Risky Business

This month, Americans for the Arts is hosting a blog salon with arts professionals across the country weighing in on "changes in the nonprofits model and some of the reasons the field is constantly looking for a better way to conduct business." Margy Waller was invited to write in; this her second entry in the series. To read all of the many entries from arts leaders and supporters across the country, check out the ARTSblog.

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Public Space art in Philadelphia

Before we start developing the public policy campaign to maintain status quo for charitable status and deductions, let’s make sure we know why we are doing it – and that it’s really a good fit for us.

Reviewing all the blog posts in this Salon in one read, I’m struck by the number of writers pointing out limitations of the special status that makes donors to nonprofit arts organizations eligible for a tax deduction.

Patricia Martin encourages us to rethink the slavish devotion to 501(c)(3) status if we want our organizational structure to keep up with the “rising generation [that] has already changed how it consumes culture and interacts with institutions.”   

A number of bloggers note that motivations for donating are shifting and new ways of supporting things we like are growing fast. James Undercofler says his students don’t base their giving on 501(c)(3) status and he notes that “contributed revenue sought in the ‘old fashioned’ way will ebb, and the new philanthropy [via crowd-funding] will play a much more significant role in the life of arts organizations.”

Rebecca Novick echoes my concern about public perception regarding nonprofit arts organizations stating that we have to both actually meet the community benefit requirements of the law and make sure that people believe that we do so. My concern is that the latter requirement may be a very heavy lift that will take longer than the debate over tax policy.

Donors are increasingly taking advantage of the chance to make serendipitous gifts and using crowd-sourcing options to support the things they love but can’t afford to do as individuals. And young supporters are not as concerned with nonprofit status of the things they choose to support.

At the same time, we can probably agree on the benefit of the deduction for larger gifts – often from wealthier, and older, donors.

Put all of this trend analysis together and we have to ask – is status quo really what we want in our tax policy? It’s going to require significant resources to win that battle. Should we put our energy and brainpower up against a different goal? Can we better define the role of arts in community – in ways that citizens already value, so that we don’t have to try to persuade them? Could we create a new corporate tax category for organizations providing these benefits? Are we prepared to talk about a variety of tax incentives for gifts of different types or amounts?

There are many risks in asking these questions. And as Scott Provancher points out: there’s not much reward for taking risks in our community.

But we need to acknowledge that there’s also danger in fighting to keep things just as they are – the risk that we will lose the debate, or that by winning, we won't get what we really need.