Smaller nonprofits benefit as Allegheny RAD budget grows
Jeffrey Dorsey worked aggressively to cut costs and build for the future when he took the helm six years ago of a community arts space operating out of a former church in East Liberty.
Dorsey slashed the nonprofit Union Project's budget from $1.3 million to less than $600,000 and narrowed its focus to ceramics and space rentals. He completed a lingering project involving hundreds of volunteers who cleaned and reinstalled the old, yellow stone church's 155 stained-glass windows. He joined a cohort of arts nonprofits in hiring a shared chief financial officer.
The moves enabled the small nonprofit — which seeks to solve community problems through the arts and incubate fledgling nonprofits — to serve more people with less money. Its attendance grew from about 12,000 a year to more than 20,000.
Next month, Dorsey and his Union Project team hope to celebrate an achievement: securing their first annual operating fund grant from the Allegheny Regional Asset District, the taxpayer-funded body unique to greater Pittsburgh known as RAD. The authority doles out grants to parks, libraries, facilities and groups deemed cultural or recreational assets using half the proceeds of an extra 1 percent sales tax in Allegheny County.
The tax revenue is climbing steadily each year, as the body's annual debt payments from stadium construction remain fixed and approach maturity. RAD's budget has increased about 83 percent since its inception two decades ago, from $51.5 million in 1995 to $94.7 million in the 2016 spending plan up for vote Nov. 23.
As the budget grows, more small nonprofits are making the cut. This fall marks the first time Union Project was included in a proposed RAD budget in at least six years of applying.
“We've been doing good work for many years, and to finally get the recognition certainly means a lot,” said Dorsey, whose nonprofit tentatively is slated to get $10,000 from RAD in 2016. “It also speaks to us being a sound financial institution and a soundly governed body.”
Such arts and cultural groups account for 11 percent of next year's proposed RAD budget, up from 8 percent of the budget in 2002. McKeesport Regional History and Heritage Center is a likely new recipient in 2016.
RAD board president Dusty Kirk, a Downtown attorney, said she's eager to see RAD's funding umbrella expand to shelter more qualified assets.
“New assets are critical,” Kirk said. “We'd love to see more assets in what we're calling RAD 2.0,” with this year marking the arrival of executive director Rich Hudic and departure of David Donahoe, who ran the authority for 20 years.
Most of RAD's $1.4 billion in grant-making money during two decades, or about 62 percent, has gone to the region's libraries and parks, whose dire straits in the early 1990s were the reason RAD formed. Nine percent has gone to entities deemed “contractual assets,” including the National Aviary, Phipps Conservatory and Botanical Gardens and Pittsburgh Zoo and PPG Aquarium. Less than 1 percent goes to administration.
RAD has pumped almost $300 million into stadiums and civic facilities — and is on the hook for $227 million.
Stadium debt payments, however, account for just 10 percent of RAD tax collections — and less than one-fifth of RAD's annual budget. The portion spent on stadiums is down from 22 percent in 2002 to about 15 percent in 2016.
RAD has $224 million left to pay on a series of 1999 bonds used to fund part of the construction of Heinz Field and PNC Park, said Mary Conturo, executive director of Sports & Exhibition Authority, which owns the venues. The 1999 bonds will continue costing RAD about $13.4 million a year through February 2031.
RAD has $3.14 million left to pay on a series of 2005 bonds originally taken out to fund renovations at the former Civic Arena, Conturo said. In 2010, the SEA refunded those bonds for savings to put toward the David L. Lawrence Convention Center. RAD is spending about $800,000 a year to pay off that debt by 2019.
“The RAD structure played a critical role in creating these new significant regional assets,” Conturo said. “I don't think they would have happened without it.”
More money available as revenue grows and debts decrease won't automatically go to small nonprofits. The RAD board could be asked to fund more stadium-related work or upgrades. It could choose to increase its reserves, or receive an unexpected request.
That happened in 2013, when RAD subsidized Port Authority of Allegheny County. About $3 million is slated for Port Authority in 2016.
Kirk said she views the Port Authority as a 10-year commitment since the contribution leverages $30 million in state funding.
“The Legislature said that the board, with certain exceptions, can declare what it wants to be a regional asset, so that's really their job and the citizens' job,” Donahoe said in one of his final interviews as RAD's director.
Natasha Lindstrom is a staff writer for Trib Total Media. She can be reached at 412-380-8514 or firstname.lastname@example.org.