When June O'Neill took over as executive director of the Philadelphia Cultural Fund 12 years ago, she barely had time to find her desk before Mayor John F. Street announced he was slashing the fund and eliminating the city's Office of Arts and Culture.

That was followed by the 2008 fiscal crisis, which saw the fund, an independent nonprofit that receives its budget entirely from the city, cut 42.5 percent to $1.8 million. This year, after several years of arts-community lobbying, Mayor Nutter agreed to raise its budget to $3.14 million, which was distributed earlier this month to nearly 300 organizations.

O'Neill, 56, has been through it all. She has been feted and lambasted for funding decisions (which are based on scores compiled by peer panels) and has advocated tirelessly for the fund's importance in maintaining a healthy cultural environment.

She is stepping down at the end of this month - Lois Welk, who led Dance USA/Philadelphia until its recent demise, will be interim executive director - and a search is underway for her successor.

So who gets the largest grant this year?

The largest is $16,500, to the zoo.

Why does a huge organization like the zoo, with a big development staff, get funding?

We've asked the large organizations, why do you bother applying for $16,000? It's like a pimple on the nose of their budget. And they have said consistently that it's important to be able to say that they get support from the city.

Do you think large groups should be applying for so little money?

It would be great if there were another mechanism for funding the larger organizations and if the cultural fund could focus on the midsize and smaller organizations only.

Who received the smallest amount this year?

I think the lowest grant is $690 to an organization called The Best Day of My Life So Far. It's a wonderful organization. They work with seniors and record them describing the best day of their lives. It's a really great program.

You could write that grant check yourself.

We have a policy that we don't give more than 30 percent of an organization's budget. This organization happens to have a very small budget.

Why are cultural fund grants important to organizations of any size?

For smaller organizations - and even for the midsize organizations, and maybe even the large ones - the fact that this money is completely unrestricted makes it way more valuable than other grants. The fact that you can use this money to pay for operating overhead, pay for salaries, pay the gas bill, whatever, the fact that this money is completely unrestricted makes it extremely valuable.

Is that because the funding community largely attaches restrictions to its grants or nudges arts groups into specific areas?

Exactly. I think we are one of the few remaining sources of unrestricted general operating funds. In 1986, when I got my first job in the city, I worked for a small cultural organization, the Philadelphia Festival Theater for New Plays. That organization got general operating funds from Pew, from William Penn, all the major funders. But it also got general operating money from Arco Chemical, from a big bank, from Cigna. In the '80s, there was a lot more money available, not just from private foundations, but also corporations. They all used to do general operating, but they don't anymore.

So you don't restrict how the funds are used, but you do have a formula to determine who gets funds in the first place and how much. What factors do you weigh?

Program merit and strength and community impact - that has the highest weight. . . . Governance and leadership, management and operations, fiscal health, and ability to plan and evaluate.

The focus by funders on fiscal practices and management strength has been criticized in the arts community. Has the cultural fund always taken these into consideration?

Yes. It's in the founding documents. There's a context that you look at. If you've got a small organization that's totally volunteer-run, you're not going to set the same kind of bars that you would for a larger organization that's got a very large and professional staff. You wouldn't treat them the same way when you look at them. There's always a context. If there's one employee or there's a part-time executive director, you look at it very differently than you do if there's a large staff.

So you cut some groups a break?

Yeah. Always.