I’ve been operating under an assumption that there are too many 501c3’s. I’ve been building a case to support this (popular) notion, and then to suggest alternative organizational models. And while I still strongly believe that a healthy arts and culture landscape includes a variety of organizational models, I am questioning my initiating assumption.
Last night I received some data from Nick Crosson, who directs the data arm of the Greater Philadelphia Cultural Alliance. I had asked Nick to give me data on the growth of 501c3 arts organizations in the Philadelphia region over the past 15 years (1995-2010). The data I received shows an approximate 70% growth in the number of arts organizations, which at first blush seems to support the “too many” assumption. However, he also pointed out that revenue growth among these organizations grew faster than inflation, at a pace of 80%. Yes, I will need to analyze the mix of revenue, earned v. contributed, with an eye to the ratio (is the earned v. contributed dropping, thus suggesting lower demand, but higher donor input), but for the time being, my confidence is shaken regarding my original assumption.
Is it possible that the impressive increase in the number of 501c3 arts organizations has rattled both the existing ones and the funding communities? Is it possible that these new ones actually represent new ideas, entrepreneurial enterprises that need to be recognized, nurtured, then allowed to thrive or go away? Are our existing (entrenched) large and very large arts institutions so dominant as to (unconsciously) put down the competition? And are our foundations and other major funders so wound into the large and very large organizational network as to only hear them?
As I study both the status of organizational design and entrepreneurship I begin to see a relationship between the two!
3 responses to “Hmm, Are There Really Too Many 501c3’s?”
I enjoy reading your posts on this topic. I think that there seems to be a huge influx of 501(c)3’s for arts organizations and starting to wonder if it’s the best model to follow anymore. I think foundations need to be the catalyst from a shift away from it and encourage arts orgs to be more sustainable in a more social enterprise kind of way. However, since being a 501(c)3 is the predominant requirement to receive funding from foundations, it doesn’t really encourage orgs to think outside of that framework.
I’ve consulted for a few arts orgs that have unique opportunities to create earned income but rarely do they take that approach.
This is a very informative post. What I’m interested in knowing is, has the growth of these type of organizational models been to much to actually alter the landscape for nonprofit arts financing?
My sense is that institutional funders of the arts are aware of emerging alternative organizational models, are interested in them, and are looking to how they can (in the future) intersect with them.