New Developments

Early in 2004, Eileen Iorio phoned Jim Abraham, a fellow attorney and former colleague. The Pittsburgh Center for the Arts, where Iorio served on the board of trustees, lacked legal counsel, and she thought Abraham could help.

Some months later, for reasons unrelated to Abraham's contributions, the Center collapsed financially, and in spectacular fashion. On Aug. 21, 2004, Board President Catherine Kraus announced that the 59-year-old Shadyside-based school, gallery and community landmark was $1.1 million in debt and unable to pay its bills. The PCA laid off all 13 staffers and closed its doors indefinitely.

Abraham, though, still wanted to help. At a September fund-raiser for Quantum Theatre, he approached fellow Quantum board member Charlie Humphrey and suggested that Humphrey, who is executive director of Pittsburgh Filmmakers, consider reviving the comatose Center.

Humphrey had long been enamored of the Center's community-based programs, and had even thought about getting involved there -- the building, after all, had once been in his family. Within two weeks of talking with Abraham, he had secured the permission of Filmmakers' board to begin splitting his time between the two organizations, and start the long process of bringing the Center out of debt.

Another of Abraham's ideas, which he floated past Humphrey shortly after that Quantum meeting, was that Filmmakers pursue a formal merger with the Center. Abraham based this suggestion partly on similarities he saw between the two organizations: Both teach art-making as well as exhibiting art, for instance.

But Abraham -- whose other board memberships have included the Pittsburgh Opera, WQED Multimedia and the local chapter of Planned Parenthood -- was also guided by his sense of the prevailing winds in local arts funding. "There was this kind of donor exhaustion in dealing with lots of organizations," says Abraham. "There were too many arts organizations out there to be funded, and [funders felt] the organizations should merge or at least merge their back offices, so the foundations would have less to fund."

At first, says Humphrey, "I thought the idea for a merger was premature." But after a few months at the Center, he warmed to the notion -- and not, as is widely believed, only because it seemed the Center's best chance for survival. "It was like, 'Duh!'" he says. "'This is an opportunity. This really all does makes sense.'"

A year later, with a Nov. 6 vote by Filmmakers' artist members, the penultimate barrier to a merger was cleared: Assuming court approval, the two organizations will be one by January

Yet there's another side to the story, and a bigger picture to examine. While the merger was sparked by the Center's financial troubles, Filmmakers has had its own, less widely publicized layoffs, cutbacks and concerns about long-term viability.

The bigger picture, meanwhile, involves a growing acceptance of the very idea of mergers between nonprofits. They're still a rarity on the national arts scene. But if this one succeeds, and if funders have their way, it's a strategy that might inch closer to the rule than the exception.





Pittsburgh Filmmakers is the region's largest and oldest school for film, video, still photography and digital media, and its heart is its equipment office. This semester, perhaps 500 students, plus many of Filmmakers' 250 artist members, will work in the North Oakland facility: Most will at some point need the gear or services the equipment office provides.

The office's two service counters open out on the carpeted two-story building. The office itself is a hive of pegboards hung with coiled cables and metal shelves stacked with camera cases, lighting gear and the plastic bins of darkroom kits -- not to mention a couple mannequin heads. Taped to the wall, a word balloon scrawled on a photo of a grievous Pope John Paul II confesses to students working after hours: "Oh God ... I forgot to sign out again!"

For years, the equipment office also has provided work-study jobs for students and longer-term employment for artists (many of them former students themselves). Equipment-office staffers lend out the Panasonic G5400 cameras, fix what's ailing the handwound 1960s-era Bolex Rex 5s, grant access to editing suites and provide ad hoc tutorials on Final Cut Pro software. They're the ones who hold the big rings of keys to every room.

On May 13, 2004, Pittsburgh Filmmakers laid off four employees from a staff that included fewer than 30 full-time positions. Two of them were long-time equipment-office staffers, Adam Abrams and Jim Mueller. The layoffs surprised most; both Abrams and Mueller are artists deeply invested in film, and Abrams in particular has a widely acknowledged gift for repairing well-worn gear. Coming just months after two previous layoffs (in Filmmakers' community-outreach production program) the cuts drove home an unpleasant truth: What Humphrey had called "15 years of steady growth" was over.

