ARTS SHRINK is a bi-weekly column designed to answer questions from artists and arts groups related to their arts business and practice. The Arts Shrink brings two decades of experience as an arts consultant, teacher, and mentor to the table as she responds your questions.
DEAR ARTS SHRINK: Should I incorporate as a non-profit organization so I can get grants?
- Riverside Musician
Dear River Muse,
Your question reminds me of a question I had myself a few of years ago: "Should I wear a Valentino gown to my Granny's birthday party?" The answer is the same: "You could but it'd be over-kill."
Let's think this through together. First off, it's expensive and time consuming to incorporate as a nonprofit because there are Federal and State fees and possibly attorney fees involved, and you will have to wait six months to a year to actually get tax exempt status. Second, most foundations and government granting programs won't let you apply for grants until you've been doing business as a nonprofit corporation for at least three years. Third, the law requires that you maintain a Board of Directors that meets regularly; this means you now have a whole group of people to manage. Lastly, there are numerous annual reports that must be filed with the IRS. Now River Muse, is this really what you want to do?
Let's consider some others options. I infer from your question that you feel you need nonprofit infrastructure and I completely understand your desire to have one but, before jumping headlong into a situation that you'll be stuck with forever, ask yourself this: How important is it to me that I own the infrastructure? What about borrowing one? Think about the possibility of becoming a "program" of an already existing nonprofit. Think inside and outside the box on this. Is there a nonprofit theater in your region? Can your music augment their existing mission? Ask them. Or what about the community center up the street? On the most basic level, community centers exist to bring the community together. Performing artists share this commitment to community convening (although it's often an implied commitment -- artists should talk about this explicitly because it's a very powerful impulse, but I'm rambling...). Talk to the community center. Think creatively along these lines. I know a theatre group who took this advice and is now "in residency" at a local College. This kind of partnership provides you with the infrastructure you desire without the initial and on-going leg work and expense.
If you are still convinced that becoming a nonprofit is the right thing for you, I would encourage you to check out this book published by NOLO Press "How to Form a Nonprofit Corporation." It contains easy instructions and forms. With this book you can probably do it yourself and avoid paying an attorney.
Think carefully about your decision. It has been my experience that artists who create their own nonprofit corporate infrastructure have substantially less time to devote to art making. They often express frustration at having to manage the infrastructure and, as a solution, want to hire a staff person to handle the business. But by hiring a staff person, they are inadvertently growing the infrastructure; now they are not only responsible for managing a board but they have staff to manage too. And it goes on and on. Large (even mid-sized) arts organizations have a built-in mandate to bring in huge amounts of money in order to support huge infrastructures. This unyielding economic mandate often negatively impacts the artistic product. Backroom management conversations then often change from "How can we do the best work?" to "What can we do to sell the most tickets (or product)?" You know what I'm talking about.
My advice: Stay small and creative, dear River Muse.
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