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Venture capital meets creativity

Unique arts funder heads into its second decade

Sundance alum “The Oath” and stop-motion feature “Gravity Was Everywhere Back Then” both began theatrical runs Friday at Gotham’s IFC Center — but they share more than a start date and a venue.

Both pics — as well as two of this season’s Off Broadway attention-grabbers, “Lear” and “The Lily’s Revenge” — were supported by Creative Capital, the nonprofit arts funder that’s struck an unusual balance between cultural philanthropy and the business principles of venture capitalism.

Also on the list of Creative Capital alums are the approximately 40 works that can be seen at MOMA, now in the midst of a six-week retrospective of film projects backed by the nonprofit since its founding in 1999.

The org’s unique synthesis of not-for-profit ideals with for-profit methodologies, which has so far supported some 325 projects across five disciplines, has proven notable enough to prompt a new case study by Harvard Business School.

“They developed an entire new paradigm of grant-giving,” said Joel Wachs, prexy of the Andy Warhol Foundation, Creative Capital’s founding donor. “There’s nothing like it in the United States.”

The Warhol Foundation provides Creative Capital with office space in downtown Gotham and recently pledged to contribute $15 million over 10 years. That sum that must be matched dollar-for-dollar by the org’s own fund-raising. Annual operating budget hovers around $3 million, according to Creative Capital prexy Ruby Lerner.

When the nonprofit was founded in 1999, the dot-com boom was in full swing and the principles of venture capitalism had achieved a new prominence in the public consciousness. While many arts funders often bestow grants in short-term cycles and in one lump sum, Creative Capital makes a long-term commitment to one artist’s project. Org doles out money — up to $50,000 per recipient — incrementally over an extended period (as long as five to seven years), and upon the achievement of specific benchmarks. In many cases, the grants make up only a portion of the projects’ total budgets.

“We say to artists, ‘You are an entrepreneur in the cultural arena,'” Lerner said. “And venture capitalists understand you’re not going to build a business in a yea r.”

In an effort to help creatives pull together the infrastructure needed to sustain a career in the arts, chunks of money also are earmarked for general business expenses, including setting up an office or buying a new computer.

“I was able to buy a piano, which I really needed,” said Taylor Mac, whose big-cast marathon “Lily’s Revenge” played the Here Arts Center in the fall. (Four future runs for the project — three in the U.S. and one abroad — are in the works.)

Creative Capital also emphasizes the development of publicity, marketing, networking, strategic planning and other skills that come in handy for the business side of showbiz. Artists funded by the org cite an annual summer retreat — at which artists pitch their work to a roomful of arts professionals including film programmers, TV development execs, and curators — as one of the grant’s major benefits.

Laura Poitras, whose Creative Capital-funded film “The Oath” scored a Sundance award for cinematography ahead of the theatrical rollout that begins at IFC, used the retreat to make art-world connections. Later this year, she’ll create a gallery installation that will serve as a prequel to a trilogy of feature docs about post-9/11 America. (“The Oath” is the second part.) “I could get meetings in the film world, but not in the gallery world,” Poitras said.

Another page the nonprofit takes from venture capitalism: a stipulation that an artist return some coin to the funder if the project ever makes a profit.

The bar is set fairly high for payback to kick in, and given the experimental nature of much of the work Creative Capital funds, not many projects yield returns. When they do, it’s often in the range of $1,500, based on the percentage of a project’s overall budget provided by the org.

Among those to pay back so far are “Well,” the Lisa Kron play that had a Broadway run in 2006, and documentaries “Trembling Before G-d” and “The Weather Underground.” “Once I was getting royalties for ‘Well,’ I felt like it made sense,” Kron said. “It’s very gratifying to be able to write those checks.”

As rarely as it returns coin, the requirement not only makes the artists feel more accountable to Creative Capital but also, according to Lerner, makes the org unusually invested in helping a project find success.

Over its lifespan, the nonprofit has expanded its offerings to include a professional development program of workshops. It all adds up to a new model of arts funding and career support that’s turned heads.

These days, Lerner expects to shift some of the organization’s support practices to reflect the new challenges of attracting attention to a single creative endeavor in a competitive new-media world.

“We have to stay attuned to where the edges are,” she said.

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