyond the available total relief of $80M for all periods. With grant application requests capped at $5M, requests for Round 1 funding based on capped pandemic loss totaled $96M.
Round 1 awards were based on a tiered system according to pandemic-related loss and/or budget size. The maximum allowed request was capped at $5 million over three years, though pandemic-related loss for some well exceeded the cap.
For additional detail on Round 1 allocations, please see https://tnartscommission.org/art-grants/tn-nonprofit-arts-culture-recovery-fund-award-detail/
III. Round 2-Final Allocations approved May 25, 2023
Total documented pandemic revenue loss for eligible TN nonprofit arts and culture applicants in Round 2 for March 2020 – November 2022 was $37.8M, well beyond the $7.7M available for grants. $31.5M of the loss was from 4 large applicants. With grant application requests capped at $1M, requests for Round 2 funding totaled $9.5M. Round 2 awards were based on a tiered system according to documented pandemic-related loss.
Similar to the allocations pattern of Round 1, the Commission approved a system of tiered awards for Round 2 proportional to documented pandemic related loss determined by standard methodology. Tiers 2-4 in Round 2 vary somewhat from Round 1 based on availability of funds, number of applications, documented pandemic-related losses and adjusted maximum request amount.
Consistent with Round 1, this allocation pattern favors organizations with smaller operating budgets and/or requested documented pandemic loss under $1M, improving funding spread and reducing concentration in fewer organizations. Nineteen (19) organizations with operating budgets less than $1M and requests less than $250k received 100% of request.
Tiered system based on documented pandemic-related revenue loss
IV. Tennessee Nonprofit Arts and Culture Recovery Fund – Round 1 & 2 Award Summary
The nonprofit arts & culture industry was hard hit by the pandemic. Covering the period March 2020 to November 2022, total documented pandemic-related revenue loss of all Recovery Fund grantees was more than $216 million. The Tennessee Resiliency Plan addressed the severe pandemic-related economic harm by awarding $80M in federal relief through the Tennessee Nonprofit Arts and Culture Recovery Fund. The Tennessee Arts Commission awarded these grants based on documented pandemic related revenue loss to a total of 186 arts nonprofits (154 nonprofits in Round 1 and 32 in Round 2) in all Tennessee Senatorial districts as originally proposed in the Tennessee Resiliency Plan.
* This total does not include Pandemic Period 2 losses from the 154 Round 1 grantees.