Mark Taper Forum. Book-It Repertory. Lookingglass Theatre. Dozens of others to come. All because of what? Vision? Vanity? Vainglory? Or just money? It should make you angry, not sad.
I will make this as clear as possible, because it seems to be going over the head of too many nonprofit arts leaders.
When nonprofit arts organizations close down, suspend productions, or otherwise stop paying people to produce art, it’s the fault of the nonprofit, not “circumstances.”
I hate that companies are choosing to jump into whirlpools of inadequate service that drain into sewers of irrelevance. Nonprofit arts organizations close down all the time. There’s rarely shame in it. After all, as one sage New York theater aficionado once told me, “Every show that’s ever been on Broadway has closed — except the ones that are open right now.”
But this is ridiculous. It’s like The Simpsons episode where Ned Flanders’ hippie parents are confronted by a psychologist about Ned’s bad behavior as a kid:
Come on.
The Mark Taper Forum, which opened in 1967, suspended operations in June. Book-It Repertory, which received its nonprofit status in 1990, closed down permanently in June as well. Other arts organizations closed earlier this year. More will close later this year. Far more.
And there’s really no good reason to have closed, other than money.
I can see that look on your face. Something to the effect of “Duh” has crossed your mind.
Let’s give you some more background on these closings/suspensions. Clear out your preconceived notions about why nonprofit theaters exist, and some of this will sound achingly weird.
The only reason that the Mark Taper Forum suspended operations was the immense financial deficit that its parent nonprofit, Center Theatre Group, had accumulated. According to reports, CTG has about $9 million in accrued deficits — bills, loan repayments, interest, etc. The two other theaters run by CTG (The Ahmanson Pavilion and The Kirk Douglas Theatre) are also losing money, year over year over year over year, etc.
Donations have dropped off a cliff. In the most recent Giving USA study, donations have dropped by 10.4% from 2021 (after adjusting for inflation). Giving by individuals dropped by 13.4%. In the arts, culture, and humanities sector, total giving dropped by 8.9%. While national data do not predict local results, it is fair to believe that giving to the arts (which has seen a precipitous drop over the last 2 decades), will continue to fall.
Looking at their 990 from June 2021, CTG’s financial condition took a huge loss from lack of ticket income (-$32 million or so), even though their net assets increased by about $15 million. These items are unrelated, financially, but serve as interest to all those arts folks who think that buying a building is a great thing.
It’s not. (For the sake of all that is holy, don’t buy a building. You can’t sell a door if you need cash.)
That said, the blame is being placed by CTG squarely on the shoulders of its own programming.
“Taper shows lose the most money,” [CTG managing director and CEO Meghan] Pressman said in an interview with The [Los Angeles] Times. “That’s always been true. But right now they’re costing us twice as much as they would have before. And the Ahmanson is bringing in less than half of what it did. Donations are down. Ultimately, we just can’t afford to continue to lose a million dollars a show at the Taper. We had to pause.”
Are you struck by the first sentence of that quote? “Taper shows lose the most money.” If this were a charity to protect and serve the homeless, would we even talk about “losing money”? Or would we talk about losing services, and in doing so, causing more people to die on the street?
Ms. Pressman is not wrong about losing money. Productions often lose money when ticket sales are part of the income stream. Ticket sales — a commercial activity — do not support a nonprofit company. But remember this: neither do ticket sales support a library. A food bank. A free clinic.
Rather than looking at ticket sales as the main rudder of financial success, it behooves Taper-like organizations to eschew the practice of producing art for the sake of artists and devote all their resources toward serving the public that really, really, really needs to be served. And the arguments that producing art is a public good ring awfully hollow when the company depends on selling extraordinarily expensive tickets to the Muffys and Buffys of the world in order to “break even.” Even the idea of “breaking even” as a construct is offensive to other charitable organizations which use their funds not only to pay their people, but to save lives and do what the IRS considers to be exempt activities in section 501(C)(3) of the code. This column has referred to those short sentences often, but until the organizations take them to heart, the nonprofit arts industry will continue to go the wrong way.
In Seattle, the Book-It Repertory issues were similar, but perhaps more doleful.
To blame for the closure, [Board Chair Christine] Stepherson said in a phone interview, were diminished audience attendance, changes in funder priorities and a lack of enough major donors, among other reasons. “We aren’t a theater company that has a huge endowment,” she said. “We had really hoped that we could make it through all of this. We are just at a point where we don’t feel it’s responsible to have contracts with artists and move forward with such small margins.”
