This post is in response to a post by Linda Essig, original posted here:
Should we be leading our students towards not for-profit business creation (501c3) or for-profits?
For me, this is a no-brainer. With benefits such as fiscal sponsorship (check with your local accountant), one can receive some of the benefits of not for profit status, but maintain a greater control over their creative process, something many artists desire.
Well, the way this question above is worded is simply a matter of tax status. I urge people to choose for profit entities, as I want them to want to profit and as much as they can. Artists, like any other business people, deserve to do well and to have nice lifestyles and to be able to provide well for their families. But there is a sick schism in the thinking of our general populace that believes art and money (meaning the creation of art) should not have a motivation of profit.
This is why so many people, I would guess Linda too, might expect artists to only create not for profit companies. That is the typical path and a standard, general belief. The typical generates the typical. We need to think via a wider directional perspective and invest in the unconventional–not simply to be unconventional, but because this way generates unconventional results and will shape the artists in unconventional ways. How exciting. Let´s throw our cookie cutters away. They are all worn out, after all, from too much use.
Not for Profit status implies that the business is contributing to a social good, rather than a profit, exclusively. But, can’t one do both? Of course and that is what I urge my students to do.
It is important to point out that not for profit status does not mean that one cannot profit in the running of their business. But, they are bound to an income, which is decided upon (usually) by a board of directors or “others”.
What I want to steer artists away from is the feeling of needing to “beg” for resources, needing to constantly be passing the bucket, so to speak.
Just as we as a nation tend to do, artist often overspend. They get themselves into traps sometimes of feeling the need to have a physical and relatively permanent place to create (like a theatre). In signing that lease, they immediately assume a huge amount of overhead. Instantly, upon signing the dotted line, they assume debt (typically).
If an institution of not for profit status cannot keep afloat in this economy, because they cannot generate enough donations/support to keep them afloat, does that mean that the community does not value the entity enough to keep it alive? That is a tricky question. I believe that is not always the case. Sometimes these companies come under mismanagement. Their poor leadership and lack of vision can lead a company and group of people towards a financial demise. Early career artists or entrepreneurs beginning ventures do not always have resources necessary to hire people of more business-minded thinking. Not all artists have an innate sense for business and know how to preserver and thrive in difficult times. Not every artist knows how to not only to stop the bleeding in difficult times, but to continue to grow, despite economic downturns. But…they can be taught how.
Some might argue that any sort of structure one might provide (any “do this or try this out”) is limiting and mechanical, but artists need structure. Creativity blossoms when operating in limitations. Technique gives us a structure and enables and artist to better express themselves, as they are playing through a tool or form. The more talent you have, the more technique you need. Technique liberates art.
We teach our students at ACPA (Austin Conservatory of Professional Arts) to perceive a need and to address it. In filling a gap (or a need), you increase your likelihood of becoming necessary. If you are necessary, you increase your chances of making a living.
Work with the Resources you have: If this translates to little or nothing, do as Meyerhold did and let that be your limitation in which to create.
Don’t step off of a cliff in your desire to move forward. Be smart about your finances and grow only as you are able to do so.
Structure and plan your business and have backup plans, as to how to overcome obstacles. When life circumstances throw you a curve ball for which you could not possibly have planned for, be flexible and willing to adjust, transform and incorporate.
As a school for entrepreneurship, we are principally dedicated to teaching our artists how to make a living. In the current economic climate, there are too many not for profits, fighting for an even weaker pool of available funds and donations than were available pre-economic collapse. Running towards not for profit status might just decrease an artists chances of making a living. The tax breaks as benefit, don’t always outweigh the risks.
How they need to be taught:
Create from a perspective of:
• What value can I contribute and what need can I fill? Work to fill other peoples’ needs and you increase your chances of making a living.
• How can I structure this business or the creation of my art in such a way, so as to increase my likelihood of making a profit?
• The profit I make from the creation of my work is not “selling out”, it is an expression of public support for your product (your work). Money is a symbol of energy. If you can create work that generates a considerable amount of energy around what you have done and are doing, you can do more with that accumulated energy.
I have a friend who runs a not for profit and he said to me, “I have been at this for years and I can barely make a living”. I then replied, “Look at your structure. You are a not for profit, which teaches under privileged children how to play instruments. You have a noble cause, but you have chosen a path that is never going to make a huge profit. Your structure dictates that. The reason you will likely never make a good living from that business enterprise, is because you are solely reliant on the charitable acts of others and until you can find a significant and constant vehicle of income for your institution, you are stuck in a pattern of struggle”. That same individual just laid off one of his key staff members and is having to face reinventing as an entity, due to conservative giving by traditional donors. This downward economy has put him in a pickle. Which is, of course, terribly unfortunate. He is, of course, not alone. A huge number of not for profits are structured excactly as his is.
He chose to define his income potential in his business—not by how this could serve others, including himself, but rather, he thought principally in terms of just how this can serve others. Period. He is a saint to do so, but he is also an individual who wants to have a family. Typically, saints don’t have much money to contribute in that direction.
I applaud those who want to live the saint’s life. We need saints. But can’t we find a middle ground and can’t that middle way become a new standard? It needs to be. There are too many who are struggling. Can’t the artist both create towards a social good AND make a decent living? Why do we expect our artists to starve? I think that both the general populace and even some artists themselves, get into this (at surface value) romantic cliché of a “starving artist”. I don’t think there is anything romantic about living hand to mouth. That just sucks.
We need to teach our artists how to create opportunities—not just for others, but for themselves. If the builders of not for profits cannot provide decent wages for their employees, those workers suffer and so does their cause.
If artists can build profitable models that are finanicially in the black, that is good for their employees and there is a great social good you are contributing towards—the creation of jobs (as well as the cause).
What I am proposing is not to just change your tax status, because that will not effect any significant change. I am urging a reshaping of our educational offerings and, consequently, a reshaping of how artists conduct business.
Independence. Spread the word.
The how of doing this? Stay tuned to our blog and take a course offering at my school. Austin Conservatory of Professional Arts www.austinconservatory.com
Jim Hart is the founder of Austin Conservatory of Professional Arts, The Hart Technique and The International Theatre Academy Norway.