Basic
Management
the new arts project
The dream
Bright spectrum hues
Bursting to brilliant rainbows ot you
Bring forth the dream, the reality
Bind its wings to the roots of earth
And make it real
P. J. Gibson
FROM THE DESK OF SARAH 0. FAISON
The enclosed primers,
1
3
4
BASIC MANAGEMENT
The New Arts Project
BUILDING AN INSTITUTION
The Neighborhood Arts Center
IDEAS INTO PRACTICE
DEALING WITH SPACE
were conceived and executed as basic
technical assistance tools for those
Project Directors presently operating
or intending to operate Neighborhood
Arts Programs. These publications were
produced by Media Associates, Inc. for
the Expansion Arts Program of the
National Endowment for the Arts.
Address comments or inquiries to:
m
1029 Vermont Ave., N.W.
Suite #900
Washington, D. C. 20005
assSCtes (202) 638-5027
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Basic
Management
the new arts project
MEDIA ASSOCIATES INC.
WASHINGTON, D.C.
THE EXPANSION ARTS PROGRAM FOR THE NATIONAL ENDOWMENT FOR THE ARTS
*3 S
Contents
Introduction
CHAPTER 1
CHAPTER 2
CHAPTER 3
CHAPTER 4
HISTORY: THE NEIGHBORHOOD ARTS CENTER
MANAGEMENT: ADMINISTRATING YOUR
ART PROJECT
General Management Considerations
In Running Your Organization
Fiscal Management
Income Chart
Expense Chart
Three Month Cash Flow Chart
Financial Records And Reporting
Program Records And Reporting
Public Relations
Fundraising
The Law And Your Organization
Insurance
PROGRAMMING: WHERE RHETORIC MEETS
REALITY
Program Quality: A Must
Setting Realistic Goals And Planning Ahead
Don't Program In A Vacuum
Things To Remember
CASE STUDIES: COMMUNITY PROGRAM
OPERATIONS PRO AND CON
Case Study One: A Good Single
Discipline Art Program
Case Study Two: A Poor Single
Discipline Art Project
CONCLUSION
7
9
10
10
8
11
11
12
13
15
19
20
20
21
21
22
23
24
24
Introduction
This publication intends to provide some helpful guidelines for
those interested in the development, management and programming of
neighborhood arts programs. Those responsible for the production of
this manual feel that neighborhood art programs are an important part
of the nation's arts picture. For this reason, these sponsors seek to iden-
tify ways to aid such groups in their survival. This manual is one of four
publications which are designed to assist neighborhood arts groups.
Over the years, certain problem areas in the operation of neigh-
borhood projects have become obvious. These projects have been strug-
gling to survive in a world that is becoming increasingly complex.
Historically, the operators of these projects have been primarily, and
understandably, concerned with artistic products and delivery. In many
cases, however, other issues— e.g., resource development, management,
reportage— have been ignored or have received low priority. Internal
problems involving the personalities of the project leadership need im-
provement. The disposition of temperament and ego on the part of the
leader have proven to be a standard pitfall of such programs. The lead-
ership of these organizations must rise above this to be of true service to
the community-at-large.
This manual emphasizes the need to understand the planning,
development and operation of a successful neighborhood arts program.
This publication includes four chapters which provide information on
history, management, programming and some case studies of neighbor-
hood program operations.
The manual provides the reader with a handy reference guide in
planning, managing and programming for a neighborhood arts project.
Its contents, if used effectively, will serve as a tool for the overall im-
provement of your project.
neighborhood
center
The forerunner of these centers was
the home studio, which began to appear
throughout the United States in the early
part of this century. These studios taught
primarily classical music and ballet. They
were designed on the conservatory concept
and emphasized traditional and classical
European art. These studios had as their
primary clients the children of parents be-
longing to the upper and middle classes.
This was due largely to the fact that tuition
and receipts from annual recitals were the
major sources of revenue.
A single-discipline art project is the
basic unit of neighborhood arts program-
ming in which there is primarily one well-
developed program in operation. Such proj-
ects are either theatre groups, dance
groups, music workshops, visual arts co-op
galleries and the like. These programs have
grown out of the needs of neighborhoods
throughout the United States to provide
meaningful and creative outlets for local
people, and they serve to aid in the devel-
opment of talent by promoting the
developing artist. These centers are neigh-
borhood-based and usually reflect the
unique character of the communities they
serve.
The teachers who operated these
studios were often retired classical per-
formers; some, in fact, were quite famous.
These studios provided opportunities for
many young artists to enter the ranks of
professionals. However, because of their
economic restrictions, few poor or minori-
ty people were able to participate in these
programs.
In the late 1920's and 1930's vari-
ous ethnic populations, such as Blacks,
particularly those in urban areas, became
aware of the need to further develop cul-
tural opportunities for their own; so, they
began to establish music and dance studios.
The Harlem Renaissance was the high point
of this movement. During this time, Black
artists throughout the world flocked to
Harlem, New York, to participate in the
growth and development of Black music,
art and literature.
2
These Black studios modified and
added a Black American content and per-
spective to their programs. However, for
the most part, they still emphasized tradi-
tional and classical European art forms.
Like their white, upper and middle-class
counterparts, the studios were generally
supported by private contributions and
tuitions. In addition, churches also gave
considerable financial support to these
programs.