The principal reason, and one tied to equipment-office usage, was declining enrollment in Filmmakers' education program. While the organization is best known for film screenings at three area theaters, including the Three Rivers Film Festival, Filmmakers has long earned most of its revenue from its school. (The screenings, in fact, are subsidized by other income.)

For years, the largest source of education revenue was Point Park University, whose film students took all their production classes at Filmmakers. In the fall of 2003, however, Point Park began its own in-house production program. Just as worrisome to Filmmakers was a drop in independent students, who are typically older enrollees taking classes not for college credit. Between fiscal years 2002 and 2004, tuition revenue -- which made up more than two-thirds of the group's earned income -- dropped by about 9 percent, to $1.17 million.

The 2004 layoffs hurt especially in the equipment office, which still had to staff a full complement of hours. "It's way more stressful at work," Eric Fleischauer, a filmmaker who's been an equipment-office employee since 2002, said recently. "We ended up stretching things really thin."

About four months after the 2004 layoffs, Humphrey began splitting his time between Filmmakers and the Center for the Arts. As reported in City Paper ["The PCA's Extreme Makeover," Jan. 26, 2005], by that time the Center had accumulated its $1.1 million debt because of factors including poor management, insufficiently informed board oversight and declining enrollment.

Humphrey's move rankled some at Filmmakers, who feared losing even more resources -- misgivings many at Filmmakers remain reluctant to speak about on the record. But Teresa Foley, Filmmakers' media-education coordinator, describes one prevailing opinion at the time as "Why are we going to help this other sinking organization when our house is not fully in order?"

Talk of a merger, which surfaced over the next few months, only exacerbated such concerns. So did the elimination this past summer of another part-time equipment-office position, which went unfilled when the employee was promoted. Meanwhile, other strategies for boosting the group's income or profile -- plans to become a degree-granting institution, and to anchor a "Media Arts Quarter" in North Oakland -- seemed far from fruition.

While there was support for the merger, much of it was cautious. "I was guarded but thought it was the right thing to do," says long-time board member and instructor Buzz Miller. One skeptic was then-board member Carolyn Speranza. An activist and video artist, she'd taken the layoffs hard, especially that of Abrams, an experimental filmmaker whose dedication to the art form Speranza saw as reflecting the very spirit of the organization -- a spirit she feared the merger might dim.

Speranza, who resigned from the board in July for reasons unrelated to merger plans, acknowledges Filmmakers' financial troubles. But, she asks, "Why not address those internally rather than taking on another big arts organization in all its complexity?" she asks. "I don't see that as an answer."





While its cutbacks helped keep Filmmakers out of debt -- its current budget is $2.2 million, down a few hundred grand from its peak -- layoffs and dropping enrollment fueled discontent over Humphrey's white-horse ride to the Center for the Arts. "There's no question there were people here who resented my doing that, who felt I was abandoning Filmmakers," he acknowledges. (Humphrey, 47, has familial ties to the Center: Its bright yellow main building, perched high on the corner of Fifth and Shady avenues, was built by his great-grandfather, construction magnate Charles Donnell Marshall, who in 1945 donated it to the City of Pittsburgh, which still owns it).

But Humphrey quickly came to believe he was doing the opposite of abandoning Filmmakers. Critics have called the Center's community-based model -- with its summer art camps and classes for adult hobbyists -- obsolete. But as Humphrey watched staff, volunteers and individual donors respond to the Center's calls for help, and the institution slowly rise to its feet, he came to believe that the PCA model wasn't just viable: It was, as Jim Abraham had suggested, a perfect complement to Filmmakers' own mission.

Filmmakers, founded in 1971 to provide artists with low-cost access to gear, was born in an East Liberty basement but spent its formative years in Oakland. Some now recall those shabby digs nostalgically -- others remember them as simply falling apart -- but the group gained an identity by nurturing artists doing cutting-edge work. By the early '80s, Pittsburgh was a nationally recognized hotbed of experimental cinema.

By the time Charlie Humphrey was hired as executive director, in 1992, Filmmakers still had an active core of artists. But its education program had burgeoned, and Humphrey saw further potential. With an intensive fund-raising effort, by mid-1995 the organization had leased a former warehouse on Melwood Street in North Oakland, sleekly retrofitted for offices, classrooms, darkrooms, editing suites and digital labs. Three years later, amid growing enrollment, Filmmakers had raised enough funds to purchase the 32,000-square-foot building for $1.5 million.

