Part of me can't believe I'm writing this. But I think it's something that needs to be said.
The nonprofit model, also known as the 501c3 model, for producing art has been given a bad rap.
The latest example of this is this article "Is the Not For Profit Structure Model Self Destructive" by James Undercofler(h/t to Thomas Cott). The entire article is worth reading but here's a selected highlight:
So, is the NFP too cumbersome in its structure to impede the flow of artistry it is created to facilitate? As a one-size-fits-all model, the answer is absolutely "YES." For small start-ups, and for perpetual start-ups, the requirements to achieve NFP status, as well as the ongoing requirements, from financial reporting to maintenance of a fiduciary board, often overshadow the creation and presentation of artwork.
I think the NFP model allows us the opportunity to let creativity flow. Just because some of us (many of us?) haven't taken advantage of the opportunity doesn't mean that it is there.
To explain the opportunity, I need to talk a little bit about scale. Stay with me, I may need a minute to make my point.
"Live" is expensive.
Live theatre. Live dance. Even the relative liveness that comes from an arts gallery or museum.
All of them cost a ton of money to produce properly.
Because the arts are both labor intensive and capital intensive.
This means they require a lot of people and a lot of equipment (sound boards, lights, etc.)
Labor and capital intensive businesses are inherently expensive.
Now I know this is the point where some of you will tell me about how you produced an epic musical and ran it for 5 weeks for $5,000. Good for you. But the truth is the only way you could pull that off is by underpaying (or not paying) damn near everybody, including yourself.
So I'll stick to my point. You, me, all of us, we are in an expensive line of work.
For an expensive line of work to be viable, it has to be able to scale. Avatar may have cost a billion dollars to make, but they made it back through their ability to distribute the film to a whole lot of people.
The live experience is far more difficult to scale. It can not be distributed in the same way DVD's, cell phones and other tech based items can.
What the nonprofit model provides us is the opportunity to scale up in a different way.
James Cameron had a network of movie theatres.
You and I have individual donors (the key to it all), foundations, Boards, etc. These are the tools we have to make our big, expensive, slow business viable in a world where damn near everything else is trying to find a way to get smaller, cheaper and faster.
In James's article he lauches into some of the typical complaints about the NFP model.
- Board members are clueless about how the business works. Yes, many of them are. But only because we allow it. We don't have to let these people on our Boards, nor does it take an act of God to remove them once they are on. We get the Board members we deserve.
- Writing grants and other administrative duties are too cumbersome. First, I know many funders are trying to find way to make their grant applications less complex and lengthy. Second, even if the admin duties are a bit of chore they are a necessary part of doing business. Do you think the guy that runs the coffee shop I go to every morning likes doing profit/loss statements and managing inventory? Some things are just part of the job.
Here's the deal.
The NFP model is about the long haul. It's about building an artistic legacy. It's about serving a defined group of people and then depending on those people to support your work.
The issue is that many artists aren't interested in all that.
They are worried about this play, this album, this moment in time.
That's an acceptable choice. But it's not a choice that fits the NFP model.
What we have right now are a bunch of organizations that are really just failed for profit businesses.
They couldn't find a way to make their art economically viable in the for profit realm so they throw on the cloak of nonprofit status and hope that nobody notices how self serving they really are.
Then they wonder why they can't raise money. They wonder why nobody is just going to hand them a check because they REALLY, REALLY, want to do this piece of art.
I'll agree with James on this. The NFP model isn't for everybody.
I'll go a step further and say that it isn't for most people. Many people who apply for 501c3 status are making a significant mistake.
But the mistake isn't the model, it's the misunderstanding of what the model is for.
Some of the greatest, most creative, most risky art this world has ever seen has been produced by nonprofit arts organizations.
It's still one of the most viable ways we have of giving scale to what essentially can not be scaled.
But what I'm hearing more and more are individuals blaming the model for their own bad decisions.
They do safe, tame, redundant work and then turn around and place the blame on the system instead of taking responsibility for their own lack of courage and creativity.
Yes, the NFP model has it's limitations. It isn't a perfect system. But to say that the system itself stifles creativity removes the responsbility from outselves and places it on an invisible "other".
I don't think that's the way to go.