The cultural landscape of the Bay Area is widely appreciated both for its dynamism and for its diversity. In addition to our pillar arts institutions, the region is home to a rich array of small- and medium-sized organizations: performing arts groups and schools, ongoing cultural storytelling projects, and producers of festivals and fairs. These experiences enhance the quality of life for residents of all ages and add to our community’s lustre.

In recent decades, local arts and cultural organizations have weathered a succession of economic downturns: the dot-com bomb of the early 2000s, the Great Recession just a few years later, and then the pandemic. In a financial crisis, the arts sector is the first to feel the squeeze and the last to recover. Tenacity, ingenuity, and community support have helped many of our cultural institutions weather these storms. Dozens of our smaller organizations credit their resilience to the guidance and responsiveness of an under-many-people’s-radar resource called the Arts Loan Fund (ALF). Housed at the Northern California Grantmakers (NCG), the ALF is unique in that it was created specifically to lend essential funding, offsetting temporary cash-flow emergencies.

Since its founding in 1981, ALF has made close to 1,500 loans, totaling slightly more than $36 million. The application process is simple and pro-borrower, with no penalty for early payoffs. Interest rates are far below market rates, and defaults a rare occurrence.

The ALF is marking a milestone in 2026: 45 years of making loans to arts and cultural organizations throughout the Bay Area. This anniversary is a great time to shine a spotlight on the quiet work ALF does to support the greater cultural ecosystem. 

Generally speaking, ALF’s lending niche is small- to medium-sized arts organizations whose annual budgets tend to be in the hundreds of thousands or low millions. These entities often face more challenges than larger organizations in accessing capital through traditional lenders. Smaller entities typically lack tangible assets, cash reserves, and other conventional collateral—and a short-term cash-flow crunch can be disastrous.

The ALF is directed by a steering committee, currently made up of 13 members, who represent a range of local arts funders—private foundations, community foundations, and city grant programs. These core funders to the ALF pool are an integral part of the arts sector, and for many steering committee members, the ALF borrowers are also grantees. The funder-grantee relationships add a personal dimension to the loan process. ALF uses its arts-centric criteria to evaluate collateral for various categories of borrowers. Sarah Williams, arts program officer at the Rainin Foundation and co-chair of the steering committee, speaks to the impressive success of the model. She comments, “Our default rate is close to miniscule. I believe the personalized financial guidance we offer reinforces the idea that ALF and the borrower are on the same team. Repaying a loan replenishes our corpus and strengthens the fund.”

ALF is attuned to the needs of its community of borrowers, and the steering committee is nimble. Olivia Malabuyo Tablante, program director at the Gerbode Foundation and Ms. Williams’ co-chair, remarks, “If an organization has an emergency need, the steering committee will accept its application and process it.” Ms. Williams adds, “During the first months of the pandemic, we met every two weeks to process loan applications.” ALF is launching a campaign to attract new funders and supporters, to ensure their own sustainability at a particularly precarious time for cultural institutions. Ms. Malabuyo Tablante reflects, “Historically, the steering committee has also served as a sort of focus group for arts funders, and we have shared with one another our respective foundations’ focus areas and observations about our sense of the arts community overall.”

Ms. Williams and Ms. Malabuyo Tablante are both quick to credit Margaret Southerland, ALF’s financial advisor, with wearing two hats: looking out for ALF’s reserves by vetting borrowers and looking out for borrowers by deepening their financial literacy.

Ms. Southerland is a former member of ALF’s steering committee; when she joined the committee in the early 2000s, she represented the philanthropic arm of a bank. She has run her own independent financial consultancy for many years now, and her insider perspective regarding the arts sector is, we dare say, unmatched. She enumerates the challenges smaller arts organizations face, “Getting a line of credit is difficult, requiring lots of financial disclosures and intimidating paperwork. It can be tempting to use a zero-percent-interest credit card offer or to borrow from a board member. I love to explain the differences between good debt and bad debt for an organization.” Ms. Southerland works with borrowers to strengthen their cash-flow forecasting. By identifying opportunities to improve financial management and accounting practices, she helps organizations build stronger financial capacity over time.

Performing arts nonprofits make up roughly 50% of ALF’s loan recipients. Several organizations have received—and repaid—multiple loans. Circus Bella, founded in 2008, is a vibrant example. Abigail Munn, the Circus’s executive director, has found ALF to be a wonderful partner. Previously, Circus Bella had only received loans from board members and private donors. She comments, “The ALF has enabled us to sustain and grow our ambitious programming with confidence. We have used ALF loans to produce both our summer Circus in the Parks and Winter Big Top seasons, allowing us to present more performances and reach wider audiences.” Ms. Munn describes the business coaching she’s received from Margaret Southerland as invaluable. “We have strengthened our operations and improved the way we record, track, and manage our finances.” She has recommended ALF to colleagues and peers at other Bay Area arts nonprofits.

The other roughly half of ALF loans goes to non-profits specializing in visual arts, arts education, literary and media arts, and art festivals. These programs and services often require up-front staffing or capital to organize a fundraiser, or a bridge loan while waiting for reimbursement from a school contract. While some loan terms are up to two years, many are only a few months, allowing an organization to cover costs while revenue catches up. Chapter 510 in Oakland lyrically describes its purpose as “connecting youth to the power of their stories,” through its writing center and programs in the community’s schools. Janine Macbeth, Chapter 510’s interim executive director, is particularly appreciative of ALF’s support.

Ms. Macbeth comments, “The Arts Loan Fund is helping us get through our fiscal year without high blood pressure, and that’s the truth. Some of our grants do not send payment until deep into the grant cycle, or even after the work is completed. Our ALF loan holds us over until our grant checks arrive, allowing us to focus our energy on program delivery as opposed to cash flow. We are so appreciative of this partnership!”

The longevity and impact of the ALF can be attributed largely to the distinctive synergy of our region’s arts community. Ms. Southerland acknowledges, “Dedicated lenders like ALF are increasingly rare. In the Bay Area, the relationships between arts nonprofits and the funding community are really tight. The collegiality within the arts funding community is deep. Everyone sees each other all the time. Everyone is eager to share information and to help other funders.”

Vicky Cassis-Silyan, director of finance and operations at Intersection for the Arts, echoes Ms. Southerland’s perspective, having become aware of ALF through Intersection’s long-term funders at Grants for the Arts. She comments, “We were excited to learn about ALF because reimbursement-based grant cycles can create cash flow shortages for organizations of any size. We used our loan from ALF to bridge the operating costs gap between award and deposit, which has enabled us to ensure a consistent quality of service for our 120-plus fiscally sponsored Bay Area arts and culture projects.” Ms. Cassis-Silyan adds, “We really appreciated the hands-on support from the ALF team throughout the process. We are even encouraging our fiscally sponsored projects to apply for a secured bridge loan from ALF, for their reimbursement-based grants.”

At Koret, we are proud to be part of this deep commitment and camaraderie of the regional arts sector, where audiences and community members come out to support performances and programs, as ways to see their local cultural institutions thrive. In the Bay Area, a unique partner like the ALF both enriches and draws from the arts sector, nurturing the vibrancy of our region’s landscape.