All the growth caused internal tensions. Some artists, for instance, felt that Filmmakers' experimental, underground roots were being lost beneath waves of students who in the post-Clerks, post-Pulp Fiction era sought to become Hollywood-style directors and screenwriters. And change continued. In 2001, with another $2 million fund-raising campaign nearly complete, Filmmakers had built out its headquarters even further, adding new classrooms and editing suites. The expansion also brought a bigger photo gallery and the Melwood facility's second screening room. The latter joined Downtown's Harris Theater, which Filmmakers leases from the Pittsburgh Cultural Trust, and the Regent Square Theater, an old neighborhood movie house purchased in 1999.

But the medium Filmmakers is named for was changing too. By the late 1990s, desktop movie-making was a reality, as seasoned artists and amateurs alike embraced digital-video recording formats and computer editing systems. The necessary gear, which seemed more affordable by the week, was quickly supplanting costlier traditional film equipment, and older analog video formats too. Pittsburgh Filmmakers worked to keep up with the changes -- its newer editing suites, for instance, were all digital -- but it was still a blow when in April 2002 Point Park announced its own, all-digital production program.

Humphrey says he'd been concerned about the technological revolution for years: What would it mean when consumers with a few grand could muster a reasonable facsimile of equipment and services they used to buy and borrow from Filmmakers? When people could as easily create media as consume it? When, as Filmmakers educator Teresa Foley puts it, "We're not special any more"?

Filmmakers' argument, of course, is that it remains special. "When everyone can afford a word processor, that doesn't make you a writer," says instructor and board member Buzz Miller. Nonetheless, Humphrey believed Filmmakers had to widen its reach.

That's where the Pittsburgh Center for the Arts comes in. Filmmakers mostly enrolls college students through thirtysomethings; the Center teaches primarily schoolkids and older adults. Yet even if Center-goers were interested in film and video classes, "Not everyone wants to come to Filmmakers, in an industrial neighborhood, and take a 14-week screenwriting class," Humphrey says. "I love this place, but it doesn't really say to the idly curious, 'Come on in here and play around.'"

Ideally, combining the Center's welcoming atmosphere -- its fees for multi-week courses range from $130 to $230 -- with Filmmakers' expertise would benefit both groups. Humphrey acknowledges that an adolescent PCA student is more likely to take a film class than a collegiate film student is to jump into pottery. Still, the increased exposure couldn't hurt either group. Nor could savings in administrative costs.

"If I didn't think this was a benefit to both organizations, I wouldn't be interested in doing it," Humphrey says.

Filmmakers is seen as the stronger partner. It has, after all continued to earn about 85 percent of its operating revenue (quite high for a nonprofit), with just the remaining 15 percent dependent on grants and other donations. Moreover, the drop in Point Park students hasn't been as precipitous as some feared. A sizable minority of students have continued to choose the "film and video" track, taught largely at Filmmakers, rather than the "cinema and digital arts" curriculum based at Point Park's Downtown campus. And Filmmakers continues to seek partnerships with other local colleges and universities.

Still, the notion of a merger is just one in a series of survival strategies. Starting last January, Filmmakers sweepingly revamped its curriculum for the first time in years. Classes began bumping up the digital component and de-emphasizing Super 8 mm -- the old home-movie format which for decades had been the beginning filmmaker's medium. While seasoned production students still shoot 16 mm film, meanwhile, most editing is now done not on geared machines that help you splice celluloid but on computers, where film images are digitized for editing.

For several years Filmmakers has taught schoolkids through Teresa Foley's media-literary program; now it has launched other classes to supplement its college-level offerings. There are short courses for youths like the four-week "Saturday Breakfast Club" classes, one of which explores monster movies. Addressing criticisms that their classes ran too long, both Filmmakers and the Center now offer one- to four-session adult workshops, too. There's even been a collaboration between the two groups: a four-Saturday workshop teaching artists how to document their work digitally.

Such classes aren't expected to generate revenue for Filmmakers. But Humphrey believes that curriculum revisions, along with the merger, will expose more people to what Filmmakers does.

