Scaling a Project: As Easy As Alpha, Beta, Charlie

Posted by KJ Sanchez On December - 11 - 2012

KJ Sanchez

As the CEO of American Records, a theater company devoted to making work that chronicles our time/work that serves as a bridge between people, scale is always on my mind and an important part of how we produce.

For your information, I’m the CEO, not the artistic director because American Records is an S Corp, not a nonprofit. We have the soul of a nonprofit in that every dollar we make we spend on artists and programing (i.e. we have no profit margin), which allows us to work under the fiscal sponsorship of Fractured Atlas.

This is a great partnership because being a corporation keeps us light and lean and able to work very quickly, and the fiscal sponsorship allows for grants for particular projects. Right now, our average earned/contributed ratio is 80/20 (80% earned, 20% contributed). We’re not the only ones pioneering this model. Rainpan 43 Performance Group and Universes are also S Corps with fiscal sponsorship. Other companies are pioneering the L3C.

I bring up our company structure because it is fundamentally tied to how we work on scale. The way we’re working on “going big” and the reason we have such a high level of earned income is because we tour. Our tours go to traditional theaters like Actors Theater of Louisville and Roundhouse and traditional presenters like The Hopkins Center at Dartmouth but we also tour to conferences, hospitals, lecture halls, and military bases.

Last year I contracted with the Department of Defense to take our play ReEntry to Army bases throughout Germany and Italy, where command used the performances as post-deployment training. ABC News covered the play as part of a larger story about veteran suicide and post-traumatic stress disorder. Read the rest of this entry »

Low-Profit But How Much Potential? (Part 2)

Posted by Adam Huttler On May - 27 - 2011

Adam Huttler

[During last week’s Private Sector Blog Salon], fellow guest blogger Diane Ragsdale got me thinking after she posed the question: what would have happened if the nonprofit regional theatre movement had embraced (and had the opportunity to embrace) the L3C instead of the 501(c)(3) corporation?

This is an interesting and subtly radical thought experiment. Diane is effectively proposing that we rewind history and build what we now think of as the nonprofit arts sector as a socially-conscious for-profit arts sector instead. Has the horse left the barn or is it really possible to reinvent ourselves at such a fundamental level?

In truth, I’ve always believed that the alleged conflict between artistic purity and commercial success was largely overblown. If anything it’s a healthy tension, not an insurmountable chasm. Certainly there are arts organizations whose missions are to push aesthetic envelopes and operate at the leading edge of craft and artistry. They will always need philanthropic subsidy to survive, and so they should probably be 501(c)(3)s regardless. But these brave, unpopular pioneers are the exception, not the rule. Most of us operate in the vast middle ground between Broadway and The Wooster Group.  Read the rest of this entry »

Circus Mojo – Part Two

Posted by Paul Miller On May - 19 - 2011

Paul Miller

Circus as an industry has been incredibly exploitative.

When I joined the circus as a college drop-out in the late 1990s, the Soviet Union fell and with it, went their highest art form—the circus. Their amazing artists had no support from the government, so American circuses enticed these talented individuals to come to the United States. They were paid thousands of rubles which seemed like a lot of money but was, in fact, only about $50 per week. This is not unusual.

I’ve worked with many Russian and Asian circus teachers who can barely read or write. In 2000, I had a six-month gig in Japan with a fellow performer who could speak seven languages but his agent stole half his fee because he could not read the contract.  Read the rest of this entry »

Questioning Old Dogmas

Posted by Colin Tweedy On May - 16 - 2011

Colin Tweedy

I sense a sea change in the way the arts are funded. There is no doubt that many countries in Europe are cutting their culture budgets. A recent leader in the Financial Times concluded:

“Cultural organisations also need to do more to help themselves. A new act is unfolding in the drama of arts funding – and artists must play their role to the full.”

Arts organisations are entrepreneurial by nature. Many of the largest arts organisations are becoming more commercially savvy.

In London, where the lion’s share of all private cultural investment is raised, major bodies have seen the light. The Royal Opera House joined forces with RealD, a film and production company to provide 3D movies of their productions worldwide; the National Theatre is producing films of its block buster productions to 380 cinemas across the globe. The public grant percentage of their income has been reducing annually.  Read the rest of this entry »

Over or Under Modified?

Posted by Claudia Bach On May - 16 - 2011

Claudia Bach

The nonprofit arts organization. An ungainly set of modifiers. But in the pre-professionalized mid-1970s, when I had to create my own bachelors degree in arts administration, I felt like I was part of an exciting evolutionary force, helping to grow the structural integrity and value of the arts within the conceptual and legal arts nonprofit corporate framework.

At that time it appeared to be a boundless horizon: a corporate structure where artists could gather force to develop and publicly share their work, communities could access entertainment and elucidation, and where we could rest assured that cultural legacies would inspire us and be preserved for future generations. I don’t think I, or my fellow travelers, questioned this as a common good. It was the chosen path and our work was to use it to good advantage in service of the arts.  Read the rest of this entry »

Revenue Means More Than Business Models

Posted by James Undercofler On May - 16 - 2011

James Undercofler

Why, why are arts organizations being advised to research models other than the 501(c)(3)? It’s vitally important to analyze the reasons behind this “movement” in the arts and culture sector.

The changing nature of philanthropy surely plays a central role. Reduced contributed revenue from government, foundations, and corporate entities has placed increased pressure on individual giving AND earned revenue. These latter two elements tend to work in opposition to each other, in that increased pressure on individual giving generally leads to more, less-informed board members who require attention, while the need to increased earned revenue requires a fleet-footed executive team.  Read the rest of this entry »

L3C Cha-Cha-Cha

Posted by Diane Ragsdale On May - 16 - 2011

Diane Ragsdale

In his book The Revolutionary Stage, Joseph Zeigler states that Arena Stage in Washington, DC, began as a for-profit corporation by selling shares totaling $15,000 (at seven percent interest) to 300 Washingtonians. As part of doing research related to my dissertation topic—the impact of economic forces on the American resident theater movement—I recently read a speech called “The Long Revolution” written in 1978 by Zelda Fichandler, founder of Arena Stage.

She writes that she founded the theater in 1950 as a regular profit corporation, in order to better maintain control of its artistic policy, and that the theater became a nonprofit seven years later “in order to become eligible for gifts and grants, especially from the Ford Foundation which entered the field that year.”

Ms. Fichandler elaborated on the transition to becoming a nonprofit, saying:

“[…] we made all of our expenses at the box office for roughly the first fifteen years of our existence. It was as late as the mid-sixties when we conceded that we couldn’t continue to do this, but had to become a deficit-producing organization.  Read the rest of this entry »

Private Sector Blog Salon: Does the 501(c)(3) Remain Top Model?

Posted by Valerie Beaman On May - 16 - 2011

Valerie Beaman

Here we all are, still in the trenches despite the recession, still searching for sustainable solutions.

Some say the 501(c)(3) model is broken while others claim it’s the economy, not the nonprofit business model, that’s broken. One thing is certain: change is the only constant. The lines between nonprofit and for-profit are definitely blurring. What do you think?

Is the 501(c)(3) model still working well for your organization? And for emerging artists, is the 501(c)(3) model  still viable for what you hope to achieve or might another model better serve your vision?

Let’s take a look at some of the newer options that our experts will be debating in this week’s private sector blog salon.  Read the rest of this entry »