Grants, Donations, and Revenue

Most of you know that I work with a Non-Profit Community Theatre company in the San Diego Area. Like most companies, we had a down year and the subject of the best way to suppliment our revenue has come up. What do we do? Do we raise ticket prices? Do we focus on getting Grants? Donations? Loans (God forbid)? Should we only focus on building audience because that's the best long term solution. Is show selection or show quality the best stragedy to follow?

There are many different opinions out there. Obviously, a non-profit theatre organization that provides a service can't exist solely on Grant money. The revenue stream is not that great to begin with and they are very labor intensive. Plus, why should any organization recieve money if they aren't relevant to the community at all? Grants, by themselves, are not the way to go.

So what about donations? Donations fall in sort of the same catagory as Grants, except you lose the revelance aspect. Donations are a good way to make money in that the community is supporting you by giving to the organization. However, just like Grants, there is a high labor component involved to the donation aspect of revenue. While the paperwork is way more manageable, there has to be a personal aspect to your donation stragedy. The organization needs to get out there and put face time to potential and active donors to woo them and take care of them. Donations alone also does not work for a non-profit based business.

The discussion invariably wandered into the building a bigger audience. This problem is not unique to the "theatre" segment. All businesses are looking at ways to increase their market share and get new business. The good thing about a non-profit (at least in the theatre community) is that no one is really competing with each other, unless they are doing the same show at the same time. If you come see Midsummer Night's Dream at my theatre (http://ping.fm/daaib March 5 - April 4) does not mean that you necessarily won't go see something at another local theatre. But, again, building the audience isn't the only way to maximize your revenue due to the unique nature of a non-profit.

The conclusion is that all three of these things need to work in conjunction with each other, that generating funds isn't a zero sum game. If you can get grants to offset specific expesnes (i.e. for special events or with theatre, show production), that allows you to not be as worried about being put in a position where you immediately need to raise your customers to generate revenue. The flip side is that raising your market share will allow you more access to grants and donations. Remember, just because you have audience, does NOT mean you don't need grants and vice-versa. An organization needs to focus on using these stragedies together to create their revenue stream for the fiscal year.