New developments in community
arts programs began to develop during the
late 1950'sand 1960's. Here art was ini-
tiated as a vehicle for social development
and treatment. Art programs were being
utilized as teaching tools for preschoolers,
as therapy for drug addicts and prisoners
and as recreation for senior citizens. Many
of these programs were sponsored by civic
groups such as the YMCA and the Boy's
Clubs of America. It was during this period
that federal and local governments began to
show interest in these programs as a poten-
tial method of social rehabilitation and
development. Single-discipline centers, one
form of the neighborhood arts programs,
also began to grow in importance. Its focus
changed from that of a conservatory for
classical dance, music and drama to a work-
shop for human growth through the arts
and creative expression. These centers not
only brought art into the lives of the poor
and "disadvantaged," but had become a
social tool as well. Their end was no longer
to produce artists, but to provide a better
quality of life for isolated neighborhoods.
These programs have
grown out of the needs of
neighborhoods to provide
meaningful and creative
outlets for local people.
The neighborhood arts studios took
on a still more diversified role in the
1960's. During the War-on-Poverty era,
poor and minority people became involved,
out of repressed needs, with questions of
cultural heritage and ethnic identity. They
began to explore drama, dance, music and
related art forms peculiar to their own his-
tory. These students were experimenting
with guerilla theatre, drama, store-front
and sidewalk performances. Puerto Rican
Americans established new arts studios in
many of the major cities in the United
States, especially New York, Boston,
Chicago and Newark. These studios high-
lighted the unique culture and tradition of
the Puerto Rican community. In San Fran-
cisco, Los Angeles, Houston and other
western and southwestern cities, Chicano
and Indian Americans were expanding pro-
grams in crafts, visual arts and other artistic
disciplines. While American craftsmen in
Iowa, Texas, Pennsylvania, Vermont and
Maine were reviving and expanding crafts-
man colonies, teaching skills represented a
3
way of life. More professional artists began
to make personal commitments to these
community-sponsored programs. Big
businesses and major foundations began to
trickle less modest contributions into com-
munity programs.
At the same time, the federal
government began to recognize the value of
these arts programs in terms of quality of
life for all Americans. Monies were now
being appropriated by both local and fed-
eral governments. It was during this era, in
1964, that the National Council on the
Arts was founded. The purpose of the
Council was to provide recommendations
on matters related to the cultural develop-
ment of the nation.
In 1965 a further commitment was
made to the arts by the establishment of
the National Foundation on the Arts and
the Humanities, an independent govern-
ment agency in the Executive Branch of
the federal government. This agency was
divided into two sections: 1 ) the National
Endowment for the Arts and 2) the Nation-
al Endowment for the Humanities. An even
stronger commitment to the arts was made
in 1971 with the establishment of a pro-
gram division, called the Expansion Arts
Program, concerned with assisting arts pro-
grams at the neighborhood level. Many of
the programs assisted by the Expansion
Arts Program had been established in vari-
ous communities throughout the United
States, but historically had not received
equitable or sufficient support from other
sources. With the advent of the Expansion
Arts Program, community arts groups were
beginning to find moderate support, allow-
ing community artists to develop the kinds
of programs they had always wanted and
needed. As these groups were able to
develop, recognition of their importance
grew in the eyes of individual donors,
businesses, federal and local governments,
thereby expanding the funding bases for
some groups.
In summary, single-discipline arts
programs, like other neighborhood-based
arts programs, have increased over the years
due to the interest of individuals, busi-
nesses and government. Because of the
concern of these people, arts training in the
United States has spread from the halls of
the rich into the streets and communities
throughout the United States.
4
Management:
administrating
your
art
project
5
Poor management may curtail the
future of your organization. Too often, the
leadership of an organization is concerned
solely with the creative product; con-
sequently, they ignore the necessity of main-
taining accurate methods of recordkeeping,
filing, budgeting, tax compliance and other
operational procedures. It is essential that
careful management of your program be
undertaken, or you may find the existence
of your group in danger. Proper manage-
ment of your group by responsible indi-
viduals with experience in management
may heighten the success of your
organization.
Some key elements in starting and
successfully managing your project are
described in this chapter.
GENERAL
MANAGEMENT
CONSIDERATIONS
IN RUNNING
YOUR I
ORGANIZATION
This section is directed to the
general management concerns of a neigh-
borhood arts project director. It highlights
some of the key considerations a manager
must deal with in order to be successful.
Operational Policies and Procedures
It is important that as a manager
you develop rules and regulations governing
the conduct of your staff, program par-
ticipants, visitors and others, to ensure the
smooth and efficient operation of your
program. It may be necessary to post these
rules and regulations in places where they
may be easily viewed or to duplicate pro-
cedural manuals.
In addition to policies and pro-
cedures governing conduct, it is also neces-
sary to develop informational management
guidelines which relate to: days and hours
of program operation, staff pay days, fringe
benefits, the maximum number of program
participants, hiring policies and purchasing
procedures, to name but a few important
issues. Your Board of Directors may have
to approve many of the aforementioned
policies and procedures, depending on your
individual constitution and bylaws.
Adequate Space for Your Program
Be sure that you have sufficient
space to operate your program. Without
adequate space, it becomes difficult to plan
and develop.
When purchasing a building or rent-
ing space, take into consideration room for
future program expansion if this is feasible.
Try to find a location that is easily
accessible to parking spaces, public trans-
portation and participants' homes.
A more thorough exploration on
the subject of space and community arts
organizations may be found in Dealing
With Space, volume 4 in this series.
