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The PCA's Extreme Makeover 

Jill Larson is hanging a picture at the Pittsburgh Center for the Arts. It's a framed collage of a dog called "Pooch Parade," and she's having a little trouble getting the nail the right height: To reach the wall, Larson has to lean over a table laden with warming trays for the Rotary Club's weekly lunch in an adjacent rented room.

Across the big, brightly lit gallery space, tape measures snick and hammers tap nails into drywall as two volunteers from the Pittsburgh Watercolor Society hang artwork too. But while most of this particular show's already up, the Shadyside-based Center has five additional exhibits set to open three days from now, and the place is increasingly alive with activity.

That in itself would surprise many. Just five months ago, in August, the Center abruptly announced that it was shutting down. The PCA was about $1.1 million in debt, said Catherine Kraus, president of its board of trustees. All 13 of its staff members were laid off, and alloperations except planned summer art camps and wedding receptions suspended. Artists who'd sold goods in the gift shop were still owed money, as were instructors who'd taught classes.

Pittsburgh, it seemed fair to speculate, was losing another institution, one that for decades had offered art instruction, exhibition space and more to both experienced and aspiring local artists.

But the Center wasn't dead. Almost immediately after the Aug. 21 closure, volunteers -- including both trustees and recently laid-off staffers -- began working to mount the Center's annual Artist of the Year Show. And within weeks of the shutdown, another nonprofit arts group, Pittsburgh Filmmakers, agreed to an unusual plan. To help the Center right itself, it made the troubled facility a temporary, part-time loan of its executive director, Charlie Humphrey. Long-term, the fix might include a merger of the two groups. But quickly, under Humphrey, the Center quietly hired back a skeleton staff and offered a short list of fall classes. The lights stayed on and the galleries stayed open at reduced hours. The Center even held its annual holiday gift sale, with proceeds going to artists still owed money.

The PCA managed much of that just like it's managing on this rainy Tuesday in January: with lots of volunteers. On the second floor, a student of one of the artists in Friday's show is painting gallery walls; Larson, taking time from running her own storefront modern-art gallery, has put in three hours a week since October. She's had plenty of company: Some 40 volunteers, for instance, personally helped ensure the Artist of the Year show went on.

Now, with more shows opening as planned, 40-some classes beginning in a week, and Humphrey and the board slowly whittling away at its debt, the Center feels resurrected, thanks largely to people who responded in its time of need, among them even instructors and artists the PCA still owed back pay and gift-shop proceeds.

Still, while reports of its death might have been exaggerated, questions remain. Larson echoes many in the community who wonder how the Center -- which just three years ago made headlines by firing several key staffers and acknowledging cash-flow troubles -- could have kept digging itself in deeper. "It's hard to believe," she says, "that a place could get into so much trouble."



About a year ago, Michael Joyce, a finance manager at Citizens Bank, got a call from Chris Casavale, the PCA's acting finance director. Casavale himself had been called in as a volunteer a few months earlier by board president Ian James to help grasp the Center's numbers. Now he needed help too: Accounting rules for nonprofit groups, for one thing, deviated confusingly from the corporate standards he was used to.

Joyce, a former management consultant and self-described "accountant by default," took several months to get a handle on the books. When he did, the picture wasn't pretty. One night in early August -- a couple months after he'd been become board treasurer -- the amiable, barrel-chested Squirrel Hill native put the numbers together. The next day, he explained the situation at a session of the board's executive committee. A few days later came an emergency meeting of the full board. "I know the color of those people's faces, I know their jaws hit the floor," says Joyce. The Center, one year from its 60th anniversary, was worse than in debt; it could no longer even pay its bills.

"It was pretty much of a shock," says executive committee member Paula Garrick Klein. Klein viewed herself as an artist advocate, not a financial expert. Still, everyone knew the Center had struggled in recent years, with financial troubles framed by divisions between the member-driven crafts guilds -- the traditional arts groups who had founded the Center -- and advocates for the higher-tech, exhibitions-based turn the institution had taken. When the board abruptly axed its exhibitions department in February 2002, firing respected curator Vicky Clark and her assistant and canceling shows, the motive was saving $350,000 and staving off a cash shortfall.

Ten days later, Executive Director Laura Willumsen was asked to resign. But shortly thereafter Willumsen told City Paper she'd been on track to balance the budget (see "What's Wrong With This Picture," April 10, 2002). And when just months later the Center announced new exhibitions of cutting-edge art -- curated by none other than Clark, now working freelance -- many assumed the institution was doing fine.

