A Proposal Concerning the Not-for-Profit American Theatre and Covid-19
Not-for-profit theatres are getting some assistance from Emergency Injury Disaster Loans and the Paycheck Protection Program, two parts of the CARES Act (H.R. 748). However, these elements of the federal legislation plus additional grants funneled through the National Endowment for the Arts cannot offset the losses being incurred by theatres throughout the United States. The combination of decimated earned revenue, diminished contributed income and unavoidable fixed expenses have the potential to wash away what was already an acutely undercapitalized sector of the American economy, the professional not-for-profit theatre.
Ultimately, we have only one American theatre culture. I believe, therefore, that this is the time for the greatest beneficiaries of the commercial or for-profit American theatre who have financial capacity to support the other makers of professional theatre, the not-for-profit theatres. Collective action is needed. Though this may seem idealistic, will there ever be a time of greater need or a more appropriate group of donors?
This proposal is ultimately in the self-interest of the commercial theatre because it depends to a significant degree on the not-for-profit theatres where most playwrights, actors, directors, designers, stage managers, and others first find their wings. In addition and of utmost importance, a plan to keep the maximum number of not-for-profit theatres alive will rescue a generation of theatre artists who will not be able to return to their craft if the theatres on which they depend disappear.
A Proposal:
Whereas, individual commercial theatrical producers and a number of creative theatre people have benefited astonishingly from smash hit shows with cumulative box office receipts and ancillary income (transfers, touring, recordings and memorabilia) well in excess of $5 billion;
And whereas, the leading New York City commercial theatre venue owners have participated in the Broadway component of this tremendous sum;
And whereas, the not-for-profit theatre is going through its darkest hour; and it will require several years for not-for-profit theatre audiences to return to the levels seen in 2019;
It is therefore proposed these very successful theatre entrepreneurs and businesses make grants (not loans) to professional not-for-profit theatres in the United States. Here are some specifics about how this might work:
It is estimated that there are 1,855 professional theatres in the United States.[1] However, the starting point of this proposal is to consider the 177 theatres that participated in the “Theatre Facts 2018” survey. This is not to suggest that a grant program should be limited to those 177, rather it is a way to get a first approximation of what this proposal will cost.
Large grants of about $500 thousand to $1 million each would be made to the approximately 61 mid-size not-for-profit theatres in the survey. These theatres have annual expenses between $3 million and $9.999 million. The exact size of the grant would vary with the size of each theatre.
Smaller theatres with annual expenses of up to $2.999 million would receive grants of $45 thousand to $275 thousand each, again depending on budget size. Eighty such theatres participated in the survey.
The total cost of these 141 grants would be $64 million. Though unquestionably a large sum, it represents only approximately 1% of the smash hit income mentioned previously. While “gross income” is certainly not “net income”, remember we are talking about billions in gross receipts. The people and organizations mentioned above have the capacity to create a grant pool of this size.
The 36 largest not-for-profit theatres in America, those with a median expense of $18.0 million, would receive no grant under this proposal given their traditional philanthropic benefactors will likely provide adequate support throughout this challenging time.
Grants of the recommended size, equivalent to approximately 14% of annual total expense during normal operations, will have a very significant impact. These grants, plus whatever additional funds can be gained from the federal government and loyal supporters, will help recipients enter a “quiet mode”, creating low-cost virtual productions, maintaining vital administrative and development staff, and paying only other truly essential or fixed costs.
As a result of these grants, a larger number of American theatres will survive than would otherwise be the case and many more artists will have artistic homes to which they can return.
Of course, our goal should be to reach more than 141 theatres with grants. This might be done by making smaller grants. Though undesirable, as an example a 50% reduction in the proposed grant sizes would allow the same $64 million to be distributed among more than 500 not-for-profit theatres.
This proposal is an attempt to start a conversation. Action is needed before it is too late.
by Arthur Nacht
[1] All data regarding the number and size of not-for-profit theatres are from Theatre Communications Group’s Theatre Facts 2018, by Zannie Giraud Voss, Glenn B. Voss, and Daniel Fonner, SMU DataArts and Ilana B. Rose and Laurie Baskin, Theatre Communications Group, pages 1 and 38.