Start Your Own Dance Company, Part 3

Posted on January 15, 2006 by

Although it’s not something many artists look forward to, one of the most important parts of starting a dance company is figuring out how to make money—or at least earn enough to cover costs. It’s not an easy proposition, especially in recent years. “The numbers are going horribly in the wrong direction,” says Barbara Bryan, an independent arts manager. “There are more choreographers on the scene and less funding.” Not to mention the long list of expenses necessary to run a company, including personnel costs, theater and studio rental fees and publicity, website and travel costs.

Yet it’s not impossible for a dance company to stay out of the red. “It takes time and effort,” attests Randy Swartz, president of Philadelphia-based arts presenter Dance Affiliates, “but there are sources of money.” With hard work and the right combination of earned income and fundraising, most companies can find a way to make ends meet and focus on what they do best—putting on a show.

Ticket Sales
The most obvious source of revenue for a dance company is ticket sales. If a troupe starts off by performing in a no-frills theater with a limited number of seats and a low rental fee, the money earned from selling tickets can cover the rental fee and then some. As the company grows and seeks larger or more desirable venues, however, the differential between the rental cost and the ticket price shrinks.

For example, if High School Theater charges a $2,500 weekly rental fee and seats 70, a $12 ticket price could generate $4,200 (or $1,700 in profit) if all five performances sell out. At the stylish new Main Street Theater, which seats 250, the weekly rental is $25,000. The company could potentially make more money—$31,250 (or $6,250 in profit)—provided its run sells out at $25 per ticket. But with houses just 80 percent full, the company only breaks even. And it can be difficult for a small company to fill a larger theater, especially with higher ticket prices.

To keep seats filled, your artistic product has to be top-notch or one-of-a-kind (such as a world premiere), something that creates the sort of buzz that will translate into sales—and, more importantly, inspire audience members to come back for more. Dana Tai Soon Burgess, artistic director of Dana Tai Soon Burgess & Company, attributes his troupe’s success to consistency. “I put 110 percent into each new work,” he says. “If [audiences] have a bad experience the first time, they’re not coming back no matter what you do.”

Watch out for competing events, too. For example, a large dance company touring to your town can draw potential audience members away from your event. Kathleen Dyer, artistic director of KDNY Dance, also tells of a disappointing turnout for one performance season in New York City when the Yankees were playing in the World Series.

Fundraisers
Since ticket revenue is an unpredictable source of income, how do most small companies make ends meet? Fundraisers of all sizes can help bridge the gap. On a bigger scale, an elegant dinner and silent auction at a local restaurant or the performance venue can help get a company on its feet. “Benefits help the donors feel a part of something,” adds Dyer.

On a smaller scale, many companies sell food or souvenirs during intermission at performances. Some limit their offerings to coffee and cookies, while others make T-shirts, mugs and hats with the company logo and include dance books and videos. Nutcracker kiosks that sell Christmas tree ornaments, stuffed toys, cards and even little tutus and tiaras can be particularly lucrative, especially when staffed by volunteers.

One of the drawbacks of concession sales is that the up-front investment in goods can be prohibitively high. However, obtaining donations from local businesses can help. Many businesses see the table as a marketing opportunity and will donate goods, especially in exchange for an ad in the program. (Selling program advertisements to local businesses is another way of generating revenue.) Because you’ll probably end up buying items to sell in bulk, purchase carefully so you’re not stuck with overstock and, potentially, storage costs.

The Power of the Individual
Although fundraisers can provide a boost, the reality is that most start-up dance companies are financed heavily by their artistic directors. “You could say I’m my biggest fan,” says Dyer, deadpan. “I donate a lot of money to me.” Drawing upon personal resources or income from another job, the artistic director pays company expenses out of his or her own pocket.

The artistic director and, for that matter, the dancers, are essential to a company’s bottom line in another sense, too. Whether it’s filling seats, attending benefits or working behind the scenes, the network of family, friends and colleagues of the artistic director and dancers is often what keeps a start-up company afloat. The same is true when it comes to fundraising. Although donations can come from foundations, the government and corporations, most small companies start out with a donor base of individuals.

