To the Editors of the Crimson:

In the January 18, 1989 article titled "ART To Receive $2.25 Million Grant," Crimson reporter Melanie R. Williams attempted to grapple with a series of complex grants and awards which the ART has received in the past few years. The matching requirements and inter-relationship of these grants are Byzantine at best, and the reporter did an admirable job. There are, however, a few factual matters that need to be corrected.

The ART was awarded a grant from the National Endowment for the Arts (NEA) Challenge program in the fall of 1985. The grant requires a three-to-one match, i.e. ART is responsible for raising $2.25 million in cash (not pledges) from non-federal sources in order to receive a grant of $750,000 from the NEA. While the maximum award under the challenge program is currently $1 million, which would require the recipient organization to raise $3 million in matching funds for a total principal of $4 million, the maximum award is set by the NEA, based on its evaluation of the organizations that apply and on its congressional appropriation, before the organization is permitted to begin fundraising. Indeed, with a $5 million endowment goal, ART applied for the maximum amount, but the grant awarded was for $750,000. Thus, even if ART successfully raises $3 million by July 31 of this year, the NEA contribution will still be $750,000. In making the 1985 $750,000 Challenge award, the NEA acknowledged that ART received the highest rating of any organization across all artistic disciplines. This is an endorsement which has been enormously beneficial in our efforts to raise the required three-to-one match.

This is the second time that ART has been awarded an NEA Challenge grant. The first was for $250,000, also on a three-to-one matching basis, and was used to expand and develop ART's marketing and fundraising efforts and to increase the artisitic scope of the company during the three year period from July 1, 1980, to June 30, 1983. The current grant period began September 1, 1985, and concludes July 31, 1989. NEA Challenge grants cover a period of no less than three years. No organization can receive a Challenge grant during the period covered by a previous award, but can apply for more than one award from the program so long as the Challenge grant periods do not overlap.

In addition to the $1 million awarded through the two Challenge grants, ART has received over the past nine years a total of roughly $1.5 million in professional company grants and $400,000 through a variety of special programs, for an average of roughly $200,000 per year. Beginning in fiscal year 1986-87, ART is also receiving, through the Ongoing Ensembles program of the NEA, funding which could total $800,000 over five years.

Income from the endowment is used to supplement not only ticket sales and Harvard's subvention, but also annual fundraising from federal and state agencies, foundations, corporations and individuals totalling some $1.5 million, plus touring expenses, tuition and fees from the Institute for Advanced Theatre Training, concessions, royalties and other earned revenue. Earned revenue from all sources combined covers approximately 60 percent of the budget. Contributions and grants, including Harvard's annual subvention of some $359,000, must cover the remaining 40 percent for ART to operate at break-even. ART has been operating at break-even or better since the fiscal year ended June 30, 1983, with the help of reserve funds (established from the 1984 Harvard gift of $600,000 made expressly for the purpose of allowing the company to break-even while the endowment was being raised). Remaining reserves are more than sufficient to ensure another break-even year in fiscal 1988-89, though a $240,000 accumulated surplus makes it imprudent to draw unnecessarily on these reserves. Robert J. Orchard   Managing Director