How Non-Profit Theatres Are Trying to Save Themselves. And the Theatre Industry | Playbill

Special Features How Non-Profit Theatres Are Trying to Save Themselves. And the Theatre Industry

Regional theatres are the birthplace of the next generation of theatremakers. And they’re in crisis.

On September 28, 2023, Lin-Manuel Miranda traveled to Capitol Hill. This wasn’t his first time there—having been previously invited multiple times to perform selections from Hamilton to President Barack Obama. But this time, the Tony Award-winning theatremaker was going not for himself, but on behalf of the theatre industry as a whole. In the Kennedy Caucus Room, located in the Russell Senate Office Building—with three Senators, and dozens of congressional aides in attendance—Miranda made an impassioned plea.

“We’re here asking for more aid, because theatre has not yet returned to being a full-time habit for theatregoers in the wake of the pandemic,” he told the room, adding that without the help of nonprofit regional theatres, his shows In the Heights and Hamilton never would have gotten off the ground. “The person who wrote your favorite musical is working on it right now in a small theatre somewhere in this country. And those small theatres are closing and those small theatres are in crisis, because we are not all the way back and we need help.”

It’s not just a group of well-heeled actors asking for money. That September 28 event was organized by the Professional Non-Profit Theatre Coalition—which comprises artistic, managing, and executive directors from more than 140 theatres across the country—and hosted by Senator Chuck Schumer. They were asking for $2.5 billion in government aid for the next five years—in what they’re calling the Supporting Theater and Generating Economic Activity Act, or STAGE Act

Regional theatres, they argued, are a necessary part of the artistic ecosystem: Nonprofits can take a chance on an unknown artist (such as a young Lin-Manuel Miranda) and produce their first-ever musical, give future stage and screen stars their first paid gigs, expose local audiences to the newest generation of theatremakers, or give established theatre-makers a low-pressure environment to try out something new (such as when Stephen Sondheim tried out Sunday in the Park With George at the Off-Broadway Playwrights Horizons).

And those regional theatres are in crisis. According to Greg Reiner, the director of theatre and musical theatre at the National Endowment for the Arts, in a statement to the New York Times, “We’re seeing two to three organizations closing a month right now.”

Those still standing have been forced to scale back. Off-Broadway’s The Public Theater cut its staff by 19 percent and some of its programming, Steppenwolf Theatre in Chicago cut 12 percent of its staff, and Center Theatre Group in Los Angeles cut 10 percent of its staff and has temporarily stopped producing entirely in one of its three theatres. And these are the theatres that many previously deemed “safe” because of their longstanding history, their size, and their record of bringing new works to Broadway. But according to an NEA report, there’s been a decline in people attending cultural events such as theatre, museums, the movies, or classical music concerts. By contrast, events such as pop music concerts, country music concerts, comedy shows, and circuses have experienced an increase in attendance (thank you, Taylor Swift).

It’s easy to pinpoint the current financial crisis for theatres on declining audiences and thus, declining demand for live theatre. It has been reported that 25 percent to 30 percent of theatre audiences have not returned since the pandemic. So if the audiences aren't coming, perhaps certain theatres no longer need to exist.

But that is a vast oversimplification of a complex problem.

According to a recent American for the Arts study, in 2022, nonprofit culture organizations generated $151.7 billion in economic activity—$73.3 billion in spending by the organizations, and $78.4 billion in event-related spending by their audiences (such as going to bars and restaurants in the area around a theatre). The arts sector supports 2.6 million jobs. And according to a 2018 NEA report, the arts contribute $763.6 billion to the U.S. economy, more than agriculture, transportation, or warehousing.

When a Broadway show closes, another Broadway show immediately replaces it. But when a regional theatre closes, it leaves behind a large cultural and economic hole that cannot be quickly filled. Here is what led to the current crisis and what actions theatre artists are taking to save their industry.

Long Wharf Theatre leaders Kit Ingui, Jacob G. Padrón, and Nancy Alexander Chike Photography

How the Not-for-Profit Business Model Works

The way not-for-profit theatres do business is widely different from commercial theatre. While in a commercial space like Broadway a show needs to turn a weekly profit at the box office to stay open, the finances for many regional theatres are different. They operate on a non-profit model where ticket sales only make up a fraction of their income—other sources of revenue include charitable giving from individuals, corporations, and foundations; grants from local and federal government; and (periodically) contributions from commercial producers to help underwrite any Broadway tryouts.

This allows not-for-profit theatres to make tickets affordable for their communities, to provide educational arts programming to local schools, and to foster riskier work from new artists. 

Unfortunately, true to its name, the not-for-profit theatre has rarely been profitable. When Jacob Padrón took over as artistic director of Long Wharf Theatre in New Haven, Connecticut in 2018, he inherited a Tony Award-winning theatre with a reputation for premiering new work (many of which had gone to Broadway, such as Wit and American Buffalo). But beneath its prestigious veneer, Long Wharf had also been operating for a decade at a deficit (meaning its expenses exceeded its income), and it was over $3 million in debt. Single ticket sales and subscriptions were also on a downward trajectory.

