Hey, Can Boy Bands Be 501(c)3s?

I don't know of any musical ensembles organized as 501(c)(3)s that play exclusively popular music. However, there are plenty of nonprofit organizations (presenters, especially) that program pop music. Not J-Lo or Madonna, necessarily, but certainly not free jazz either. I mean, just in NYC, you have the River to River Festival, Celebrate Brooklyn, Central Park Summerstage, etc. programming people like Jill Scott, Isaac Hayes, Yo La Tengo, Wyclef, etc. It's "smart" pop but pop nonetheless. Also, a lot of nonprofit music education programs, especially those serving low-income populations, are not specific to classical music.

Molly notes: Good clarification points, Ian. Thanks!

Do you want to become a 501(c)3 so that you don't have to pay taxes? So that you can get grants/awards that are only available to 501(c)3 organizations? I'm not sure that those benefits would be worth the time and energy you'd have to devote to managing yourself/selves as a legitimate 501(c)3. Also, if you're a band or a solo artist, you would be disqualified as a 501(c)3 if you are perceived to be promoting your musical career over promoting education and community. That's a difficult line to navigate and a very awkward position to put yourself in if you want to eventually make a living selling CDs or playing shows. Society would probably be served well if the 501(c)3 laws were reexamined, but for now I'm wearing the hat of a pragmatist.

It seems to me that non-profit status is the de facto category for classical, jazz, and new musics. Why is this the case?

Corey, do non-profit musicians make a living selling cds and playing shows?

Molly, thanks for posting this!! I really appreciate it.

I don't believe that having a 501(c)3 status actually has any education requirements. For example, I work for an artist management organization that is 501(c)3 that does no educational things whatsoever: it manages artists and a record label (the label is for profit and "hires" the non-profit to run it). I think part of the point of fiveohwonseethree is to provide funds to things that market forces don't provide for; but that's just a guess. Anti-Social Music has also acted as a fiscal umbrella for the pop/rock group The Gena Rowlands band when that band wanted to create a multi-media opera and needed grant money to pull it off. So, there's an historical precedent for you of a band wanting/needing to cross over into the not-for-profit realm for its own devious purposes having nothing whatsoever to do with education. Rumor has it that another such ASM-GRB collaboration may happen again. ASM has also worked with Dälek, His Name Is Alive, and Dan Littleton of Ida in various capacities and has received Meet the Composer Creative Connection grants into order to present works by those folks. I personally see no reason why musicians in the rock/pop/whatever world shouldn't apply for funding for their projects.

Since noone is answering this:

"...do non-profit musicians make a living selling cds and playing shows?"

The answer is - in New York City - no. Definitely not. But making a living means different things to different people often depending on their age. And the musicians I know supplement their income by doing a variety of jobs - both union and non-union, not-for-profit and for profit.

John - What is funding like in your city? Is there substantial state or city funding available for people involved in "new music," dance, or the visual arts?

Section 501(c)(3) qualifies organizations organized and operated exclusively for the following purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and/or the prevention of cruelty to children or animals. Arts and cultural organizations are found under the definition of "educational."

If you don't have an "educational" purpose, not sure where else you fit. Individuals or partnerships do not qualify, since the recognition is a form of incorporation, which means there is a board deciding what to do and accountable for seeing that it gets done, not an individual

There are several other forms of 501(c) nonprofit organizations. Perhaps the artist management example is actually qualified under a different number.

A whole series of misconceptions are reflected in this post and its comments, all of them flowing from a baseline misunderstanding of what tax-exempt non-profit status actually is and means. As a professional lifer in the non-profit sector, who has both been an artist and had lots of professional involvement with artists, I've learned the hard way how widespread that misunderstanding is.

Non-profit status is a social contract, a conscious tradeoff: certain benefits are granted by society in _exchange_ for surrendering certain rights and accepting certain limitations. (Legally it is simply a particular application of the basic concept of incorporation.) Seeking charitable donations or grants (two things which are by the way not at all the same) is not in any sense a "perk" but rather is an ability gained in exchange for surrendering other abilities that for-profit businesses have.

