From new eligibility rules to temporary funding adjustments, important updates are in place for the FY2026 LRAC grant cycle. Learn what’s staying the same, what’s changing, and how these shifts may affect your project planning—starting with the next grant round in September.
I want to share some insights with you regarding grants to artists and arts organizations in Lake Region Arts Council’s region in the new Fiscal Year 2026, which began July 1, 2025.
Continuing Programs and Adjusted Award Ceilings
First, we’re continuing all the same grant programs that we’ve had in past years. Several of them have increased award ceilings to keep pace with rising costs of projects, materials and labor.
Why Legacy Funding Is Lower for FY2026
Second, there is less funding coming in from the Legacy Fund for LRAC to grant out this year. This is due to the Arts & Cultural Heritage Fund dollars—which are distributed through Minnesota’s Legacy Amendment—being lower for FY26 only. The reason is a one-time accounting correction, and funding is expected to return to normal in FY27.
During the 2024-2025 biennium, the State of Minnesota experienced a historically unprecedented spike in state revenue. In that two-year cycle, the state had a projected $18 billion surplus. The state’s sales tax revenues were also unusually high.
State sales tax revenues are the source of funds for the Arts and Cultural Heritage Fund, which provides the lion’s share of the Minnesota State Arts Board and regional arts councils’ (RACs) funding. Between the FY2022-23 biennium and the FY 2024-25 biennium, the Arts Board and RACs received an extraordinarily large, 39% increase in funding from the arts and cultural heritage fund (the dollar increase was more than $27 million!).
Understanding the One-Time Accounting Correction
Earlier this year, the Minnesota Department of Revenue and Minnesota Management & Budget discovered that, for more than a decade, certain lottery ticket tax revenues were mistakenly included in the formula used to calculate Legacy Fund distributions. These revenues were not actually subject to the Legacy sales tax, leading to an overpayment of approximately $31.7 million across all Legacy funds between FY2010 and FY2024. To correct this, the state will reduce FY26 distributions by about $10.5 million—impacting all four Legacy funds, including the Arts & Cultural Heritage Fund. As a result, LRAC has fewer dollars to grant out this year, which will make Legacy rounds more competitive.
Fortunately, this is a one-time adjustment. Legacy funding is projected to return to its regular levels in FY27, and the correction helps ensure that future grantmaking remains fair, accurate, and sustainable. It’s appropriate to note that this change has nothing to do with any action on the Federal level.
Board Actions on Grant Eligibility
Third, you may have already read that the LRAC Board has made some changes in the eligibility requirements for grants for individual artists and arts organizations.
Over the years, grants from LRAC have supported many festivals and events through the Region. The Board and staff at LRAC have received a great deal of feedback from the artist community over the last few years telling us that they sometimes feel we are funding the same artists/organizations/projects, and that many less familiar, less proven, and perhaps less polished proposals don’t have a chance when stacked up against excellent grant-writers and projects that have a well-established track record of success.
Additionally, our recent EDIB (Equity, Diversity, Inclusion, and Belonging) assessment results also indicated we need to improve the matching of our Region's demographics in terms of grant funding and that’s an area we are addressing in making changes to some of LRAC’s grant programs. LRAC staff will be tracking the results over time and we hope to see if these changes have improved our demographic reach and feedback about fairness from the arts community. If not, we will reassess and make changes as necessary. LRAC grants funds to help artists and arts organizations create arts access for all Minnesotans.
The Three-Year Funding Limit Policy
The new policy being implemented by the LRAC Board this year (FY26) limits eligibility for applicants who seek funding for a similar project more than three times. The rationale is that by funding a recurring event or project three times, a grantee has the chance to launch (#1), grow (#2) and get established (#3). After three years or funding cycles, knowing that LRAC funding will be sunsetting, the organizer needs to make the necessary plans to transition into a sustainable project or event with other income and funding sources. The LRAC Board doesn’t intend to become an expected (and do-or-die relied upon) income line item in the budget of a recurring project or event. If we did, we’d quickly use up our available grant funds and leave little for anything new, unexpected or untried.
In the roll-out of this policy change, LRAC will consider projects that were awarded funds in the last two fiscal years (whether it be once or twice funded in that time) as having received their “first” funding. So, going forward, applicants can be awarded for that project two more times, regardless of how many times they were awarded in the past before FY24. That means a grant applicant can be awarded two more times before the project is no longer eligible for the Project or Legacy Grants (per our current guidelines.) That gives grantees time to prepare and cultivate alternative funding sources. The idea is for LRAC grants helping launch and incubate arts projects that create access for all Minnesotans, not sustain them in perpetuity.
We’re Here to Help
Finally, don’t hesitate to reach out to Ali Pinto, LRAC Grants Manager or me with any questions or for any assistance in the grant process. We’re here to serve the people of the LRAC region, and to assist you in all your artistic pursuits!
Timothy Wollenzien, Ph. D.
Executive Director
Lake Region Arts Council
