In Part 2 of our series on starting a dance troupe, we ask (and answer) the tricky questions: What are the pros and cons of being a nonprofit, and the logistics of becoming one? 

Few people start a dance company with dollar signs in their eyes. Only the extraordinarily talented and extremely lucky few gain widespread fame or glory, and even then, financial rewards are elusive. For the vast majority, the value of a company is more ephemeral—it’s hard to put a dollar value on the importance of an artistic outlet or the pleasure of working with gifted collaborators.

Because of the economic realities of running a concert dance troupe (expenses are high, funding and revenue low), most are run as nonprofit organizations, meaning they meet the requirements of Section 501(c)(3) of the Internal Revenue Code. As a result, nonprofits are often referred to as 501(c)(3)s. (One rare for-profit company in the U.S. is Momix, the modern-dance offshoot of the wildly popular Pilobolus, itself a nonprofit.)

Although there are distinct benefits to nonprofit status, it is not the right solution for all dance companies. How do you determine if, when and how you should incorporate as a nonprofit? The complicated answer depends on a variety of factors, including your company’s revenue, established infrastructure—and future goals.

The Nonprofit Pros
The benefits of nonprofit status are straightforward. A nonprofit company is exempt from taxes, including income tax and some sales and real-estate taxes, and is eligible for special postal rates. Nonprofits can apply for grants from the local, state and federal government and foundations, the bulk of which only offer money to nonprofit organizations, and can receive donations that are tax-deductible from individuals. Reduced rates in theater rental and advertising, among other benefits, sweeten the deal.

“When you compare the amount of money it costs to rent a theater and pay for lighting, costumes and advertising to the amount of seats that a small theater has—keeping in mind that you can’t charge $50 a seat in a small theater—you realize it’s almost impossible to make money,” says Jennifer Weber of Decadance Theater, a hip-hop company in New York City that is in the midst of applying for nonprofit status.

Randy Swartz, artistic director of Dance Affiliates and president of Stagestep in Philadelphia, agrees: “Unless you have an immensely popular group instantly, you’re going to be hard pressed to match box office to expenses.” In addition, the formation of a nonprofit corporation provides protection for the company’s members and directors from personal liability, should the company face a lawsuit or insolvency.

With the break-even point for performances more and more difficult to reach, the reduction in the tax burden and increase in potential income make applying to become a nonprofit corporation seem like a no-brainer for dance companies.

The Nonprofit Cons
But the decision is anything but simple. “You have to have a certain amount of infrastructure once you’re a 501(c)(3), and you need to make sure that you can support that infrastructure,” advises Barbara Bryan, who manages a number of small dance companies, including John Jasperse Company, Tere O’Connor Dance, Wally Cardona Quartet and the choreographer Sarah Michelson. “You have to form a board of directors and hold quarterly board meetings, which becomes increasingly complicated as the board grows. You have to put employees on payroll, which involves paying for unemployment insurance as well as disability and workers compensation insurance.”


Although the definition of the employer/employee relationship doesn’t change with nonprofit status, many dance companies find that once they are official nonprofit corporations, they are “on the radar” of the Internal Revenue Service, and the increased level of scrutiny of their operations forces them to get all their financials in compliance. With a payroll system, dancers are treated as employees, rather than independent contractors. As a result, federal, state and local taxes, as well as Social Security, must be withheld from their salaries.

Another drawback to filing for 501(c)(3) status is the cost of filing and of staffing to stay in compliance. Although organizations such as Volunteer Lawyers for the Arts (or the accountant and lawyer you wisely invite to join your Board of Directors) can help with some of the initial paperwork, there is a filing fee of around $1,500 to contend with. In addition, nonprofits have to submit detailed documentation to federal, state and local authorities to prove compliance, requiring staff to prepare and file this information and to maintain payroll.

Add to this the fact that after becoming a 501(c)(3), your company’s financial information is available to the public, and the prospect can seem less enticing. As a nonprofit, of course, your company is essentially a charitable organization—one that is formed for the common good. You may struggle with the idea of pouring your heart, soul and waking hours into an institution that doesn’t really belong to you. “When you create a nonprofit organization, it’s no longer yours,” says Swartz. “You don’t own it. It’s held in the community trust. If and when that nonprofit dissolves, its assets must pass on to another nonprofit. It cannot be distributed in any way, shape or form to an individual.”

