A red “Now Leasing” sign hung over SE Portland’s Newspace Center for Photography logo as over four dozen people gathered on a sunny Monday night to learn more about why Newspace had abruptly closed the preceding Friday.
Newspace board member Bob Hestand confirmed suspicions the nonprofit organization that operated the gallery, studio, and education space had shut down weeks shy of its fifteenth birthday. “This is not a new story, just another sad chapter,” he said.
Former developmental director Steve van Eck, echoing Hestand, framed Newspace’s closure as part of a national pattern of photographic and artistic centers for education closing due to the same conditions Hestand said contributed to Newspace’s closure: declining enrollment, use of the space and donations to the organizations which operate them. For Newspace, Hestand said the nonprofit organization was receiving $29,000 a month less than it had the previous year, part of “a perfect storm” of conditions which led to Newspace’s sudden closure.
“In Portland, we talk about how much we love arts, but few people follow through to that next step with opening their checkbook,” Hestand said. He said Newspace would have needed around $150,000 to remain operational, an amount he said could not have been raised in time without hitting “legal triggers.”
Newspace declared insolvency after receiving a phone call from its accounting agency approximately two weeks ago, with news it could not afford rent and payroll. The board explored options to keep Newspace open, including a potential merger with Open Signal (formerly known as Portland Community Media) and a third organization Hestand declined to identify because it pulled early out of the merger process. In all cases, Hestand said Newspace simply did not have enough time to respond, and, “short of hanging a neon sign,” no more could be done.
But donors and other audience members questioned why Newspace had not used its email newsletter to alert donors to Newspace’s crucial needs. One donor told Hestand he would have personally raised his monthly donation if he had known of Newspace’s dire straits. Hestand, when asked if Newspace could have done more to communicate with its members about the situation, said, “Yes.”
“When you operate on a razor thin margin, you’re used to dips,” said Newspace board member Steve Stegeman. “This time, it was like we went over a cliff.”
Hestand and Stegeman said Newspace had, over the years, transitioned away from relying on educational enrollment fees to relying on grants and philanthropic funding as it turned into a nonprofit organization, hiring two development directors in its mission to transition and receive more philanthropic donations and higher revenue-producing fundraisers.
Relying more heavily on grants and philanthropic funding is a strategy some organizations like Portland State have attempted in recent years. But in Newspace’s case, the sharp drop in monthly revenue was compounded by a three-to-four-year-old line of credit used for catalog printing and equipment leasing: Newspace could no longer pay on the principal, only the interest, creating a situation with no foreseeable recovery.
Hestand also said Newspace’s accounting firm, an accrual basis firm, met with Newspace annually instead of daily, which contributed to the short notice. Newspace’s board of directors communicated frequently through text and email and met monthly with 75–80 percent board attendance. Meetings became less frequent in later months of Newspace’s life.
Newspace’s landlord has allowed the organization to continue to use the space through the end of July, and donations from both instructors and donors would allow Newspace’s children’s programming to continue for the next two weeks, but summer courses have been cancelled and cannot be refunded.
One instructor asked Hestand if they would be allowed access to their canceled class enrollment list so they could offer their courses to the students outside of the organization, a question to which neither Hestand nor Stegeman could give a clear answer.
Audience members seemed interested in knowing how much certain assets would be sold for, with the intent to purchase them; Hestand was asked if a new group would be able to come in and take over the space and equipment. “If there is something new, I will be one of the first ones to write a check,” he said.
Hestand said by Wednesday, July 12, Newspace’s landlord will determine how much of the space will be open for use, and Newspace’s lenders will determine how Newspace’s assets, including purchases and donations, will be organized and to what extent they could still be used.
Newspace is still in need of experienced volunteers to pack equipment and operate the front desk for the children’s programming. Donors can still make tax-deductible donations to help Newspace pay debts which, speaking for the board and himself, he said would be “emotionally satisfying to pay.”
Emotions were running audibly high in the room, as Hestand’s voice occasionally wavered when addressing the audience, and members of the audience mentioned they were not trying to attack Hestand as he occasionally struggled to address specific questions related to financial details. Stegeman asked that the Vanguard let its readers know: “We really tried.”