Purchase or Lease of Equipment and Supplies
The following are key factors to
consider when purchasing or leasing sup-
plies and equipment:
1. Know exactly which supplies
and equipment you will need to operate
your program.
2. Research the most inexpensive
sources of the needed supplies and equip-
ment.
3. When your budget does not
permit the purchase of new equipment,
used equipment should be taken into con-
sideration.
Scrounging: Hustling Things Up
One of the most important abilities
of a community organization manager is
the ability to scrounge: that is, a communi-
ty manager must know the ways and means
of getting supplies, equipment, services and
6
other vital necessities for the agency at
little or no cost to the agency. This can be
accomplished through friends, local con-
tacts, referrals, salesmen and a host of
other innovative ways. In short, an effec-
tive community organization manager must
have the ability to hustle resources needed
by the program, but not affordable within
its budget.
FISCAL
MANAGEMENT
Fiscal management is at the heart
of your organization's operations. It is at
this level that you have to maintain
accountability for resources. This demands
planning, efficient recordkeeping, fiscal
responsibility and scheduled reporting.
Most centers are handicapped by
poor management and inadequate funding.
Management of resources is the key. If you
do not handle this aspect of your opera-
tions properly, then you will be faced with
the inability to raise money; this, in turn,
will increase difficulties in accomplishing
priorities and program objectives.
Many financial problems may arise.
Sound financial management will assist you
in dealing with some of the following
items.
1 . Operating expenses keep going
up. During the past few years the nation
has experienced economic crises which
have been reflected in high interest rates,
tight money, severe unemployment and
higher consumer prices. Consequently,
operating expenses, the cost of capital
equipment and building-maintenance costs
have increased. In their planning and ex-
pansion phases, organizations must take
this reality into consideration, for they
should not underestimate their funding
requests or earned-income objectives.
One way of improving your cash-
flow position is by controlling operating
expenses through a proper building main-
tenance program and the efficient use of
material resources. You should introduce
regulations for controlling the costs of
heating, electricity, telephone services and
office supplies. All equipment should be
properly serviced and maintained. Only
authorized persons should be allowed to
use specialized equipment— e.g., dimmer
boards, electric typewriters, Xerox
machines. Young students who are not
trained should not use the equipment.
Therefore, it is important to employ a con-
scientious custodian who is well paid and
who will take excellent care of the equip-
ment, as well as the facilities.
2. Accountability demands ac-
curate recordkeeping and scheduled report-
ing. One can never overemphasize the im-
portance of maintaining up-to-date records
of the organization's activities. There are
final, program, personnel and inventory
records, all of which must be kept separate-
ly, but in one central location. They should
be securely maintained in case of fire or
burglary with easy accessibility for working
purposes.
Financial records must be accurate,
since they help to make efficient payroll
schedules, tax liabilities and outstanding
liabilities in notes payable and accounts
payable. The proper handling of all payroll
accounts and tax deductible items must be
emphasized. The temptation to use Social
Security monies for operating-expense
items has had a disastrous effect on many
groups. Don't dip into the till, for you
might not be able to make the tax pay-
ments when they become due.
Accurate financial records will also
allow the organization's administration to
analyze its status at any given time and to
plan effectively. One aspect of the planning
process is the preparation of a cash flow
statement which will help you:
1) to forecast your future needs
for a given period of time. It will minimize
second guessing.
2) to become more accurate in
your projections by comparing expected to
actual outcome. This allows for a closer
look at increased costs of operations as a
result of inflationary pressures. If costs of
supplies, heat, telephone bills, etc., keep
going up, then you can project systemat-
ically for those increases.
7
3) to realize the true value of your
resources. On a cash flow chart, you can
see where your money is going and your
ability to meet expenses.
4) to sharpen your ability to make
managerial decisions.
(See sample income, expense statements
and three-month cash-flow chart for ex-
amples of useful accounting procedures.)
With tools such as these you should be able
to tell, at almost any given time, exactly
where your organization stands financially.
Funding sources respect institutions whose
financial recordkeeping and reporting have
been efficient.
3. Good accounting eliminates
headaches. It is important to have an ap-
propriate recordkeeping system that will
support all income and expenditures. Every
organization needs a good bookkeeper or a
staff member with accounting skills who
will prepare weekly balance sheets for the
Executive Director's use. In large centers, it
is advantageous for the Executive Director
to be familiar with accounting principles, as
well as to have managerial skills and fund-
raising abilities. Furthermore, it is also use-
ful to have an accountant on the Board of
Directors or Board of Advisors. Although it
may be desirable for the latter to be a certi-
fied accountant, this is not absolute, for
there are many competent people trained
in accounting who work in corporations,
universities or government institutions.
These professionals can serve the needs of
the organization by assisting in the prepara-
tion and auditing of fiscal records.
4. Good relations with your bank.
It is important to establish an ongoing,
responsible relationship with your bank.
Under certain conditions, your banker can
be your best friend, but only if you have
allowed time for the bank to develop con-
fidence in your organization and its opera-
tions. Nonprofit organizations sometimes
must turn to their banks for short-term
loans— for example, when payments on a
grant are delayed. You must recognize that
a nonprofit group, by definition, presents a
risk for a bank, because of the possibility of
lack of return. The only way to overcome
this potential difficulty is by demonstrating
the organization's responsibility.
FINANCIAL
RECORDS
AND REPORTING
It is important to have an appropri-
ate and planned system of records which
will keep track of your income and ex-
penses. It is crucial to know to whom you
owe money and how much, as well as who
owes you. I mportant also is the need to
keep track of your inventory. This will
make it possible to know the whereabouts
and condition of equipment purchased.
