Could it be that you never talked to them about your nonprofit’s charitable goals and how they mesh with the donor’s? Whose fault is that?
A few weeks ago, I participated in a discussion about the arts and measuring impact in the community. As every other author does, I believed that the message that the arts are not a tax-exempt activity had been spread far and wide among nonprofit leaders. And yet, when I asked the group if any had actually read which purposes are exempt from taxation under Section 501, Subsection (C), Subsection (3) of the Internal Revenue Service Code — a.k.a. 501(C)(3) — only a few sets of hands were raised.
It’s always surprising to me, even after asking this question at nearly every event and getting the same response among arts leaders, that so few people have even read this very short, simple, and reasonable definition of tax-exempt activities among nonprofit corporations. It is the foundation of the system under which all nonprofits operate. Including arts organizations. I’ve printed the words in these articles numerous times. They appear in each of my two books, Scene Change: Why Today’s Nonprofit Arts Organizations Have to Stop Producing Art and Start Producing Impact and Scene Change 2: The Five Real Responsibilities of Nonprofit Arts Boards (available wherever you buy books).
If you were charged to operate an old-fashioned balloon ride, wouldn’t you want to read up a bit on how the contraption worked?
If you are a leader — staff, executive, board member, donor, etc. — of a nonprofit organization of any kind, read the damn IRS code. When you don’t, it shows that you really don’t care about your position as a charity. If you don’t care about your position as a charity, then why are you a charity? For the donations? Is it all about what your artistic leaders want to do?
Or do you even give a gluteus maximus of a rattus norvegicus about what your community needs (not what it wants) and how you can use your art to solve issues for the vulnerable citizenry therein?
Back to the discussion. A smart, savvy development officer asked the group about presenting data to a donor. She wanted to know how others were presenting data such as audience size to donors for projects they helped finance through their donations to the company. Was there a better method than merely counting? The company’s donors were interested in how “their project” was going, and how many people paid to come.
After several dozen blank seconds from the group, I trod where angels fear to do so. I challenged the idea that audience counts have anything to do with charitable impact, and that this was probably the reason she was having trouble presenting the data. The data was irrelevant to a charity. As someone wrote on that photo at the top of this article, paid admission is not charitable data.
It’s good data to have if your company continues to pursue its commercial goals. But it has nothing to do with the 501(C)(3) part of the business.
I took some flak for this, as I usually do. After all, if that’s what the donor wants to know, that’s what the donor wants to know, right? In a donor-centric organization, that would be the most important piece of data for that moment in the relationship between donor and company.
If this were a food bank or shelter for the homeless, the request makes some blunt sense. “How many did you feed with my money?” “How many did you temporarily house?” These are metrics that begin to tell the story of the nonprofit’s ability to make the community a better place to live.
But “How many people paid to come to my show?” makes little sense. It reveals that the nonprofit arts organization did not discuss the charitable metrics with the donor ahead of time, did not mesh its charitable goals with the donor’s, and, perhaps, doesn’t even have any charitable goals. If that’s what the donor wants to know, the process was made toxic from the start.
When is a charity not a charity? When it refuses to do anything charitable. The production of art, no matter what has been offered in the past, is not a charitable activity. Foundations have cut their arts budgets because of that very fact. So have governments. The companies that are succeeding in 2024 are those that choose to help their communities by using their art as a tool for measurable public good. They’re being funded in part by non-arts funders because they’ve proved worth.
The ones that are failing? Those that still hold onto the notion that art is for art’s sake.
Talk to your donors and community leaders now. Stop acceding to the wishes of toxic elitists within the nonprofit arts industry by insisting that the work on the stage or in the museum is enough to justify donations. Start with one-on-ones with each member of your board and staff to determine whether they have the stomach to fight for the industry as a whole, or whether they continue to be willing to sacrifice the industry for one last go-round of arts-first codswallop before they retire. Let them moan about how their predecessors were “free” to do whatever they wished – this is not then, and they are not them.
So, if donors want to know how many people came, tell them. But don’t leave it at that. Have the courage to let them know that their donation helped X number of underserved people achieve Y equity. Year over year. Over year. Over year. You can have that conversation with them, but only after you have the preliminary conversation with them. Now would be the second-best time to have that conversation. (The best time would have been ten years ago.) Then show them what the impact of that impact was; something we call “Impact2.” If you need help, contact me. Or read the book. Charitable purpose, impact, and achievement will prove to be life-changing for everyone involved with the arts, but only when a critical mass of nonprofit arts organizations choose the “arts-mosphere” over their own unproductive survival.
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