But while the Center continued to mount shows, conduct classes and pay its bills, everything was far from OK. True, the place looks prosperous, from its perch on the first terrace of the hill rising from Fifth Avenue, in one corner of Mellon Park: The largest and most distinctive of its three buildings, after all, is an old mansion, painted bright yellow.

Yet even in good times, the Center, like many nonprofits, walked a financial tightrope. Its three buildings are actually owned by the city; the lease is for $1 a year, but leaves the PCA responsible for all maintenance on the old structures and prohibits any subletting. The Center's assets are largely tied up in arts equipment and improvements to the buildings themselves; its endowment is modest. Meanwhile, in the recession-dampened charitable-giving climate, grants and contributions to the Center were dropping. In the fiscal year concluding in June 2003, membership fees declined for the second straight year -- to a level barely half of that seen in the mid-'90s -- and the Center racked up its third straight year with an operating deficit.

Joyce says the fiscal woes took root during Willumsen's tenure, with the growth of an ambitious and costly exhibitions program that featured international artists and brought the center critical accolades but little or no revenue. Another issue was grant income: According to Jen Boughner, whom Willumsen hired as development director, grant money (from foundations and government sources) as a percentage of the operating budget increased from 32 percent in 1997 to 46 percent by 2001. That's a bit risky: Conventional wisdom holds that nonprofits should earn as much of their budgets as possible through revenue-generating services, such as the Center's classes. Otherwise, they might they become too dependent on funding sources more likely to dry up.

The rise in grant income under Willumsen (who declined to be quoted for this article) at first seemed anything but troubling. "The place was really growing in a great way," says Boughner. "I don't think anybody really saw any problems until late 2001" -- just before the controversial axing of the exhibitions program.

In early 2002, the board appointed a new president, Ian James, an entrepreneur and one of the founders of FreeMarkets Online. After the departure of Willumsen, her assistant, Gretchen Zellner, and financial director Ginny Schultz, James backed as interim director the PCA's director of community programs, Lou Karas.

Observers say that in the two-and-a-half years that followed, the PCA was caught between a new, and possibly overworked, director and a board that failed to completely grasp the Center's longstanding financial problems.

Karas remains widely respected as an arts educator, and many at the PCA welcomed her as interim director. But while she would officially be named executive director in June 2003, some came to question whether she was the best person for the job. "I'm not surprised that she was the choice for interim director, but I am surprised that she was the choice for director," says Boughner.

"Lou was great at the first job she was doing, and as soon as she was promoted to executive director, it was pandemonium," says a former arts instructor at the Center who asked not to be named -- one of many instructors who went unpaid for stretches of time in the couple years before it shut down. "It was so obvious to everybody working there in some capacity that stuff was just going haywire."

After the 2002 firings, say ex-staffers, employee morale at the Center plummeted; worse, when management-level workers including Boughner and director of external affairs Sarah Jane Lowry left just months later, no replacements were hired. That left staffers reporting to no one but Karas -- who at the time she became interim director was also serving as a consultant to the Pittsburgh Public Schools. According to Pittsburgh Schools spokesperson Pat Crawford, between Feb. 3 and June 1, 2002, Karas logged 147 hours -- the equivalent of nearly one month's worth of 40-hour work weeks.

"I had a kind of feeling that [Karas] really liked the Center a lot ... and wanted to have her fingers in every pot, and it might not have been the best way," says Dave Madden, who worked there in public relations and marketing from June 2001 to July 2003. "I got to almost crave middle management."

"It's important to be able to communicate when you need help," says Laura Domencic, whom Karas hired as exhibitions coordinator in October 2003. "At times [with Karas] that may not have been the case." Domencic adds of Karas, "I think that she did the best she could."

Board members who served with Karas echo that sentiment. "Lou cared so much about that place she would have done anything to keep it alive," says current president Catherine Kraus. "She worked herself into a tailspin."

"It was a very difficult situation to be in," says Karas today. She took decision-making responsibilities for so many areas, she said, because there was no money to hire replacements for the managers who left. As for finances, she says, "I believe we kept the board informed."

Still, the board didn't grasp everything that was going on at the Center. For example, one day shortly after its closure, the PCA received a bill for a 2003 lease agreement for its three photocopiers. "It was a very expensive lease the board didn't even know was there," says Joyce.

"We really didn't have a good financial reporting system," says current board president Catherine Kraus. Another problem might have been that some board members didn't pay much attention to finances. For example, Paula Garrick Klein says she didn't involve herself in finances because, as the representative to the board of Pittsburgh's Guild Council -- and an artist herself -- she saw her main responsibility as cultivating artist involvement.

