Why Dance Companies Should Be Transparent About Their Finances

Information is the most powerful currency in the modern age. Yet, with the dance world struggling to recover cultural relevance and fiscal health post-pandemic shutdowns, most dance workers, critics, and donors have little concrete knowledge of overall economic conditions.

Two key initiatives are already in progress to combat this: one by Dance/NYC, collecting data from dance industry workers, and the other by the Association of Performing Arts Professionals, to establish an information bank on salary ranges, compensation, and the like. While both are excellent, it’s crucial that more is done.

There is one immediate step with broad impact: real transparency throughout the dance economy. How can dance organizations do that? By making their annual tax returns available.

As Alan Harrison said in his excellent blog for ArtsJournal, “Yes, You Do Have to Show Your Nonprofit Tax Returns to Anyone Who Asks, No Matter What.” But, as I’ve discovered through my work at Dance Data Project, many dance companies respond to these requests with “We are too busy right now,” or even “You have no right to this information.”

To date, 19 of the largest 50 ballet companies in the U.S. have placed their most recent federal returns online. This is a great first step, one that other companies should implement as soon as possible. Those in dance leadership positions are also in dire need of basic education around their obligations to the community. In return for not paying taxes, a duty of disclosure is beyond expected—it’s mandated.

In 1969, reacting to multiple instances of self-dealing, inflated salaries, and undisclosed perks obtained by leadership, consultants, and board members, Congress enacted a series of reforms designed to shed daylight on operations of the not-for-profit sector. Today, by law, all 501(c)(3)s must provide any taxpayer, upon written request, with their most recent three years of annual returns (990s), within 30 days—or within 24 hours, if a member of the public makes this request in person. Note the immediacy expected of these not-for-profit organizations, underlining the social obligation for fiscal transparency at any point in time. Congress and the IRS also demonstrated how serious the issue is by making individual leaders, not just organizations, liable for penalties of up to $10,000 for failing to provide copies of an annual return.

Those in the dance workforce should equip themselves with an understanding of how to navigate 990s and the IRS website. Knowledge of pay practices, the importance of residuals, intellectual property rights, federal requirements on overtime, and salary information, as well as state mandates around leave and safe working conditions, should be taught and available to all. (DDP is planning a series of informational videos to begin to cover these topics.) Yet there’s a lingering sense of discomfort around a frank discussion of money and economics in an industry built by a generally underpaid workforce.

The pandemic threw these issues into yet starker relief. Coming out of shutdowns, while larger companies have seen robust attendance for perennial favorites like The Nutcracker, smaller productions with newer, more innovative voices are struggling. Overall, the audience for ballet dropped 37 percent between 2017 and 2022, and audiences for other dance forms dropped by almost half, per findings from National Endowment for the Arts.

DDP reports have shown that in the classical dance world, artistic and executive compensation has steadily risen as a percentage of budget. Within the largest 50 U.S. ballet companies, average artistic director compensation as a percentage of total budget increased from 1.59 percent in fiscal year 2018 to 2.50 percent in fiscal year 2022. The average percentage of executive director compensation compared to overall budgets increased from 1.38 percent in fiscal year 2018 to 2.44 percent in fiscal year 2022.

a blonde woman wearing black with a pearl necklace
Photo by Kyle Flubacker, Courtesy Dance Data Project.

While their compensation grows, we see countless dance workers fighting for salaries that cover the cost of basic living expenses. No wonder we are seeing a rise in unionization efforts. It’s a failure of the industry that, in many cases, the only avenue for dancers seeking daylight on pay and benefits is to seek representation.

Elizabeth “Liza” Yntema is the founder and president of Dance Data Project.

Source link

About The Author

Scroll to Top