Prospectus

April 1, 1999

Creative Capital is a non-profit organization incorporated in New York State as The Creative Capital Foundation. The Internal Revenue Service granted it tax-exemption under Section 501 ( c ) 3 of the tax code on August 12, 1998. Creative Capital began operations January 1, 1999.

Summary

Creative Capital is a new, national organization that will manage a revolving, tax-exempt Fund, designed to support artists creating original work who are pursuing innovative, experimental approaches to form and/or content in the visual, performing, and media arts.

In contrast to traditional charitable grants programs in the arts, which usually provide only one-time financial assistance to an artist, Creative Capital will work closely with the artists it supports to help ensure the success of their projects by providing marketing and other non-artistic assistance to develop audiences for the artists' work.

In return for Creative Capital's financial and managerial support, artists selected will share a portion of the proceeds generated by their projects with Creative Capital's Fund. These proceeds, used to replenish the Fund, will enable Creative Capital, in turn, to support more artists in the future.

Creative Capital is conceived as a pilot program - a national experiment to create a place friendly to and supportive of artists. The long-term plan of Creative Capital is to raise $40 million over 20 years for this purpose, and a threshold amount of $5,000,000 is now being sought prior to a public announcement of the new fund in May 1999. As of April 1, 1999, $4,630,000 has been committed by fifteen individuals and foundations. All contributions to Creative Capital are tax-deductible.

Creative Capital's Operation

1. Board of Directors - Creative Capital will be overseen by a Board of Directors of fifteen individuals drawn from the entrepreneurial and artistic communities.

2. Staff - Creative Capital will be managed by a Director, who will be an experienced, energetic executive, alert to innovative and experimental creative work, knowledgeable in several artistic disciplines, and familiar with audience development.

   Working with the Director will be creative managers responsible for identifying artists' projects, and development managers who will provide expert help to each artist's project as needed, especially assistance related to audience development as well as legal, financial, and other support services.

3. A Network - A variety of outside professionals and specialists will be called upon to supplement the knowledge and skills of the Director and the managers, creating in the process an informal network of advisors. From this large and expanding resource, Creative Capital will form, as needed, independent panels of experts to judge grant applications and ad-hoc teams to assist the development of projects.

4. Offices - Creative Capital's staff will initially be housed at The Andy Warhol Foundation at 65 Bleecker Street in New York City, which will also provide the staff with office support services.

   It is the expectation that Creative Capital's growth will enable opening additional offices in other cities of the United States in the future.

5. Portfolio of Projects - The essence of Creative Capital is to find individual artists pursuing innovative approaches to form and to content and to support each project, as it matures, through a flexible process of development assistance. The goal, then, is to build an ever-changing portfolio of projects - ranging from those which are still in their beginnings as conceptual investigations to others which are fully-developed, expanding projects -- realizing that after the initial funding, projects will develop in different ways depending on real-world circumstances.

   Creative Capital's Fund goal is to have approximately $1,000,000 available each year to support artists' projects. A number - perhaps 60 to 80- projects will be supported at initially modest levels of, say, $5,000 to $20,000 each. The balance of the funds would be applied subsequently on a case-by-case basis as projects develop, to expand their audiences and reception. Each year, new artists' projects would be selected, some older ones would be added to, others would end naturally, and the portfolio would change and expand. Assuming a constant pool of $1,000,000 annually in the initial years, it can be anticipated that as the Fund matures perhaps 100 or more projects will be active at any one time. With additional funds being added to the available project-funding pool due both to the revolving nature of the Fund and to additions of new monies contributed to the Fund, it is a goal that Creative Capital will ultimately support hundreds of artists and their projects in many parts of the country for many years.

6. Selection Process - Creative Capital will operate an open process of selection seeking artists creating original works, who are over 18 years of age, living in the United States, who are not full-time students, and who do not have ready access to financial resources for their work. Preference will be given to artists pursuing in their proposed projects innovative, experimental, and risk-taking approaches to form and/or content through their activity in the visual, performing, and media arts, including projects taking a multidisciplinary approach. Consideration in the selection will be given both to past achievements of the artist and to the creative promise of the artist's proposed project. A budget will be required, and it may include a fee for personal support while creating the project, as well as costs for materials, work space, and equipment.

   Evaluation and selection of the artists' projects will be based solely on artistic merit; and, with the assistance of Creative Capital's Director, the selection will be made by an independent panel of experts. Applicants must consent to participating in a Project Development Planning process if their projects are selected (see below) and to an agreement for sharing of the proceeds resulting from the artist's project (see below).

