Arts supporters won major victories Monday night when the Durham City Council restored funding that had been cut in its preliminary 2008-09 budget (see "Durham arts groups face steep cuts in city funding").

The council funded the St. Joseph's Historic Foundation, housed at the Hayti Heritage Center, at last year's levels, reversing $58,000 in proposed cuts. The council also padded the budget with $100,000 for the city's Cultural Master Plan, charged with guiding the development of arts and culture in the city and county through 2020.

Although the African American Dance Ensemble and Walltown Children's Theatre failed to fill out their grant paperwork correctly, they received $25,000 and $15,000 respectively.

The council is scheduled to adopt the final budget June 16.

At the initial budget discussion June 2, supporters packed council chambers to fight $118,000 in proposed cuts to cultural organizations.

"When you go through a process like this and continue to lobby like this, it gets discouraging," says Dianne Pledger, director of St. Joseph's. "I'm hoping in the future discussions related to funding arts programs and programs that support our youth that arts organizations will have more of a chance to be a part of the process."

Representatives from the arts groups and concerned citizens hammered home three demands:

• Maintain funding to all nonprofit arts groups at previous levels
• Fund the Cultural Master Plan
• Discuss future decisions with arts leaders

Nonetheless, several venerable arts and culture organizations that the city has long funded—the Durham Symphony, the Mallarmé Chamber Players and the American Dance Festival, for example—will still suffer cuts. Most organizations will see a 30 percent drop in funding in the upcoming fiscal year, and city officials promise similar cuts through 2010.

"I remain convinced that this is a good plan," Councilman Mike Woodard says. "We anticipated this first year being difficult, and that difficulty is just compounded by other budget factors—salaries, cost of gas. It was never the intent to hurt or damage any of these organizations."

Meanwhile, the city is investing in the $46 million Durham Performing Arts Center that will host touring shows, not local arts events.

The proposed budget changes were part of a complex plan to restructure how the city funds nonprofits. The budget office oversees a pot of money for "non-city agencies," which the city defines as "nonprofits doing business in the city, providing services supporting City Council goals." The list includes the Durham Affordable Housing Coalition, El Centro Hispano, Durham Crisis Response Center and more than 30 other community, youth, arts and public safety groups.

The city plans to "wean" these organizations from the city purse over the next three years. Officials say some of the money that had been dedicated to non-city agencies would then be allocated to other departments: Parks and Recreation would administer grants to youth organizations, Housing and Community Development would administer housing grants, and so on, lessening the strain on the budget director.

Durham doesn't have a department to oversee arts funding. There were talks to administer arts grants through the Cultural Master Plan, but it is unclear whether that plan can support its own mission—its top priority is to build a history museum—in addition to handling grant-making.

Funding for the Cultural Master Plan originated from a one-time $500,000 occupancy tax grant, which administrators have nearly depleted, spending $165,000 on two consulting firms—Wolf, Keens & Co. and AMS Planning and Research—and much of the rest on staff hours.

The city's $100,000 allocation to the plan falls short of the $250,000 annual commitment supporters sought from the city and county for the next three years. County commissioners haven't decided whether to match city funding.

Woodard, who sat in on talks about the city's grant restructuring, says another goal is to open funding to new nonprofits. Woodard hopes the city would dedicate any money remaining in the non-city agency pot to "capacity grants," $20,000 over two years to help launch new programs.

"Should the city provide funding for the same organizations without them building their own capacity for funding?" Woodard asks. "The intent was for these organizations to go and secure other funding and become less reliant on the city grants. The pool is small and the same old stalwarts are getting funding every year."

He points to the case of two track and field clubs that lobbied the council June 2. The Durham Striders, founded in 1977, complained about proposed funding cuts, while members of Triangle Champions Track Club, founded a couple of years ago, pleaded for a piece of the pie.

"The notion of weaning them off is misleading," says Sherry DeVries, executive director of the Durham Arts Council, referring to arts and culture groups. "Private support is not going to be there for them. Corporate support is declining. It penalizes the very partners that have worked hand-in-hand with the city for many years."

"Some percentage of the grant program could be reserved for new organizations," DeVries adds. "But you don't do that on the backs of the treasured assets in the community."

Tax forms for the groups don't show any drastic income drops through the end of 2006, but Pledger says recent dips in the economy have hurt fundraising. "We've lost some of the sponsors for the blues festivals," she says, referring to the annual Bull Durham Blues Festival, which St. Joseph's hosts. "We're out here seeking new dollars."

The manager's proposal implemented only the first phase of the plan—the cuts. Officials have not yet shifted the grant money to other departments.

"It isn't just the economy," says Evonne Coleman, former executive director of the Durham Arts Council. "It's the fact that there isn't a cohesive policy as a whole and appropriate strategies to reflect that policy."