A remarkable revolution is taking place in the American theatre today. Led by the pandemic and long-pent-up demands for racial and social justice, this revolution is challenging the basic assumptions, structures, and values that have dominated the field for decades. Although we are familiar with how these powerful forces are affecting our theatres, we are less familiar with how they are affecting our boards. But our boards are also undergoing a revolution, a revolution in their membership, in how they structure and use power, and in the foundational values of their work. I want to explore this revolution by looking first at our historic model of governing, then at the challenges to that model, and, finally, at some of the exciting early responses to those challenges.
The Historic Model
More than any time I can remember, I believe that, in order to understand where boards are today, we need to understand their past, their origins, their purpose, and how they have developed over time. Since most of our current problems come out of this past, the more clearly we see it, the more creatively we can move forward.
Seventy years ago, when our founders were creating the regional theatre movement, their goal was to create great theatre at accessible prices for audiences across the country. To do this, they realized they would need sources of funds beyond ticket sales, as the cost of producing theatre was more than most people could afford. To raise more funds, they made the decision to adopt the legal, nonprofit model already being used by universities and social-service organizations to support themselves. Legal, nonprofit status is part of the United States tax code that provides two tax benefits to organizations that contribute to the public good. One is that these organizations are exempt from paying taxes themselves, and the other is that charitable donations made to them are tax deductible for donors.
In exchange for this charitable support, organizations agreed to accept oversight of their activities by creating boards of trustees that held them in trust for their communities and ensured they actually provided the public goods defined in their missions, maintained financial integrity, and obeyed national, state, and local laws. Although this exchange looks straightforward, it actually has had complex implications for how theatre boards developed.
With the nonprofit model, theatre boards are responsible for maintaining three relationships: their relationship with the community they represent, their relationship with the organization they govern, and their relationship with the public good they are protecting and championing, in our case the artists and their art. What I believe happened is that, over time and under constant financial pressure, the values and priorities of theatres developed in ways that strongly supported the relationship between the board and its theatre institution but undermined the potential relationship between the board and its community on one side and the board and its artists on the other.
First, as theatres grew, the need for fundraising, marketing, and planning developed into a complex institutional structure that needed to be supported with staff and funding. These institutional needs became the fixed costs of the theatre, which were difficult to change, while the art and artists became the variable costs, able to be changed from show to show. Always operating in an environment of scarcity, too often the art and artists were cut to maintain the institution. As a result, over time, theatres inadvertently began to prioritize the institution over the art, and most artists became itinerant workers, hired for individual shows. Because of this, board members rarely encountered artists, so they knew little about their lives or their work, and, since few fellow board members were artists, there was little artistic presence around the board table. Often artists were brought to board meetings for what were “show and tell” performances to educate board members about the art, but, mainly, the board’s relationship with artists became mediated by the institution.
The board members who are directly involved in setting the agenda and passing the budget hold much of the power of the board. Underneath most of the challenges facing boards today is the issue of who holds these positions of power.
The second thing that happened was that, again over time and under financial pressure, boards’ relationships with their communities changed. Rather than being the community’s main representative in the oversight and operation of the theatre, boards started to see communities as a prime source of donations, and fundraising became a dominant function of boards. At the same time, communities were increasingly looked at as sources of audiences and became the targets of growing marketing campaigns. Since board members are generally chosen for their abilities to help with the work of the board, wealthy or connected board members with fundraising and marketing experience became particularly desirable, and the broad-based connections between the board and the community were eroded. Membership on boards became increasingly narrow, representing only a small part of the community. Boards began to no longer serve the communities they were supposed to represent or the art they were supposed to champion.
In contrast to these two relationships, theatre boards did develop strong relationships with the institutions they were charged with governing, which created the model of governance we are so familiar with today. I think the most striking characteristics of this model are that it is hierarchical in form, that its membership is determined by the needs of the theatre rather than the needs of the community or the artists, and that board power is concentrated in a few vital functions.
Comments
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Laurie, thanks for your comments. You are right, of course, that ensemble companies differ from the classic model in that they all have artists on their boards and ensembles based in communities like Bloomsburg also have community members on their boards. A very different approach to governance. Hope all is well with you. Jaan
Aaahhh, the ongoing, ever-present, perhaps-evolving relationship(s) of board and artists and economics and mission and power and community. I offer Bloomsburg Theatre Ensemble (from which I retired as a founding member three years ago) as a model-- an artist-run company thoroughly committed to its community, with an ongoing, ever-present, perhaps-evolving, often-rocky, often-mutually-nourishing relationship with its board. BTE is currently celebrating its 45th season. Yay.
Roche, thank you for your thoughtful response to the essay. I completely agree with you that trustees need to understand the basic economics of not for profit heater, the inherent structural imbalance that Bowen and Baumol set out for us those many years ago and which your recent presentations have made accessible to so many people in the field. I wish that all trustees, particularly new trustees, were required to read a summary of your work. I also wish that, if TCG ever resumes publishing trustee material, either online or in book form, it would form one of the first chapters. This was a subject that was missing from The Art of Governance. Best, Jaan
Jaan Whitehead has always provided thoughtful comments regarding our industry. This article is no exception. At the same time, I believe there is another aspect to the governance crisis/evolution: the lack of understanding by boards (and theater practitioners) about the basic economics of our industry. Over the last seven years I have presented WHY NOT FOR PROFIT THEATER, an illustration of the economics of our industry at conferences and theaters around the country. I have been amazed that trustees don't understand why ticket price increases have occurred to fill the gap between annual contributions and expenses. Price increases obviously lead to programming changes and mission erosion. Furthermore, trustees are not really aware of how the commercial and not for profit business models differ. At the same time, in meeting trustee leaders around the country, I have been impressed by their commitment to their theater's mission and their frustration with the financial challenges they face. It is important to remember that the Ford Foundation had an overwhelming financial impact in the first decade of the not for profit theater movement. When their involvement ended, the pressure on boards to raise funds increased significantly and has continued to this day. In short, board governance issues are intrinsically linked with an understanding of the economics of the theater field. Without fully understanding the current business models, we cannot hope to change them. Roche Schulfer, Goodman Theatre