Attaining Nonprofit Status
If you do decide that nonprofit status is for you, keep in mind that becoming an official nonprofit, tax-exempt entity is a process that often parallels the growth of a dance company. (See “10 Steps to Creating a Nonprofit, Tax-Exempt Corporation” on page 157 for the steps you should take.)


Most dance troupes start off informally, with earnings and expenses reported on the artistic director’s tax return as small business or self-employment earnings. A common intermediate step is obtaining nonprofit status under the umbrella of a larger nonprofit, usually a local dance service organization. As a company becomes more established and revenues increase, official nonprofit, tax-exempt status becomes more and more important.

“There are different stages,” confirms Dana Tai Soon Burgess, artistic director of Dana Tai Soon Burgess Dance Company, a modern troupe based in Washington, DC. “The thing about becoming nonprofit is that you want to do it organically, when you’re large enough, and when you can answer questions like, ‘Why do I really need a board of directors?’” Burgess started working with dancers in 1991 and solidified the company in 1993. The troupe started the process of filing for federal tax-exempt status in 1996 but didn’t complete all the paperwork until 1997.

Alternatives to the For-Profit/Nonprofit Conundrum
For companies seeking some of the benefits of nonprofit status without actually filing for federal tax-exempt status, assuming nonprofit status through a fiscal agency can be an appealing solution. Service organizations act as umbrellas for smaller companies that share their mission. For a small fee or a percentage of the income from grants, these organizations enable the smaller companies to adopt their nonprofit status in some parts of their operations.

Decadance Theater spent a few years using The Field in New York City as a fiscal agent. “It’s something that I would definitely recommend,” says Weber. The vast majority of—but not all—foundations allow companies with nonprofit status through a fiscal agency to apply for grants.

There are limitations to this kind of nonprofit status, however. Bryan notes that once a company starts bringing in a fairly significant amount of grants (she estimates the breaking point at $60,000 per year), it doesn’t make financial sense to give a large chunk of the grant money to a third party. And individual donors can be loathe to send checks through a third party.

The nonprofit status itself has limits, which has led Decadance to move beyond fiscal agency. “You can only use it to get donations and grants,” explains Weber. “The Field will only accept the money if it’s a donation; it can’t be a payment for a service rendered, like a performance, so it gets complicated.” In addition, organizations that offer fiscal agency are generally in cities; companies in less densely populated regions of the country may not be able to find such sponsorship.

Thinking Ahead
Whether or not to pursue nonprofit status may ultimately depend upon your company’s goals. Bryan points to one choreographer she works with who has been successful, bringing in upwards of $200,000 annually, but hasn’t applied for nonprofit status because she’s not certain that she wants to continue the demanding schedule that a dance company requires in the long-term.


On the opposite side of the spectrum is Kathleen Dyer, who sought and received nonprofit status in 2001 for her small, emerging troupe, KDNY Dance. “I’m determined that I’m going to get bigger every year, I’m going to get more organized every year and I’m going to do it just by sheer perseverance,” says Dyer. Like many dancemakers with troupes of all sizes, Dyer has her own definition of wealth, valuing a life spent creating and sharing art more than monetary profit. DT

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

The Conversation
Dance Teachers Trending
Photo courtesy of Hightower

The beloved "So You Think You Can Dance" alum and former Emmy-nominated "Dancing with the Stars" pro Chelsie Hightower discovered her passion for ballroom at a young age. She showed a natural ability for the Latin style, but she mastered the necessary versatility by studying jazz, ballet and other forms of dance. "Every style of dance builds on each other," she says, "and the more music you're exposed to, the more your rhythm and coordination is built."

Keep reading... Show less
Sponsored by Harlequin Floors
Burklyn Ballet, Courtesy Harlequin

Whether you're putting on a pair of pointe shoes, buckling your ballroom stilettos or lacing up your favorite high tops, the floor you're on can make or break your dancing. But with issues like sticking or slipping and a variety of frictions suitable to different dance steps and styles, it can be confusing to know which floor will work best for you.

No matter what your needs are, Harlequin Floors has your back, or rather, your feet. With 11 different marley vinyl floors available in a range of colors, Harlequin has options for every setting and dance style. We rounded up six of their most popular and versatile floors:

Keep reading... Show less
Studio Owners
Getty Images

Dance teachers have a lot of strengths (communicating corrections, choreographing gorgeous movement, planning excellent recitals, cleaning technique—just to name a few) but when it comes to interior design—talent isn't exactly a given. So when studio owners remodel or build, worrying about the decor can feel a little overwhelming (you've got just a few too many other things to worry about, don't you?).

