Swan Song for Nonprofit With Expiring Business Model?

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May 4, 2011; Source: The Wall Street Journal | The Wall Street Journal yesterday reported on the problems at the Music Performance Fund, a 53-year-old Manhattan-based nonprofit that was set up to receive and distribute as grants a small portion of the proceeds on the sale of vinyl records and CD’s. I guess you can anticipate what the problem might be.

The nonprofit was engendered within the settlement of a 1948 musicians' strike and is based on a contract between the American Federation of Musicians and some record labels, including Sony Music, Universal Music Group, and Warner Brothers Records. The funds are to be used to support free musical performances.

Unfortunately, the last time the contract was renegotiated in 2005, no provisions were made for the Fund, which does not participate in the talks between the Union and the labels, to receive any portion of music downloads.

The loss of the Fund, which has a $5.9 million budget would have a wide impact on communities. According to this article, “MPF helped sponsor 4,408 concerts in the U.S. and Canada in 2010." But even this was "a 60% drop from 2005 and more than a 93% decrease since 1982, according to the same records.” One of the beneficiaries, for instance, is the New York Grand Opera Company, which has been funded to do free performances in Central Park for the past 38 years.

The Fund’s future revenue stream, as mentioned earlier, is dependent at this time on the current talks between the union and the labels which are represented by the firm of Proskauer Rose.—Ruth McCambridge