‘A Work in Progress’

“The future is at a crossroads,” says Jean Picker Firstenberg, executive director of the American Film Institute, in her office on the AFI Los Feliz campus, her measured voice making even a history lesson sound like a confidence.

“At the start of the century, our major cultural institutions were built by individual giants with names like Ford, Rockefeller and Carnegie. The last half of the century, we moved to an institutional base led by the National Endowment for the Arts and the Ford Foundation as the driving force of arts in America. Now, we have to figure out what the next structure is going to be for the survival of nonprofit cultural institutions.”

The annual budgetary blood-letting at the NEA has left AFI scrambling to make up lost federal funding that historically made up almost a third of the annual budget. At stake is the organization’s mission to advance and preserve the art of the moving image; its programs, built up over its 30 years of existence, include film preservation, a graduate film school and its annual L.A.-based film festival.

Over the years, such filmmakers as David Lynch, Bill Duke and Ed Zwick have come from AFI’s ranks, and the institute has made occasional headlines with preservation activities, as it did last fall when the oldest known surviving American film feature, a silent version of “Richard III,” was discovered and donated to its care.

Yet the institute, despite its lofty goals and its enviable proximity to Hollywood, is probably still best known to the general public as the sponsor of its annual TV gala salutes to filmmakers.

Tom Pollack, AFI Board of Trustees chairman and former vice chairman of MCA, said that even before the federal budget cuts, the institute’s overhead had already been cut by hundreds of thousands of dollars, resulting in a still considerable $13-million budget in the last fiscal year. “The next time we don’t make the budget, for whatever reason, we have to make uncomfortable program cuts.”

To avoid such a scenario, a “new AFI” was announced three years ago--well before the most recent cuts--with much fanfare and a new logo. The plan was to cultivate corporate partnerships as part of a new game plan centered on commercial industry buzz words like “branding,” “entrepreneurism” and “marketing.”

Entrepreneurial ventures with everyone from Silicon Valley players like Intel and Integraph to the U.S. Postal Service--though, interestingly, not the movie studios or the conglomerates that own them--are intended to increase and diversify its financing. The bottom-line business initiatives are a far cry from the ivory tower appeals for government and foundation grants that supported AFI through its first three decades.

AFI’s recent evolution could be subtitled “The Education of Miss Jean Picker Firstenberg.” The executive director acknowledges that during her 17-year tenure, her thinking had become entrenched in the old model of federal and foundation nonprofit support.

In a Los Angeles Times interview last year, Firstenberg said she still believed that lost government funding was a temporary cycle. Today she has “more clarity” that the transition is more than a “downturn” but instead a revolutionary shift away from the institutional grants that prevailed over the last half century.

“The job I took in 1980 is different from the job I try to do today,” she explains carefully. “Part of it is that the times have changed. Part of it is my own maturation. I had this old-fashioned belief that if you did good work, the community and the world would reward it. I was really foolish.

“I see now that the Board of Trustees understood the business climate and financial realities we faced while I continued to run AFI like a normal nonprofit in extraordinary times. We started in this direction about three years ago but, truth be known, the board has been pushing for these changes for much longer.”

Fortunately, the dual revolutions in the world of not-for-profit institutions and in communications technology have produced a new synergy beneficial to AFI. Silicon Valley digital innovators eager to stake a lucrative claim in Hollywood are now among AFI’s biggest supporters.

“Just as the nickelodeon started the 20th century, the digital era is starting the 21st,” Firstenberg says. “It’s an exciting time, and AFI is fortunate to have the support of both the creative and corporate communities.”

Spokesmen for those businesses sound equally upbeat. “Timing of the current technology shift is important to AFI,” says Jeff Edsen, vice president of Integraph. “Fortunately, it is an opportunity to assert our leadership. AFI is where film industry leaders are being trained, and now they’re being trained on our equipment.”

Ron Whittier, senior vice president at Intel Corp., agrees: “AFI’s goals align with ours. We think personal computing is the future of film and television entertainment, and therefore a relationship with AFI is essential.”

Financial self-interest and new technology have expanded not only AFI’s potential to raise money, its officials say, but also its mission. The “art of the moving image” is no longer seen as defined exclusively by film and video.

