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From the Archives: Non-Profit Model vs. For Profit Model

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By LJDevAdmin News April 29, 2014

What Is A For Profit Theatre Operation?

 

A For Profit Theatre Operation is is strictly a business; Wants to make money, needs to do nothing else because:

    • Someone or a group wants to draw a profit on the business
    • Earned income is its only means of paying bills

Marginal business with poor track record in Northern New Jersey.

It must maximize income while minimizing costs.

No incentive to address the needs of the community because it cannot afford to address them.

    • Mayor Schundler suggested that the “Department of Culture” could use the Loew’s four times a year; This hardly addressed the needs of the community.

Limited programming.

Implications for the Loew’s Jersey:

Limited diversity in programming

    • No programs which do not make money but are otherwise desirable: i.e., quality/children’s programming, multi-cultural, discounts for seniors/students, etc.
    • Programming mix will not be analogous to Bergen PAC (John Harms Center)

Limits diversity i n audiences, limiting economic “spin-off” for Journal Square

Places a landmark building in jeopardy

    • No incentive to adequate maintain (general wear and tear)
    • No incentive to limit, control or at least repair damage caused by incoming shows

Jeopardizes legal responsibility to the New Jersey Historic Trust

What Is A Non-Profit Theatre Operation?

Is more than “just” a business:

    • Has a mission to include programming that is desirable even if that programming won’t make money

Earns income in same ways that for profit theatre does BUT ALSO has opportunity to receive contributions/increased sponsorship opportunities.

Not for profit theatres have a fairly successful track record in Northern New Jersey.

Implications for the Loew’s Jersey:

Far more divers programming

    • Opportunity to seek sponsorship for regular schedule of quality children’s programming, multi-cultural, discounts for seniors/students, etc.

Much more diverse audiences and likelihood of more frequent programs, greatly enhancing opportunity for economic “spin-off” to Journal Square.

Part of mission is the preservation of the Loew’s as an important landmark to Jersey City and all New Jersey; Therefore:

    • Has determination as well as reponsibility to maintain (general wear and tear)
    • Has the opportunity to solicit contributions to help pay for this maintenance
    • Has incentive to limit, control or at least repair damage by incoming shows

Supports legal responsibility to the New Jersey Historic Trust

Fundamentals for ANY Not-For-Profit:

Idea that will benefit community but won’t make money. Will necessitate the need to raise money.

    • Understandable
    • Relevant
    • Interesting/Engaging
    • Seems Do-able
    • Practical Goals/Benchmarks
    • Credibility
    • Organization
    • Means of Involving
    • Visible
    • Community Involvement/Support
    • Leadership in the development sense

Development:

A professional process, set of practices that all not-for-profits must go through in order to prepare for successful fundraising and operation.

    • Refines Mission Statement
    • Improves Goals
    • Identifies Weaknesses
    • Case Refinement/Testing
    • Builds on Community Links
    • Additional Leadership Recruitment
    • Works With Leadership
    • Peer Connections/Prospect Development
    • Foundation Research
    • Corporate Research
    • Fundraising: Gifting, Grant Writing, Etc.

In 1994, after the Loew’s had finally been saved and the Lease Agreement between JCEDC (Jersey City Economic Development Center) and the City was signed, the Loew’s project had Friends of the Loew’s idea to benefit the community, a draft of programming goals prepared by Friends of the Loew’s and $2 million in capitol funding.

It had little else in terms of the fundamentals of a not-for-profit:

    • A Dead Building
    • Projected Renovation Cost of At Least $5 Million
    • Many Unknowns About Renovation Work
    • An Image of a “Money Pit” Created By Opponents
    • No Specific Operating Plan
    • No Means of Even Limited Operation
    • Only Semblance of Organization – FOL
    • No Means of Involvement
    • Limited Community Support
    • No Leadership in the Development Sense
    • No Basis for Fundraising

January, 1994: The Lease Agreement

The Lease Agreement was far more than just a “lease”. It included a schedule of construction work to be completed with $2 million. It also laid out a process to put in place the fundamentals required of any not-for-profit and carry out development/fundraising.

The Lease Agreement was written by Tom Ahern based on FOL’s understanding of not-for-profit fundamentals and the operations of other theatres. It required the participation of the Mayor’s Office and JCEDC and FOL.

Underlying Principle:

Assumed Architects, Marketing/Public Relations, Development and Theatre Operations Consultants would work with a Steering Committee to create the fundamentals of a not-for-profit operation:

    • Development professional would help refine the mission to ensure the project was Understandable and Relevant.
    • Market surveys and architectural cost estimates would make the projects seem Do-Able.
    • Projection of programming mix would make the project Interesting.
    • Professional Business and architectural plans would set preminary Goals and Benchmarks for construction and fundraising and lend Credibility.
    • Initial Organization would be provided by JCEDC while Development and Theatre consultants outlined a long-term structure for Organization.
    • Working with consultants would provide the means of Involvement.
    • Visibility would come from progress reports, press releases, speaking engagements, etc.
    • Community Support would be stimulated by surveys, seminars, etc.
    • Leadership would emerge and be cultivated in this process.

Further Development work such as Additional Leadership Recruitment, Peer Connections/Prospect Development, Foundation Research, Corporate Research, Fundraising, Gifting, Grant Writing, etc.) would proceed.

The Lease Agreement also intertwined creation of not-for-profit fundamentals with the $2 million construction by requiring that the process ensure that the schedule of work could be completed within budget.

The Lease Agreement set out an approach to creating the fundamentals for a non-profit and undertaking further development that was

    • High End
    • Thorough
    • Expensive
    • Similar to NJPAC

This was never implemented.

LJDevAdmin / About Author
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