Theatre Co-op
This may not be an original idea, but it might be new to my four loyal readers, and it's new to me as of this morning: the Everyman's Endowment Fund. Sort of.
I had a conversation with a board member last fall who was telling me that when she worked in municipal finance, her municipality had a AAA bond rating. And I thought, "what if our theatre could issue bonds?"
Then I thought, nah. But - what if we could raise an endowment the way co-op markets raise their buying pool? In a co-op, each person buys "shares" that vary in price depending on the location. I currently own two shares in a co-op (one for each member of my household). The shares were $35 each. The co-op has about 14,000 current members. At $35 each, that's $490,000. Invested modestly, that amount would generate $25,000 a year in interest.
What if, rather than hawking season tickets, a theatre sold shares like a co-op? Shareholders would receive the "member price" on tickets, could sell their shares back at any time, and would take advantage of other perks and incentives offered to members. Non-members would pay a premium price for tickets more reflective of the cost of producing the theatre. By purchasing a membership, shareholders are making a commitment to the health and longevity of the theatre and their community.
For example, let's say you have 1000 season subscribers, purchasing packages with an average price of $200 each year. That's $200,000. Offer those subscribers one share each at a price of $300, payable at $150 a year for two years. They'll be buying tickets of course - maybe even a "member-priced" season ticket, so there's a bit of an upfront push - but that's how co-ops work. Or cast a wider net - try to sell shares to anyone who comes to, say, two plays a season, but price the shares at $50. If you're in a big market, that might be 10,000 people. That's $500,000.
I'm sure there are some bugs to be worked out, but the bright side is that food co-ops all over the country do this every day, and it's a model that works. The folks who run the co-ops would probably be more than happy to help out. Incidentally, I know of at least one food co-op that raised money from its members to finance the construction of a building. They tapped existing members for short-term no-interest loans to the co-op, which were repaid to the members in the years after the co-op opened.
This is a bit sprawling, but to me, it's a big exciting idea that needs room to sprawl. The beauty of it all is that you're getting exactly what you wanted from your audiences - ownership. And with 5,000 to 15,000 members, the ebb and flow of a few hundred has little effect - compared to the day you biggest donor finds a new pet project and pulls the plug on 5% of your budget or more in one swell foop.
For my next amazing feat, I shall convince my board that this is not crazy! Stay tuned...
I had a conversation with a board member last fall who was telling me that when she worked in municipal finance, her municipality had a AAA bond rating. And I thought, "what if our theatre could issue bonds?"
Then I thought, nah. But - what if we could raise an endowment the way co-op markets raise their buying pool? In a co-op, each person buys "shares" that vary in price depending on the location. I currently own two shares in a co-op (one for each member of my household). The shares were $35 each. The co-op has about 14,000 current members. At $35 each, that's $490,000. Invested modestly, that amount would generate $25,000 a year in interest.
What if, rather than hawking season tickets, a theatre sold shares like a co-op? Shareholders would receive the "member price" on tickets, could sell their shares back at any time, and would take advantage of other perks and incentives offered to members. Non-members would pay a premium price for tickets more reflective of the cost of producing the theatre. By purchasing a membership, shareholders are making a commitment to the health and longevity of the theatre and their community.
For example, let's say you have 1000 season subscribers, purchasing packages with an average price of $200 each year. That's $200,000. Offer those subscribers one share each at a price of $300, payable at $150 a year for two years. They'll be buying tickets of course - maybe even a "member-priced" season ticket, so there's a bit of an upfront push - but that's how co-ops work. Or cast a wider net - try to sell shares to anyone who comes to, say, two plays a season, but price the shares at $50. If you're in a big market, that might be 10,000 people. That's $500,000.
I'm sure there are some bugs to be worked out, but the bright side is that food co-ops all over the country do this every day, and it's a model that works. The folks who run the co-ops would probably be more than happy to help out. Incidentally, I know of at least one food co-op that raised money from its members to finance the construction of a building. They tapped existing members for short-term no-interest loans to the co-op, which were repaid to the members in the years after the co-op opened.
This is a bit sprawling, but to me, it's a big exciting idea that needs room to sprawl. The beauty of it all is that you're getting exactly what you wanted from your audiences - ownership. And with 5,000 to 15,000 members, the ebb and flow of a few hundred has little effect - compared to the day you biggest donor finds a new pet project and pulls the plug on 5% of your budget or more in one swell foop.
For my next amazing feat, I shall convince my board that this is not crazy! Stay tuned...
That sounds good and all, but remember that the return for a food co-op is food, a necessity. Whereas, the return for a theatre co-op is going to be performance? Unlike food, a performance is luxury, a good performance, even more of a luxury.
ReplyDeleteYour idea frightens and confuses me. It makes me feel like the wolves are after me. Hope your board isn't a bunch of old people.