Will Taxes Be Known As Manadatory Donations?

by:

Joe Patti

While non-profit arts organizations are looking into alternative structures under which to organize themselves like the L3C, it seems at least one municipality is looking to the non-profit model for their government structure.

Back in July, I came across an article about how Hopewell Borough in NJ is considering the non-profit model as a way to avoid state mandates. Mayor Paul Anzano posted a letter on the borough website in December:

“This would not be about seceding from the state, abandoning our responsibilities or failing to maintain the highest goals,” he wrote. “But it would most certainly involve exploring new options for delivering services based on the unique character of our borough. … Let the discussion begin.”

He was motivated by frustration he felt when the state mandated services but forbade raising taxes.

According to the newspaper article, “Under Mayor Anzano’s plan, the community would be run on a corporate model, and a board of directors, rather than a borough council, would hold residents responsible for municipal fees much like those in a co-op.”

The government wouldn’t be organized under 501 c 3 like arts organizations are so there wouldn’t be an opportunity to write off your property taxes as a deductible donation. There are a few non-profit categories under which you can organize which supporting would not be tax deductible (neighborhood associations or condo co-opts, for example).

The mention of co-opt association raised a momentary red flag for me as I recalled a recent story about how Texas Homeowner Associations can foreclose on your property without a judicial proceeding. This is the case in 33 states. I wondered if NJ were one and if Hopewell Borough might end up structured in such a way that they were exempt from any eminent domain prohibitions that usually face governments.

I was waiting to see if there might be any more development on the story, but other than the borough meeting a few days later to discuss this, I haven’t been able to find much more news on the matter.

So at this point, there is no sign that this will ever come to fruition. But if a borough of 2000 people can get a discussion started on the topic among various state government units and the associations to which they belong, maybe the charitable non-profits should get together, the hospitals, social service agencies, arts organizations, etc, and push for an alternative structure–either a new one or a new hybrid non-profit category that provides more options for operation.

Be A Broadway Producer!

by:

Joe Patti

Broadway Producer Ken Davenport is offering the first crowd funded investment opportunity in a Broadway show. For $100/unit, ten unit minimum, you can invest in Davenport’s Broadway revival of Godspell.

Davenport had to pass an exam to become a securities agent in order to offer this opportunity.

From Davenport’s blog-

“Each investor in Godspell shall receive a limited liability company interest in The Godspell, LLC, per our Offering Circular as qualified with the Securities and Exchange Commission of the United States.*

In addition, every single investor, no matter how much he or she invests, will have his or her name listed on a poster outside of our Broadway theater.

Yep, you’re going to get billing.

And every single investor will also have their name listed on a new website created exclusively for this community, PeopleofGodspell.com, as well as his or her photo, hometown, a quote, and links to their Facebook and Twitter profiles.

What do you think? Fun, right?

There may even be opportunities for opening night performance and gala tickets, complimentary tickets to previews, invitations to private cast functions and more.”

Bad news for many of you, including me, you have to live in one of the following states to directly invest – CA, CT, GA, IL, MA, MI, MN, NJ and NY. If you really want to participate, maybe you can have friends/relatives who live there and are interested in investing themselves pool your money with theirs. Not sure if you can get credit on the poster though.

1099s For Everybody!

by:

Joe Patti

I was idly skimming around Inc.com today when I came across a story which raised some concern for all the already overburdened arts organizations out there.

Apparently, a provision of the new health care law will require that any company making a purchase of more than $600 issue a 1099 form to the seller. Even for arts organizations who don’t generally have a lot of money, it is pretty easy to spend $600 with a single company in the course of a year. I can see a lot of arts organizations being driven to distraction trying to comply with this. Especially since arts organizations may also end up receiving as well as giving because of rentals or blocks of tickets people may have purchased for their business.

This law actually may provide a disincentive to shop around for the cheapest price. If it is easier to keep track of everything you spent on hardware at one store, you may avoid the other stores even though they often have good prices on certain items.

Non profits may be exempted for all I know, but there was no mention of that in the six different articles I read trying to get more information on the subject. There are a few amendments that have been proposed. One was voted down today because it tried to dismantle a couple other elements of the bill along the way.

This is supposed to go into effect in 2012 so more information may emerge as Congress tries to sort all the intended and unintended consequences out.

Gumbo With Your Show

by:

Joe Patti

I have only written about performances we have presented that transcended my expectations artistically (or things that we self-produced). The performance we presented this past weekend was just as excellent as I expected so it doesn’t necessarily fall into that category. However, the ancillary activities we conducted garnered us a lot of audience goodwill.

We were having a Louisiana group, Red Stick Ramblers, perform for us and noticed they did cooking demonstrations. Since their performance would be the first event of the season, it seemed like a good opening event to have the group cook for a small number of people. Theatres often offer the opportunity to have dinner with performers, but having the performers cook the dinner is a little more novel. They would be performing the same night so we didn’t want them to keel over in exhaustion. The chef/fiddler confirmed that cooking for nearly 200 people and doing a show nearly wiped him out once so I was pleased we limited the tickets to 50 people. We still have nice weather so we held it outside and billed it as a picnic. In addition to cooking, the band jammed a little off to the side while the meal was being prepared.

The people who attended were quite verbal with their appreciation for hosting the dinner and concert. They kept telling my boss how wonderful I was and what a great job I was doing at the theatre. (I should add, we weren’t serving any alcohol.) People got to listen and chat with the musicians. Others crowded around the pot and helped stir. If you have ever made a brown roux, for gumbo you know there is a lot of stirring to be done. A good number who attended the picnic knew each other from attending various music festivals in Louisiana so I was pleased there was some word of mouth in operation. I know the event added a couple people to our mailing list.

Of course, we had to expend quite a bit of effort to make a picnic happen in addition to a concert. There was a lot of food to be purchased and prepped prior to their arrival. Potatoes don’t peel themselves, nor do shrimp de-vein and lose their tails on command. Tables and chairs to be set up and broken down. Dishes had to be washed. By the end of the night, you begin to see the wisdom of having things catered.

But as people poured out of the theatre at intermission and the end of the show, still heaping praise on the experience, I realized we had earned a lot of good will with a number of people that evening. Caterers may have done all the clean up, but sometimes that can’t compare to a good home cooked meal. (Letting them in to the seating area earlier than everyone else probably didn’t hurt either.) By the time I got to the pot, everyone had fished all the big pieces of shrimp and other seafood out, but the liquid itself was pretty great tasting.

I am not particularly pushing these guys, though they are pretty easy going and fun. I think there are a few Louisiana/Southern US groups that do this sort of thing. A guy calling himself the Sauce Boss makes gumbo on stage while he performs and then gives a little to the audience. This can be a fun activity for a performing arts center. One of our partner venues in the state is having their cooking demo on a separate day from the concert so they can serve a larger group than we did. I think their dinner event was more fund raising focused.