No need to fear! In 2019 we have Pinterest, which shows us all the latest trends we should know about. To help you make the best design decisions for your studio, we've compiled a list of public Pinterest pins we think you'll love.

You're welcome!

Keep reading... Show less
Sponsored by Insure Fitness
AdobeStock, Courtesy Insure Fitness Group

As a teacher at a studio, you've more than likely developed long-lasting relationships with some of your students and parents. The idea that you could be sued by one of them might seem impossible to imagine, but Insure Fitness Group's Gianna Michalsen warns against relaxing into that mindset. "People say, 'Why do I need insurance? I've been working with these people for 10 years—we're friends,'" she says. "But no one ever takes into account how bad an injury can be. Despite how good your relationship is, people will sue you because of the toll an injury takes on their life."

You'll benefit most from an insurance policy that caters to the specifics of teaching dance at one or several studios. Here's what to look for:

Keep reading... Show less
Dance Teacher Tips
Vanessa Zahorian. Photo by Erik Larson, courtesy of Pennsylvania Ballet Academy

At the LINES Ballet Dance Center in San Francisco, faculty member Erik Wagner leads his class through an adagio combination in center. He encourages dancers to root their standing legs, using imagery of a seed germinating, so that they feel more grounded. "Our studios are on the fifth floor, so I'll often tell them to push down to Market Street," says Wagner. "They know that they should push their energy down to the street level." By using this oppositional force, he says, dancers can lengthen their bodies to create any desired shape.

Keep reading... Show less
Studio Success with Just for Kix
Bill Johnson, Courtesy Just for Kix

Running a dance studio is a feat in itself. But adding a competition team into the mix brings a whole new set of challenges. Not only are you focusing on giving your dancers the best training possible, but you're navigating the fast-paced competition and convention circuit. Winning is one goal, but you also want to create an environment that's fun, educational and inspiring for young artists. We asked Cindy Clough, executive director of Just For Kix and a studio owner with over 40 years of experience, for her advice on building a healthy dance team culture:

Keep reading... Show less
Dance Teacher Tips
Getty Images

After years of throwing summer parties at your studio, you're likely fatigued by coming up with themes and event details. You want your students to have a good time, but you're also up to your eyeballs in choreography and costume decisions.

Never fear! We've come up with party themes and activities to do during the event. Delegate tasks to your teachers and office managers, and voilà! You have a stress-free party ready to go.

Have a blast, people!

Keep reading... Show less
Sponsored by World Class Vacations
David Galindo Photography

New York City is a dream destination for many dancers. However aspiring Broadway stars don't have to wait until they're pros to experience all the city has to offer. With Dance the World Broadway, students can get a taste of the Big Apple—plus hone their dance skills and make lasting memories.

Here's why Dance the World Broadway is the best way for students to experience NYC:

Keep reading... Show less
Dancer Health
Thinkstock

Q: I recently returned to a modern dance class after a long absence. While I didn't feel any acute pain at the end of class, the next morning I could barely walk from the soreness in both my Achilles. What can I do to fix this?

Keep reading... Show less
Studio Owners
Getty Images

Q: I'm trying to think of ways to maximize studio space and revenue during the summer. What has worked for you?

Keep reading... Show less
Studio Owners
Getty Images

In 2019, dance parents are more eager than ever to observe their child's progress, and stay up-to-date with the ins and outs of what's happening in the classroom. That means yearly recitals aren't always enough to keep them satisfied—especially if you have rules against visitors observing class from week to week. The solution? Visitor observation weeks. Trust us, the guardians and loved ones of your students will love you for it!

We caught up with Suzanne Blake Gerety, vice president of Kathy Blake Dance Studios and regular contributor to Dance Teacher's "Ask The Experts" column, to hear her tips on how to have a successful visitor observation week.

Keep reading... Show less
Dancer Health
Adequate dorsiflexion mobility is needed to find a supple demi-plié needed to bound into the air and land safely. Getty Images

Dancers are trained to think often about the range of motion, stability and power of their extended lines: the point of the foot, the reach of the penché, the explosion of the sauté in the air. But finding that same mix of flexibility and strength in the flexed foot is just as integral to technique and injury prevention. Without adequate dorsiflexion mobility, it is nearly impossible to find the kind of supple demi-plié needed to bound into the air and land safely.

Keep reading... Show less

mailbox

Get DanceTeacher in your inbox