Nonprofit Arts: Over-Dependent on the Kindness of Strangers? Hm.

The philanthropic model is broken. It was not always broken. It is now. Especially for nonprofit arts organizations.

Performing arts nonprofits have talked about ticket sales as a part of their revenue ratios for years and years. It simply does not play in the market. Here’s why:

The average ticket to a nonprofit theatre in the United States in 2018 cost $41.19. For the most part, performing arts organizations claim that 50% of their revenue comes from earned income. It follows that the real cost of an average ticket back then was $82.38.

Larger organizations may have cost twice that; smaller ones half that. (The universe was 1,855 nonprofit theatres in America.) Even in 2018, $41.19 (let alone $82.38) was a lot of money - way out of the range of the average person, especially when considering external costs (parking, dining, babysitting, etc.). $41.19 as an average price immediately moveds the purchase to one of luxury -- like a vacation -- rather than one of culture or a way to contextualize life -- like a book.

To a luxury crowd, then, the quick response to a plea about that 50% issue is simple:

“Why not raise the price of tickets so that the average is $82.38?”

Irrespective of the luxury consumer, there are fewer donors than ticket buyers in any given year. And why wouldn’t there be? Tickets are expensive enough. Many theatregoers even attempt to write off the price of their tickets as a donation to a nonprofit (which it is not, of course).

Among individuals, the ratio of donors to ticket buyers can vary wildly, from 1:10 to 6:10. Rarely is it higher than that.

However, no matter that ratio, that 1:10 to 6:10 is comprised almost 100% by ticket buyers. The result is that anywhere between 10-60% of individual donors contribute to subsidizing the programs and activities of the organization.

Individuals only comprise one portion of the giving universe. Foundations, corporations, and government donations comprise the rest.

What’s wrong with this picture? Can you find it? It’s subtle, but deeply troublesome for the future of nonprofit arts organizations in your city.

Maybe it will reveal itself better in a diagram:

Now is it clearer?

Among non-arts nonprofits, there is an ongoing, rigorous discussion about the hassles of getting things funded. The time when donors gave unrestricted funding has, for the most part, passed. Even among those that do give unrestricted funding, there are any number of obstacles to funding that only those larger organizations with personnel to cover those requirements can afford.

Yes, sir. No, sir. How high would you like me to jump, sir?

Donors – especially high-level individuals and corporations – are having a larger say about programs and activities. As a marketing tool, corporate donations are only as good as the bang they provide. Individuals, some with a great deal of ego (and sometimes bad actions – see “Sackler”), are seeking personal goals reached, using the nonprofit as a kind of fame lever. All in all, it’s not harmless – many nonprofits have shifted their priorities to garner a donation and once that happens, the nonprofit has announced that it is “for sale,” in so many words.

Still, the saving grace is the mission - the reason to provide a critical service to those who cannot afford it, those who experience discrimination, those who require health treatments, those have no food security, those who cannot read, those who deserve a pathway to a “normal” life, those people and animals who have experienced cruelty, etc. Each nonprofit serves specific users who do not comprise the donor base.

For arts nonprofits, the discussion is even more muddled and dangerous. Because, for the most part, arts nonprofits serve an ample subset of their users – their individual donors – and not the underserved, the only goal left is the issue of propagating the art as a public good. Among larger organizations, it is why, now and into the future, they have to be dependent on their own board members for financial support. The universe of potential supporters (among individuals) has been limited for years to those who attend.

In the main, an arts organization’s individual donors contribute so that the donor may benefit.

A non-arts nonprofit organization’s individual donors contribute so that others may benefit.

Art is a public good, to be sure, but that is not equivalent to a single arts organization’s art being a public good. There is quite a difference. The case for support, therefore, is also different. It has to be.

If your organization were to go out of business, people would be sad. But the art you produce would continue, just somewhere else.

If the art itself were to end, so would thousands of organizations just like yours. And millions would no longer experience it.

Regardless of what some ivory-tower artists would have us believe, there is no connection between the closing of an organization and the end of art. To put it in perspective: every television show, regardless of their excellence, has been cancelled except the ones currently on the air. Arts organizations are like the shows. Art is like television.

Think about that as you look back to the chart above. Does that, in some way, represent your organization’s base of support and user universe?

Or, have you discovered, finally, perhaps because of the lack of activity due to the pandemic, that your organization’s relevance lies outside the production of art? Put another way, does the art serve a tangible purpose beyond its own excellence?

It’s not about the food bank (or even the food), it’s about the users.

If you see your organization, no matter how established it is, as a startup rather than seeking to return, somehow, to some pre-COVID ideal, you have the advantage of the following:

• Finding an issue that you believe needs to be resolved or fought;
• Creating a mission that reflects what success would look like in resolving that mission;
• Creating programming that executes that mission.

There is a direct flow chart from the Bubonic plague to the Renaissance:

1353 – Bubonic plague ends; estimated 200 million dead.

Overabundance of cloth from dead people’s garments ultimately leads to the invention of rag paper, literally a writing surface made from fabric. Surplus rag paper makes the product cheap to use.

1455 – Gutenberg uses rag paper on his printing press to print 200 copies of the Bible. Distribution of the book weakens the hold of powerful Christian clergy, revealing lessons first-hand to the public at large. Public no longer has to take the word of the clergy on the contents of the Bible. They become curious and want more.

Following the printing of the Gutenberg Bible, little-known texts which promoted the renewal of traditional Greek and Roman culture and values were printed and distributed to the masses for the rest of the century, triggering an era of new thought, ideals, and potential called The Renaissance.

2021 – COVID-19 virus vaccine perfected and distributed. Perhaps 2 million dead. Will anything as positive as The Renaissance come of it?

That depends on what you do next, doesn’t it?

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Thanks for reading (and commenting and sharing). I recently completed a 12-part series for nonprofit arts organizations post-Covid. If you missed any of them, just click on the link. Or send a private message and I’ll be glad to respond.

Post-Covid Article #1: Don't Ask

Post-Covid Article #2: Is It About the Car Wash or Is It About the Car Wash, or the Car Getting Cleaned? Steps Toward a Post-Covid Performing Arts Future

Post-Covid Article #3: The Sacrifice After the Sacrifice - Go Small or Go Home

Post-Covid Article #4: In the New Normal, You're Going to Need Some Mischief

Post-Covid Article #5: Shedding Egos and Empowering the Tribe

Post-Covid Article #6: A Rose is a Rose is a Rose – Don’t Let Data Get in the Way of Failure (because failure is the key to innovation)

Post-Covid Article #7: We're All Startups Now

Post-Covid Article #8: Just When You Thought It Was Safe...

Post-Covid Article #9: Remember the “Nonprofit” Part – It’s Way More Important Than the “Arts” Part

Post-Covid Article #10: The 5 Stages of Stages

Post-Covid Article #11: Are your impacts intentional? Incidental? And what if…?

Post-Covid Article #2047: Why Did THOSE Nonprofit Arts Organizations Succeed

Alan Harrison is a writer, father, performer, nonprofit executive, artist, blogger and impresario (in no particular order). He has led, produced, directed, promoted, raised money for, starred, and failed in over 300 theatrical productions on and Off-Broadway and at prestigious (and not so prestigious) nonprofit arts organizations across the country. He’s also a two-time Jeopardy! champion so, you know, there’s that. The arts invoke passion (mostly from artists), but nonprofit arts are only successful when they result in measurably positive change among those that need it most. When a nonprofit’s donors are also its recipients, then its mission is meaningless puffery, flapdoodle and codswallop.