The Blurring/Vanishing/Missing Line Between Commercial & Nonprofit

Posted by Diane Ragsdale, May 20, 2011 19 comments

Diane Ragsdale

People have been talking about the blurring line between the commercial and nonprofit arts sectors (and related mission/market tradeoffs) for decades. Some see this line blurring and become concerned; others seem to see it as a natural progression and even a step forward for nonprofits. I’d venture to say that Patron Technology CEO Eugene Carr is in the second camp, based on his recent blog post, "What’s the Secret Sauce Today?"

Here are a few excerpts from his post:

“… more and more, Artistic Directors need to realize they must balance audience needs with the financial needs and mission of the organization, and in these economic times, the mission may have to bend a bit.

Frankly, it’s always a balancing act, but if you’re too mission-oriented, you can end up with something like what we’re witnessing at the City Opera, which essentially abandoned any vestige of its old mission … and instead decided on a radically new approach with nothing but daring new operas. 

… more and more organizations are realizing that the decidedly for-profit impulse of filling the house at any cost must be job number one. I’m not suggesting that organizations don’t already think about doing this — but what I am suggesting is that earned income is looking more and more like the newest and best bastion of hope in this economic downturn, and if that’s true, it requires a change of focus and a reallocation of resources.”

Is it just me or is anyone else worried about what might be implied by that little prepositional phrase at any cost? And how far can we bend the mission before it breaks? At what point might we need to worry that the commercial/nonprofit line has blurred to such a degree that there is no longer a distinctive role for nonprofit arts institutions? At what point might someone suggest that nonprofit arts organizations have become for-profits-in-disguise?

Just to be safe, perhaps we should be getting out our red and black markers and a big sheet of paper and writing ‘mission’ and ‘money’ at the top of the sheet with a line down the middle and keeping track of this stuff so we’re sure we end up with enough plusses and minuses in the right columns at the end of Day? Season? Decade? Lifetime of the organization? At what point in time, I wonder, should we take a snapshot of this mission/money balance sheet?

Before we manage to erase all vestiges of ‘the line’ I, for one, would be in favor of some thoughtful discussions on what may be the implications, costs, and gains of doing so.

19 responses for The Blurring/Vanishing/Missing Line Between Commercial & Nonprofit


May 25, 2011 at 11:24 am

I figure it's time I rejoined this conversation, and I'm delighted that this issue is being debated. First, I agree with Joseph above, this is not a zero/sum game and I don't think there's opposition here with regard to mission and revenue. And wasn't my intention to suggest by the phrase "at all costs" means abandoning the mission. "Bending the mission" does not mean breaking it.

I'm pushing for doing both, per Brett's post above. Another organization to look at is Ailey. Its mission is well defined and intact. They produce new work *and* their popular works sell well. Their annual NY run (which I understand is mostly sold-out) is a combination of chestnuts and new works. So let's not let this debate be all about a dance company abandoning the idea of creating new work just to do Nutcracker which makes them money.

And,what I mean by more of a focus on revenue is not only about what to produce but also on marketing. We need ever more hard-nosed marketing, more creative marketing, more innovative marketing, and *most importantly* an emphasis on understanding the ROI of these marketing efforts. Non-profit should calculate ROI on their efforts, even if their bottom line is negative. I often speak with managers don't know the ROI on their marketing efforts, or on their events. These are the places where the kind of focus on revenue can have a major impact.

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Joseph Futral says
May 25, 2011 at 11:51 am

"Another organization to look at is Ailey. Its mission is well defined and intact. "

Ailey is actually good case study and combines well what I think everyone is trying to say. But from my limited experience (I remember when shows had to be papered just to fill the audience... in Atlanta!!!) and from people like Michael Kaiser relate in their tellings, the business had to readjust to the mission, not the other way around.

I could be wrong about that or I could only be seeing what we are _supposed_ to see, not what actually occurred in their turn around. I have no doubt they had to re-examine their mission, take a hard look at who they became as an organization, and adjust accordingly. But that is my take away.


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Joseph Futral says
May 25, 2011 at 11:55 am

You are correct, too. According to oral tradition, Ailey DID have to examine their marketing efforts and adjust to the mission of the organization and not just where they thought the broadest audiences would be reached.