Good financial recordkeeping be-
comes even more important when it comes
to payroll records, tax reports and pay-
ments. Without accurate records it may
become difficult and, in some cases, impos-
sible to give an accurate accounting of
taxes owed.
Accurate financial records also
allow you the opportunity to analyze the
status of your organization and to make
forecasts. This is impressive for persons
interested in your financial status, be they
Board members, community persons,
funders or others. In short, keeping accu-
rate records allows one the ability to
develop financial reports to be used for a
variety of managerial purposes.
Last point: It is important to have
at some point the advice and assistance of a
qualified accountant in the planning pro-
cess of your organization. This individual
will help ensure that your records and
financial reports are in order. An account-
ing system which addresses the unique
needs of your group will prove to be ad-
vantageous. An accountant's consultation
should be sought when you institute major
changes in your structure. The accountant
should again be consulted for interim or
annual reporting. Do not try to presume
that you know it all!
8
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9
1973
PERSONNEL
Administrative
50,000
Program
65,000
Consultants
35,000
Fringe Benefits (11%)
16,500
PHYSICAL FACILITIES
O f f ice & Supplies
24,500
Equipment
1 1 ,300
Renovations
1 2,200
Miscellaneous
a) Insurance
1,200
b) Contingency Fund
2,100
$218,000
1974
60,000
95,000
30,000
20,350
32,650
8,000
1 8,000
1,500
3,000
$268,500
1975
60,000
101,750
28,250
20,900
38,500
6,500
9,000
2,000
2,800
$259,700
NOTE: In 1974 there was a small deficit which was offset by the surplus of 1973. The cost of renovations had increased
sharply due to program expansion.
SAMPLE THREE MONTH
CASH FLOW CHART
January
February
Expected
Actual
Expected
Actual
Income
Cash on hand at
beginning of month
1,500
1,500
18,500
16,000
Grants
30,000
28,000
1 5,000
1 2,000
Contributions
8,000
10,500
1 2,000
8,500
Fund raising
3,500
1,700
2,000
1,800
Total Cash Income
43,000
41,700
47,500
37,500
Monthly Expenses
24,500
25,700
32,800
28,000
Cash on hand at
the end of the month
18,500
1 6,000
14,700
9,500
March
Expected
14,700
10,000
10,000
1,200
35,900
23,400
1 2,500
Actual
9,500
10,000
5,000
1,500
26,000
27,500
1,500
10
PROGRAM
RECORDS
AND REPORTING
Program records are information
gathered about the quantitative and quali-
tative nature of your program. These
records include vital statistics, such as the
number of participants on a weekly,
monthly and yearly basis. These records
should include age, sex and other meaning-
ful statistics on program participants, the
Board, staff and volunteers. The purpose of
program records is to document the activi-
ties of your program. In some cases, these
types of records are vital for the funding
life of your program. You can be running
the best neighborhood arts project in the
world; but if you can't prove it, you have a
serious credibility problem!
Important also is inclusion in your
program records of all newspaper clippings,
letters of support, program awards re-
ceived, tape recordings, pictures, profiles of
outstanding program participants and other
documentation which will highlight the
value of your program.
Program records are wital
for the funding life of
your program.
To secure the safety of your rec-
ords, burglar and fireproof storage of your
records and file cabinets should be con-
sidered. You cannot overprotect the vital
information of your organization— your
records.
PUBLIC
RELATIONS
It is important to let people know
who you are and what you are doing. An
essential tool in any public relations effort
is good records of program activities. Be
sure to use free publicity spots given to
nonprofit community organizations by
local radio stations, television stations and
newspapers. These free community services
can help you to gain community accep-
tance and support for your program.
1 1
Another effective public relations
medium is the circulation of a newsletter to
various community people, businesses and
sponsors, as well as the general public. This
newsletter should include information on
the program— how to join, schedule of
classes, hours of operation and other infor-
mation for interested persons— and articles
highlighting the nature and scope of the
program.
It is essential to remember that the
key purpose of publicity and public rela-
tions is to build goodwill and support for
your program. Letting the public know
who, where and what you are is the key to
successful publicity and public relations.
Other factors which might be included are
appeals for donations, editorials and re-
quests for volunteers.
Advertising and Promotion
Well-organized methods of adver-
tisement must be implemented to ensure
public support of your planned events.
Here the effectiveness of good records and
public relations pay off. Promotion litera-
ture which explains the event(s), program
specifics, artists, dates, place, time and
costs should be prepared. This literature
may be forwarded to radio and television
stations for their free, nonprofit organiza-
tion spot slots. Newspapers, community
newsletters, fliers, church and community
organizations can assist in the promotion
of your events when supplied with well-
planned, informative promotion data.
When personal interviews with
newspapers, radio and television stations
occur, it is advantageous to select a repre-
sentative who not only knows the purpose
and function of your group, but who also
articulates well. You want to instill interest
in your organization and events. Again,
carefully kept records and experienced
individuals to implement advertising and
promotion are essential.
zation manager will be to identify sources
of funding for your agency. It is imperative
that you spend a considerable amount of
time carefully developing a fundraising
plan. To do this, you should weigh all of
your project's financial needs as reflected
in past records and current projections of
your organization's future income. A care-
ful analysis of need and projected income
should enable you to predict how much
money you need to raise for your program.