Moreover, Joyce says that until he stepped in, Center board and staff were reading the books incorrectly. Thanks to accounting rules for nonprofit entities, things were actually even worse than they appeared on paper. Financial documents from 2002-03 (the most recent available) show a deficit of about $460,000. But Casavale says that figure is deceptively low -- by about $300,000 -- because legally the Center had to report as current income a multi-year grant, to which it would have only partial access that year. "That might have confused the board," says Casavale.

Board members, says Joyce, assumed that as long as they could pay last month's bills, even if it was with this month's revenue, things were manageable. But all it took to upset the tenuous balance was that a few grants not come through, a few unanticipated expenses crop up. "We were kind of in denial the whole time," Kraus said in an Aug. 23 City Paper interview.

In mid-2002, board president Ian James took a three-month leave of absence from heading his information-technology support company to tend to the Center. Asked about the Center's debt at that time, he says only that it was "between $500,000 and $1 million." James says that after cutting exhibitions to save cash, the board attempted to dig out of debt first with fund-raising, through "strenuous efforts with individuals and foundations." But the center had little luck: The departure in April 2002 of Boughner, the development director, left no one on staff experienced at grant-writing, and the board's relative inexperience -- it was James' own first service on a nonprofit board -- was compounded by the poor giving climate.

Determined to keep the PCA open, the board even dipped into its own pockets. After the Center closed, Kraus made public that board members had personally contributed to pay some instructors, and to meet the final two payrolls before closure. But back in early 2003, the board launched another initiative, what James calls a "credit-holder's agreement program," which allowed individuals to purchase with their own money certificates of deposit to be used as collateral for loans to the Center. "Well over $400,000 was raised this way," James tells CP -- including some from board members. One purchaser was Klein, though she'll say only that it was "not an exorbitant amount."

When the Center decided to save money, says Joyce, it sometimes made the wrong decisions. One of its debts to vendors included some $14,000 owed Herrmann Printing & Litho for the Spring 2004 "Create Your Center" class catalog, an attractive publication with a full-color cover and heavy paper stock. Joyce says staff sent copy for the brochure to the printer late in order to delay the bill -- but that caused the brochure itself to be finished and mailed so late that it held down enrollment, cutting into the Center's already meager revenues.

By the time Joyce and Casavale located the big holes in the Center's finances, even reducing its 2004-05 budget to $1.5 million -- down from $2.6 million in '02-'03 -- wasn't enough. "After two and a half years, we thought we were on the mend, and that wasn't the case," says James today.

The PCA went dark shortly afterward. "[The board] dealt with it as though they felt it was a short-term thing," says Joyce. "When you deal with it from that perspective, you drown."



On his way in to work one day in December, Charlie Humphrey greets shoppers leaving the PCA's gift sale, where a couple customers browse and Hanukah music plays on a boom box. Curving wooden railings lead up from the bright, high-ceilinged first floor, garlanded with artificial pine and metallic red ribbon. In his office overlooking Fifth Avenue, Humphrey is approached by Laura Domencic and Ryan Epps to discuss the Center's leaky roof. Domencic -- who was laid off in August, then worked several weeks without pay to help put on the Artist of the Year show -- was recently rehired as assistant director; Epps, laid off as maintenance man and currently unemployed, has been coming by just to help out. So has Loretta Stanish, the longtime volunteer who coordinated this year's holiday sale.

The Center now comprises the second of Humphrey's two jobs, albeit the unpaid half: About two months ago, he began splitting his time between here and Pittsburgh Filmmakers, which he's headed since 1992. It's also a sort of homecoming for Humphrey: His maternal grandmother grew up in the building before his great-grandfather, construction magnate Charles Donnell Marshall, donated the mansion to the City of Pittsburgh in 1945; it's still known as the Marshall mansion. Humphrey's parents volunteered here in the facility's early days, when it was known as the Arts and Crafts Center.

The Center's closure dismayed Humphrey, and preoccupied him during a late-summer trip to London. Three days after he returned, fellow Quantum Theatre board member Jim Abraham, an attorney doing some legal work for the Center, broached the idea of a merger. "I said, 'Yes! Very interested in that!'" recalls Humphrey. Two weeks later, the boards of both groups had ratified Humphrey's new role.

Broadly, the PCA plans to bring expenses in line with revenues by focusing on things such as its education programs -- which generate some income -- and lowering costs on important but money-losing functions such as exhibitions. So short-term, task No. 1 for Humphrey -- when he's not doing things like helping install the front-lawn banner announcing that the Center is still, in fact, open -- is to stitch up the facility's tattered finances. "Every day, it's like, 'Count the money,'" he says.

