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8/30/12 - The Nonprofit as Nonstarter - Dance Groups Use New Funding Models

NY CULTURE August 30, 2012, 8:28 p.m.

This Wall Street Journal article cites a Trust-funded report by Dance/NYC.  New York Foundation for the Arts and Fractured Atlas are also grantees.  

For many choreographers, the path toward building a dance company typically includes a few basic stops, the actual creation of a dance work being the easiest. The harder part is finding sustainable funding and establishing a nonprofit to manage that funding. But as the economy and philanthropy have evolved, so have the expectations of dance artists. A new report, to be released by Dance/NYC, the service organization for the dance industry, examines what that shift will mean for artists and audiences going forward.

The report, to be issued Sept. 7, looked at dancemakers in New York City who have chosen to join existing arts organizations in an arrangement known as "fiscal sponsorships" rather than establish new nonprofit entities. A fiscal sponsorship guarantees the choreographer artistic autonomy while the sponsor organization handles the administrative burdens of achieving and maintaining tax-exempt status, as defined by the 501(c)(3) section of the IRS code. Any funds raised are donated through the sponsoring 501(c)(3) organization, then passed along to the choreographer or company, rather than being donated directly.

"It comes at a time when the field is re-evaluating the nonprofit model," said Dance/NYC director Lane Harwell. "The resources that might have inspired a dancemaker to form a nonprofit aren't as readily available."

Fiscal sponsorship isn't a new concept. The nonprofit New York Foundation for the Arts has made the option available since its founding in 1971. But it is being increasingly embraced because new online tools have made it easier for artists to interact with sponsors and donors.

"Before, when you were fiscally sponsored you had to physically come to our office to pick up your check or talk to someone to check your bank account," said NYFA's executive director, Michael Royce. "Now it's the ATM experience, not the teller experience."

Typically, a percentage of the funds raised by a company goes to the sponsor, which may offer oversight and technical support but doesn't involve itself in fundraising for the artists. Some organizations also charge a membership fee. But the costs are still lower than the alternative.

"They can focus their attention on making art and less on trying to be lawyers and accountants," said Adam Huttler, the founder and executive director of Fractured Atlas, a service organization that sponsors 50 dance groups in New York City, including the In-Sight Dance Company, Donnell Oakley Projects, and choreographer Amber Sloan. His organization keeps 6% of funds raised and charges a yearly membership fee of $95 or $195, depending the size of the group.

The Dance/NYC report collected information (such as location, budgets and income) on more than 250 city-based dance-making entities sponsored by five institutions. (The institutions also support artists in other fields and locations, but this report covered only New York dance.) Said Mr. Harwell, "This gives us the ability to have benchmarks. We will be able to track this over time."

Though the report should lead to better and broader information later, one hypothesis set out by the researchers is that fiscal sponsorship may be reducing the number of new nonprofits (which may not be an accurate reflection of the activity in the field) and at the same time increasing the overall of support for dance in the city by streamlining the process for donors and grant-makers.

The impetus for the report came when a 2011 study, "State of NYC Dance," which used data collected by the New York State Cultural Data Project, neglected to illuminate the dance landscape at the lower-budget end of the spectrum. "What wasn't captured was all those dancemakers operating outside of the nonprofit structure or making under $25,000," Mr. Harwell said.

Choreographer Kyla Barkin, the co-founder of the Harlem-based Barkin/Selissen Project, is part of that population. She considered starting a nonprofit in late 2008, but chose instead to become a sponsoree of the Field, which provides "strategic services to thousands of performing artists and companies in New York City and beyond," according to its website. Her company's budget has fluctuated from a low of $10,000 to a high of $50,000 per year. As Ms. Barkin recalled: "My accountant said, 'Don't even bother until your budget is $100,000 a year." Write to Pia Catton at pia.catton@wsj.com





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