Discovering Fiscally Sponsored NYC Dancemakers

That’s the title of a new study published this month by Dance/NYC and produced by yours truly, with (lots of) help from Fractured Atlas Research Fellow Carrie Blake and Dance/NYC Director Lane Harwell. The study examines data from over 250 dance-related projects fiscally sponsored by Fractured Atlas, The Foundation for Independent Artists/Pentacle, New York Foundation for the Arts, New York Live Arts, and The Field. Building off of Dance/NYC’s previously released research, “Discovering Fiscally Sponsored NYC Dancemakers” also compares findings where possible to corresponding figures for nonprofit dance organizations,  as reported via the Cultural Data Project.

So what did we find? Not surprisingly, sponsored projects are for the most part quite small in scale. Aside from the Foundation for Independent Artists program, which is an unusual Model A full-service fiscal sponsorship that includes complete financial and payroll management, each fiscal sponsor’s projects averaged less than $16,000 in expenses for the most recently completed fiscal year. (Note that we had to work some statistical magic to get those figures from the available data, so they should be treated as estimates rather than hard counts. All relevant assumptions are included in the methodology section of the report.) It appears that in the New York dance world, at least, the grassroots level of the field is making heavy use of fiscal sponsorship.

According to figures self-reported by the sponsored projects, it also appears that the sponsored projects in the study group are more efficient than the corresponding nonprofits, by various measures. Compared to nonprofit dance organizations in all budget categories, sponsored projects spent the greatest share of their budgets on programs (83% vs. 72-83%), spent the least on fundraising for every dollar they raised (4 cents vs. 5-20 cents), and spent the least on marketing for every audience member they brought through the door ($0.28 vs. $0.53-$9.15). (The samples for these analyses varied according to which sponsors provided us with the relevant data; full details are in the report.) Furthermore, and perhaps most notably, the sponsored projects paid their artists proportionally more than nonprofits in the $25,000-$99,999 budget category: 48.6% to 32.2% of their budgets, respectively. Although the study was not designed to prove fiscal sponsorship’s value or lack thereof, it’s worth noting that these observations are consistent with one of the foundational theories behind fiscal sponsorship, which is that it saves small enterprises money and allows them to focus more of their energies on their programmatic work.

Artist Expenses graph

It should be noted that these findings come with some caveats. Most importantly, it’s difficult to know whether the differences noted above between the sponsored projects and the nonprofit organizations are more a function of corporate form or budget size. Due to the lack of representation of the smallest dance nonprofits in the Cultural Data Project, Dance/NYC had previously studied only nonprofits with budgets of $25,000 or more. By contrast, most of the fiscally sponsored projects under study had budgets falling under that amount. So we don’t know whether the sponsored projects seem more efficient because they don’t have to be nonprofits, or if there’s something about the under $25,000 budget range in particular that lends itself to greater efficiency – or both.

We are also dealing with incomplete samples for many of these analyses, due to the heterogeneity in data collection practices and standards among fiscal sponsors. The report includes a data collection comparison chart that details the overlaps and gaps between each sponsor’s data and the Cultural Data Project. Hopefully this resource can serve as a starting point for further collaboration.

Nevertheless, what “Discovering Fiscally Sponsored Dancemakers” does show is that fiscal sponsorship is a major force in the New York City dance world. Sponsored projects account for hundreds of distinct enterprises and at least $3 million in annual expenditures. They reach tens of thousands of audience members and serve something like a thousand artists (assuming a reasonable rate of overlap between projects). And remember, this is just in one discipline and one city of the country.

I hope more people will take advantage of the emerging data sets covering fiscally sponsored projects, one of the few windows we have into the poorly understood, creator-driven grassroots of the arts ecosystem. Fractured Atlas alone sponsors nearly 3,000 projects in all disciplines around the country, and we redesigned our annual report last year to better align with the CDP with exactly this sort of analysis in mind. The possibilities for better understanding our sector are just beginning to reveal themselves.

Further reading:

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  • Rohana Elias-Reyes

    Having worked on fiscally sponsored projects and for larger non-profits in many capacities, I feel there is something dangerously disingenuous about looking at very small-budget fiscally sponsored performing projects as a model for greater project efficiency without taking into account some painful realities of the model. Deeming the inability to pay everyone involved with a project for the value of their time as “efficiency” is questionable.

