Sunday, February 26, 2012

Nonprofit Professional Theatres

This is my daily life.  Managing a nonprofit, professional theatre.  It is an interesting world!  Please take a moment to review this sector's equivalent of "the Broadway League" -- that would be Theatre Communciations Group.  Their web site is: www.tcg.org.  Of perhaps deep interest to you as the 'next generation' would be the Executive Director's most recent blog: http://www.tcg.org/publications/weekly/index.cfm

They produce a monthly magazine, AMERICAN THEATRE.  There are copies in the main office and/or copier room in the department.  Please take a moment to look at one this week as you are passing through. 

Remember when we signed up for the ArtsJournal weekly or daily news on theatre (or were supposed to on the first week of class).  Part of the reason was to help you know what is going on in the industry in an easy news feed (the New York Times mostly covers last week's content:  commercial theatre)

A recent article in the LA Times covers the struggle of the 'big' theatres in the US (these are similar to Center Stage -- bigger than Everyman)  http://www.latimes.com/entertainment/news/la-ca-mcnulty-notebook-20120219,0,7909313.story  As Americans, we seem to be caught up in the "it is so hard where we are right now' litany.  I, however, see it as a great opportunity -- what do you see this opportunity to be?

Finally, as mentioned frequently, nonprofit arts organizations must serve their community (that's why they are nonprofits).  The key phrase of the future is "sustainability."  Is the system/organization able to sustain itself.  A recent study of the Columbus arts community proved quite interesting in this arena.  The full 104 page report is here (click to download).  Part of their summary noted:



Situation Analysis
Building on work by WolfBrown in their January 2010 report on the Future of the Arts in Columbus, Ohio, we began our work by extending their trend analysis over a 10 year period to document changes in the Columbus arts sector over two economic cycles. Among key observations:
  • There has been an aggregate loss of earned revenue in the sector, with a decline of 27.3%. ($4.8 million)
  • Contributed revenue has increased, with individual giving having increased by 124.4%.
  • Corporate contributions increased by only $285,000 (5.0%)
  • Public sector support from all levels of government gained just $850,000 (23.3%)
While some organizations contracted considerably over the past decade, there are a number of organizations that have successfully grown or emerged.
The largest organizations, in aggregate, have had no material gains in buying power over the past decade despite increased budgets.
There has been increased competition in the local entertainment sector with a substantial number of new venues and organizations having opened in the past decade.


Understanding Change
Nationally, the arts and culture sector has experienced change that mirrors some of the trends in Columbus, including:
A decline in participation of benchmark arts activities (classical music, opera, ballet, dramatic plays) by as much as 30% since 1982.
  • Arts philanthropy ranking in 7th place of ten charitable organization categories for the past decade.
  • Non‐profit theatre companies experiencing stagnant buying power over the past decade.
Locally, Columbus has not changed much demographically over the past ten years though there are some economic indicators which are of concern. In particular, Columbus has seen less net growth in the number of business firms and fewer new small business establishment which correlates with slower growing economies. In addition, Columbus’s GDP has grown at a slower rate than the average of all U.S. metropolitan areas. While these areas are of concern, Columbus 2020!, a regional economic development plan, outlines an aggressive plan to build the local economy, centered around three key strategies:
  1. Retain and expand the companies and industries that call Central Ohio home today
  2. Attract major employers to establish operations in Central Ohio
  3. Create more commercial enterprises by leveraging our tremendous research assets and entrepreneurs
There is a strong consensus among community leaders that Columbus’s arts sector can and should play an important role in achieving these goals by:
  1. Contributing to Columbus’ competitiveness by helping to tell the Columbus story
  2. Aligning with broad community goals
  3. Pursuing partnerships with business, government, education, sports, tourism and entertainment
  4. Achieving further efficiency and right‐sizing by promoting strong management practices...that align with community capacity and
Benchmarking
One of the key outputs of our analysis is to test whether Columbus’s arts sector is right‐sized and sustainable. Central to this consideration is exploring what a robust and reliable sector looks like, including the capitalization necessary to succeed. As we pursued the notion of sustainability, we needed to better define measures or indicators of “right‐sized” through field research and stakeholder conversations. It quickly became apparent to us that sustainability is a place on a continuum of operating outcomes. There are distinct levels; each reflecting different degrees of organizational health, capacity and required capitalization – whether in an individual organization or the arts sector as a whole. The three levels we have defined for this project are:
  • “Viable” – the capability to function in the short‐term, but limited in the capacity to adapt and grow
  • “Sustainable” – the ability to meet present needs, but also to generate enough resources to deliver on mission in changing  environment

    “Vital” – access to sufficient resources to allow the organization to fulfill its mission, reinvest in its future, and maximize its public value by evolving to meet future needs2
With these definitions in mind, we developed an index system with 14 indicators spread among these five categories:
  1. Attendance and Market
  2. Contributed Income
  3. Human Capital
  4. Assets5. Product 

    How do you understand their view of the situation?  Why are those 5 categories of indicators important to the nonprofit arts sector?

8 comments:

  1. Since many new artistic directors in theatres such as the Old Globe have succumb to a more commercial side, many people will start to eventually get tired of the “business as usual” facet where all they see is spectacle over substance. I could start up a theatre that is more substance based. It’s mission statement should be evolving with the community. It should not only engage the community where it is located, but also appeal and inspire the younger generation. With hands on workshops, the younger generation could learn the trades of acting, writing, lighting, ect. and small troupes could be created. Working with the community could help to re-craft ones mission statement and tailor it towered a more direct and concise direction. However, it should not ever be set in stone due to the fact that communities evolve. After a good foundation with the community, and a loyal audience, people will start to drift from the mundane business as usual spectacle theatres towered a more diverse one.

