To Be, or Not To Be? (a Non-Profit Organization)

By Corbett Barklie

I recently met with an actor who pretty consistently works collaboratively with another group of actors. Lately he’s been thinking that if he became a nonprofit organization, he could apply for some grants and really get things going. He wondered if I had any advice.

WHY YES – YES, I DO

First off, it’s expensive and time consuming to incorporate because there are many forms to fill out, federal and state fees, possibly attorney fees, and you could wait for six months or a year to actually get tax exempt status. Second, most foundations and government granting programs won’t even let you apply for a grant until you’ve been doing business as a nonprofit for at least a couple of years. Third, the law requires that you maintain a board of directors that meets regularly and that you file annual reports with the Internal Revenue Service.

NOW IS THAT REALLY WHAT YOU WANT?  

Typically when an artist asks me whether or not they should become a non-profit, the question reflects an individual’s desire, not just for access to grant money, but for the sense of permanency that comes with organizational infrastructure. Loosely formed creative collectives, which I happen to believe are the most powerful of all creative groupings, are fluid in nature and may, at any moment, dissolve into thin air so it’s not surprising that an artist who has worked in this capacity for some time would begin looking for more structured alternatives.

So before jumping headlong into a situation that you’ll be stuck with forever, you may want to consider another option. Now that you’ve identified your desire for infrastructure, ask yourself this, “How important is it to me that I own the infrastructure?” What about borrowing one? Think about the possibility of becoming a program of an already existing nonprofit. Think inside and outside the box on this. Think about existing nonprofit theaters. Can your work augment their mission? Talk to them. Do you know any presenting theatres that struggle to find consistently high quality work for their space? Would they be interested in a partnership? Or what about the community center up the street? On the most basic level, community centers exist to convene people. Performing artists share this commitment and activate it through audience development and marketing efforts. Talk to the community center. I know a theatre group who took this advice and is now “in residence” at a local college and able to apply for grant funds using the college’s nonprofit status. Creating this kind of partnership can provide you with the infrastructure you desire without the administrative bother and expense. It will also provide you with the nonprofit status you’re looking for.

Allow me to specifically address the notion of grant money. Take a look at the current state of charitable giving. Here are the stats: In 2015 charitable giving the in U.S. totaled $373 billion. Individuals made the majority of charitable gifts totaling $299 billion (80%). Foundations gave only a total of $59 billion in grants or 15% of all charitable giving. (Corporations gave the remaining 5 %.) Given these shocking statistics, I would encourage everyone to re-focus fundraising efforts on the individual donor – more on that in another post – and move away from the idea that you will be able to totally support your organization – or project – through grants.

If you are still convinced that becoming a nonprofit is the right thing for you, I would encourage you to use this NOLO Press resource, How to Form a Nonprofit Corporation . It contains easy instructions and forms. Using this site can probably do it yourself.

Good luck and I look forward to hearing from you in 3 years when you ask “How the hell did I become an arts administrator?”

ASK CORBETT AN ARTS-RELATED QUESTION, FOR YOURSELF AND POSSIBLY FOR A FUTURE COLUMN: corbett@stageraw.com