7. Project Development Plan - A key element of Creative Capital is its ability to assist each artist in developing a plan for imaginatively presenting his or her work and for reaching the widest and most varied audiences possible. To facilitate this process, Creative Capital will put together a body of specialists-such as producers, curators, and publicists-who will be available to help in the Development Planning process. Included in this process will be the establishment of partnerships, where appropriate, with public and private organizations such as cooperating venues, spaces, laboratories, and galleries. Broader promotional techniques may also be applied. The Project Development planning will perform an important educational function, for through this process, artists themselves will be able to develop many of the skills they will need in the future to be successful, and Creative Capital itself will gain over time a greater capacity to assist future artists and their projects.

8. Sharing of Proceeds - Each artist receiving a grant must agree to share with Creative Capital's Fund proceeds derived from the project. The structure of the sharing will vary depending on the nature of the project and its budget. Generally, the cost of the project will first be repaid proportional to the amounts contributed by the Fund to the project budget, and then additional income divided between the artist and the Fund on an agreeable and appropriate basis.

   The principle of sharing the proceeds realized by the artist's project is essential to the concept of Creative Capital in order to sustain the revolving nature of its Fund, and thus will be included in every agreement. However, care will be taken to ensure that the continuing financial involvement between the Fund and the artist is fair, proportional, and not onerous to the artist.

9. Supporting Activities-In addition to the support provided to individual projects, Creative Capital has an opportunity to look more broadly at the context in which artists are working and to ask: What would be the components of a comprehensive system of support for our nation's artists? To that end, Creative Capital will engage in a number of ancillary activities:

   1. Annual Roundtables- Since our goal is to help artists' efforts succeed, it is critical to understand the environment in which they are working. Each year the fund will bring together representatives of both the noncommercial and commercial sectors in each of its discipline areas (performing arts, visual arts and media) to assess the "state of the fields." This information will be made widely available on line and in print.

   2. Annual Retreats for Creative Capital Artists-These events will make it possible for artists to meet each other, to share work and ideas, and to create a sense of community. Outside resource people will be brought in and skills building workshops will be held.

   3. Quarterly Publication-This will be a widely disseminated vehicle which will promote the work of the Fund. It is likely that this will also become the vehicle for publication of the texts of the roundtables, and that several original articles would be commissioned for each issue.

   4. Industry Database-We will build, as a resource to ourselves and to the field, a substantial database consisting of a variety of organizations and businesses in the commercial and non profit arts sectors. This would include artists organizations, museums, commercial galleries, commercial media production and distribution companies, media centers, performing arts presenters, state and local arts councils, foundations, and the arts press, to name a number of the categories likely to be included. The database can be sorted by geography or discipline, enabling Creative Capital to target the promotion of projects to the individuals and organizations most likely to be interested in them.

   5. Public Events- After several years of project funding, it will be possible to package collections of projects in interesting ways, and to seek additional funding and presenting partners from the commercial and non-commercial world. Work might be organized by discipline, by region or by subject area, to name a few programming possibilities.

   6. On Line Presence-Creative Capital will have an active presence on line, and the website can also become a place for artists to market their artistic work and services.

Financial Plan and the Operation of the Fund

The financial goal of the Creative Capital Foundation is to raise at least $40 million over the next twenty years for the support of individual artists. The Foundation will seek to achieve a diversified funding base through a multi-faceted fundraising strategy. This will include the following areas:

• earned income derived from supported projects;
• foundation support from foundations both large and small;
• support from individuals, including trust and estate arrangements;
• support from the business community, with a focus on the commercial arts industries and related creative enterprises such as fashion, advertising, and media;
• support from artists who have become financially successful;
• grassroots support from artists, arts professionals and arts supporters nationwide.

As of April 1, 1999, fifteen individuals and foundations have made financial commitments of $4,630,000 toward an initial, threshold budget of $5,000,000.

All contributions to Creative Capital are tax-deductible. Creative Capital's share of proceeds from successful artists' projects will be used to replenish and increase the size of its Fund -- the pool of money available to support artists' projects. No money from Creative Capital, its Fund, or from proceeds from artists' projects will be returned to contributors. All monies will be kept, recycled, and used to support future artists' projects. Contributions to Creative Capital with geographic or discipline limitation will be welcomed.

Creative Capital will report regularly on its progress both with regard to the individual projects selected and to the overall, financial status of its Fund.