Yes, Arts Organizations CAN Show Charitable Impact

If they can do it, your nonprofit arts organization can do it.

Nonprofit arts folks continue to balk at the idea of using their art as a tool rather than as the goal. And that’s their right, although it’s soon to be their downfall, as we’ve discussed in previous articles.

We’ve tried to show them that by using their Willy Wonka-esque Golden Ticket, their nonprofit status, they can use their organization as a catalyst to impact their communities.

Indeed, they must positively impact their communities in specific ways, according to IRS Code 501(C)(3). And they’re just not, but they are determined to use deflections such as “art for art’s sake” and “isn’t art enough?” as noisy rationalizations that their nonprofit arts organization, unlike EVERY OTHER nonprofit organization in the United States, has no relationship to charity or charitable activities. 

Of course, because of that, we have a sector where donors donate so that donors benefit. In other words, a donor donates so that they can buy a ticket to the charity’s offering, even though there is nothing impactful about that relationship. Indeed, it is the ultimate definition of elitism: the kind of diamond-studded codswallop that has caused people to conclude that the arts are not essential to a community. That conclusion by a wide swath of people was brought into clear focus during the pandemic, when the word “essential” became a watchword, a beacon for those with the power to help their own communities. Pharma companies became essential, as did health care providers (especially home health care), social services, supermarkets, delivery services, mask manufacturers, pet adoption services, and Anthony Fauci. Nonprofit arts organizations? They started streaming their work (which let audiences and donors know that they never had to go back to the venue) and begged for financial support for survival.

The nonprofit arts community (except for a few amazing, selfless companies) basically acted out the fable of The Little Red Hen. They only wanted to eat the bread. Essentially speaking.

Other arts organizations manage to act charitably. One, based in California, sent care packages in collaboration with the USO, to 10,000 service members around the world. As part of that charitable activity, they sent email messages thanking those same troops for risking their lives. Those packages and messages arrived just before the December holidays.

Is this their mission? Decidedly not. Their mission, as excerpted from their website, is to “to entertain, inform and inspire people … through the power of unparalleled storytelling.” And yet, their culture as a company compelled them to do this bit of charity, which has almost nothing to do with storytelling.

The arts organization? Disney. Yes, that Disney.

And no, they’re not a nonprofit. I never wrote that the organization was a nonprofit. But they could be, given everything.

After all, they do all three things that nonprofit arts organizations say they do to prove their worth: their art (movies, theme parks, Broadway shows, television shows, books, music, educational materials) attracts high attendance along all ages, racial demographics, ethnic backgrounds, and genders (including a special emphasis on hiring LGBT folx) – aka “butts in seats.” They provide millions of dollars of positive economic impact in their communities, not just in Anaheim and Orlando, but in Hawai’i, Burbank, and all the other places where local economies thrive because they’re in the neighborhood. And test scores have improved because of their dedication to providing educational materials in classrooms across the country. Butts in seats, positive economic impact, and improved test scores – exactly what individual nonprofit arts organizations have been trumpeting (and not proving) for years.

If your organization continues to insist that the simple production or presentation of art is a charitable activity (which it is not, according to the IRS, your state, your local government, and frankly, your artists) and justifies your existence as a nonprofit corporation, then so does Disney. If they were still a privately-held company, they might consider applying for — and receiving — their 501(C)(3) status from the states of California and Florida, for example.

No, Disney shouldn’t become a nonprofit. They engage in social responsibility because they have something to gain. Social responsibility improves their value to the shareholders. And, as a public for-profit entity, they are allowed to engage in some activities that may not befit a charity, but are perfectly legal.

Your organization can do that too, if you don’t want to act as the charity you are. It would be the ethical thing to do, allowing those nonprofit arts organizations who use the art they produce or present as a tool to generate tangible results. Create prospectuses and solicit investors instead of donors out of your executive producer office. Give them all the perks you think they need. Use a substantial marketing budget to sell tickets (and anything else you’d like). You can even choose to do socially responsible activities to increase the value of your LLC (or whichever kind of corporation you prefer). You wouldn’t need a board of directors, but you could certainly utilize the skills of one if you want. You’d just have to pay them.

You could potentially even campaign for and donate to candidates that will grease the skids for you to achieve whatever artistic vision you want to achieve.

BUT, if you want to continue to be a nonprofit arts organization, you need to find a way to improve the life of your community not solely by producing or presenting art. You need to solve or mitigate a community issue. You’ll need to do the research to discover a) what that issue is; and b) how to use your art to solve or mitigate the damage it inflicts. Then you’ll need to measure that – perhaps, as discussed in this column earlier, by utilizing the Scientific Method.

And while you can’t endorse a candidate, you can, depending on your state, spend a percentage of your expense budget on lobbying for legislation.

What this all boils down to is this: if you’re not going to lead by producing art as a means toward an equitable end, GET OUT OF THE WAY of those that do. Stop vacuuming badly needed cash from the people in your community who need help. They deserve it more than you do.

Besides, there’s a lot of freedom of expression in the commercial arts business. Ask Mickey.

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