There are various basic ways that
your organization can solicit funds. Your
fundraising plan should use some, all or a
combination of these techniques. The funda-
mental ways that a nonprofit neighborhood-
based arts organization raises money are as
follows:
Membership Dues — collected from
participants and interested persons to sup-
port your program. Generally, there are
several classes and/or modifications of
membership, each with different annual
dues.
Service Fees — usually charged to
make ends meet. These are fees incurred by
the program participants.
Grants — given by local, national,
private or governmental agencies. This has
historically been an area of support for
community-based arts projects. It is im-
portant that you develop good writing
skills, good contacts and a lot of informa-
tion in order to be successful in this area.
Short-term, low-risk
savings plans can add a
considerable amount to
your budget.
FUNDRAISING
Perhaps the most important aspect
of your role as a neighborhood arts organi-
12
Business and Individual Contributions
- your organization, as part of its
fundraising plan, may want to develop a list
of individuals and businesses who you feel
will be willing to give donations to your
organization. It helps if you have friends
who presently know of such businesses or
individuals. They may make the initial con-
tact for you. Many neighborhood project
managers and developers are too timid to
approach the business and corporate sector.
Your friends may be of assistance to your
organization.
Board Dues — some nonprofit cor-
porations charge dues to Board members as
another method of raising funds.
Bequests — there are nonprofit
corporations which receive large sums of
money from the estates of supporters. It
may be to your advantage to identify elder-
ly people, interest them and get them in-
volved in your program. They may, if they
feel your project is worthwhile, name your
center as a recipient in their wills.
Special Projects — bake sales, fund-
raising dinners and raffles are used to raise
money. In choosing a special project, be
sure to select one that will not cost too
much to organize and one in which the
community will actively participate.
Annual Concerts and Recitals —
your program may have as a part of its
format an annual concert recital or other
program display to which you may want to
charge admission. If attendance is good,
you can make a considerable amount of
money this way.
Investment Income — very few
community organizations have money to
invest. However, for those that receive large
sums of money, short-term, low-risk savings
plans can add a considerable amount to
your budget. By utilizing temporary excess
monies, you can get a handsome return on
savings accounts without risking or tying
up your monies.
THE LAW
AND YOUR
ORGANIZATION
In any discussion of management it
is important to understand the relationship
of your organization to the laws— local,
state and federal. This section outlines
some of the key issues to be considered.
13
Incorporation
1. If you have not already done so,
your organization will probably want to
consider becoming a nonprofit corporation.
The advantage of becoming a nonprofit
corporation is two-fold: 1) you establish a
corporate identity which is useful for legal
and public relations purposes; and 2) you
are exempted from federal income and
local sales taxes.
2. If you are interested in becom-
ing a nonprofit corporation, you should
consider retaining a competent attorney.
He will request information from your
state (or district) secretary of state's office
or, where applicable, the office of the state
(or district) recorder of deeds.
3. Annual reports must be filed to
maintain your nonprofit corporate status.
This filing is usually made between January
1 and April 30 of each year. This is the
responsibility of your organization's
registered agent as named in your articles
of incorporation.
4. The Constitution and Bylaws. In
most states and in the District of Columbia
a nonprofit corporation, as other forms of
corporations, must make some provision
outlining how the internal affairs of the
corporation will be handled. In most cases,
a constitution and bylaws serve this pur-
pose.
In the constitution and bylaws,
detailed policies and procedures are spelled
out. Usually these include a statement of
purpose; who the Board members will be
and how they are elected; provision and
classes of membership; methods for dis-
posal of corporate properties; and descrip-
tions and definitions of corporate officers
and staff.
In conclusion, the constitution and
bylaws are a very necessary and valuable
tool in the management of a nonprofit
corporation. In addition to the fact that
they are usually required by law, they are
necessary because they provide a written
and relatively comprehensive statement on
how your organization is to do business.
You should always be aware of the fact
that it is incumbent upon your organiza-
tion, as a public charity, to observe legal
requirements scrupulously. Because the
constitution and bylaws are of such great
value, it behooves the Board and managers
of a nonprofit corporation to review and
revise them periodically to keep them up to
date and useful.
5. The Board of Directors. The
governing body of a nonprofit corporation
is usually called a Board of Directors. These
individuals are responsible for setting policy
for the organization. They also have the
legal responsibility to ensure that the
corporation's activities are consistent with
state and federal laws and with the organi-
zation's constitution and bylaws. In short,
the Board of Directors of a nonprofit cor-
poration is responsible under the law for
being the custodian of corporate resources.
It is important that these individuals be
aware of their obligations and responsibili-
ties if the organization is to survive and grow.
Tax-Exemptions
After successful completion of
incorporation, your next step is to file for
local or state sales tax-exemptions and
federal income tax-exemption.
1 . Sales tax-exemption allows you
to make purchases without having to pay
taxes on them. Local or state sales tax-
exempt numbers are issued to nonprofit
corporations that meet certain guidelines.
You can get detailed information on sales
tax-exemption from your local govern-
ment's office of taxation. This filing needs
to be done only once.
2. Federal income tax-exemption
allows religious, charitable, educational
social service, and other nonprofit groups
to pay no tax on their income. After in-
corporation you should go to your nearest
federal Internal Revenue Service (IRS)
Office to get instructions and forms for
filing for income tax-exemption. More than
likely, you will be applying for the status
of 501 (c)(3). If you qualify for this tax
status, in addition to being exempt from
14
federal income tax, contributions made to
your organization are also tax deductible.