“We inherited a pretty difficult financial situation,” says Padrón. “Historically, the way that it worked at Long Wharf was we would have a deficit. And then those wealthy donors would then write the check to cover whatever the loss was. A: That's not a sustainable model. And B: Those folks are just not with us anymore.”

A number of industry professionals have called this dependence on philanthropy “an outdated business model.” Indeed, during the pandemic, many theatres saw those big sources of revenue (donations and ticket sales) immediately dry up. Beyond the pandemic, there has been another issue that’s been affecting many other industries in America, to which theatre has not been immune: cost disease.

“Our ability to raise more money has not kept up with the rate of inflation and other cost increases,” says Martha Demson, who runs the Open Fist Theatre Company in Los Angeles. Because as ticket sales and charitable giving has decreased, the costs of making theatre have increased. Those increases include a rise in venue rental; in raw materials needed to build sets, costumes, and other physical aspects of a production; and in labor costs to meet inflation. As Demson puts it, compared to when she first founded Open Fist in 1990, “What I can do now is less than what I could do when I started.”

Those longtime difficulties were then exacerbated during the pandemic. The current state of affairs for theatres can be seen as years of metaphorical chickens coming home to roost. Or as Padrón puts it, “The pandemic expedited the conversation that we were all needing to have in our institutions.”

To rein in costs, many theatres have taken to cutting productions or trimming down their staff roster to balance their budgets. Padrón took a different approach; in 2022, Long Wharf left its permanent building near New Haven’s Union Station and started producing in different venues all over the city. That move, crucially, saved the company $300,000 to $400,000—which helped them to pay off their debt. But Padrón admitted that such a big change shocked the small town of New Haven, leading many longtime patrons to withdraw their support of the theatre. That initial itinerant 2022-23 season did come out at a deficit.

But slowly, things are turning around. The theatre’s current production of The Year of Magical Thinking, which Kathleen Chalfant is performing in different intimate spaces all around New Haven, has sold out. Long Wharf’s season also features more BIPOC writers than in years past. Padrón right now sees the central challenge as: How to preserve the longtime audiences of Long Wharf while fostering newer, younger audiences with different sensibilities. He admits he hasn’t quite cracked that code yet. But as he walks around downtown New Haven, he regularly encounters people who have never been to the theatre—those are potential audiences.

“​​You can go back to the same kind of group of supporters, but you also have to actively be creating bridges to those newer audiences,” says Padrón. “You can't expect them to show up overnight. When we program something and maybe we don't have the turnout that we had anticipated, we have to keep showing up for those communities. We have to keep making that commitment and saying, our doors are open.”

Padrón now happily reports that there’s been a steady increase in the number of people who are buying tickets to Long Wharf for the first time. And have audiences been getting more diverse? “For sure,” Padrón responds, with no hesitation.

California State Senator Susan Rubio speaking at a rally in support of SB 1116 at Boston Court Pasadena in 2022

A Moment of Opportunity

The theatre artists who spoke for this article all admitted that the current climate is challenging. But they all added that it was also one of opportunity, pinpointing this moment as a turning point for the industry—as a way to transition from a business model that was created in the mid-20th century to a new kind of theatre for the 21st century. Perhaps that means not owning a building, not producing as many shows, or even going into political advocacy.

Scott Ellis took over as artistic director of Roundabout Theatre Company after its longtime leader Todd Haimes died due to cancer. Overnight, Ellis went from being a stage director overseeing one show at a time to an artistic director overseeing three Broadway theatres and two Off-Broadway theatres. 

But despite the tumultuous year, Ellis has been keeping positive, “We are in challenging times, but I feel unbelievably jazzed about it. Because it makes you think differently—how you're working, who you're working with.” He admits that prior, it was normal for theatre leaders to not communicate with each other and to see each other as competition. “But this is making us come out and talk and ask questions, and that, I think is thrilling.”

It is this eye towards conversation that led Roundabout Theatre Company to partner with New York Theatre Workshop in their inaugural productions this past fall: The Refuge Plays by Nathan Alan Davis (which starred Nicole Ari Parker). It was an unprecedented move for these longtime Tony-winning Off-Broadway theatre companies. The Refuge Plays was a three-hour work with a cast of 10, plus five understudies. NYTW’s leader Patricia McGregor admitted that a co-production made financial sense, saying: “Every dollar counts for a thing. And so, if we share resources, it also means that I'm able to advocate for other projects…to give as many resources as possible to some of those things as well.”

It also made sense artistically. The collaboration bore not just a large-scale production—it also led to cross-pollination of audiences where the younger audiences of NYTW mixed with Roundabout’s older audiences, leading to increased visibility for both organizations. “We can include a lot more people than we used to,” says McGregor, who adds that the NYTW and Roundabout collaboration is part of a wider trend: “We are seeing more partnerships, more brainstorming groups, more collective action in our field than I've ever seen before.”