“We didn’t start an advanced technology program because we wanted Silicon Valley money, which we do,” Pollack says. “The next generation of filmmakers needs to know how to use the tools of tomorrow or they’ll be passed over.”

All this cheery optimism comes, however, with at least some trepidation. Pollack recognizes the potential pitfalls of nonprofits’ remaking of themselves too closely in the image of corporations driven by the balance sheet.

“It’s like the politician who has to spend all of his time raising money for reelection and has no time to concentrate on his real mission. If the main occupation of a nonprofit organization becomes raising money, then what’s the point? That’s my worry.”

Veterans of the old nonprofit status quo at AFI have another fear: that money from the new corporate partners may come with too many strings attached. “We haven’t seen results of the new approach,” says Florence Dauman, who is in charge of film and video production and archives at the Directors Guild of America.

“It’s premature to say if AFI’s focus and function will be affected by corporate money, but it usually comes with a price attached,” says Dauman, who worked off and on at AFI for nearly 10 years, first with its National Video Festival and later in public relations.

Others, like Robert Faust, executive director of the fledgling Los Angeles Independent Film Festival, believe that the entrepreneurial approach is the only way for nonprofits to survive. “You’ve got to create programs that will be fundable, then go out and raise corporate support,” he says. “What else do you do? Rob a bank?”

Becoming entrepreneurial is a scary proposition, according to Firstenberg, especially when AFI’s make-over is more than a strategy to make the bottom line. It’s helping to test and create the template for nonprofit survival.

“What we’re trying to do is redefine how a nonprofit is going to function in the 21st century,” Firstenberg says. “We’re going in the right direction. In a few more months we hope to announce a dozen more partnerships and ventures to back that up. We are a work in progress. We’re not there yet, but we’re very happy with where we are at this point.”

With powerful links to some of the nation’s richest individuals and industries, AFI has a better chance of swimming than most cultural nonprofits. In fact, there are those who question why it isn’t doing better.

“If there’s one institution that should have been able to raise money, it’s AFI,” says Miguel Arteta, an AFI graduate whose first feature, “Star Maps,” opened last month. “Why isn’t the Board of Trustees, so full of heavy hitters, able to make some calls and get this organization back on track? Tom Pollack could pick up the phone and raise the bucks in a couple of hours.”

He has a point. If AFI is indeed, as it suggests, the Smithsonian of the moving image and a premier training ground for filmmakers of tomorrow, why haven’t the major studios and industry people of personal wealth helped take up more of the slack?

“Actually, that’s been the subject of very informal discussions over the last few months,” offers John Cooke, executive vice president of corporate affairs at Disney and an AFI trustee. “We’re looking for a common-ground approach where each studio can agree on a minimum level of direct support that’s higher than what we give currently. The conversation started informally over coffee during a break at a board meeting, but it’s being taken seriously, and I expect it to be agreed to before it ever arrives on the agenda as a formal item.”

Fellow AFI trustee and Warner Bros.’ Chairman and CEO Bob Daly isn’t so sure.

“We at the studios have a tremendous amount of charities to support,” Daly says. “The economics don’t allow the continued writing of larger checks. The studios already do give an awful lot to AFI, not only financially but through special projects, fund-raising premieres and events. Top executives also give personally. We will continue to support, but we can’t subsidize the AFI. It’s going to have to branch out and find revenue from other sources.”

Pollack is receptive to increased direct support from the majors but also believes there is a limit to the studios’ largess.

“I would love to be able to say to Jean, ‘We’ll go get a million dollars from each major studio and that will bridge our gap,’ ” Pollack says. “But I don’t believe that’s going to happen, and I say this as someone who ran a major studio for 10 years. The studios support us very well and have for 30 years. After all, the studios, through the MPAA [Motion Picture Assn. of America], helped create the AFI, along with the NEA and the Ford Foundation. But they don’t see themselves as our underwriters.”

Instead of increased direct support, Hollywood is giving AFI tough love and experience. Explains Pollack, “Instead of a check, we’re more likely to get studio cooperation that allows us to move forward on some of these entrepreneurial projects we couldn’t do without them.

“What’s hard is you can’t force entrepreneurial activity to make you money. If it works, we’ll be a case study; if not, we’ll be an object lesson.”