Federal income tax filing is done once a
year between January 1 and April 15.
Like incorporation, this process
may become somewhat complicated; it
may therefore be to your advantage to
consult with an accountant or an attorney
who is familiar with federal tax laws.
How It Works
INSURANCE
One legal question you might have
about your organization may concern in-
surance coverage. What type of insurance?
How much? Can I do without it? This sec-
tion on insurance outlines some of the im-
portant facts you will need to know con-
cerning insurance coverage for you organi-
zation. Insurance is important to your
agency, particularly if your project is being
operated in a high crime area or if your
project has a high degree of public
exposure.
The points covered are grouped
under three headings: coverages that are
essential for most nonprofit organizations;
coverages that are desirable for many
organizations, but not absolutely necessary;
and coverage for employee benefits.
Used correctly, insurance can con-
tribute a great deal to your success by
reducing the uncertainties under which you
operate. It can reduce employee turnover,
encourage community participation in your
program and help keep your program going
in case an insured peril interrupts opera-
tions. The potential benefits of good in-
surance management make it well worth
your study and attention. Planning an
insurance program for your organization
will most likely involve a delicate balancing
act: through careful study and periodic
review, you must determine what are the
risks against which you feel you must be
insured and what is the amount of funds
available for insurance premiums, given the
expenses of running your programs. It will
also be to your benefit to discuss your in-
surance needs with a qualified agent,
broker or other insurance counselor.
Insurance has been defined as a
system in which "winners pay losers."
Those who are lucky enough to avoid loss
contribute through premium payments to
the unlucky ones who do suffer loss. If you
never collect from your insurance, consider
yourself ahead, because you are one of the
winners. If you suffer a loss for which you
are insured, you have the security of
knowing that the other members of the
insurance system will relieve most of your
burden.
In this sense, you come out ahead
either way. Your premiums are the price
you pay for freedom from worry about
economic loss from conditions beyond
your control.
Essential Coverages
Four kinds of insurance are
essential: fire insurance, liability insurance,
automobile insurance and workmen's com-
pensation insurance. In some cases and for
some types of nonprofit organizations,
crime insurance— which is discussed under
"Desirable Coverages"— is also essential. You
should know the following key facts about
these various types of insurance.
Fire Insurance
1. You can add other perils— such
as windstorm, hail, smoke, explosion, van-
dalism and malicious mischief— to your
basic fire insurance at a relatively small
additional cost.
2. If you want comprehensive
coverage, your best buy may be one of the
all-risk contracts which offers the broadest
available protection for the money and can
be written to cover almost any peril you
deem necessary to include.
3. The insurance company may
indemnify you— that is, compensate you
for your losses— in any one of several ways:
(a) it may pay actual cash value of the
property at the time of loss; (b) it may
repair or replace the property with material
of like kind and quality; or (c) it may take
15
all the property at the agreed or appraised
value and reimburse you for only the face
value of the policy at the time of the pur-
chase of the insurance.
Liability Insurance protects your
organization in cases where it is sued by an
individual claiming injury on your
property.
1. Legal liability limits of $1 mil-
lion are no longer considered high or un-
reasonable for even a small business.
2. Most liability policies require
you to notify the insurer immediately after
an incident has occurred on your property
that might cause a future claim. This holds
true no matter how unimportant the inci-
dent may seem at the time it happens.
3. Most liability policies, in addi-
tion to bodily injuries, may now cover per-
sonal injuries— libel, slander and so on— if
these are specifically insured.
4. Under certain conditions, your
business may be subject to damage claims
even from trespassers.
5. You my be legally liable for
damages even in cases where you used
"reasonable care."
6. Even if the suit against you is
false or fraudulent, the liability insurer
pays court costs, legal fees and interest in
judgements in addition to the liability
judgements themselves.
Discuss your Insurance
needs with a qualified
insurance counselor
16
7. You can be liable for the acts of
others under contracts you have signed
with them— for example, the actions of a
security guard on contract with your organ-
ization. This liability is insurable.
Automobile Insurance
1. When an employee or a sub-
contractor uses his own car on your
organization's behalf— for example, running
an errand or transporting program partici-
pants to an outside event which is part of
the organization's program— the organiza-
tion can be legally liable, even if it doesn't
own the car or truck.
2. You can often get deductibles of
almost any amount— say $250 or $500—
and thereby reduce your premiums.
3. Automobile medical-payments
insurance pays for medical claims, in-
cluding your own, arising from automobile
accidents regardless of the question of
negligence.
4. If your organization owns an
automobile or has activities which require
extensive use of an auto, in most states,
you must carry liability insurance or be
prepared to provide other proof— surety
bond— of financial responsibility when the
automobile is involved in an accident.
5. You can purchase uninsured-
motorist protection to cover your own
bodily-injury claims caused by someone
who has no insurance. This coverage is
particularly important if your organization
is located in a state which does not require
liability insurance.
Workmen's Compensation protects
employees in the case of work related in-
juries.
1 . Common law requires that an
employer provide his employees with a safe
place to work and safe tools, as well as
warn them of any existing danger.
2. If an employer fails to provide
the above, under both common law and
workmen's compensation laws he is liable
for damage suits brought by an employee.
3. State law determines the level or
type of benefits payable under workmen's
compensation policies. For information
contact your state workmen's compensa-
tion board. They will inform you of re-
quirements and refer you to insurance
companies which offer policies.
