Business structures are one thing; business models are another. For all nonprofit arts and culture organizations, there are six sources of revenue: Gifts from individuals; gifts from corporations; foundation grants; government support; earned revenue (tickets or sales, fees for service, rentals, etc.) and investments (including endowments).
Your business structure establishes a foundation and sets the stage. (For all the charitable support, being a 5o1(c)3 is essential. An LC3 would focus more on earned revenue.) However, your business model is the mix of those six sources. Cultural organizations are not all the same – they have a number of different business models, all within the 501(c)3 structure. Each drives different behavior and requires a different attitude. As a thought-starter, here are five ways to think about it. In our experience, most organizations have a mixed model and are not purely one or another. Read the rest of this entry »