There is no moral or legal right to tax-exempt status, and no one should seek or accept it without understanding the nature of the contract you're proposing to enter into. For example accepting 501(c)(3) status means accepting certain obligations of public disclosure and financial reporting such as paying for annual audits if your organization gets above a certain size. The requirement to have a board directors, which must truly control the organization, is another tradeoff. Any individual who speaks of an organization as "my non-profit", who thinks that he or she can own or control a non-profit the same way a restaurant owner controls the restaurant, is simply not getting it -- and is setting herself up for a world of legal and financial trouble, too.

Also it is a core principle of U.S. law that non-profits be public entities and not simply containers for an individual's business or expression, so if an organization's annual revenues don't include a certain fraction of "public support" the non-profit status will be revoked. "Public support" simply means funds, whether donations or sales revenues or whatever, that come from people other than those employed by or involved with the organization.

The phrase "not-for-profit" is actually shorthand, and therein lies the most-common misunderstanding of what it means. It does not mean that the organization cannot or should not make a profit; it does mean that such annual profits must by law be spent only on the organization's declared charitable purpose. Profits can be shared or paid out to anyone, ever. The full legal phrase is actually "not-for-any-individual's-profit."

For all these reasons, the question "do non-profit musicians make a living selling cds and playing shows?" is simply a nonsequitor. There is no such thing, legally, as a "non-profit musician"; rather there are non-profit corporations (organizations) which can pay musicians reasonable wages for work if that work expresses the group's charitable purpose, and if the revenues of that organization aren't simply coming from one source. (Valid charitable purposes do include the presentation of music, which the IRS considers to have inherent educational value; hence the Chicago Symphony Orchestra is a non-profit, etc.)

Wow, lots to consider here. I want to respond to Paul first. It seems to me that the overwhelming majority of music 501c3 groups are classically oriented. As Andrea points out, there are significant exceptions to this (Andrea, I'm not sure about the extent to which you consider ASM "classical). Why are classical and new music groups so inclined to set up non-profits? Why are other musical styles not? I feel that the "social contract" created with not-for-profit status implies that certain music is educational and other music is not. I'm not sure I would agree that any music has any "inherent educational value," how can you learn from music that you know nothing about? Don't we start by learning about the music and it's frames?

When I asked about people making a living as non-profits (Paul correctly criticizes my wonky phrasing), I meant to ask if musicians made a living as employees of non-profit organizations dedicated to some musical endeavor. By "living" I mean the bulk of income with which a person buys food, clothing, shelter, and other necessities of life. I do not intend to qualify a certain amount as "making a living" I just want to know if musicians pay most, if not all, of their bills with money from music jobs.

Chris, I'm not sure how much funding is available for such music, though I know that Tennessee has a few new music groups. I'm pretty sure that that the possible funding in NYC alone is greater than that for all of TN. The community orchestra I conduct is a registered non-profit; we have a board, financial records, solicit donations, pursue grants, and raise money. However, I cannot in good conscious say that we are educational, anymore than the excellent bands I hear in bars around Knoxville. To do so requires supporting classical music as inherently superior, or somehow more meaningful.

I understand that non-profits must have a board, transparency, and other devices designed to distinguish them from for-profit corporations. I am questioning the extent to which these characteristics encourage participation by some and discourage it in others. Molly, your response hit on this last point. I know a lot lot of classical and new music groups who "want to play gigs and make records." Isn't the educational outreach enacted by these groups a form of enculturation, and a part of the culture? I believe that it is. Education in classical music has been has been explored in considerable detail (see, for example, Kingsbury's 1988 ethnography of a conservatory, "Music, Talent and Performance").

