On September 9, 2021, the Maryland State Arts Council voted to adopt a new funding formula for the GFO program in an effort to more equitably distribute state appropriated funds to arts organizations across the state. The change will be implemented over a five-year phase-in period beginning in FY2024 and puts MSAC at the forefront of a national trend of state arts agencies adopting policies that promote more equitable distribution of grant funds.
The new formula groups organizations into five budget tiers, providing a larger percentage of allowable expenses as a maximum grant award to smaller budget organizations, and a smaller percentage to larger organizations that have greater access and connections to non-governmental funding sources, professional fundraising staff, and other resources.
Click here to read the press release for details on the process of developing the new formula.
When will this change happen?
The new funding formula will be used to determine FY24 grant amounts. FY23 funding determinations will use the current formula.
There will be a 5 year “phase in” process of the new funding formula. Over 5 years (starting with FY24 funding), the formula’s cap allocations will move to land at the following percentages by Tier level by FY28:
Tier 1: ($50K - $500K) - 15% (cap allocation) over 5 year transition
Tier 2: ($500K - $1.5M) - 10% (cap allocation) over 5 year transition
Tier 3: ($1.5M - $5M) - 6% (cap allocation) over 5 year transition
Tier 4: ($5M - $10M) - 4.5% (cap allocation) over 5 year transition
Tier 5: ($10M+) - 4% (cap allocation) over 5 year transition
During this 5 year process, a Grant Amount Cap will also be put into place, as follows:
Year 1 (FY24): $1.4M maximum grant
Year 2 (FY25): $1.3M maximum grant
Year 3 (FY26): $1.2M maximum grant
Year 4 (FY27): $1.1M maximum grant
Year 5 (FY28): $1M maximum grant
Note - the cap allocations will vary based on the MSAC funding allocation each year for the GFO program, along with the other variables, including number of organizations in the GFO program, and each organization’s allowable income year to year, and panel score.
What WILL change for FY23?
Another change that was approved is that NEW organizations will no longer need to complete 3 consecutive years of “on year” full applications to be “phased into” the GFO cycle (receiving 40%, then 60%, then 80% of the total grant in each of the three years). New organizations will now complete just one year of an “on year” full application (in their first year) and, if approved, will receive 100% of the award in Year 1! In Year 2, the organization will then fall into the discipline-specific GFO cycle.
Click here to access the FY23 program guidelines to review all program details, including deadlines and discipline cycles.
Click here to download the new GFO Funding Formula Calculator.