4. Not all employees are covered
by workmen's compensation laws. The
exceptions are determined by state law
and, therefore, vary from state to state.
5. In about half the states, you are
not legally required to cover your workers
under workmen's compensation. If you do
not, however, you may lose some of your
legal defenses in employee suits.
6. You can save money on work-
men's compensation insurance by seeing
that your employees are properly classified.
7. Rates for workmen's compensa-
tion insurance vary from 0.1 percent of the
payroll for safe occupations to about 25
percent of the payroll for very hazardous
occupations.
8. Most employers in the majority
of states can reduce their workmen's com-
pensation premium cost by reducing their
accident rates below the average. They do
this by using safety and loss-prevention
measures.
Desirable Coverages
Some types of insurance coverage,
while not absolutely essential, will add
greatly to the security of your organiza-
tion. These coverages include crime
insurance and participant health insurance.
Crime Insurance provides coverage
in cases of criminal acts against persons
and property.
1. Burglary insurance excludes
such property as accounts, display articles
in a window and manuscripts.
2. Coverage is granted under
burglary insurance only if there are visible
marks of the burglar's forced entry.
17
3. Burglary insurance can be
written to cover, in addition to money in a
safe, inventoried merchandise and damage
incurred in the course of a burglary.
4. Robbery insurance protects you
from loss of property, money and securities
by force, trickery or threat of violence on
or off your premises.
5. A comprehensive crime policy
written just for small businessmen is avail-
able. In addition to burglary and robbery,
it covers other types of loss by theft,
destruction and disappearance of money
and securities. It also covers thefts by your
employees.
6. If you are in a high-risk area and
cannot get insurance through normal chan-
nels without paying excessive rates, you
may be able to get help through the FAI R
plan or through the U.S. Department of
Housing and Urban Development. Your
State Insurance Commissioner can tell you
where to get information about these plans.
coverages should be thoroughly investi-
gated before you complete your organiza-
tion's insurance plans.
Organize Your Insurance Program
A sound insurance protection plan
is just as important to the success of your
business as good financing, public relations,
personnel management or any other busi-
ness function. And, like the other
functions, good risk and insurance manage-
ment is not achieved by accident, but
rather by organization and planning.
Insurance coverage can
be used to provide em-
ployee benefits.
Participant Accident Health Insurance
1. You may want to provide health
insurance benefits to participants in your
program who might become injured during
a program activity.
2. This coverage is not required,
but you might want to provide it if you
feel your program— for example, dancing
—may expose the participant to some
degree of physical injury.
3. Such coverage is usually fairly
inexpensive if purchased for a relatively
large group. You may want to add this
amount in the form of a program service
fee.
Employee Benefit Coverages
Insurance coverages which can be
used to provide employee benefits include
unemployment insurance, social security,
group life insurance, group health in-
surance, disability insurance and retirement
income. Although not explained here, these
18
Programming
where rhetoric
meets
reality
CHAPTER 3
Develop a program
planning document that
explains your objectives.
An art project should be about art.
All of the rhetoric in the world will not
produce a good program. It is vital that
the program be of the highest quality. The
program is where rhetoric meets reality; it
is at this point that potential energy must
become kinetic force!
PROGRAM
QUALITY:
A MUST!
First and foremost in your con-
sideration should be program quality.
Although there may be a host of social,
recreational and other related needs, your
first concern as a programmer should be
the development of good arts techniques
and skills to deliver excellent arts products.
A major pitfall is that many proj-
ects attempt to expand too quickly. Many
studios, in an attempt to provide a larger
number of participants with services,
grossly weaken the quality of their pro-
gram. In short, be sure to place quality
before quantity. The value of your program
lies in its quality.
20
It is good to have an annual or
seasonal display for the public. This should
be planned as part of your basic program.
This allows the participants a chance to
display their talents and gives them a show-
case to work toward. In addition, it gives
your program the public visibility it will
desperately need for its success.
SETTING
REALISTIC
GOALS AND
PLANNING AHEAD
Be sure that your program design is
suitable for the space, staff and budget that
you have available. It is also important that
you develop a program planning document
that explains to all concerned where you
are going and what your objectives are.
DON'T PROGRAM
IN A VACUUM
One of the most frequent problems
in community arts projects is the fact that
all too often they exist in isolation from
other artists and other arts projects. This is,
indeed, a shame. Despite the fact that
many arts projects are physically situated
within reach of each other, there is no
meaningful contact between them.
A major reason for this isolation is
an ignorance of other program resources.
This, like egomania, must be avoided. Your
agency should make a conscious effort to
expand and develop relationships with
others in the arts community. In short, you
should have an open house in which you
invite others in the arts community to
come and share experiences. Whatever you
do, do not program in a vacuum!
A major contributor to this
problem is the "egomania" of the artists
and founders of these various arts projects.
Some feel that they know it all; others feel
that other neighborhood artists are not
doing the right things or don't know what
they are doing. Egomania builds walls
separating community talent, and these
walls should not be there. It is your
responsibility as a programmer, manager or
participant to build bridges and establish
lines of communication connecting your-
self with other artists and arts projects.
Only through this kind of cooperation can
the true end of neighborhood arts be
reached— providing the immediate com-
munity with a range of exposure to the arts
and the developing of its artistic talents.
THINGS TO
REMEMBER
A few tips to keep in mind when
operating or developing your program:
• Always remember, do not try
too much too soon. Take your time and
plan your program well. Keep in mind that
quality should not be compromised. In the
long run, your program will be better if
you do not attempt premature expansion.