Humphrey acknowledges factors in the Center's troubles including the drop in class enrollments and "well-intentioned but not very good ideas," such as the fancy course catalogs. The biggest problem, he says, is money the board borrowed while anticipating to pay it back with grant money that never materialized.

The Center's debt falls into four main categories. Instructors who are owed back pay have all received it, he says, while artists owed gift-shop money are being paid through sales there. Money due vendors is being handled through payment plans or renegotiated contracts. Bank loans -- including a $360,000 loan taken out in June 2003 -- are being serviced, along with loans from individuals totaling more than $100,000.

Finally there are obligations to foundations -- about $200,000, including the value of grants the cash-poor Center once used for something other than their intended purpose, and on which it now must make good by executing the originally intended program. Aside from simply asking funders to forgive some or all of those obligations, Humphrey says, the Center is trying to "execute programs with chewing gum and baling wire" -- and to raise more cash. In mid-December, after just two months on the job, Humphrey said he had the $1.1 million debt down to around $900,000. A month later, he said it was down to about $800,000.

Meanwhile, for an institution many figured down for the count, the fund-raising effort has been surprisingly successful. A direct-mail campaign to individuals on the Center's mailing list yielded $70,000, Humphrey says -- a nice chunk of the Center's new, lean $1 million budget. To the tune of some $260,000, the Pennsylvania Council on the Arts agreed to continue funding the Center, including PCA-administered arts-education programs in local public schools. And the Allegheny Regional Asset District made this show of faith: After deciding it wouldn't fund the financially crippled Center at all this year, following an appeal by Humphrey it agreed to give $50,000, contingent on RAD review of the Center's forthcoming operating plan. If that's much less than the $90,000 RAD gave the Center last year, it's also much better than nothing.

"I think there's a high level of confidence in Humphrey, and a high level of confidence in Filmmakers," says RAD Executive Director David Donahoe.

Indeed, if there's one factor working in the Center's favor, it might be Humphrey, whose name in the fund-raising community is as good as any in town. Within a few years of his taking over Filmmakers, the organization left its shopworn, longtime Central Oakland digs for a warehouse sleekly retrofitted for its offices, classrooms, darkrooms, editing suites and digital labs; it's also gone from having one professional-grade theater to three for its popular film showings. And over the past five years it's earned about 85 percent of its operating budget, mostly from its education program in film, video, photography and digital media. That track record now bodes well for the Center.

"The buzz is Charlie is up there doing a great job," says Kevin McMahon, executive director of the Pittsburgh Cultural Trust (and, briefly in early 2002, a board member at the Center). "I think the funding community will be very supportive."

Humphrey, meanwhile, professes amazement at the support the Center's gotten from the community at large. "Every day I wake up and I'm stunned by how much people love this place and how willing they are to help us work through it, even people who've been burned pretty badly," he says. It wasn't just staffers such as Domencic, Epps, special-events director Joy Sato and program director Amy Mangis: The Center's roots in the community touched artists who remember taking classes there 40 years ago and more, sometimes as schoolchildren. In the fall, instructors called up students to help populate their scantly advertised classes; artists owed money by the gift shop volunteered to keep it running. Jen Boughner, the former development director (and a friend of Humphrey's), came back to stuff envelopes.

Many see the Center's best hope as the proposed merger with Filmmakers. While it's a proposition the groups' boards have yet to formally consider, it would likely involve a joint management agreement, with both groups maintaining separate identities. To Humphrey, it makes sense: Both groups do education, exhibition and artist services, differing only in their chosen media.

Leaving his office, Humphrey runs into Mike Joyce, the board treasurer. Another of the Center's goals is to cut costs, with tactics including the combination of its winter and spring course handbook in one inexpensive handbill-sized publication, with a glossy cover but pages of newsprint. Joyce has been crucial to such efforts. Along with continuing to meet several nights a week with fellow volunteer Chris Casavale to work on finances, Joyce -- whose PCA experience prior to volunteering there was zero -- has been donating one day a week to the group, doing things like renegotiating deals like the $37,000 contract for three photocopiers. Joyce talked the copier company into letting the Center out of the lease, dropping from three machines down to one and saving some $30,000.

Nearby, the Center's second-floor galleries are hung with paintings by E.M. Castonguay -- big, vivid and hopeful works in three rooms titled "Birth," "Life" and "Death & Beyond." Humphrey and Joyce speak there briefly about the copier deal, Humphrey concluding for a visitor, "It's a great copier, but we can't afford it."



