Lyall Bush, the Northwest Film Forum’s gangly, gray-haired executive director, is wearing a yellow cardigan and talking to Grant Cogswell, the eccentric local filmmaker, who is drinking out of a flask from his jacket pocket. It's almost 2 am, and they’re standing in the main lobby of the Northwest Film Forum among empty plastic cups and a couple of other stragglers—the remnants of the forum’s Local Sightings premiere party, usually its biggest event of the year.

This year’s event was, by all accounts, more low-key than usual. The young crowd, mostly volunteers and ambitious young filmmakers who came to meet others and drink $3 beers and sing karaoke, seemed like they stayed for an average of about 15 minutes.

If nothing else, the quieter Local Sightings party, which kicks off the NWFF's week-long festival of homegrown movies, is the latest sign of how turbulent 2009 has been for the nonprofit arts organization. For starters, in February 2008, NWFF's then-Executive Director Michael Seiwerath resigned, in order to "seek something new," as he said in a press release at the time. NWFF didn't announce his replacement, Bush, until March 2009.

Then, in late July 2009 , NWFF issued an urgent call to the community asking for $70,000 to help the organization fill a sudden and potentially disastrous budget shortfall. The film forum scoured its budget and ultimately laid off its managing director, the organization's second-in-command, a position with the most sway in terms of finances and funding. The film forum currently has eleven paid staffers.

Members and generous donors kicked in more than half of the $70,000, sending the film forum a surprising $44,000 in all, and quite possibly saving NWFF from having to close its doors, according to Bush and Film Forum board president Jennifer Roth. It was the closest the organization has come to shutting its doors since it moved from its location at the quaint Grand Illusion in the University District in 2004 into its larger location on 12th Ave on Capitol Hill, a stylishly spartan space of long hallways, wooden ramps, and two screening rooms, crowned with a giant neon "Cinema" sign outside. The arts community and other Seattle businesses struggling in the recession watched NWFF's plea for help with quiet curiosity.

The canary in the the coal mine for NWFF may have been the December 2008 decision by a longtime funder, the Seattle Foundation, not to approve the film forum's $40,000 grant request—more than half the amount the NWFF would need less than a year later.

The film forum has received the Seattle Foundation grant every two years since 2002 (in 2006 they were awarded a grant of $25,000, according the the foundation), but didn't win it in 2008 because the foundation was wary of the film forum's prolonged leadership transition, according to the grant office at the foundation.

And perhaps the Seattle Foundation, a public non-profit that guides large charitable donations to other organizations, is still something of a thermometer for what's going on at NWFF: According to Seattle Foundation, NWFF has yet to apply for this year's grant.

"I don't have an answer about the Seattle Foundation, " said board president Roth in an email. "It's my understanding that we are applying to every grant we possibly can."

•

“[The budget shortfall] should not have been a surprise,” says Susie Purves, the managing director who lost her job in August in the wake of the budget crisis. When The Seattle Foundation rejected NWFF's 2008 grant request, she says, it was a "trend that wasn't addressed."

Purves left the film forum in August after her position was eliminated. Purves, who is currently looking for work, had been the organization's managing director since 2003.

Purves says she brought up concerns to Bush and the board of directors about a possible budget shortfall when she found out the Seattle Foundation had denied the NWFF's grant. “The time to take action is when you see the trend, and the trend wasn’t addressed.” But Purves didn’t push the matter.

I brought the question of the causes of the budget gap to Bush, who summed up his analysis in one sentence: “I blame it on Lehman Brothers."



He said the budget shortfall was a surprise, both to him and to the members of the film forum’s board. Bush says the loss of the Seattle Foundation grant was “a disappointment, but not a trigger” of the budget crisis.

•

Bush originally reacted to the budget shortfall by cutting Purves' position. According to a couple of sources close to the film forum, Bush also put another key position, Special Programs Director (held by Peter Lucas), on furlough until further notice, according to sources, as well as reducing the hours of a couple of other staff.

Two positions have also been knocked down to 3/4 of their previous hours, and although Bush declined to say which, one will be the position of Studio Director Dave Hanagan, who is responsible for renting out filmmaking equipment, according to NWFF sources.

In addition, Bush says, the film forum will pay for fewer trips to international film festivals for its programmers and step up its outreach to contributors.

