Challenge Grants Offered to Historical Societies by National Endowment

The National Endowment for the Humanities has expanded its assistance to cultural institutions by launching a new program. Challenge Grants are intended to help humanistic institutions improve their- financial stability by stimulating new or increased support from the public. Unlike regular Endowment grants, which may support only projects in defined NEH program areas, Challenge Grants may be used for a variety of broad purposes which the recipient institution judges to be most critical to its long-term functioning and financial health. This feature should prove especially attractive to historical societies. Possible uses include general operating expenses (including staff salaries, rent, utilities, mortgage, general administration), defraying of operating deficits, renovation of facilities, acquisition of equipment, maintenance of collections, and new programs.

Any non-federal source of funds is eligible to be matched by NEH – state or local governments, foundations, corporations, labor unions, business, professional, and civic organizations or individuals. A minimum of three non-federal dollars is required for every federal dollar. The basic requirement is that the matching funds must be from new sources or in addition to the support normally provided by traditional sources. Fund raising “benefits” may also be used to meet the Endowment’s offer as may income from other special events, proceeds from special sales, and membership contributions, as long as contributors understand that their donations will be used to match an NEH Challenge Grant.

How Are Challenge Grants Awarded

In brief, Challenge Grant funding proceeds as follows:

1. An institution submits to the Endowment an application describing (a) how it would use an NEH Challenge Grant offer to help it raise new or increased financial support, both in the short-term and long-term, and (b) the purposes for which Challenge Grant funds would be used.
2. The application is reviewed by the National Council on the Humanities and, if recommended by the Council for approval, results in a Challenge Grant. The Chairman of the Endowment, as part of the notification, will specify the maximum level and conditions of funds. The major conditions will include:
   1. the matching requirement (normally amount­ing to a minimum of triple the Federal funds offered);
   2. acknowledgement by donors that they are re­sponding specifically to an NEH Challenge Grant offer;
   3. the date by which the matching funds should be raised; and
   4. the grant period within which the matching and Federal monies may be actually expended.
3. The approved applicant proceeds to identify eligible donors and arranges for transmittal of their gifts and acknowledgements to the Endowment or for transmittal to the applicant (in which case appropriate gift certification should be submitted to the Endowment). Private donations, if they are to remain eligible for matching under’ this pro­gram, must not be expended until the Federal matching funds have been released.
4. On receipt of the gifts (or certifications) by the Endowment, the Federal funds are released from the U.S. Treasury and made available to the grantee.
5. The grantee is now free to use the gifts and the Fed­eral funds according to the approved application and grant conditions, and provides an annual report during the life of the grant.
6. Two years after the completion of the Challenge Grant project, the grantee provides the Endowment with a brief “follow-up” report describing the continuing effects of the grant in terms of on-going contributions generated by the initial Challenge Grant or the resulting change in the institution’s financial or operating condition from the pre­-Challenge Grant period.

Timetable

It should be noted that funds for Challenge Grants are not presently available. Federal funding for Challenge Grants will depend on appropriations made by the Con­gress specifically for this purpose. The ceiling set by the authorizing act – that is, the maximum that the Congress may appropriate – is $12 million for fiscal year 1977 and $18 million for fiscal year 1978.

Fiscal year 1977 funds for Challenge Grants require a supplemental appropriation, and Congressional action on this is not expected before the spring of 1977. The amount of Federal money to be available for grants in 1978 will not be known until the late summer or early fall of 1977.

Reflecting the expected timing of appropriations, the Endowment has established the following schedule for Challenge Grant applications in 1977:

Applications postmarked by April 1 will be reviewed by the National Council at its spring meeting, with notifica­tions for successful applicants issued in mid-June.

Applications postmarked by June 1 will be reviewed by the National Council at its summer meeting, with notifica­tions for successful applicants issued in mid-September.

Applications postmarked by December 15 will be re­viewed by the National Council at its winter meeting with notifications issued in mid-March, 1978.

Timetable for Bicentennial Challenge Grants

The nature of the projects supported by Bicentennial Challenge Grants and the variable amount of Federal funds which the Chairman may offer make it necessary to allow more time to process these applications. The following schedule should be observed for Bicentennial Challenge Grants.

(Note: Preliminary Bicentennial proposals should reach the Endowment two months prior to the deadline date being considered for application.)

Examples of Possible Challenge Grant Projects

A public radio station is currently able to spend only $3,000 out of its annual operating budget of $120,000 for the production of humanities programming. It seeks a Challenge Grant offer of $3,000 in NEH funds over three years in order to generate an additional $9,000 in matching funds, more than doubling the amount available for human­ities-oriented programming in each of the three years, and to attract continuing support from its listeners.

A small historical organization which relies heavily on a volunteer staff has a collection of documents and photo­graphs important to the local history of its community. These materials are uncatalogued, poorly stored, and partially in need of conservation. A Challenge Grant of $10,000 over a two-year period, which would stimulate $30,000 or more from other sources, could provide funds for a trained staff member to organize the collections, to pay for immediate conservation needs, and to acquire a storage system that would prevent further deterioration. The organization believes the Federal Challenge will stimu­late new memberships and new support from local business firms.

A group of two-year and four-year colleges wishes to establish a visiting lecturer program bringing outstanding scholars to their campuses and community for a series of public lectures and faculty seminars on an emerging field. They apply for an NEH Challenge Grant consisting of $50,000 matched by $150,000 in donations from the public over three years in order to endow the program.

A number of libraries in a region wish to cooperate to solve the problems which all face in the field of conserva­tion and preservation. They apply for a Challenge Grant of $100,000 in Federal funds over a two-year period and pre­pare to raise gifts of $300,000 in order to (1) set up a con­servation laboratory which can service all the participating institutions; (2) to run workshops to give basic training to members of all their staffs in certain elementary techniques of preventing further deterioration of the materials in their care; and (3) to launch a coordinated microfilming effort to transfer to that medium deteriorating materials which do not need to be preserved in their original form. The librar­ies believe that most of their users will respond to the Challenge Grant and will continue to make annual contri­butions.

A museum finds that, in order to maintain existing staff and services and to respond to demands for expansion of its educational program, it must: eliminate a $600,000 deficit, increase its operating budget, and raise capital funds in a major endowment drive. The institution seeks an NEH Challenge Grant of $500,000 a year for three years in order to stimulate a minimum of $1,500,000 annually in other support, and to enable the institution to accomplish all of these objectives. It would also be used to encourage donors to the Challenge program to regard the ongoing needs of the institution as a continuing responsibility.