The Entrepreneur's Lament

From the Executive Director

By Ben Cameron

As Ben Pesner's coverage of our annual fiscal survey amply demonstrates, the theatre field has become immensely creative and imaginative in developing and maximizing earned revenue streams. The great majority of theatres in this country do more than simply mount productions of plays.

We run restaurants, concession stands and gift shops, selling books, coffee mugs and theatre memorabilia. We have education outreach programs that target schoolchildren, as well as niche marketers and group sales specialists who constantly broker new audience relations with amazing alacrity and effectiveness. We teach acting classes to theatre enthusiasts as well as to professionals, organize talkbacks and social groups, rent our facilities for meetings and banquet functions, and sell advertising in our programs. We have theatres that have partnered with local city authorities to build municipal parking facilities, theatres that have opened costume rental facilities or play-licensing groups, theatres with entire divisions that generate new plays for corporate human-resource training. In fact, it's amazing we have time left to actually produce plays, especially given the skeletal staffs many of us have.

Clearly we have responded to those urging us to become more entrepreneurial.

I often worry, though, that behind this entrepreneurial imperative are unspoken admonitions—that we need to become self-sufficient, that we should replicate the successes so apparent in venture capitalism. However well-intentioned these aspirations may be, they are fundamentally misplaced.

The very premise behind the creation of a not-for-profit sector was that certain services or activities, fundamental to a healthy society, could not be sustained by the marketplace—a visionary recognition that forward movement, progressive ideas and innovative practice often demand resources beyond those the market can ever provide—and that can, indeed, even alienate the market in the name of progress.

For-profit ventures ultimately work in time frames and charge prices that recapture the entirety of their research, development and production costs: Even in the arts world, Broadway shows, offering eight performances a week of the same production 52 weeks a year at ticket prices twice, three or four times the rate most not-for-profits charge, still typically take more than a year to recoup these costs—if, indeed, the costs are recouped at all.

Given our not-for-profit core mission of economic accessibility and our practice of producing seasons of multiple works (each of which, of course, entails additional new production costs), comparable results are obviously beyond our power. Clearly, trying to move the not-for-profit not merely to solvency but to self-sufficiency has consequences—consequences in programming, consequences in programs, consequences in our very structures.

Because our very terminology emphasizes the rejection of the profit motive as our primary driver we often lose sight of what we are for: equitable access for all citizens, challenging ideas, community formation, innovative artistic practice, civic dignity and more. Demand we become self-sufficient, and all those values suddenly are on the table; ask a not-for-profit to become economically independent only if what you really want is for an apple to become an orange.

But there are other reasons that for-profit results are impossible for us to capture. Success is determined not only by how money is spent but by the degree of control a group can exercise over the money it has. Where the entrepreneurs get it right is in the belief that experimentation, growth, risk and flexibility go hand in hand. For-profit ventures depend on revenues grounded in unrestricted working capital—the money investors contribute in an unrestricted way for product exploration and development. Can you imagine a corporation really being able to work if every stock buyer specified how the corporation could use the money—that my money can only go to developing shaving cream, while yours can only go to toothpaste?

And yet, given the increase in restricted funds and donor-directed contributions, this patchwork approach is the norm for us today. Our core needs are not sexy to donors, and fund-raising increasingly depends on the laborious project-by-project approach. The idea of "general operating support" (GOS) has been discredited, subliminally linked to lack of discipline or lack of control.

Such support is flexible working capital—and especially in a world of dizzying change, the arts organization without access to such capital cannot survive.

How revealing that our for-profit partners the Shubert Organization and the Altria Group make unrestricted giving the cornerstone of their philanthropic work. If advocates of entrepreneurialism really want to see results, let them start by advocating for the return to flexible working capital—and by emulating the Shuberts and Altria in making general support the rule, rather than the exception, of their own donor practice.

Finall—-knowing that Nov. 2 is just around the corner—don't forget to vote: Never has so much been dependent on how seriously we take our obligations, not merely as cultural citizens, but as citizens deeply engaged in our collective future.

© - 2006 by Theatre Communications Group, Inc. All rights reserved. No portion of this publication may be reproduced in any form, or by any means, electronic or mechanical, including photocopying, or by any information storage or retrieval system, without written permission from the publisher.