by Jini Stolk
There are so many conversations these days about the need for a new corporate structure that straddles the line, or creates a bridge, between the nonprofit/charitable and for-profit forms. Thanks to Dave Kranenburg and members of the Centre for Social Innovation for these informative documents from a recent email chain.
Much of this conversation seems to rest on issues of personal and organizational financial security. New entrepreneurs, who may want to firmly align their enterprises with doing good in the world, don’t want to close the door on being financially rewarded for their creativity and hard work. And it’s really hard for anyone needing capital investment to help their nonprofit grow when there’s no possibility of meaningful return to investors.
I’ve been thinking about where the arts fit in. Many artists already straddle the nonprofit and for-profit worlds, cobbling together various sources of freelance income with salaries or contracts with nonprofit organizations. More and more, people who run small companies (but are essentially independent artists or members of a collective) are questioning whether the nonprofit/charitable form is a help or hindrance to their work.
Charities in Canada are allowed to undertake “business activities” that make money, as long as they’re mission related or the profits flow back to the charity. Unfortunately there aren’t many goldmines out there. Is that t-shirt run really going to take off… are your cd’s going to sell like hotcakes…is your next production, even if it’s a remount of your biggest hit, going to be absolutely sold-out? (Well, sometimes; thank you Ravi and “A Brimful of Asha” for being such a shining example.)
In New York even the largest nonprofit theaters like Roundabout are trying to deal with financial hard times by remounting successful shows (“Cabaret ” is coming back to Broadway with Alan Cumming in the lead!), and being roundly criticized for charging “for-profit-like” ticket prices.
The charitable corporate form, which allows mixed sources of revenues to flow to artistic projects, works reasonably well in the performing arts as long as the reporting and administrative burdens are not too heavy for the size of company – but this is an important caveat. Some of my friends in Montreal are moving on, structurally: examples include Susanna Hood who recently closed her company hum dansoundarts but is busier than ever as a freelance artist and movement designer; and Eryn Dace Trudell, whose MamaDances , which offers movement classes for parents and their babies or toddlers, is thriving and expanding across Montreal and in Toronto.
One of the major problems with nonprofit organizations in Canada is that standard salary levels, instead of offering decent remuneration, are frequently downright indecent. This is not just an arts problem, but it IS a big problem for our sector’s future. The ONN and Mowat Centre Human Capital Renewal Study found that 69 percent of nonprofit organizations have faced at least one retention challenge in the past three years because of lack of career mobility; non-competitive wage and salary levels; uncertainty of on-going funding; and excessive workloads/insufficient staff resources.
No wonder many of our brightest emerging leaders are looking for new ways to contribute their gifts to the world while living decently, without worrying about their financial futures.
Many thanks to my friends and colleagues Lynn Eakin from ONN and Tonya Surman from CSI for their deep knowledge and smart ideas about the future of nonprofits and social enterprises.Â