The key phrase here is “diminished attendance, changes in funder priorities and a lack of enough major donors.” Ms. Stepherson, like Ms. Pressman, is not wrong. Book-It, a much smaller company (at least in budget), had a mission to “to transform great literature into great theatre through simple and sensitive production and to inspire our audiences to read.” Among all the theater companies we’ve researched over the last year, Book-It was among the only ones to use one of the tax-exempt purposes listed in 501(C)(3): “…literary or educational purposes.” As such, it has a greater chance of success — if it can choose to break away from its past.
On the other hand, Book-It never reported measurable impact on, say, the numbers of people reading due to their productions, increased reading among those readers, or better test scores among the student readers in that population. Instead, they constantly referred to their own productions, just like the Mark Taper Forum.
The “changes in funder priorities” has all to do with the one thing the Pandemic taught all Americans who seek a better life. What is essential? It turns out that social service organizations are essential and arts organizations are not. The public voted, and those are the results. No other portion of the sector dropped as much as nonprofit arts organizations did in 2021. And while correlation does not equal causation, there is much to be gleaned from the data.
As for Lookingglass Theatre Company in Chicago (which formed as a nonprofit in 1989), there is at least a drop of hope. However, they seemed to take the “the business is bad all over the country” tack, ceding no responsibility to addressing the needs of their community in direct, measurable ways.
“While the pandemic has been declared over, theatres in our country are still feeling the effects of needing to shut down for so long. Since re-opening, audiences and donations have not returned to 2019 levels, and the American Theatre is struggling to survive.”
(excerpted from a letter to donors from artistic director Heidi Stillman and board chair Diane Whatton.)
National data has no bearing on local impact. The immediate message here is that there seems to be no way to continue to do business in Chicago, even though many theaters in Chicago are continuing to do business in Chicago. And, of course, no comment at all about the loss of charitable impact for members of the community – mostly because there is no comment about the existence of real, quantifiable, charitable impact for the community.
It’s not about what’s going on in the rest of the United States. It’s about impact. It’s not about tickets. It’s about impact. It’s not about breaking even. It’s about impact. It’s not about the art. It’s about impact. It’s not about the next big thing. It’s about impact. It’s not about the building. It’s about impact. It’s not even about new voices telling new stories, unless those stories provide measurable impact in your community.
I can only hope something like “Duh” has crossed your mind now.
Based in Kirkland, Washington, Alan Harrison is a writer and speaker specializing in nonprofit organizations, strategy, the arts, and life politics. His columns appear regularly in major publications. Contact him directly at alan@501c3.guru.
BIG NEWS: Alan’s new book, “Scene Change: Why Today’s Nonprofit Arts Organizations Have to Stop Producing Art and Start Producing Impact” will be published in January. CLICK HERE TO PRE-ORDER IN THE UNITED STATES. If you live in the UK, CLICK HERE.
Alan will be hosting a session on the responsibilities of Nonprofit Arts Boards for the California Association of Symphony Orchestras in August. If you’re affiliated with an orchestra in California, come join us in Riverside!
A few more copies may be made available for those booking conferences, reading engagements, and speaking engagements. Recruit your local bookstore, conference panel, or boardroom to get a visit from Alan. Let Alan know if you want bulk copies for your board!
I feel you are simplifying a complex issue into a simple one. Among the issues which I feel you don’t deal with is how American society treats cultural works primarily as “entertainment” which is always seen as optional rather than as a structural and essential part of history (not just cultural history) and life. The same is almost as true as with education in American life (I was brought up to believe that after food, education was the most important thing in life).
You do recognize that the pandemic made people shift their priorities, but you don’t mention how many people lost their jobs and the general across-the-board economic strain on the *world-wide* economy, let alone the United States. You don’t mention the internet. The recent discussions of ChatGPT and other forms of AI software have reminded a few writers that the internet has caused and is still causing a massive disruption in everyone’s life. I mention a few because it is generally not recognized. If you look a statistics between 1990 and 2005 concerning television viewing habits, book reading, magazine/newspaper subscriptions, concert attendance – in short, virtually any cultural activity, you will see that the numbers have gone down markedly. That’s not because there are fewer people in the world; it’s because people have become diverted to engaging more with the internet.
Thus cultural organizations don’t have to work hard, they have to work exponentially hard to attract an audience. Many say it goes back to education, but it would take more to inculcate American life to recognize the significance and how culture is essential. That’s the problem because many believe that culture really is only a superficial and dispensable element of life.