It's Jan. 11 and in three days, six new shows will open at the Center, including both works by local artists and an exhibit of prints and photographs by famed surrealist Man Ray on loan from Shadyside's Mendelson Gallery. The largest exhibit is A Way With Words, dozens of paintings and assemblages hosted by the Pittsburgh Watercolor Society, one of the guilds that have historically supported the Center.

Hanging pictures with her fellow guild member, artist and volunteer Dafna Rehavia-Hanauer, Dottie de Groat sounds exasperated -- not about the show, but about the Center. Voicing one side of a longtime debate about the Center's identity, DeGroot laments what she feels is the declining influence of the guilds. "The Center doesn't talk to the artists very much," she says. "Even after all this happened."

"The Center really has to decide what they're going to do," adds de Groat, standing near K. Rice Hunter's "Memory: The End Window," whose painted text reads, "i know i love you but i don't know who you are." "Are they going to be an arts center, or a gallery where they bring in solo artists?"

De Groat doesn't speak for all guild artists, but her concerns are a reminder that for all the progress it's made, the Center's not out of the woods yet. Staff and volunteers are still working to combine and update the Center's disorganized, badly out-of-date mailing lists, which Humphrey says crippled efforts to recruit new members and students; the new business plan demands not only that volunteers take the place of the staffers who used to install gallery shows, but also new ways to generate income, including renting the hall out for events besides wedding receptions -- perhaps more uses such as the Rotary luncheon.

Moreover, there are problems beyond simply letting people know the PCA is open for business. Cathy Lewis, director of the funding group The Sprout Fund, says the Center needs to do more to engage young audiences. "It needs to serve the artistic and cultural community that it reflects, and I'm not sure it's doing that now," says Lewis. "You don't want the artists or the art to be stale."

Tom Sokolowski, director of The Andy Warhol Museum and an admirer of the Center's aesthetically adventurous exhibits from a few years back, is characteristically more blunt. "As much as I hate to see arts organizations come to the end of their tenure, it just seems that for a long time the Center for the Arts has not been doing the multivalent things they used to do so well," says Sokolowski. "I just think it's a place that's outlived its usefulness."

For now, however, the Center is indisputably still alive, fueled largely by good will. The staff under Humphrey is back up to seven full-time employees. A front-hall banner announces the Pittsburgh Biennial, historically one of the PCA's signature group exhibitions, scheduled to open April 1. And three days from now, on Jan. 18, A Way With Words and five other shows will open; hundreds will attend, including many who were unaware the Center was still functioning. Taking a break from hanging art, standing by a trash can that's catching the steady plock-plock of water from a leaky ceiling, volunteer Jill Larson explains simply why she's here: "Because they need help."









Pittsburgh Center for the Arts

A Timeline of Recent Events

Date Event


2001

June 30, 2001 Reported year-end operating loss: $274,682.


2002

January 2002 Ian James assumes board presidency.
Feb. 11, 2002 Board lays off exhibitions curator Vicky Clark and assistant.
Feb. 21, 2002 Board asks for resignation of executive director Laura Willumsenandlays off Willumsen's assistant and finance director Ginny Schultz.Board selects Lou Karas as interim director.
April 2002 Development Director Jen Boughner quits.
June 30, 2002 Reported year-end operating loss: $874,778.
Summer 2002 Director of External Operations Sara Jane Lowry quits.
Summer 2002 Ian James takes three-month leave of absence from his company to tend to the PCA.
August 2002 PCA announces Vicky Clark will curate its 2003 Pittsburgh Biennial.


2003

Early 2003 PCA initiates "credit-holders' agreement program," raising funds from individuals to purchase CDs as collateral for loans to PCA.
June 2003 Board unanimously votes to name Karas executive director.
June 30, 2003 Reported year-end operating loss: $459,540.
June 30, 2003 PCA takes out $359,531 bank loan.


2004

January 2004 Catherine Kraus assumes board presidency.
Aug. 19, 2004 Citing $1.1 million debt, board votes to close PCA, laying off all 13 staffers and leaving instructors and artists owed back pay.
Aug. 26, 2004 Board votes to keep its galleries open and hold its annual Artist of the Year show.
October 2004 PCA and Pittsburgh Filmmakers enter operating agreement; Charlie Humphrey assumes role of PCA acting executive director.
October 2004 PCA rehires four staffers, resumes studio-arts classes, holds Artist of the Year show.
Nov. 19, 2004 PCA opens four new exhibitions.
Dec. 3, 2004 PCA begins its annual Holiday Shop Sale.


2005

Jan. 14, 2005 PCA opens six shows.
Jan. 18, 2005 Winter classes begin.

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