Where is the profit in non-profit?

Have you ever visited the website CharityNavigator.org?

It’s an incredible tool for those interested in making contributions to non-profit organizations.  The site analyzes financial reports of charities and then them, giving the user the chance to see where his or her money is going.

You know what else it does?

It shows the salaries of the executives of each charity.

That’s right.  By accessing public records, this site gives you the chance to see how much the head honchos at organizations like Amnesty International, Mothers Against Drunk Driving and Feed The Children take home every year.

So what kind of numbers do you think you would come up if you searched the site for, oh, I don’t know, say some prominent “not-for-profit” theaters around the country?

Would you be shocked if I told you that execs of some of these theaters take home in excess of $300k?

How about $500k?

What if I told you that there were some that earned close to $700,000???

That’s more than the guys who run The Red Cross, The American Cancer Society or The Partnership for a Drug Free America!

Don’t believe me?  Go on.  Try it.  If you’re like me, you’ll be typing in names of non-profits for hours (and maybe thinking about starting your own non-profit).

Let me make something clear.  I don’t mind when people make money.  I don’t begrudge someone being able to negotiate great deals for themselves.  Good for them!  Some of these Guys and Dolls have built these theaters up from plays in basements into major contributors to the modern theater.  They deserve to be rewarded.  Get your salary, guys.  Go for it.  If you can get your people to make donations to afford those payrolls, even if you’re earning more than the guys at Oxfam, then you deserve it.

What I have trouble with is that these not-for-profit theaters get better deals from vendors, some unions, actors, authors, etc. than their commercial producing counterparts, simple because of their “non-profit” status (someone did a helluva job marketing that “title”), no matter what folks at the tippy-top are being paid.  Many own theaters in major cities all over the country have the ability to get tax breaks and accept donations, and so on.

Commercial producers don’t get these perks.

Yet, with 4 out of 5 Broadway shows failing to recoup their investment, and maybe 29 out of 30 Off-Broadway shows failing to recoup . . . the question is, aren’t most commercial productions “non-profit” as well?  As tough as non-profits have it (and it ain’t easy and I commend those that are so committed to mission statements that others, including myself, wouldn’t touch), I believe the commercial producer has it tougher.

So perhaps all of the agents, vendors, etc. can stop looking at us commercial producers like the Scrooge McDucks of the theater world, especially when we lose 80% of the time.

Why don’t you treat us the same way as those other guys that are taking home large guaranteed checks?  Give us the same deals up front . . . and then, hit us harder when we recoup.
I’m happy to give you more money on the back than on the front.  Just allow us to get there.  You’ve already demonstrated that your clients, members, etc. can work for the lower amounts, so why not let us have access to those deals as well?  And we’ll even pay a higher premium on the back end just for our (ahem)  “for-profit” status, since your peeps helped us get there.

Oh yeah, one more thing.  As I’ve blogged about before, one of the questions I am asked most often is “Where can I find people who make enough bank that they may have some disposable income to put in a show?”

I think I just found a few.

  • Jared Kaplan says:

    So 80% / 97% of Broadway / off-Broadway shows don’t even recoup? That’s got “ego-investment” written all over it. I guess the real question is, what average return on capital do the shows that actually make money generate? I would love to start investing in shows, but unless the risk adjusted return is astronomical, how can a “savvy” investor ever justify investing?
    Talk about a broken business model…I should just go buy a baseball team. There’s got to be a better way…any books that you can suggest that detail the business side of production?

    • Well, if you are looking for smart investments show business is not the place. There are any number of reasons to invest outside of direct returns. However, if you are looking for purely financial rewards many Broadway shows and off-Broadway shows do very well with national and international tours after their New York runs end, and the original investors are entitled to subsidiary payments and are often repaid therein. “Ego-investment???” Actually, knowingly taking a financial hit to make are and entertainment happen is quite the opposite.

  • Sarah McL says:

    Charity Navigator is terrific, but it’s worth noting that some of these charity-evaluation websites/services champion the charities with the lowest administrative expenses and highest percent of their budgets going towards programming. This can lead to real difficulties in procuring general operating funds, of which theatres are always in need. But yeah, I definitely blanched when I found out how much the ED of the first nonprofit theatre I worked for is making (like 500k), while I was living in Bed Stuy on less than $28,000. I stayed for less than a year. I think it’s criminal to pay someone so little when you’re making so much.

  • Thanks for the link, and the interesting interpretation. Back in 1968 (I think) at the first FACT meeting there was a lot of sparks between for-profit and not-for-profit theatre people. The next FACT meeting, this had changed, and there was a spirit of collaboration. The result, as you point out, may be that the not-for-profit theatre may have become a lot more like the commercial theatre, which raises questions. I’m curious: do you know of a place where I can get data on Broadway and Off-Broadway recoup percentages? For my own purposes, I’d love to have even a season’s figures.

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