Eleemosynary
Among the curiouser things about nonprofit theatres is that they are organized under what is essentially a charitable principle. Section 501 of the USC allows organizations "organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition" - with a few restrictions - to conduct business toward those ends without paying income taxes. There are a number of finer points, and potential taxes on unrelated business income - but the basic fact is that nonprofit theatres operate under one of those headings. In addition, unlike many other 501 organizations, 501c3 organizations can receive tax-deductible contributions.
I know we like to think that our audiences have religious experiences in our spaces, but I don't think the IRS would buy that. You could have a company devoted solely to the production of plays about science and math, or create of sort of Cirque du Soleil in which performers dressed in slinky gorilla suits put consumer electronics and Samsonite through their paces, but generally, theatre would probably fall into either the "educational" or "literary" categories. And that seems to make sense, except that there are foolhardy capitalist entrepreneurs out there who keep insisting on producing the same repertory, with the same talented group of people, sometimes in the same spaces as nonprofit theatre companies. A monograph on UK arts pricing notes that top-price tickets in commercial and non-commercial venues are typically the same.
The major legal difference is that nonprofit theatres don't distribute profit to shareholders or individuals. For those of us in the trenches raising money for what many consider merely a particle of entertainment, that's not really clear enough. We need to define why we are worthy of alms at the same time we define why we have to compete with rock concerts, movies, and other forms of entertainment to generate our earned revenue stream.
I know we like to think that our audiences have religious experiences in our spaces, but I don't think the IRS would buy that. You could have a company devoted solely to the production of plays about science and math, or create of sort of Cirque du Soleil in which performers dressed in slinky gorilla suits put consumer electronics and Samsonite through their paces, but generally, theatre would probably fall into either the "educational" or "literary" categories. And that seems to make sense, except that there are foolhardy capitalist entrepreneurs out there who keep insisting on producing the same repertory, with the same talented group of people, sometimes in the same spaces as nonprofit theatre companies. A monograph on UK arts pricing notes that top-price tickets in commercial and non-commercial venues are typically the same.
The major legal difference is that nonprofit theatres don't distribute profit to shareholders or individuals. For those of us in the trenches raising money for what many consider merely a particle of entertainment, that's not really clear enough. We need to define why we are worthy of alms at the same time we define why we have to compete with rock concerts, movies, and other forms of entertainment to generate our earned revenue stream.
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