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August 30, 2012; Source: Wall Street Journal
A Wall Street Journal article titled “The Nonprofit as Nonstarter” points to a study finding that many small startup dance companies in New York City are moving away from the standalone nonprofit model toward a model relying on fiscal sponsorship. But the article’s title may jump the gun a bit, at least as far as we can see. There is no definitive statement in this article that says that the use of fiscal sponsorships has increased significantly or that the number of nonprofit dance start-ups has decreased. We look forward to the release of the Dance/NYC report, scheduled for September 7th, and will pass that along to you. In the meantime, what we take away from this article is that the study will present a baseline of information including location, budgets and income on more than 250 New York city-based dance-making entities using fiscal sponsorship services. The fiscal sponsors involved also sponsor other types of arts groups, but the research covers only dance groups. The plan is to track the groups over time and one of the hypotheses to be tested is that fiscal sponsorship will reduce the number of new nonprofits in that field while “increasing the overall support for dance in the city by streamlining the process for donors and grant-makers.”
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Lane Harwell, the director of Dance/NYC, comments, “This gives us the ability to have benchmarks. We will be able to track this over time.”
The report from Dance/NYC will reportedly feature interviews with individuals such as choreographer Kyla Barkin of the Harlem-based Barkin/Selissen Project, who mulled the possibility of founding a dance nonprofit in 2008. Instead, she opted to turn to a fiscal sponsor that provides “strategic services to thousands of performing artists and companies in New York City and beyond.” The WSJ reports that, given that her dance company’s budget has so far ranged between $10,000 and $50,000 annually, her accountant told her, in Barkin’s words, “Don’t even bother [becoming a nonprofit] until your budget is $100,000 a year.”
The draw to the fiscal sponsorship model for such groups, according to Adam Huttler, the founder and executive director of Fractured Atlas, which reportedly sponsors 50 dance organizations in New York City, is that the groups “can focus their attention on making art and less on trying to be lawyers and accountants.” In return for this service, Fractured Atlas gets to keep about six percent of the funds it raises for the groups.
NPQ is glad to see this type of research surface. Not every collective effort requires a standalone nonprofit. That said, given our past coverage of fiscal sponsor abuses (most notably Rick Cohen’s investigative work on the International Humanities Center (IHC), an apparent Ponzi scheme which is, of course, not the norm in the fiscal sponsorship industry), we are concerned about the kind of talk that makes it seem as though an artistic director, or anyone else running an organization, can simply hand over the keys without significant due diligence and focus on nothing more than one’s art or one’s mission. It was this mentality that left several of the small organizations in the IHC scandal wondering where their money went, with some not even knowing how much was missing. –Mike Keefe-Feldman