Risky Behavior

Posted by Ms. Margy Waller, May 24, 2011 4 comments

Margy Waller

Before we start developing the public policy campaign to maintain status quo for charitable status and deductions, let’s make sure we know why we are doing it – and that it’s really a good fit for us.

Reviewing all the blog posts in this Salon in one read, I’m struck by the number of writers pointing out limitations of the special status that makes donors to nonprofit arts organizations eligible for a tax deduction.

Patricia Martin encourages us to rethink the slavish devotion to 501(c)(3) status if we want our organizational structure to keep up with the “rising generation [that] has already changed how it consumes culture and interacts with institutions." 

A number of bloggers note that motivations for donating are shifting and new ways of supporting things we like are growing fast. James Undercofler says his students don’t base their giving on 501(c)(3) status and he notes that “contributed revenue sought in the ‘old fashioned’ way will ebb, and the new philanthropy [via crowd-funding] will play a much more significant role in the life of arts organizations.”

Rebecca Novick echoes my concern about public perception regarding nonprofit arts organizations stating that we have to both actually meet the community benefit requirements of the law and make sure that people believe that we do so. My concern is that the latter requirement may be a very heavy lift that will take longer than the debate over tax policy.

Donors are increasingly taking advantage of the chance to make serendipitous gifts and using crowd-sourcing options to support the things they love but can’t afford to do as individuals. And young supporters are not as concerned with nonprofit status of the things they choose to support.

At the same time, we can probably agree on the benefit of the deduction for larger gifts – often from wealthier, and older, donors.

Put all of this trend analysis together and we have to ask – is status quo really what we want in our tax policy? It’s going to require significant resources to win that battle. Should we put our energy and brainpower up against a different goal? Can we better define the role of arts in community – in ways that citizens already value, so that we don’t have to try to persuade them? Could we create a new corporate tax category for organizations providing these benefits? Are we prepared to talk about a variety of tax incentives for gifts of different types or amounts?

There are many risks in asking these questions. And as Scott Provancher points out: there’s not much reward for taking risks in our community.

But we might need to admit that there’s also great risk in fighting to keep things just as they are – the risks of losing or that in winning, we wouldn't get what we really need.

4 responses for Risky Behavior


May 25, 2011 at 9:43 am

Today's post by Margy - and Joe's reply - are a breath of fresh air - to me, anyway. I've been scanning the other posts with one question in mind: when will the mentality of arts organizations begin to reflect that of artists? These two 'new takes' on the subject do just that.

Art pushes boundaries. Art challenges the status quo. So today's art happens largely outside the organizations that are playing the game - and the public, now with more choices, is leaving those tried and true venues in droves.

If you think of it in the context of trying to have your feet in two canoes, you can see why the mentality of "let's just play along and maybe we'll get the support we need" just hasn't worked. That's not art.

After 20 years in the nonprofit business (and boy, is that ever a business!), my husband and I have launched a for profit so we can place both feet in one canoe and paddle like crazy ... with the site launching in a few weeks I can only say we have no idea how it will all end, but there's no doubt in our minds it's going to be an interesting journey.

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Joseph Futral says
May 26, 2011 at 9:00 am

A question I rarely hear asked, much less answered is, what is 501c3 that has made it so important today? If everything we say about the _arts_ is true, if the top 10 reasons to support the _arts_ has merit, what does 501c3 have to do with any of that? Is someone's art automatically better because they are under the structure of a 501c3? Does the work have more importance because the creators organized as a 501c3? Is art created under the the structure of a 501c3 the only art that benefits the community? If so, then there is a HUGE unspoken when we talk about supporting the arts.


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Joseph Futral says
May 24, 2011 at 2:44 pm

The hard part I've found, as someone who is trying to start an arts organization and has worked with many arts orgs, is that most of the support systems and mechanisms out there _require_ 501c3 status. The public doesn't require an arts group to be 501c3 and, by and large, don't care.

But any para-arts organization that exists to support the arts, doesn't really mean support the art, but support 501c3 arts organizations. We have this huge infrastructure, crumbling or not, built to support systems, not art. The systems have taken on a greater importance than what the systems were created to support.

The only people concerned about 501c3 are the policy makers and the people trying to exist as a or support other 501c3.

I do not support status quo, but whenever there is a chance of losing government funding, the first thing I see artists do is rally to support status quo.

I don't know what the answer is other than to just ignore what already exists. But then I can't escape the fear of leaving money on the table.


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May 25, 2011 at 3:05 pm

I started a for-profit last year for a similar reason. I am not interested in competing for funding against those artists and art organizations I wish to support.

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