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May 20, 2011 at 2:10 pm

Blurring the lines of non-profit and profit in the arts really depends on your non-profit's mission. These days, with social entrepreneurship and our donors' desire to be truly involved in the mission of what we do (as opposed to just sending money), makes us wonder if there is a role for our audiences in attaining self-sustainability within our non-profit ventures. The train of globalization is moving and it is moving fast! Our audiences want to engage and not just observe. The question is: how do we make a profit for the benefit of the people we serve (our artists, dancers, actors, musicians). How do we create profit that secures our future while sustaining the artists in need of this support? At Artistic Dreams International, we thought of these questions and drafted answers where profits from sales of artwork and music directly favor our sustainability and the careers of the artists we serve. Business cannot be bad if it makes our artists produce more art and be free to live the life they love through the arts. Great post Diane, I encourage more conversation!
Lillian - Artistic Dreams International

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Joseph Futral says
May 25, 2011 at 11:40 am

I don't have a problem with them producing only a Nutcracker, either. Just don't crying for public funding like you can't make ends meet without it. And don't call yourself a not-for-profit endeavor. Nutcracker is a _money maker_. That's worse than the banks and car makers needing government funds to keep from going under.


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May 25, 2011 at 11:16 am

Thank you for this re marketing - in fact, I might quote you on this!

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May 25, 2011 at 11:12 am

How dare the arts try to make money, right?

Good for that dance company! More power to them.

If they only want to put on the Nutcracker and people want to see the Nutcracker, there is absolutely nothing wrong with that. Supply/demand.

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Joseph Futral says
May 21, 2011 at 10:25 am

Seeking increased earned revenue in and of itself is not a bad thing and not contrary to being a not-for-profit. Just because one is organized as a not-for-profit does not mean the organization cannot make a profit or even expect to make a profit. The point is what the organization does with those profits.

That said, I have seen a dance company, seeking funding, that existed solely to produce a Nutcracker. One production a year. This drove me absolutely up the wall. Plus they were seeking public arts funding. Talk about being a for-profit in the guise of a not-for-profit. Most ballet companies do a Nutcracker to _fund_ their season. This company only produces a Nutcracker. They had not plans to do anything else. There only professional/paid artist positions were Sugar Plum and Cavalier. So the entire rest of the organization existed on a volunteer basis.

No arts organization exists solely to put butts in seats. Creating art, for an arts organization, is always job #1. We want the affect of our art to be enough butts in the seats to justify our existence as a business entity, but I would say what has gone wrong at a lot of arts organizations is the approach of trying to find what will be popular instead of finding what it is you do well. Frankly, being a business is the wrong point to find what it is you do well. You should know that, or at least have a good idea of it, before you become a business. For too many organizations, being a business is an experiment, not the result of what they create.

I'm less concerned about the quoted organization because of this:

"...instead decided on a radically new approach with nothing but daring new operas"

Personally, I find this pretty exciting and wish them the best of luck. I was just lamenting the other day that few theatre companies are producing new works. They are just doing previously produced, tried and true, productions. Don't get me wrong. There will always be a need for cover bands—weddings, birthday parties, business conventions. But let's not forget we are supposed to be creative, too. Create! Excite!

At the same time we need to remember—populist art does not equate to great art. Finding great public appeal is not the sole measure of worthwhile art. But how great is it when creating new work finds public appeal?

There is a lot that can be said on this topic. I've gone too long already. I hope to hear more from others and the author. I always find it disappointing when the writers in this blog essentially do hit and run blogging.


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Joseph Futral says
May 21, 2011 at 12:31 pm

Ah. I misread that statement. The daring new works was the mistake that cost, not what turned them around.

I do agree that blaming marketing is too easy. Good marketing comes from having a good product. Marketing cannot make a product good, much less great. You might be able to use marketing like that once, but the audiences will catch on and that trust is lost.

However, I do think producing daring new works in and of itself was not the problem. Creating something audiences feel worth seeing is the problem (if that is why one exists as an organization). I've seen companies produce "staples" and lose audiences. Producing staples is not a guarantee of success.

However, losing focus as an organization is ALWAYS a sure way to fail.


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David H. Graham says
May 23, 2011 at 1:11 pm

Joe is spot on.