Arguments such as these apparently helped sell the merger to Filmmakers' board of directors, which approved it with no dissenting votes in September (as did the Center's board). Artist members eligible for voting backed the merger as well, approving it by a 22-4 vote on Nov. 6. Some hard feelings remain, along with concern that the merger will dilute Filmmakers' purpose. One artist member contacted for this article said he was too upset about the merger to even discuss it.

"It's change, and everybody is like, 'Change! What's it gonna be?'" says Foley. "I truly do see it more as a survival thing."



Mark Weinstein sounds like he's celebrating a happy marriage. "It's rather wonderful that these two organizations could get together," says Weinstein. But Weinstein is familiar with such unions: The Pittsburgh Opera director is also board chair of the Greater Pittsburgh Arts Council, a service and advocacy group created in last year's merger of the Greater Pittsburgh Arts Alliance with ProArts.

Moreover, five years ago the Opera joined five other local arts groups in a "shared-services agreement" -- not a merger, but an arrangement designed to save money and improve the groups' marketing efforts. Now the Opera, the Pittsburgh Cultural Trust, Pittsburgh Symphony Orchestra, Pittsburgh Public Theater, the CLO and Pittsburgh Ballet Theater share a health plan, an integrated direct-mail database -- and, most recently, a new computerized ticketing system. Mitch Swain, the Trust's director of shared services, says that purchasing just one such package collectively saved the groups $700,000.

Swain himself now gets calls from arts groups around the country asking about shared services; he's recently made presentations in a dozen cities, including Cleveland, Seattle and Scottsdale, Ariz. Mark Sorca, head of New York-based Opera America, says the National Performing Arts Convention he chaired last year was held here because "The Pittsburgh arts community has been a pioneer in figuring out ways that individual arts groups can work together."

Such collaborations are likely to become more common. Since the stock-market downturn, and the post-9/11 climate's depressing effect on both charitable giving and government grants, money is tight. There's been belt-cinching at the Pittsburgh Symphony; the Ballet eliminated its entire orchestra, substituting cheaper taped music; and there were cutbacks even at the Carnegie Museums, which eliminated its Department of Film and Video.

"Nationally, there's more and more interrest in doing" mergers, says Bill Coy, of Oakland, Calif.-based La Piana Associates. Coy, a consultant on "strategic restructuring" for non-profits, facilitated the GPAA/ProArts merger. He's also been in contact with Humphrey about helping Filmmakers and the Center through their transition.

But such moves aren't just to save money. As Jim Abraham, who gave Humphrey the idea for the merger, intuited, funders smile on these arrangements too. Last fall, ideas for sharing services were on the table at the Allegheny Regional Asset District, which administers the $74 million collected from the region's one-cent sales-tax surcharge.

About $4.3 million of that money is earmarked for grants to nonprofit groups, and ARAD Executive Director David Donahue says, "The board said, 'Maybe this is an area we should look at. Money's gonna be tight.'" On applications for 2006 funding, ARAD asked groups whether they were exploring shared services. Donahue says the question was not designed to influence funding -- ARAD doesn't want incompatible groups merging just for the money -- but to get groups thinking along those lines.

Still, it's no coincidence that this year, when ARAD froze spending and cut funding for many groups, Filmmakers and PCA got bumps of $25,000 each -- funding contingent on the merger going through. "It shows that the board of the district has put its money where its mouth is, that this could be a policy in the future," Donahue says.

Few in the local or even national nonprofit arts world can recall a merger of this scope -- between two groups with nearly a century of history and a budget of $3.3 million between them. Nonetheless, many see the move as a harbinger.

"It will become the model for how arts groups have to come together and merge missions," says Abraham, who still does legal work for the Center.

Janet Sarbaugh, arts and culture program director for the Heinz Endowments, one of the region's biggest funders of nonprofits, says that as funds remain tight, the future belongs to arts groups who get more creative.

"We've tended to organize most of our arts organizations by genre" rather than by overarching mission, she says. "That's the leap Charlie has made. ... If it's successful they will have created a new kind of arts organization."

Will we see more such mergers? "I hope we will," says Sarbaugh. "I think we have to."





Ten students gather at one end of the long tables lined with butcher paper to hear Vanessa Gross explain who Georgia O'Keefe was. Amid plastic bins of colored pencils, and bottles of "Learn & Play" washable paint, Gross reads from an art book depicting O'Keefe's "Purple Petunias."

