Portland Stage on Forest Avenue in Portland is among the Maine theater companies that are ineligible for a state relief program because of requirements they don’t believe reflect their needs. Shawn Patrick Ouellette/Staff Photographer

Professional theater companies in Maine do not expect to receive much help through the state’s $200 million emergency grant program for small businesses and nonprofits, citing eligibility guidelines that they say are too restrictive and give organizations that have lost more money an unfair advantage over those that have worked to minimize losses.

Curt Dale Clark, the artistic director at Maine State Music Theatre in Brunswick, said “it’s still another example” of state government taking the arts for granted by not writing rules that account for the art sector’s unique workforce and business practices. “They don’t respect the arts. The state is expecting the benefit of the arts to just happen without doing anything to assist us,” he said. “They are expecting places like Portland Stage, Maine State Music Theatre and Ogunquit Playhouse to get out of this on their own by begging their subscribers and supporters. And guess what? We will. We will find a way to win, but it shouldn’t be this hard.”

Economic recovery grants of up to $100,000 are available to Maine-based businesses and nonprofits with 50 or fewer full-time equivalent employees and anticipated revenue losses of at least 20 percent because of the coronavirus pandemic. The deadline for applying was 11:59 p.m. Wednesday, but Clark said the application process was flawed because it rewards organizations that sustained more financial losses than others and penalizes those who controlled costs to mitigate the impact of lost income.

“The main thing that is upsetting me is they are penalizing good business people. We cut every expense. We cut the salary of every single person in the organization, including my own. We did everything we could to get as right as we could,” he said. “They are rewarding businesses who didn’t act as responsibly, and because they suffered huge losses they are eligible for the money and we are not. That is not fair. They are throwing good money after bad, but that money is taxpayer money and it should be spent wisely.”

Despite having fewer than a dozen year-round full-time employees, Maine State employs about 240 people for four months while it produces and presents summer musicals at Pickard Theater on the Bowdoin College campus. As the grant program rules are written, Maine State is ineligible for relief because of its elevated summer employment, Clark said. He applied anyway, hopeful “for something at the end of the rainbow.”

Portland Stage ended its fiscal year June 30 with an operating deficit of about $150,000. Photo by Shawn Patrick Ouellette/Staff Photographer

At Portland Stage, executive and artistic director Anita Stewart said she did not apply despite the theater ending its fiscal year on June 30 with an operating deficit of about $150,000 as a result of shows that were canceled and curtained because of the pandemic. Earlier that month, before the close of the fiscal year, the theater received an anonymous gift to the endowment for its educational program. Based on the state guidelines in place for pandemic relief, that grant counts as income for the theater and offsets its operating loss, even though the nature of the gift restricts Portland Stage from using it toward operating expenses.

“We had a single gift, totally unexpected, to the endowment for our education program. It’s the largest single gift we’ve ever had, but it has nothing to do with the day-to-day operation of the theater,” Stewart said, adding that if the gift had come in July instead of June, the theater would be eligible to apply. “It’s all about timing, not about how efficiently businesses are running,” she said.

The gift was anonymous, and Stewart declined to say how much it was.

She is as frustrated as Clark, and said a solution would have been for the Department of Economic and Community Development to consider earned income, which is based largely on ticket sales, instead of looking at an organization’s total revenue, which includes restricted grant money. Earned income offers a more accurate picture of the theater’s financial standing and needs, Stewart said. “They chose a metric that is easy to measure. It is just not accurate,” she said.

Bari Newport, producing artistic director at Penobscot Theatre Company in Bangor, also did not apply, because the application “looks backwards and not forward” and counts the theater’s Paycheck Protection Program loan and Economic Injury Disaster Loans as money in the bank. The theater opted to apply for the money while it was available and hold on to it through the spring and early summer with the expectation of using it to plan and mount a fall or winter season. The theater began using the PPP money in August, and it will run out by month’s end. It has not yet tapped the other loan, because it has no income to pay off its terms.

Because the theater banked those loans and much of the application is based on income and loss from January to June, Penobscot Theatre didn’t qualify, Newport said. “But we desperately need funding to go forward,” she said. “Truly. I cannot stress enough.”

Heather Johnson, commissioner of the Department of Economic and Community Development, said the program was not designed to meet the needs of all applicants but to distribute money as widely and as fairly as possible to organizations and small businesses harmed by the pandemic. Gov. Janet Mills announced the program on Aug. 20, tapping the $1.25 billion available to Maine through the federal CARES Act. “We have talked to many nonprofits who are eligible and who already have their applications in. Unfortunately, there have been some that won’t be eligible for the program, for a variety of reasons. No grant program will solve the wide needs we have right now,” Johnson said. “While we feel good about where we are at, we recognize this program does not meet everybody’s needs and we recognize those needs are valid, as well.”

She said Maine’s economic leaders continue to push the federal government for more financial help. If the state does not distribute all $200 million that it has available in this round of grants, it may open up the application process with different eligibility requirements. But Johnson doubts there will be leftover money.

Jennifer Hutchins, executive director of the Maine Association of Nonprofits, attributed the complaints to Internal Revenue Service rules that say restricted income must be counted in full during the year that it flows into an organization and not when an organization spends it. She agreed with Stewart at Portland Stage that total income “is not a good indicator of true operational needs for a nonprofit’s bottom line.”

Hutchins also said she sensed “trepidation” among some arts nonprofits to apply for the state grants because they assume they are not eligible. “I have been hearing from arts nonprofits saying, ‘I am not sure it’s worth applying, based on the criteria established because I don’t think I will qualify.’ My concern is that will translate into people thinking there is not a need. That is my major concern. This could give people the impression they don’t need the money.”

Christiopher Schario, executive and artistic director at the Public Theatre in Lewiston, did apply, but isn’t certain if the theater is eligible. “I can’t say for sure if we will or won’t be eligible. If we are, we are. If we are not, we are not,” he said, adding, philosophically, “I am, like a lot of my colleagues out there, taking it day by day. When a program comes up that looks like we might be able to apply, we look into it. Sometimes we can apply for something, sometimes we can’t.”

Dawn McAndrews, producing artistic director at the Theater at Monmouth, also applied and like Schario is unsure if the theater will be eligible. It is “sitting on a pile of money” that it had raised in an ongoing capital campaign to improve actor housing, and “that could be a hiccup,” McAndrews said. However, with actors not present this summer, the theater began spending the money on the housing project, and that could influence how the application is received, she added.

“How can it hurt to spend a couple of hours doing the application,” she said. “At this point we have to apply for everything that is a possibility, because I don’t think any of us has enough major donors to sustain us for the next year.”