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David Dower says
May 21, 2011 at 1:56 pm

This post has been keeping me up nights. I'm not surprised you snagged on it as well, Diane.

I have been trying to articulate my own sense of disquiet from having first encountered Mr. Carr's analysis of our situation.

What's most gnawing at me is the binary nature of his view. There seem to be only two choices: rigid (and foolhardy) application of the mission OR a bending of mission to accommodate the buying public.

But my entire career in the theater I have been working in the space between these two poles. I think there is something to learn from the organizations that are making a third way-- where the mission and purpose of the organization is designed and developed with the public AND the artists occupying the center together. Why can it only be true that a focus on the public means a bending of the mission, or that a focus on the mission automatically means alienating the public?

Isn't it possible to develop a strategy that advances the mission and purpose of an organization "at all costs"? If the mission and purpose of the organization have a rationale for being, in this world, then surely we can discover a way to support it using the various tools at our disposal. And, in the case of the nonprofit theater certainly, one of those tools is commercial enhancement. At least for the time being. Another is mission-rooted programming that appeals to a broader segment of the public. Another is mission-rooted philanthropic support for strategic work on behalf of some important segment of the organization's service community: the local audience; youth, seniors, underserved populations for whom the organization's work is important and meaningful. And there's a case to be made for the strategic importance TO MISSION of philanthropic support that makes the individual donors feel like "special members" of the community served.

Where we seem to get in trouble is where we separate the mission and purpose of the organization from the strategy for funding it. So, any commercially enhanced project starts to look helpful; a group of major donors starts to take over the priorities of the fundraising staff; or we program pop culture for the exclusive purpose of paying the bills.

Mr. Carr's post seems to inhabit that world- a bifurcated world where the artistic purpose and the revenue strategies can be severed one from the other. I know it's harder to live in a world where you can't and don't do that-- it's a challenge for marketing professionals as much as for artistic directors-- but isn't that actually the job for both? Not to find some way out of the responsibility we accepted when we signed our 501c3 incorporation papers, but to find, as a matter of the highest priority, the way to fulfill it. To the extent that, when we come to this question of "bending mission" to stay alive, we will have to conclude that our survival is of lower priority than our purpose. We can't conflate survival of the organization with sustained relevance of the mission and purpose. And we may have reached the end of the road: either we are on a mission that is not a priority to those it seeks to serve, or that we are not the organization best positioned to serve it.

I take issue with this formulation: leaders "must balance audience needs with the financial needs and mission of the organization." Mr. Carr puts the needs of the audience both AHEAD OF and IN OPPOSITION TO the mission here. And he even pits the audience against the financial needs of the organization. Well, if the organization in question is meeting neither its financial needs nor its mission responsibilities, what exactly IS it and why is it still a 501c3? Let's assume, then, that he means that an organization must balance it's audience and financial needs with mission. I agree. But if the only way to adjust toward that is to "bend mission" that's not success-- it's not balance. It's using the shell of a 501c3 to serve the financial needs of the staff and to meet the demands of the market.

I worry about the call to "bend the mission" becoming the rallying cry of marketing departments and boards across the country and the equally reductive, reflexive, defensive response of artistic leadership crying "artistic purity at all costs" in response. Yes, Mr. Carr-- down that warpath lie lots of dark, abandoned buildings. But the middle path is the one that we could use more minds and attention on: developing sound and comprehensive strategies that maximize the available revenue streams on behalf of mission, fully captured through the purposeful pursuit of that mission.

And that, then, would be balance, no? When mission and purpose are woven into every interaction, every ticket sale, every donation, every artistic choice, every programmatic initiative AND the organization pays its bills with the results? Sounds Pollyanna, but I actually think it's the hard stuff. And its what we're paid to do.

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Joseph Futral says
May 23, 2011 at 1:22 pm

I like your comment about bifurcation. I would like to extend that a bit to the OP. I would contend there is no "commercial art" versus "non-profit art". There is only art, sometimes with broad, public and commercial appeal, sometimes not.

The more important thing is that as a business you do your best to be aware of the difference and plan your business and financial strategies accordingly. Don't try to create a high revenue model around a venture that will not have a high revenue potential. Leverage every possible revenue stream you can, but recognize when a project is not going to have that broad appeal. At least put yourself in the position to be surprised if it does have commercial, high revenue results.

