The first grants in the new program provided some $5.3 million to five theaters, one dance company, and fifteen opera companies (see list at right). Funds will be allocated to additional groups, primarily in the theater and dance.

Each grant is made on a one-time, non-renewable basis, and has two key features: First, if a group has an accumulated operating loss, as indicated by certified audit, the Foundation will supply 50 per cent of that figure, providing the group has liquidated the other half within a specified time, usually one year. Second, the grants will provide each company with a revolving cash reserve fund, separate from the company's operating account, over a four-year span. The reserve will amount in the first year to 15 per cent of the company's operating budget for a given base year, and an additional 10 per cent for each of three subsequent years if all conditions of the grant are met. Funds withdrawn from the reserve during the year to meet current operating expenses must be replaced at the end of the year from earned or contributed income, not from loans.

A group that does not replace withdrawals from the reserve, or fails to liquidate 50 per cent of its accumulated operating loss within the specified time, will be dropped from the program.

The program thus gives the group and its board of directors powerful incentives both to broaden the base of contributors and to avoid the creation of new operating losses. Since the new program does not involve the Foundation in operating budgets, which are more properly the responsibility of local committees and public agencies, operating funds will have to be raised every year from other sources. Nevertheless, the groups that can meet the terms of the program will have established, in four years, the working capital to set their sights on the future. That in itself will represent a major shift for performing arts groups in the United States.

In planning the cash reserve program over the last four years, the Foundation staff tried to estimate as accurately as possible what other sources of support for nonprofit performing arts groups could be projected, in particular what rate of governmental