Or: Why the non-profit model is ancient but not obsolete (part I).
It’s conventional wisdom that there’s two sides to a story and that there’s more than one way to skin a cat. Fine and good. But how many ways are there to count? One, two, three, four… Okay, them’s the “integers,” if we want to use a fancy word. Pi is a number, too, though. So is the imaginary number (I kid you not, that’s what it’s called), which is the square root of -1. There are a lot of ways to count. Just ask an accountant.
Counting matters because how you count determines how much you keep – particularly when we’re talking about the tax code, withholdings, and what we pay to federal, state, and local governments. Two big ways of counting are “for profit” and “not for profit.” In the for-profit case, the owners get to walk away with extra money, though this is for small business owners typically not as impressive as it sounds. In the not for profit case, there are no owners; instead there is the responsible authority, the Board. In both cases, employees can do very well. Joe Dowling, artistic director at the Guthrie Theatre, reputedly makes just shy of $700,000, not unlike the disparity between pay at a for-profit corporation between a CEO and an assembly line worker.
Not for profit doesn’t mean “don’t make a lot of money.” It just means the owners, the responsible party, the Board, doesn’t take any money home. In fact, at some bigger institutions, the Board is required to pony up. That’s right – for the privilege of giving us your time, sitting on committees, maybe even going to see plays you don’t like or music you don’t care for, or charities you could give a rat’s ass about, you are asked to contribute to the bottom line. Maybe it’s only $1,000 a year. Maybe it’s more. Maybe you’re cajoled into a pyramid-like scheme in which every year you’re to bring in more subscribers, or more donors. Only it’s not really a pyramid scheme because you’re not promising any money back.
Why the hell would you give your time and money away like that? I work freelance freelance freelance and occasionally teach at the university level, and as much as we struggle to balance books, my time is much more valuable to me, because I have so much less of it. This seems to me to be a crazy calculus.
Why indeed. How many ways can you count?
Maybe your law firm does pro bono work – because it’s good “corporate citizenship,” and they want to raise their profile in the community. As an associate or a partner, you might be required to serve so many hours on so many boards. There’s the time part of the equation. And the money? Well, it’s tax deductible on your federal 1040, so it’s not a total wash. This part of the tax code allows us as citizens to direct where our “tax” dollars go, to some degree, if we have enough money that we beat the standard deduction. In other words, if you’ve got a lot of money coming in, you can direct it toward books-not-bombs, if that’s how you feel.
This doesn’t apply to most of us, but honestly, who thinks that the tax code was written for most of us? Back to counting.
Let’s say you’re an up and coming doctor. One way of getting people to know you, to trust you, and thereby to believe in you and ultimately to give you their business, is to join a board. Okay, you’ve got some interests. You like music, contemporary music. Choices! You could join the board for WMSE or for Radio Milwaukee – they’re both non-profit! A wealth of opportunities at your hands. Are the listeners of either station ever going to meet you, and thereby trust you, et cetera et cetera? No. But you’ll meet other people on the board, who are up and coming like you. Or maybe they’re established. You think just any lawyer or accountant can get a seat on the board of the Symphony, or the Ballet, or the Art Museum?
I’m making it sound like there are no altruistic people out there, and that’s simply not the case. There are, and a lot of people serve on boards selflessly. Not only that, a lot of non-profits take advantage of their board members and chew them up. It’s a relationship, and abuse can run both ways.
All I mean to say with these examples is that there are financial incentives for boards to exist. There are financial incentives for people to join them, and as I implied with the Symphony and company (and I don’t mean to single them out – they’re just big), there are different payoffs at different levels.
But not for profit versus for profit are just two different ways of counting, and there are a lot more than two sides to any given story.
Let me hit a couple of stereotypes about artists right away. We’re divas. We’re babies. We don’t know how to manage money. We’re selfish, self-centered, self-important. I’m sure I’ve missed a couple of hundred, but you get the point. The other thing about artists, the thing that trumps all of our bad features? We’re cool. Not all of us (me, for instance: dork central), but enough of us. Cool diva: Tom Cruise. Cool baby: anyone who asks to have the green M&Ms taken out. Cool bigot: Mel Gibson. Cool guy who mismanages money: Donald Trump (really? You’re still going bankrupt?). Cool self-important: Madonna. And yes, I consider Trump to be more of an artistic personality than I do a financier, so there. Another post for another day.
Now “cool” is relative. You might not think any of them are cool. Maybe you think Britney Spears is cool, or Bono, or Jeff Koonz, or Mary Zimmerman. What I’m saying is this: whomever you think is cool, someone is already sick of their shit. But you – or me – we’d hang with Franka Potente, or Frances McDormand, or Joel and Ethan Coen (heck, I’m not greedy, either one will do). Why would we do this? Because we relish the awkward conversation?
ME: (gushing) I’m a big fan of your work.
FRANCES MCDORMAND: You know I’m married, right?
No, with any luck and a lot of self-control, we will have an only-reasonably awkward conversation, the kind that happens between two people who have nothing in common at all, and maybe we exchange some real information. Maybe we even have a Real Connection.
But no matter what, I have a story. I met someone important. Cool brushes off, and now I can tell my friends about the cool person I met. Yes, it’s shallow, but we all do it. My wife – an excellent film producer, but hardly anyone who’s name will ever grace a marquee – was doing an apartment sublet in Chicago a few years ago while working on a film. Said apartment’s owner was a dentist. A very good dentist. And she reveled in having someone who had an exciting career IN HER HOUSE!!! It didn’t matter that my wife came back at 11pm on a good night, and got up between 5 and 6am. She was working on a MOVIE! And it’s not like my wife and I are any better. We talk about the people we’ve run into, or worked with (Bernie Mac, of course, and a peach of a man he was, too), or know through someone else (I have it on good authority that George Clooney has back problems – thanks for the story, Sarah Price!). Or we exchange war stories. Remember the time we had to work all night? Remember when the personnel lift fell over and no one got hurt? Remember when the super-conscientious technical director broke his own nose while de-burring a steel pipe?
This is called “cultural capital,” and it’s a different kind of money. Unlike regular money, you can spread it around easily through experience – it’s contagious. But just the same as regular money, there’s inflation. How cool can you be? I only talked with Bernie Mac, I wasn’t the person he flirted with, but I was part of the (very, very, very) brief conversation. But that’s her story, not mine.
At least five reasons to be on a board, not in the order I’ve presented them. Altruism – you really believe in what you’re doing. Financial incentives that help you re-direct your wealth. Civic mindedness towards the community generally speaking. You get to hang out with cool people. Lastly – you get to meet other people in your sphere, or in a sphere just above you, you make connections with people who share your cultural capital.
The big question: is it worth it?
That’s an individual question. I’ve had friends who’ve served on boards simply as a favor. They do everything that’s asked, but they don’t relish it. They view it as a responsibility. I’ve had friends who throw themselves heart and soul into projects. And then there are the stories about boards that take over (thanks to Megan Powell for this recent story). Maybe they decided they’re cooler than the people they boss around.
There aren’t hard and fast rules, and these five reasons aren’t the end of the list – they’re just the ones that are easy to observe. Climb aboard.
Empathy is the hard part
1 day ago