    Basically, fiscal sponsorship allows those with very limited resources to access $ that is only available to not-for-profits, without having to become a 501(c) 3. However, it comes at a cost of 6-10% of those dollars, and the reason the budgets looks so nicely skewed toward a massive percentage going directly toward project expenses is because there simply isn’t enough money to pay everyone for the work they are doing. In other words, the artistic director of the company may receive something for the choreography or performance works she does, but zero for the hundreds of hours of grant-writing, individual soliciting, administrative and production work, press outreach and marketing, web design, and so forth. Additionally, though the artists’ fees may be proportionally higher than in bigger budget companies, they are actually tiny. I have received $600 for a year’s labor developing new work with a choreographer I believed in (though I loved every minute of it), and she gave the same to the dozen or so others involved in the project. And I’m sure it was a sizable percentage of the budget. In other words it is a model that relies on most of the human labor cost being free. This is simply not sustainable in the long run for most people. It makes entry level work possible for groups – but if they can’t break out of this realm, they will not be able to continue on the long run.

    Secondly, I’m also concerned with applauding the low cost per audience member of small groups’ marketing/outreach dollars without digging to find out with that means in terms of who is in the audience. In my experience it usually means the groups are using all-digital means of communication, which translates to performing for a homogeneous in-crowd already familiar with the company’s work. That’s fine if you and your friends are sponsoring the project, but when you receive government and foundation funding there is an implicit understanding that you will be providing some sort of social good (in this case cultural) in return for those dollars, and if you have no mechanism for doing outreach – you will not be providing that cultural benefit, no matter how excellent your work is, or how low your ticket price may be.

    To be clear, I have nothing against fiscal sponsorship or small-budget companies. In fact, it is the only way for many of us to get our work out there. But unless it is a step on the road toward other fiscal models (some perhaps as yet to be discovered), it is not sustainable. Many fantastically gifted artists and companies fall to the wayside if they are unable to progress financially beyond this level that relies so heavily on donated and below cost labor, because it simply doesn’t pay the bills for the artists. In other words, it’s great that Fractured Atlas, the Brooklyn Arts Council, NYFA and others are offering fiscal sponsorship and helping artists get their work in front of audiences, but it should be part of a varied ecosystem – and it should be viewed with a clear eye toward the hidden costs.

    • http://createquity.com Ian David Moss

      Thanks for these very thoughtful and challenging comments, Rohana. I very much agree with almost everything you say here. The work of sponsored projects, as well as that of many smaller nonprofits, is subsidized by massive amounts of in-kind and volunteer time that for the most part does not show up on the books. (We are starting to grapple with how to quantify this important piece of the artistic puzzle, but it’s a work in progress.) I don’t, however, see this as a function of fiscal sponsorship per se, but rather of budget size. You do make an important point that sponsored projects typically have to pay a fee for the services they receive, so the question of whether this fee effectively pays for itself in saved costs is a critical one for future study.

      Your comments speak to a more general phenomenon that we see across all of the arts, which is that there is a bottleneck for attention and, consequently, financial resources that ends up unfairly shutting out talented artists. I’ve written about this topic at length and addressing it is a continuing interest of mine.

  • http://www.artsfwd.org Karina Mangu-Ward

    Interesting post!

    A few questions: In paragraph 3, why is there such a big range for the second stat in your comparison, but no range for the first stat? i.e $.28 vs. $0.53-$9.15.

    What percentage of fiscally sponsored projects do you estimate you are covering by reporting on those 5 major fiscal sponsors?

    • http://createquity.com Ian David Moss

      Sorry for the confusing ranges, Karina – I was trying to pack a lot of information into a short space. The ranges refer to the various budget segments into which we divided the nonprofit dance organizations. By contrast, the 28-cent figure refers to the total sample of fiscally sponsored projects. If you check out the full report, the graph on the top of page 10 will answer your question better than I can here.

      Your second question is much harder to answer. I’m pretty confident we caught most of the sponsored project activity that is taking place through what I’ll call “dedicated” fiscal sponsors – i.e., organizations that have specific programs set up to provide fiscal sponsorship to dance entrepreneurs in New York City. But there’s also quite a bit of fiscal sponsorship that happens on an informal, ad hoc basis, usually as a favor to a friend. Unfortunately I don’t have any data, quantitative or qualitative, on the scale of that activity. If I had to take a wild guess, I’d say this report covers more than half but less than 90% of all the fiscally sponsored dancemaker-led projects in NYC.

      • http://www.artsfwd.org Karina Mangu-Ward

        Thanks for the clarifications, Ian!