Desperation can cause bad and even damaging ideas. Sometimes, those ideas get funded. And then there’s this.
I read recently that an informal group that calls itself the Professional Non-Profit Theater Coalition has put forth an effort to get $500,000,000 (five hundred million dollars) per year allocated to nonprofit theater organizations in America. The group has recruited Lin-Manuel Miranda and Phylicia Rashad to address Congress. Calling out the economic impact of the arts on today’s economy is part of the rhetoric supporting the idea, adorably called the Supporting Theater and Generating Economic Activity Act, or the STAGE Act.
“Prior to the pandemic, the nonprofit theater sector added over $2.8 billion to the U.S. economy through direct payments of goods and services, supported the employment of 145,000 artists, administrators and technical production staff and served an estimated 38 million audience members, according to a Theatre Communications Group report.” – Ashley Lee, Los Angeles Times
Terrible metric measurement. First of all, the data include ALL nonprofit theaters, not just professional ones. Second, if the number of audience members were a metric for charitable organizations, then the Los Angeles Dodgers would be a nonprofit. And third, there’s no mention of charitable support for the communities that granted these companies their nonprofit status – and pay their taxes – only that they’re popular and pay artists. Of course, if they didn’t have artists, there would be no theater; just as if there were no M&Ms, there would be no company that made M&Ms. It’s a bad argument.
It’s an even worse piece of legislation. But we’ll get to that later.
I don’t know how powerful the group is, but, according to the website, they were among those who advocated for PPP loans and the Shuttered Venues Operator Grants during the hottest part of the pandemic. They’ve gotten a taste of garnering federal support for an industry in crisis. So they’re doing it again.
Give them credit. As you can see from the photos above, worse ideas have been funded.
According to one source, the goal is to raise 20% of the funding for all professional American nonprofit theaters. That’s what the $500 million per year for 5 years is supposed to cover.
The number is low as pertains to the federal budget. It’s “couch pennies” in a $6 trillion budget, even the “discretionary” portion (some $1.7 trillion).
The math sounds a little wonky.
$500 million is 20% of $2.5 billion. That means that the coalition has decided that the collective budgets of all nonprofit professional theaters in the United States, put together, have a budget of $2.5 billion.
In the last Americans for the Arts “Local Arts Index” in 2012, there were 113,000 nonprofit arts organizations in the United States. Given the rise in population and the continued rise of arts organizations (despite the recent closings), that number has reached about 133,000 nonprofit arts organizations of every discipline (art, theater, dance, music, opera, museums, etc.).
Theater Communications Group has estimated that there are 1,852 professional nonprofit theaters. $2.5 billion dollars divided equally among 1,852 theaters would mean that the average nonprofit professional theater organization in the US has a budget of $1,349,892. Even to the untrained person in the business, that rings as inflated. It seems unlikely that the average professional theatre in America spends and raises $3,698 every single day of the year, including weekends, holidays, and times in which there are no performances or exhibitions.
Stay with me.
Would the $500,000,000 be distributed to all 1,852 theaters? Or just to the 104 theaters that are active participants in the Professional Non-Profit Theater Coalition? Or to all 45,000 nonprofit theaters, as argued in the Theatre Communications Group data? And what about the remaining 132,000 nonprofit arts organizations in the US? Could they request that level of funding, too? Or would they be left out in the cold?
Flawed math. But even if it weren’t, it’d still be a bad idea. Two reasons.
Reason #1: It’s a five-year program. What happens in six years?
The US provided substantial bailouts for the auto industry, the banking industry, and the airline industry, but there was no real attempt to solve the core problem in each.
After the bailouts ended, and in many cases, paid back, the companies’ bad behavior reverted to bad acts. Wage gaps widened, automation killed some jobs forever, and none of those industries are what anyone would call excellent (except their own respective marketing departments and their CEOs, although you might have to leave a message on their fourth yachts to find out). And did any of that money pass down to the workers? Ask your local UAW worker about that one – look for someone holding a sign.
In this case, there is no provision for paying any of it back, which by itself is not an issue. What is an issue is that among the small- and mid-sized organizations, the money will go to buy some necessities, loan payments, and a minor increase in staff. Among the larger companies, the money will go to loan payments, too, but treated more as a windfall than as a contribution to a better community. Likely, the latter groups will spend money on more staff, more toys, more buildings, and higher salaries for the top-level employees. They always have. And the people on the bottom of these intricate, “art for art’s sake” behemoths? They’ll get enough of a bump to make them happy until year six, when half their jobs will disappear due to a perceived “cut” in funding. Not only will they not understand why, but the highest-ups will not decrease their salaries to pre-funding levels when that sixth year comes up.
It’s not cynicism that causes that prediction; it’s history. It’s what always happens. It’s how the rich get richer and the poor get pink slips.
And don’t count on foundations holding the feet of their close friends among the larger organizations to the fire. We talked about that problem last June.
Reason #2: What’s the incentive to change the way in which these theaters do business? Why wouldn’t they just keep ignoring the community in which they do work?
Remember, funds were already drying up before the pandemic. There has been a year-over-year loss of donated income for over a decade. And did these same theaters do anything to speak to their lack of community support, the charitable portion of their responsibility, in order to prove that they, too, were essential to the life of their neighborhoods? Or did they just pout, cut costs, put their chips behind a failed notion of “producing excellent art” (excellence being completely subjective, and therefore, meaningless), and think that magically, all the crowds would get younger and all their money would replace that of their grandparents?
Sadly, people don’t change bad acts because frankly, they don’t know how. How many times have we heard over the years, “I don’t know how to solve society’s problems; I shouldn’t have to. My nonprofit is not a charity – it’s a “noncommercial” business!”?
“Noncommercial” and “not-for-profit” are not terms of law. They’re made-up terms for arts companies that have no intention to aid the community with tangible, quantifiable impact. Somehow, many of these offensive companies believe those terms absolve them from community responsibility. Not only does it not absolve them, but it damages the reputations of those companies who actually do believe their charitable status means what it’s supposed to mean and use art as a tool, not a final product.
I don’t hate the arts. I spent my life in the business. What I hate is tone-deafness. And this legislation, even though it would serve as a windfall, won’t solve the core issue that continues to bedevil the nonprofit arts industry, making it less essential than ever. And to do it with taxpayer money that continues to benefit toxic stakeholders in the sector – remember, only in the arts do donors so that they may attend – is a slap in the face of real arts charities that are solving the issues of the communities that granted them the tax-exemption they deserve.
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.
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I’ve worked in the nonprofit arts long enough to be horrified at the thought of tax dollars being used to bail out the theatre industry. The post-pandemic shock that’s rippling through the cultural sector is revealing just how out-of-touch and unengaged arts organizations have been, how oblivious they are to what’s happening outside their bubbles, and how woefully unprepared they are to demonstrate professional self-suffiency.
The only theatres that deserve to be bailed out are the ones that can prove their communities want and/or need them. If they’re not selling enough tickets, their communities don’t want them, and if, as you so eloquently suggest, Alan, there is no tangible, measurable impact on pressing community needs, their communities don’t need them.
If theatre people want to do theatre – which is the real reason most theatre companies exist – they should do it. And if some people want to pay to watch them do it, so much the better. But if they can’t find enough paying customers to cover a reasonable share of their budget, and they can’t demonstrate exactly why the rest of their budget should be otherwise supported, there’s no reason American tax payers should bail them out.
I agree with your assessment. For a number of years in the 1990s, a major foundation made million dollar, multiyear grants to arts groups with much smaller budgets. Seeing how hard it was for groups to manage this windfall, I started to call them “destabilization grants.”