    The 5 categories are almost the who, what where, when, and how of non profit theatre. Examining these will show the theatre what is wrong and what needs to be changed. They are realizing that though population has not changed that much in Columbus Ohio, the community is still evolving and they have to find some way to reconnect with it.

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  2. I agree with Sean in that theatre companies need to be flexible and change in accordance to how the community around them changes. I also thing that it is particularly important to provide entertainment and services that mirror what the surrounding community requires. I believe that the most important of the 5 categories is product. What a company produces is what is going to bring more patrons in. If the services that they provide to their community are those which enhance the world around them I believe that they will be successful.
    My dream job is to open a non-profit children's theatre in the Miami area. In order to not only entertain but to enhance the area which the company is based in I believe that a number of things could be done. I would like to house productions that are not only for children, but also those that involve children. This not only entertains but also engages young audience members. Teaming up with local schools and providing after school programs for working parents provides a safe haven for children to learn and play at while parents are still working long after the school day is over. Providing this service gives parents a worry-free place to send their children after school and keeps children out of the less safe areas of Miami while unsupervised. Because of the diversity of the community I also think it would be a good idea to provide services in multiple languages, most likely English and Spanish, the two major languages in the area. By producing shows and providing classes in multiple languages this widens the pool of possible patrons. My last major idea was to make my theatre "green". By making my theatre eco-friendly you are able to receive additional government funding and possibly attract more patrons. Because of the proximity to the ecologically protected Florida Keys people in the area may be drawn to the company because it makes a great effort to protect the local environment. Also the younger generation is drawn to "green" companies because they understand the need to protect our planet.
    These ideas not only set the theatre up for success but clearly enhance the community. Because these ideas fulfill immediate needs of the surrounding area and are up to date with the current need of the world it shows potential for the company to grow with the needs of the community. This shows sustainability within the corporation.

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  3. In the beginning, I was shocked to see that you saw this as a great opportunity, but as I read the article, I really began to see what you meant. Sure the times may be hard, but it seems to be a perfect time to play with the system a bit and see what people really want. If certain shows are not answering well to the public's calling, maybe the companies should try more "fluff" shows, if you will. These shows would not only generate profit, but the reputation of the theatre would become better. Once the theatre's attendance is up, lesser known shows and edgier pieces could slowly infiltrate the company's season. If they do not work out, then they should try to stick with these well known shows. As Sarah said, the companies are not in this for the money (well they are, but not to the extent of for-profit), and therefore, need to change with the community around them in order to see some money come in.
    As for the Columbus situation, their views seem to focus mainly on the "who", and this is obvious due to the fact that they are non-profit. In this world, the "who" is what can make or break you. The population of the city has not changed dramatically, so like Sean mentioned, the city needs to find a new way to connect with their own people.

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  4. I am wondering if 'serving the community' necessarily means going towards fluff (whether presented in the article or implicitly by me at times). How might you engage your community that isn't fluff?

    For children's theatre -- we should talk -- as there are a couple of great models for you to investigate for structures, etc (eg Imagination Stage does put student companies on stage, but in a different fashion than you have described . . .).

    As to a 'green theatre' -- several are definitely working in that arena, including adult theatres. The difficulty can come with the programming (difficult to be Broadway and green, but . . .). LEED certification for your building is the first step (or partner location . . .)

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  5. I can see this as being an opportunity to kind of get the feel of the people in the communities. I think that the theatre companies should base their theatre and producations off of the communities they decide to place the buildings in. If the theatre is located in a fairly "high class" "rich" community, why not have a "businnes theatre"? If the theatre is located in a more "lower/middle class" area, then the theatre can be more flexible as far as just trying to make a profit from the theatre. However, I feel like no matter if the theatre is placed in a area with high class patrons or lower to middles class patrons a theatre can pull in the type of audience they want to pull in by the type of businees they are running from seatings to the actual producations. So it all depends.

    I think that the 5 categories of indicators are important to the nonprofit art sectors because it basically showing statistics of hpw things are going now and what should happen in the future. The theate community is envolving and here is how to keep up. This is what you need to know in non-profit theatres.

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  6. Hawaii...I am unclear on what you mean by 'business theatre' ? A bib budget does not mean for profit. I run a 5 million dollar theatre with 275 employees (48 full time). If I had to only use earned income, my classes would cost 500 per semester and my shows $75 per ticket (and they would have to be musicals....' I would not be serving and education and empowerment through theatre mission which is what my community wants. (and some would argue Bethesda is a wealthy community...I would say Potomac is wealthy and the many apt dwellers etc esteem to be :-))

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  7. I agree with Sean, these 5 categories are important to the non-profit sector because they are basically the 5W's in viewing an organization's current situation. It is very important to be aware of market potential, funding, contributors, arts professionals, etc in the community.

    Although I currently work for a nonprofit and am definitely interested in a career in the theatre industry, I still struggle to fully grasp certain aspects of nonprofit theatre, such as the business structures and terms in the industry. I hope to learn more during our lecture today so I can better understand the organizational structure of nonprofit art organizations.

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  8. The 5 categories of Attendance and Market, Contributed Income, Human Capital, Assets, and Product are important to non-profit organizations structure because they are the backbone of the company. They bring in the money needed to keep them going with being a non profit organization.

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