• Wil Sherk

    I commend to all performing arts board members Michael Kaiser’s Art of the Turnaround. This short, helpful book reminds us that although diversification of revenue is important, the most important requirement of sustainable nonprofit arts enterprises is a quality product that is valued by consumers.

  • DPearson

    The first comment to the article is a good consideration to keep in mind. I always worry when organizations start talking about renting parking lots and expanding unrelated special events to support themselves. These ideas are normally coupled with expanding other business activities and, before you know it, it’s hard to determine when the business activities end and the charitable mission begins. Much less, in small organizations, these business activities can easily outpace traditional sources of funding which can result in all sorts of property tax and exemption issues for organizations.

    At what point does it not just make more sense to just convert to a for-profit business….?

  • Trevor O’Donnell

    Thanks for a great article. And thank you for encouraging arts organizations to begin taking cues from the sports world, which is way ahead of the arts in audience development and especially community engagement.

    I’d caution against encouraging arts organizations to outsource marketing to agencies, however. Agencies don’t build audiences; they sell creative and media services to people who want to build audiences. The difference is monumental. If an arts organization doesn’t have a sophisticated marketing pro on staff who can hold the agency’s feet to the fire, they can find themselves working with agencies that will happily sell them anything they think they want to buy. There’s no substitute for professional in-house marketing talent.

  • Alan Harrison

    Assuming that your UBIT is being paid on your non-mission revenues (parking lots, book-in events, etc.), the Fox’s financial obligations are being met. But the 501 c 3 code is pretty strict on mission:

    “(d) Exempt purposes—(1) In general. (i) An organization may be exempt as an organization described in section 501(c)(3) if it is organized and operated exclusively for one or more of the following purposes:

    (a) Religious,

    (b) Charitable,

    (c) Scientific,

    (d) Testing for public safety,

    (e) Literary,

    (f) Educational, or

    (g) Prevention of cruelty to children or animals.”

    That said, unless the Fox is serving an historic purpose (stretching the use of the word “educational”) or is directly serving its community by offering quantifiable charitable outcomes (as its main purpose, not as a sidelight), then it should probably just be a for-profit institution and seek investors rather than donors. There’s nothing wrong with making money, either as a true nonprofit or as a for-profit, but in the case of the former, there had better be a direct, specific, and measurable public good – or else it’s just another ruse to evade taxation.

  • John Godfrey

    I agree with the overarching premise, that we have to think beyond traditional fundraising practice. We need to think in terms which one US colleague of mine labels “financing not fundraising”. That may include, as this piece suggests, looking at other revenue producing ways of using assets. However, there are many kinds of theater and theater organization and the focus of this article seems to be on a theatre venue (maybe one that has programing and perhaps production responsibilities). How might other types of theater and other types of arts organization adopt this advice?