What are non-profit musical organizations teaching? As a music education undergrad, I was taught that "music makes your smarter," but which music? Is there music that makes you dumber? Can Keane, or Black Star, or (gasp) Britney Spears make you smarter?

Non-profits do not have to be educational. Many non-profit organizations are educational and there is a lot of funding earmarked for educational purposes, but that's not a stipulation or requirement for not-for-profit status. You have to provide some sort of service to some sort of designated community, but it doesn't have to be educational and it doesn't have to be children. We set ourselves up as a non-profit as a way to get funding for projects that, as we see it, help out the new music community by getting more voices heard, getting the music played and recorded. We know we're not going to make money; we just want to get these projects out there. We know we're doing things a little differently, and we think that's something worth offering. I don't think that by setting up 501(c)3 we're saying that our music is educational or drawing any other lines in the sand.

"Isn't the educational outreach enacted by these groups a form of enculturation, and a part of the culture?"
You also need to read your Christopher Small, young man! =) Plus the Eric Bluestine book about Ed Gordon, where he reminds us that musicking is not about making anyone smarter.

I've read Small, and I'm pretty sure I'm in line with his ideas. I'm not saying that music makes you smarter, I'm trying to question this concept, which requires questioning many of the fundamental premises of my undergrad. Andrea, which of the 501c3 requirements does ASM meet?

From the IRS website, we meet these:
(ii) have an active program of fundraising and receive contributions from many sources, including the general public, governmental agencies, corporations, private foundations or other public charities, (iii) receive income from the conduct of activities in furtherance of the organization’s exempt purposes

Item iii mentions a purpose, which I'm guessing you want to know: Anti-Social Music (ASM) is a NY-based composer/performer collective (501c3), formed by musicians in their 20s and 30s that is dedicated to supporting the music of our generation and connecting the composed contemporary classical/jazz worlds and the rock/punk/indie scenes that surround us.
ASM performs, produces, presents, promotes and records new music projects in and around New York City – in unconventional venues such as rock clubs, art galleries, and rooftops – for audiences that do not regularly attend new music concerts. We work with young, emerging composers who generally have no formal structures of support in developing and promoting their projects (i.e., no university, no regular ensemble or venue) to forge meaningful connections in the new generation of underground New Music composers and performers.

Then we have the usual hoohaa: the board, the meetings, the budgets, the mission statements, etc., as required by the government.

Full disclosure: I wasn't part of the group, yet, when they decided to become a not-for-profit organization, which was pretty much right after the first show. From what I can tell from the IRS website, as far as 501(c)3 goes (and there's 4, 5, 6, etc.), we're considered (and I'm guessing other non-educational music organizations fall under this) a public charity under 509(a)1. More from the IRS:
"The fact that an organization generally provides facilities or services directly for the benefit of the general public on a continuing basis is evidence that the organization is publicly supported." Then one of the examples they give is "a symphony orchestra that gives public performances."
This same document (http://www.irs.gov/pub/irs-pdf/p557.pdf) has a whole separate section about educational institutions, which is really about schools. So a 501(c)3 can have education as its purpose and not be a school, but you don't have to have education as your mission or your activities in order to qualify as a 501(c)3. You do have to provide some sort of public service in order to qualify for public funding; creating concerts open to the public is considered a public service.

If you want to question the music ed assumption that music makes you smarter, then Small's definition of musicking should help you debunk that; it's about exploring values. Now if you value not expanding your horizons, I'm sure there's music out there and a way of musicking that speaks to playing it safe, not questioning authority, not questioning anybody; in that sense, sure, I guess it makes you dumber by encouraging you to not grow. But remember, it's not just the sounds, but the whole act of musicking, so any piece of music can be repurposed to explore values that perhaps its composer didn't intend. Alex Ross posted a link to a harrowing article a few months back about music and torture that makes that point:
http://journals.cambridge.org/download.php?file=%2FSAM%2FSAM2_01%2FS1752196308080012a.pdf&code=47363e6fe457ef2901f7ea49a2a202a6