Mission, Money & Markets: How access to a PPP loan is helping a Detroit artist haven thrive
Editor’s note: In the early days after the passing of the CARES Act, the first round of Paycheck Protection Program loans quickly funneled through the traditional channels to the typical players. Despite a stated intent to serve the most vulnerable small businesses, news reports showed it was the “big” small businesses, the multimillion-dollar bank clients, that tended to find the most success in applying. Small nonprofits were left behind. Seeing this as it began to play out, Kresge’s Social Investment Practice moved expediently to approve a $2 million program-related investment loan to a CDFI, the Community Reinvestment Fund (CRF), with the purpose of opening up a pipeline for Detroit-based nonprofits to access PPP, which offers (sometimes) forgivable loans that allow small businesses, including nonprofits, to weather the economic storm created by the COVID-19 pandemic. With the loan to CRF in place and the second round of PPP funding available, Detroit nonprofits were more quickly and easily able to access the loan program, with more than $7 million ultimately flowing into dozens of Detroit nonprofits. This money helped organizations keep their lights on, keep employees employed and keep vital services available for the community. In this Q and A, we spoke with one nonprofit leader about his experience with this program. Matt Fry is the Director of the Detroit Artists Market.
Q: Matt, first off, tell us what the Detroit Artists Market (DAM) is all about.
A: DAM is a nonprofit art gallery that has been around for 88 years. It was formed in 1932 during the Great Depression for the purpose of giving struggling artists a voice, a venue and a means of income, by selling their artwork. We exhibit and sell the work of Detroit and Michigan artists. When work sells, we pay artists a two-thirds commission, which is favorable to a commercial gallery. We also bring together collectors, artists, and communities.
Q: How did the early days of the pandemic begin to impact DAM?
A: It was very difficult. We had just started our scholarship exhibition, which is one of our best shows of the year. In short order, the pandemic hit, the shutdown order came and we closed the gallery.
After that, we reacted quickly and did what just about everybody else did. We started to create ways of showing content online. Our gallery manager, Alex Diebel, came up with a really nice slideshow featuring the work of the students, and people really appreciated that. We even sold a couple pieces online from that initial effort.
But, right away, we knew we were going to be foregoing roughly $30,000 of revenue from art sales and memberships. For me, as the director, I immediately started thinking about what we can do to make up this large gap in revenue.
The Paycheck Protection Program, I deemed early on, was the most critical component of that financial aid. Even though the gallery was shut down, we maintained our staff – two full time, one part time and two contract employees. We knew we were going to reopen at some point, so we had to keep planning and keep working.
Q: In the early days of PPP, did you see a way in?
A: It was completely nuts. There would be new information released from the Small Business Administration, or the Treasury, or some other source sometimes in the middle of the night. I would rush into work at odd hours and do the computations I thought we needed. The communication about the regulations, requirements and deadlines, and information about whether you had to stick with your bank, that was all fluid. It felt like it was changing every single minute. It was stressful. I was trying hard to keep up with all the information coming from the different sources.
Q: What happened when you applied through your traditional financial institution?
A: I found that the bank we were working with was ill-informed about the Paycheck Protection Program. I was a little alarmed, because there were times that I had more PPP information than the bank. It was just this mad dash on my side to make sure our payroll calculations were exactly right and the proper forms were complete. There were so many details to line up and get ready. Again, I saw this as our best way to keep our staff gainfully employed. I worked hard to get all the information as quickly as possible, and to get it into the bank’s hands early.
Q: Did that result in your getting a PPP loan?
A: They told us that we were accepted in the first round. But then a day or two later, I asked them the very pointed question of, “Do we have the Small Business Administration loan number?” They told me then that they were unable to get the actual loan. That’s how it shook out for us. I was really let down. And at the time, I was instructed that you could only get a PPP loan going through your bank. So, I was very concerned at that point.
Q: How did you then hear about the CRF program?
A: I got a nice email from the team at Kresge, and also from Paul Trulik at Apparatus Solutions, letting us know about the Community Reinvestment Fund (CRF), which, boy was I happy to hear about it. I was all over it. And fortunately, that process was easy, in part because I had all the documentation and paperwork filled out and ready to go. It was a quick back and forth that involved a couple of extra things that they needed from me. But it was processed. It went smoothly.
Q: What was the result of that process, and how has it shaped the last few months?
A: We got a $25,400 loan. It was a huge relief to me and to our board. In addition to the deficit of revenue, we were also paying employees and continuing to work at a normal, and sometimes at a heightened rate. To know that we had some financial aid to cover the health benefits of our employees, the salaries of our employees, it was huge.
Since then, we’ve had a full online exhibition and an editorial series called Cooped Up and Creative, in which artists shared their stories about how they were dealing with the pandemic and how the creative process is therapeutic.
Following these online efforts, I began work on a thoughtful plan for reopening, and so much of this was uncharted territory. When should employees come back? How many people should we have in the gallery? Sneeze guards? What signage is needed? We scheduled our opening around hourly time slots of no more than 20 people in the gallery, and that worked out well. Our visitors are wonderful, and everybody's been coming in with masks and abiding by distancing.
Q: Has this process left you with any takeaways on how nonprofits fit into traditional financial systems?
A: I think it's causing me to reevaluate our current banking relationship. Once I have the time, I'm really going to reassess whether we look at local banks and credit unions and other financial institutions that may have our best interests more in mind.
Q: What’s next for the DAM? How will you keep shifting as the pandemic continues, and also address the current civil unrest and calls for more racial equity?
A: The Detroit Artists Market has a long history of featuring Black artists. We want our gallery to reflect the community, and we’re looking for strong voices that encourage conversation. As an organization, we talk about these things and we formalize them in planning. Right now we have three consecutive African American centered exhibitions. Dell Pryor: A Common Thread is on view now through July 25. The exhibition features 19 Black artists who have all shown at both the Dell Pryor Gallery and the Detroit Artists Market over the years. It's a heavy-hitting lineup that includes work from Lester Johnson, Taurus Burns, Rashaun Rucker, Anita Bates, the late Gilda Snowden and more. Dell Pryor is an amazing woman with an encyclopedic knowledge of artists here in Detroit. She and her daughter Sharon have been referred to as the first family of Detroit arts. Our next show is called Multifaceted Narratives: An Exploration of Black Figurative Art and is curated by Juana Williams. And, following that, we have the exhibition Maya Stovall and Todd Stovall: Positions.
We put a lot of thought and hard work into our reopening, and we have a strong lineup of exhibitions. I’m thankful for the help in stabilizing our finances. We are going to need more help, because the coming year is going to challenge everyone. For now, we are going to do what we do best: showcase and sell the work of great Detroit artists.