As November light shines through a big window in this Saturday morning drawing-and-painting class for 6- to 9-year-olds at the PCA, Gross tells of O'Keefe's break with artistic conventions: "She didn't want people just to look at a flower painting. She wanted them to see beyond that."

According to Humphrey, the Center for the Arts has essentially recovered from the financial disaster that shut it down some 15 months ago. From a debt of $1.1 million, the Center now owes only about $420,000, most of that in bank loans Humphrey hopes to refinance. He credits a combination of debt forgiveness, extreme thrift and renegotiated contracts on one hand, and volunteer work, donations, grants and earned revenue (mostly from course fees) on the other.

Not counting Humphrey himself, the Center now has 11 full-time employees. They're still overtaxed, but not nearly so badly as in October 2004, when it re-opened with just four staffers. After taking over as executive director, Humphrey made sure the Center operated at least a skeleton slate of classes; in 2005, its summer art camps -- a local institution for decades -- drew nearly 1,000 kids. Current enrollment is about 600 for a full complement of 60 fall classes for children and adults. The Center's shop, featuring work by local artists, has remained open, and has paid what it owed to artists when the Center closed. The exhibition program, meanwhile, operated at reduced hours, but thanks largely to volunteers didn't miss a show, including this year's Biennial and the just-closed Artist of the Year show.

Gross tells her students to draw their shoes just as O'Keefe did her petunias: One smaller, one bigger, and overlapping. "That is the key term," she says. "Overlapping." Nick, a blond boy in a green Gap hoodie, repeats: "Oooverr-LAP-ping!"

Another cost-cutter has been to shift some of the Center's tasks to Filmmakers personnel. That includes Humphrey himself, who spends most mornings at Filmmakers and afternoons administering the Center for no extra salary. It also includes other Filmmakers staff who've been dispatched to help (also for no additional salary) with public-relations work, cleaning and general maintenance. Thousands of dollars were saved by having Filmmakers staff do graphic design for the Center's course brochures, which are direct-mailed and are the education program's chief form of advertising.

After the merger becomes official, patrons are likely to notice little change at either group. The Center will become, as Filmmakers is now, a membership organization, meaning that for a small annual fee, members have access to facilities and equipment even if they're not taking a class. Each group will still offer much the same classes and slate of exhibitions as they do now. They'll even both retain their names.

But while the new corporate entity's name (still undecided) will likely appear only on checks and funding applications, other behind-the-scenes changes might prove more challenging. The by-laws of the merged entity will essentially be those of Filmmakers; its board will comprise a blended family, adding five members of the Center's board to the current Filmmakers board, for a total of about 30.

The plan (still to be approved by Filmmakers' board) would give the Center its own director, with Humphrey remaining as the executive director of the merged entity. Each group would retain separate directors of education and exhibitions and programming. Partly because the Center is still understaffed, Humphrey says he doesn't foresee any layoffs. But the groups will share, for starters, public and media relations, marketing, purchasing and IT management.

Those who study mergers and other nonprofit collaborations say the key is not combining functions so much as integrating cultures. The Center, after all, is a place where 7-year-olds draw their shoes for fun. Filmmakers, by contrast, might be exemplified by a class called Photographic and Motion Principles, where a recent session comprised an intensive, two-and-a-half-hour still-photo critique featuring technical explorations of composition, depth of field and narrative technique. "I feel like the teachers care more here," says Kelsey Kradel, a Point Park sophomore photography major who prefers to take classes at Filmmakers. "The critiques are more brutal and they tell it like it is."

Some might wonder whether two groups with strong identities might take a while to learn to live together. Humphrey acknowledges that some associated with the PCA fear "Filmmakers is going to come in and turn it into Filmmakers Northeast."

But he's not concerned about an identity crisis. "The cultures are pretty similar," he says. "The common denominator is you have staff of both organizations who are themselves really mission-driven."

Gross shows her watercolor technique called "wet on wet," in which the heavy paper is dampened with a brush before the paint is applied. Some of the kids struggle with it.

"It's sloppy," says Emmanuel, in his hand-painted shirt.

"Not if you do it the right way," says Gross.