• Although you should not
attempt too much too soon, you should,
nevertheless, not be afraid to experiment.
Try new methods, but keep them within
the scope of your resources. Don't be
afraid to be creative, but don't go out on a
limb to do it. Flexibility is important. A
flexible program allows for a latitude of
creative expression. Let the participants do
their thing within a controlled scope. A
flexible program is vital for participant
growth and development.
• Above all, make sure that your
program is relevant. Ask questions of the
neighborhood. Get involved and find out
what you can do to ensure that your pro-
gram has value! A program that is meeting
the creative and artistic needs of the neigh-
borhood, if managed properly, will grow
and flourish.
A more detailed exploration for
the processof planning and implementing
programs may be found in Ideas Into Prac-
tice (volume 3) of this series.
21
CHAPTER 4
Case Studies:
community
program
operations
pro and con
22
This chapter presents examples of a
good and a bad single-discipline arts proj-
ect. Facts in these cases are true; names and
other identifying elements have been
changed so as not to discredit anyone.
These cases are used as examples and are
designed to be instructive, not critical.
CASE STUDY ONE:
A Good
Single-Discipline
Art Project
Single-discipline Project A was
established in 1970 in a large northeastern
city. This single-discipline center was
established to teach dance to minority
inner-city youths. Started by Mary J., a
Black professional dancer, the center grew
and developed over the years.
The art studio has 1 1 classes of
dance, with an average class size of 16. The
school has 6 full-time instructors and 10
part-time and student instructors. There are
4 large dance studios and 2 smaller ones.
The studio itself is located on the basement
level of a large community church. The
space at one time was used for storage.
Mary J. had it renovated with funds
supplied through one of the grants she re-
ceived from a large government agency.
The space was given to her at no cost, be-
cause her uncle was a good friend of the
minister, who was interested in the devel-
opment of neighborhood art.
Due to her professional contacts,
Mary J. was able to get her organization
funded. In 1971 Mary J. contacted a
lawyer friend who set her studio up as a
nonprofit membership corporation. Mary
then developed two categories of member-
ship: participating and sponsoring. Partici-
pant membership is $5 per year; sponsoring
23
membership, $25. Through this method she
was able to raise $16,000 in revenue. In
addition to this, Mary J. had semi-annual
recitals each year and was able to raise
$3,000. Mary J. made it a point to always
ask her equipment and materials suppliers
for discounts and contributions. The major
advantage Mary J. had, in addition to her
own dance talent, was her ability to get
things done at little or no cost. In fact, all
her bookkeeping and accounting was done
free by a local Black CPA firm.
In short, Mary J. was a very re-
sourceful manager and programmer. For
these reasons she continued to watch her
dance program grow and develop. Mary
made every effort to share and work with
other dance projects and went so far as to
have intercity exchange visits with a dance
group from a neighboring city.
Mary J. provides us with a very
good example of the successful single-
discipline art project manager and
programmer. She utilizes effectively all re-
sources available to her and attempts to
expand and improve her program.
At one time the studio had 9 classes
of 10 students. The studio employed 5
full-time and 6 part-time drama instructors.
The project started in a small storefront
building; then, after receiving a large grant
from a foundation, it was moved to a larger
space. The project lost a portion of its
funding because reports were not filed on
time. When this happened, the project was
forced to move to smaller and less desirable
spaces.
Although incorporated in 1971, the
organization lost its charter of incorpora-
tion due to its failure to file an annual re-
port. The reason, said Oscar B., was that he
did not know that he had to file such a re-
port every year. Other problems included
improper amounts of payroll taxes being
withheld and the organization's yearly in-
come tax statements being filed on the
wrong forms. The reason for this was
obvious. Oscar B. had hired his nephew, a
first-year accounting student at the local
community college, to keep his books. Being
unfamiliar with the intricate corporate and
income tax reporting systems, the young
man made several serious errors.
CASE STUDY TWO:
A Poor
Single-Discipline
Art Project
Single-discipline Project B started,
as did Project A, in 1970. Single-discipline
Project B is located in a large midwestern
city. The program of this project is theatre
training for minority youths in the inner-
city area. Started by Oscar B., the center
did quite well in its first year. However,
over time, the project deteriorated. Oscar B.
is a well-known actor and playwright. Be-
cause he is so active in his personal career,
he has little time to pay close attention to
project details. To add to the problem,
Oscar B. does not like to delegate responsi-
bility to others. Oscar is quoted as once
saying, "There ain't nobody but me that
can run this program the way it should be
run."
Single-discipline Project B depends
entirely on a single grant from one founda-
tion. Oscar B. feels that: "They gotta fund
us 'cause we're Black and poor. They can't
take all our money away without catching
hell!" Therefore, no real attempt has been
made to raise funds from other sources.
In short, Oscar B. feels that because
he is Oscar B., his program will always exist.
Oscar B. also feels that he does not need "to
deal with any other projects. I know what
I'm doing, but I'm not sure if they do!"
CONCLUSION
The success of your organization
relies heavily on good management and
structure. Careful planning and implemen-
tation of your group will guarantee its sur-
vival and assist in making your dream
become a reality.
24
I
PHOTO CREDITS
Page Number Photographer
Inside Front Cover Edward Klamm
4 Perlmutler
11 GaryTenen
14 Martha Swope
Graphic design by Portfolio Associates, Inc., Philadelphia, Pa.
Lisa Werchow, Art Director