These industry conversations have already borne remarkable fruit. Last year, California Governor Gavin Newsom signed SB 1116 into law, which establishes the Performing Arts Equitable Payroll Fund—$11.5 million which will be provided to theatres in California to offset their payroll costs, giving a much-needed jolt of capital to these under-funded institutions. The Fund is for theatres with annual operating budgets of under $2 million, and it was the product of a joint advocacy effort from Actors’ Equity Association, Theatre Producers of Southern California, and California Arts Advocate. They’re also currently lobbying for additional funding, with the hope of getting $50 million.

“It's a way to kind of counter the decades of cost disease, not by paying for a show or paying for a building, but by investing in workers,” says Demson, who, besides running Open Fist, is the president of the Theatre Producers of Southern California. “There are a lot of people who go into creating a theatrical piece, an opera, ballet, or symphony—we're talking about large payrolls, generally.” The hope is that by helping offset these costs, it would help smaller theatres who have been floundering stabilize their finances and grow.

During the pandemic, it was advocacy from theatre artists that helped pass the Save Our Stages Act, which provided $16 billion to live performance venues (which in the grand scheme of government bailouts is modest—the airline industry received $54 billion in 2020). Now post-pandemic, these artists are telling lawmakers that COVID is still adversely affecting live performance and so relief is still needed. Demson says that prior to the pandemic, Open Fist was on an upward growth trajectory. But now, despite keeping ticket prices below $35 and not changing the types of plays it produces (edgy and experimental), the theatre has been struggling to rebuild its audiences. 

“All of our shows in 2019 paid for themselves…our most successful show in 2022 made less than our least successful show in 2019 [in ticket sales],” says Demson.

In California, artists banded together to make a case to politicians that live theatre was a valuable economic engine. In New York City, Mayor Eric Adams recently assembled the first ever arts council to address the current crisis. And in Washington, D.C., the STAGE Act has the support of Senator Amy Klobuchar and two other Senators—stakeholders hope it will be introduced in the Senate in the next month. 

According to Demson, lobbying needs to go hand-in-hand with artmaking. “More and more [theatre] people are seeing that advocacy has to be part of what you do,” says Demson. “If you're in this field, it can't just be left solely to the lobbyists and arts advocates. We all have to get involved and support it.”

Out of the Box Theatrics Founding Artistic Director Liz Flemming opens the doors of the former New Ohio Theatre Gabrielle Garcia

An Ending Is Not the End

At the end of the day, nothing lasts forever (aside from death and taxes). And that includes theatres. This past summer, Robert Lyons was looking to retire and was wondering what to do with his 30-year-old Off-Off-Broadway theatre company, The New Ohio—a place where Tony-winning directors Rachel Chavkin and Alex Timbers started their careers. Instead of handing the company off, he just…dissolved it altogether.

The New Ohio was a beloved mainstay in downtown Manhattan, with its weird, experimental shows regularly selling out. But Lyons admits that he had “COVID fatigue.” Then another part of him thought: “An organization does not have to go continuously forward indefinitely into the future. It can have a lifespan and conclude gracefully.”

But the news wasn’t bleak. That’s because the landlord of the West Village building where the New Ohio performed, ​​Rockrose Development, agreed to keep the space as a theatre. That means another company could take it over. And they have.

Out of the Box Theatrics, another small Off-Off Broadway company, is the new steward of the former New Ohio space. They’re collaborating with Chashama, a nonprofit that manages art studios all around the city and who is the current leaseholder. For Elizabeth Flemming, who founded OOTB and who (as a legally blind artist) is passionate about diversity and representation, this opportunity has been a way to expand the profile of her company.

But Flemming isn’t just hunkering down and making shows right away. She’s been focused on getting to know her potential audience. “We're trying to create these small community events that are, like, $10. And a lot of them are really to engage young people who are maybe new to the city or still in school, and to build a foundation there,” she explains. 

These events include regular open mics for aspiring artists to show off their talent, cabarets featuring Broadway talent (the inaugural one will feature Caissie Levy), a reading series of in-progress works, and free skills-building workshops for artists. The way Flemming thinks about it: “It’s every point of entry that you can possibly have. You can engage everyone and create an entry for everyone.”

At this point in the joint conversation, Lyons joins in, “And re-entry.”

Flemming nods, smiling—as the metaphorical torch is passed. “And re-entry! It keeps going hand in hand. You're totally right.”

OOTB currently survives primarily on donations from individual patrons rather than large sums of money. Flemming is hopeful that these new programs and the new space will unlock a new level of financial support. “This whole conversation about how the nonprofit is dying, I just kind of refuse to believe it.” She then adds, emphatically, “We have to force people to see the value in it. And there's such great value in it.”

Similarly, Lyons is also optimistic, saying that as long as there’s artists who feel the need to make work for an audience, the theatre will survive. After all, today’s large institutions started out as a scrappy group of friends wanting to create shows together; they then made things that audiences did not know that they wanted, but loved when they saw it.

As Lyons puts it: “There's always an influx of artists who want to make work. It's a production-driven field, it's not demand-driven. And there will always be artists who want to make work. Period...Now we have to figure out new ways to support those artists. That's our job and the job of the field.”

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