Before the economic crisis, the Hyde Park Art Center was growing by 15 percent annually—a rate that far exceeded many nonprofit arts organizations in Chicago. But this year, growth leveled off and three employees were laid off at Chicago’s oldest exhibition space.

“We specifically cut administrative staff so we wouldn’t affect our programs, which are holding strong,” said Christina Jensen, development associate at the art center.

HPAC is one of several nonprofit art centers in Chicago that is eligible to receive Recovery Act funding from the National Endowment for the Arts through grants from the Illinois Arts Council.

Jensen said the stimulus funding could help make up for lower enrollment in programs and camps this year as well as lower endowment contributions.

Part of President Obama’s $787 billion stimulus package, $50 million was allocated to the National Endowment for the Arts to help save jobs in the nonprofit arts sector that are threatened by a deteriorating economy. While these grants will offer short-term preservation of arts jobs in Illinois, arts advocates say that sustaining the state’s cultural sector is really up to Springfield.

“For our arts sector here in Illinois to really be healthy in the long term, this is a good first step, but it is critical for state funding to be restored,” said Scarlett Swerdlow, advocacy and communications director for the Illinois Arts Alliance.

On March 18, Illinois Gov. Pat Quinn is set to unveil the state’s fiscal 2010 budget, confronting a backlog of unpaid bills from fiscal 2009 as well as declining state revenue due to the distressed economy.

While the state approved $23.1 million for the Arts Council in fiscal 2008, the Council's actual budget was slashed to $15.2 million, a 23 percent cut from the previous year. As a result, the Arts Council was forced to reduce general operating support grants--like the funding administered to the Hyde Park Art Center--by nearly 30 percent.

Former Gov. Rod Blagojevich again proposed $15.2 million in Arts Council funding for fiscal 2009, while the Illinois Arts Alliance contends that $24 million is necessary to sustain the cultural infrastructure of Illinois.

“Problems with state funding and allocation have had a profound impact,” said Abena Brown, president and co-founder of eta Creative Arts Foundation Inc., an African American cultural organization that provides professional and technical training in the performing arts.

Eta Creative Arts first received IAC funding in the form of a $50,000 Partners in Excellence grant. Due to cuts in the state’s arts budget, eta’s grant was reduced to around $30,000. This year, grants have also been awarded late, said Brown, whose organization received its 2008 PIE grant less than a month ago.

Arts organizations are now hoping that federal stimulus dollars will help fill some of the funding gaps left by the state. The NEA released grant guidelines March 4 for organizations seeking a share of the $50 million stimulus.

The NEA will offer two categories of one-time support. Forty percent of funding has been designated for state and regional arts organizations and 60 percent will take the form of direct competitive grants.

To be eligible, arts organizations must have received funding from the NEA within the last four years. Additionally, arts groups may receive funding from only one source—a local, regional or state arts agency or through the NEA itself.

The NEA will address the urgent need for funding with a quick turnaround period for grant applicants, leaving arts organizations with little time to apply. State and regional arts agencies have until March 13 (Friday) and nonprofit arts groups until April 1.

“People need the money now,” said Jensen, who added that she didn’t think the deadlines were too soon.

Alex A. G. Shapiro, director of research, planning and marketing at the Illinois Arts Council, said the agency is hard at work on its Recovery Act funding application. The IAC is also developing its own guidelines and criteria for awarding stimulus funding to Illinois arts groups.

But arts organizations shouldn’t get their hearts set on receiving some of the NEA stimulus.

The NEA says it receives far more requests than it is able to fund. During a grant cycle ended Oct. 31, 2008, one category—Access to Artistic Excellence—received more than 1,300 applications requesting $73.5 million. Of those requests, only 886 organizations received a total of just $20.3 million in funding.

“The same will happen with the stimulus fund program,” said a representative from the NEA Office of Communications. “It is very rare that an application is funded at the full amount requested.”

In Chicago, nonprofit arts and cultural organizations generate $1.09 billion in revenue, support 30,134 jobs, and deliver over $103 million in tax revenue to local and state government, according to the Illinois Arts Alliance. In Illinois, 23,643 creative enterprises employ 132,882 people, according to Americans for the Arts.

At the same time, approximately 129,000 artists were unemployed in the United States in the fourth quarter of 2008, a jump of 50,000, or 63 percent from 2007, according to NEA research.

While the artist unemployment rate is comparable to the 8.1 percent unemployment rate for the U.S. workforce in general, the unemployment rate among artists has risen more rapidly. Artist unemployment grew by 2.4 percentage points between the fourth quarters of 2007 and 2008, while unemployment rates among professional workers and the general population grew by only 1.0 and 1.9 percentage points, respectively.

The Hyde Park Art Center says state funding covers a small percentage of general operating expenses, such as salaries, building upkeep and utilities.

At eta, state funding does more than just support the center’s operating expenses. According to Brown, it helps build a community.

“We anchor the southeast side of Chicago. We’ve participated in the development of the area,” she said.