Dyer keeps an extensive mailing list of audience members, her own contacts and those of the dancers and musicians she works with and periodically sends out letters explaining what the company is doing and requesting donations. “You have to put on a professional, really positive face in your letters,” she says. “People want to be involved in something great, not a sinking ship.” And don’t give up: Dyer was about to remove a few names from her mailing list after five years of no response when suddenly they started giving money. “If you don’t ask, you’re not going to get anything,” she says. “And always try to get them to give more.”

Keep in mind, however, that the cost of such mailings can be substantial, especially with a large list of potential donors. If your company operates as a nonprofit, on the other hand, you will be able to take advantage of nonprofit postal rates. (See Part 2 of this series in DT November 2005 for more on nonprofits.)

Corporate and Foundation Support
Individuals can pave the way into corporate funding, especially if the companies for which they work have a matching gift program. Choreographer Wally Cardona has benefited from board members who work at Johnson & Johnson, which has a two-for-one match. If the board member gives $100, Johnson & Johnson will give $200, and the company will end up with $300.

Obtaining corporate or foundation support through traditional channels such as submitting formal grant requests through the mail can be tricky, especially for a start-up troupe, as more established players are likely making requests as well. The key is to get invited by a presenter to perform on a shared program or get offered a commission in a new works program. How do you do that? Make sure your company stays in the limelight: Presenters and those with the resources to commission work constantly attend performances (through word of mouth or by invitation) and select those companies they feel will suit their audiences.

The benefits to being presented are multiple. As Bryan explains, “When funders read [grant] applications, they think that if a company is presenting an artist, there is some noteworthiness behind that artist. If you’re self-presenting, it’s much more difficult to get any kind of structured funding from a corporation or foundation.” Being presented also removes some of the financial burden from the company, as the presenter pays a performance fee and, on occasion, a commissioning fee as well as the costs of the theater rental.

If your company has not been presented, it’s wise to focus on local funders, as some corporations and foundations target donations in their geographic area. “Often a branch of a bank will support activities within the branch area,” explains Bryan. “Usually you’re looking at $250 or $500. And major businesses in your area might have priority funding in that area because they employ so many people there.” Some programs earmark money to organizations that benefit their community, so if your troupe conducts outreach programs, it may be eligible for additional funding.

Donations don’t necessarily need to be in dollars. Many companies offset costs by having labor or supplies donated. Jennifer Monson’s Flight of Mind, part of her Bird Brain project, needed natural fiber material for props. Bryan helped her contact five companies across the country that produced the fabric she needed, and one agreed to donate several yards. Other businesses might be willing to offer a discount on items that you plan to purchase for a show.

Overall, it pays to start small. “You might start with a $200 grant,” says Dyer. “But if it increases, that could become a good part of your bottom line one day.”  

Government Grants
Government support, while limited, is still an option worth looking into. In order to apply for most government funding, you must be a 501(c)(3) organization or have a fiscal agent. (See Part 2 of this story in DT November 2005 for more on the pros, and cons of obtaining 501(c)(3) or nonprofit status, as well as how to find fiscal sponsors.)

There are basically four levels of government support: federal (from the National Endowment for the Arts), state, city and county. NEA funding is very challenging for a small company without a proven track record. However, Bryan notes that choreographers who live in states with a lower concentration of artists may have a better shot. “A South Dakota artist who has done much less work than a New York artist might get funded first because there is a regional prioritization,” she says. The same is true on a statewide level: “A Bakersfield artist might get funding before someone in San Francisco because of priorities in spreading the funding around [California].”

On the local level, it can help if elected officials are familiar with your company’s work, especially if established programs are not in place to support the arts. “Sometimes local elected officials have discretionary funding,” explains Bryan. “That’s something to look at—who in your district or state has discretionary funding.” She also notes that guidelines for government funding are often notoriously complex, so it’s important to look into what you’ll need to provide long before the deadline.

The Right Mix
In the end, each company gets by with its own patchwork of individual and corporate donations, foundation and government grants and earned income. The mix changes as the company grows and the funding landscape shifts. “As we grew, we realized there was a real need to diversify, just like you’d diversify in stock purchasing,” says Burgess. “If there is a fluctuation in funding, and your government or foundation grant doesn’t come in one year, the only thing that can make that up is individual donors. It’s really important to stay diversified.” DT

Caitlin Sims is the Editor at Large of Dance Teacher and Dance Spirit magazines.

Comments

comments