Bush says the film forum cut the managing director position because that position is a "luxury" for a small nonprofit like NWFF. (Purves disagreed with this description: "We functioned well for four years with a managing director," she said). Bush admits that the cuts rankled a few members of the staff, but he says that after talking with them, the matter was settled and that the staff just needed "to feel valued again."

Several staff members contacted for this story didn’t return emails or declined to comment.

•

Despite lower revenues and lower attendance at events like the Local Sightings party, Bush is adamantly optimistic. "Cross your fingers, but after this budget, we will have paid off our debt, and it'll be the beginnings of a reserve fund," he said.

The film forum's entire budget, according to the nonprofit tracking web site Guidestar.org, is about $480,000, and the organization now estimates their original shortfall, before the outpouring of support, at about $80,000.

The fact that the NWFF still hasn't applied for the Seattle Foundation grant may be an indication of the organization's harried nature—Bush says he's "putting in 14-hour days" working on financial matters, and was sure the film forum's new grant writer planned on applying for the grant.

According the Seattle Foundation's grant office, the organization was denied the grant in 2008 solely because of the leadership transition. "Now that they have a director, I would recommend they call and talk to us about how [the grant] aligns with their priorities," said Ceil Erickson, director of the foundation's community grantmaking program.

Bush's vision for the organization is to focus on expanded education programs, including youth filmmaking workshops (presumably beyond what the NWFF is currently offering—a three hour sock puppet-making class. The programs are still in the planning phase).

He says he's also presented the board with his vision to create a two-year filmmaking class for aspiring filmmakers, but none of his recommended changes—his "three-year plan," as he calls it—have been approved yet.

The film forum's directors, at least according to board president Roth, are putting their weight behind that vision. "We feel overall pleased with the turn the Film Forum has taken in the past year," said Roth in a statement. "We believe in Lyall Bush's leadership of the organization, and we are looking forward to a financially healthier Film Forum next year at this time."

In an email exchange for this story, the film forum's programming director, Adam Sekuler, was quick to emphasize the organization's power at pulling through the crisis. "I might suggest you discuss how we manage, with such little money, to remain one of the most dynamic arts organizations in the city," he said.

Certainly, Sekuler has a point—the NWFF has done some notably cool stuff this year, even under the budget crunch, like bringing in indie all-star filmmaker Ramin Bahrani or cinema genius Melvin Van Peebles to teach classes on filmmaking or holding workshops to teach filmmakers how to film in 3-D.

But Sekuler didn't answer a question regarding his opinion on how the budget was addressed. Actually, he was the only staff member, besides Bush, who was even willing to comment on anything at all.



UPDATE: Today, NWFF board member (and former board president) Alan Pruzan added a few more factors that led to this summer's $70,000 budget crisis, which I've been reporting on for the last several days.

Pruzan says staff salaries, which have been steadily increasing, and the expense of hiring Lyall Bush to replace Executive Director Michael Seiwerath, took a costly toll on the film forum's budget.

Pruzan also confirmed that film forum staff were incensed with Executive Director Lyall Bush's original response to the budget crisis, which included, according to sources, laying off Special Programs Curator Peter Lucas and putting Studio Director Dave Hanagan on unpaid furlough.

The staff brought their concerns to Bush and to the board, and the decision was, in part, overturned (Lucas is currently on unpaid furlough, and Hanagan is working three-quarters of his previous hours).

"Yes, the staff had issues with [Bush's decision], and those concerns were raised passionately and eloquently by many staff members," said Pruzan, who was not present at the meetings. "The case was made to re-think some of the staffing changes, and many of those suggestions were not only considered, but acted upon."

Pruzan continued: "The staff... was able to move past the raw, upending emotion that accompanies any personnel changes within a tightly-knit organization, and see the forest for the trees. I think the reality is that our current staffing scheme works on a practical level, is rooted in economic reality, and can serve as foundation for future growth."

UPDATE II: NWFF Board Member David Rosencrans responded to my original story with this comment:

I was present at countless meetings through the month of August in which budget and staffing decisions were being made in the context of a cash-flow crunch and in advance of the organization's 2010 budget cycle. In my estimation, the Executive Director, staff and Board succeeded in reaching a collaborative outcome which in fact strengthened the financial and programming initiative of the organization. The entire group is to be applauded for its tenacity and desire to continue providing great service to the community, a hallmark of the Northwest Film Forum. And it is clear from the generous response to the fundraiser by our audience that they, too, are invested in the organization's future.