An arts organization should ALWAYS be in the position to adjust their business model to their art. An arts organization that adjusts their art to the business model should just find an easier way to make money. Open a McDonald's franchise or something.


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Joseph Futral says
May 21, 2011 at 5:36 pm

"Mr. Carr puts the needs of the audience both AHEAD OF and IN OPPOSITION TO the mission here. And he even pits the audience against the financial needs of the organization. Well, if the organization in question is meeting neither its financial needs nor its mission responsibilities, what exactly IS it and why is it still a 501c3?"

Right on.

I love this:
"developing sound and comprehensive strategies that maximize the available revenue streams on behalf of mission, fully captured through the purposeful pursuit of that mission."

I have tried to annunciate my own version of what that says, but nothing matches these words. Nicely put. (although since we are talking about the arts industry and not general non-profits, it would be nice if the word "art" was in there somewhere, but the meaning stays the same).


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Joseph Futral says
May 26, 2011 at 7:36 am

Oh, man. Please do. That would be sweet! I would rate this as "the most helpful post ever".


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May 25, 2011 at 11:33 pm

Tom, want to weigh in?

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Joseph Haj says
May 23, 2011 at 1:19 pm

Thanks for this dialogue. The binary, zero/sum, discussion is boring and as old as time. Here's my observation: just because nobody is coming to your theatre doesn't mean your art is too good to be appreciated. Inversely, just because you are filling your theatre doesn't mean that you have abandoned your mission and compromised your art. I completely subscribe to David Dower's "pollyanna" view. It describes what many of us are trying very, very hard to do. I have learned that nothing good happens at the theatre where I work when we invite a non-involved community to admire our Art. I have also learned that if we can promise our community (a community that as a not-for-profit we are charged to serve)relevance and connection, they will come for anything we make, however challenging that work might be.

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Mr. Brett A. Bernardini says
May 23, 2011 at 11:12 pm

I am the founding Artistic Director / CEO of The Spirit of Broadway Theater in Norwich, CT. Now in our 14th season we are internationally recognized for our commitment to the full production of new musicals - as the programming for our entire season! New works are all we do and we are still in business!! In fact, we are using the full production of new musicals as a platform by which we are exploring what the future of theater can look like for the 21st century. New "daring" works are not the demise of a business, but instead the heart and soul of a passionate and dedicated, creative life in the theater.

As Joseph Haj points out, audiences will support you if they trust your work...even if it is unknown.

For me, there is no binary discussion to be had. The truth is simple, do work that has value to your audience and you have an audience. A happy audience is one that buys tickets, brings friends, makes donations and supports your organization through active participation.

If your mission has value to your audience...Bravo!!! If not, create a new mission or do something else. Life is like art...make a choice and stand with it. Great art is about bold, authentic choices...make one...enjoy the rewards.

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David Dower says
June 02, 2011 at 1:36 pm

Someone just sent me this quote, in reference to the various related discussions that are going around, so that I might share it with interested parties:

“Once we made the choice to produce our plays not to recoup an investment but to recoup some corner of the universe for our understanding and enlargement, we entered the same world as the university, the museum, the church and became, like them, an instrument of civilization.” Zelda Fichandler

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June 14, 2011 at 1:30 pm

I'm late to this discussion, but it's a real bugaboo of mine, so I need to pop in.

I think the FIRST thing that symphonies need to do is to get rid of the words "Pops Concerts."

I'm growing increasingly frustrated at the assumption that "mission-based" cannot mean "popular." This is insulting to audiences -- and no wonder they don't come to our "mission" work. We are giving them the message that they don't belong -- and the only thing they can handle is stuff that the artists hate.

One of the reasons we can't seem to attract audiences to serious programming is that we insist on marketing the art, not marketing the experience. When people see Brahms on the program and don't come, it doesn't mean they don't like Brahms, it just means they don't know Brahms. If we loosen up on our rigidity surround the concert experience, the marketing methods, and the message we're giving to the audience, we don't have to bend our mission, not even in the slightest little bit.

I also disagree with the premise that we need to tighten our belts, find more efficiencies, and in general cling tightly to our cherished traditions rather than change. We need to invest in innovation, just like every other industry.

Otherwise, it's hard to see how we can continue to justify the fact that we are serving our communities.

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