On the Boards: Sustaining a Vibrant Seattle Arts Institution

On the Boards (OtB) is recognized as a leader in contemporary performance. As with so many nonprofits that expand, growing pains were inevitable. In 1998, a wonderful performance space was for sale, and OtB found the support to purchase and renovate it. Though their audiences loved it, revenue couldn't cover the increased expenses of the new facility. See how their participation in NFF's Mid-Sized Presenting Organizations (MPO) Initiative helped them turn around.

The Situation

On the Boards (OtB) is recognized as a national leader in the field of contemporary performance. Founded in 1978 by performance artists in Seattle, WA, the organization introduces audiences in the Pacific Northwest to international innovation in dance, theater, music, and new media.

Though OtB’s focus is worldwide, they also take pride in their communitybased programs, supporting the artistic development and presentation of artists in their local and regional performance communities. In Seattle’s artistic mecca, OtB has carved out a valuable and popular niche, collaborating with the best avant-garde artists and presenting organizations in the world.

As with so many arts organizations that experience success and expansion, growing pains were inevitable. In 1998, a wonderful performance space was for sale, and On the Boards found the financial support to purchase and renovate it. Though their audiences appreciated the renovated space, revenue growth could not cover the increased expenses of OtB’s new facility. For several years, the operation ran at breakeven or a deficit, which Board members covered with loans or gifts. There were no financial reserves or endowment to serve as a safety net. It was clear to the organization that things could not continue in this manner, that the underlying enterprise of OtB needed to be as strong as their commitment to mission and programming.

The Opportunity

In 2005, Nonprofit Finance Fund (NFF) announced a national program, the Mid-sized Presenting Organizations (MPO) Initiative, funded by the Doris Duke Charitable Foundation (DDCF). MPO was designed to strengthen artistically outstanding mid-sized presenting organizations during a time when audience interests, shifts in patterns of public and private funding, and increased competition from commercial entertainment were changing all the rules about presentation content and format.

In addition to providing grants of up to $500,000 over four years to increase opportunities for artists to create and perform their work, NFF also offered customized technical support, including financial management consulting, to help these companies meet their long-term goals and maintain their financial health.

After a competitive evaluation process, 17 arts presenting organizations were selected to participate in the Initiative. On the Boards was chosen as an organization with excellent artistic values and accomplishments. They had already recognized that there were problems in their company that needed addressing, and had proposed a plan to improve their long-term financial performance.

What Happened Then?

As part of the Initiative, On the Boards entered into a fouryear project with NFF. The goals identified by OtB were to establish operating and building reserve funds, create an endowment and retire long-term liabilities.

Drawing on their 30 years of experience providing financial assistance and advice to nonprofits, NFF recommended and implemented the following steps: With their new building, OtB had facilities costs they hadn’t anticipated, and they needed a game plan—and funding—to manage these costs going forward. NFF worked with OtB to hire a local architect and engineer to conduct a Systems Replacement Plan using funds from the MPO Initiative.

For the first time, OtB was able to quantify the financial commitment for the deferred and ongoing maintenance of their building. The assessment also estimated the future building costs over the next 20 years, so OtB could begin to save and fundraise accordingly. NFF employed their Nonprofit Business Analysis (NBA), which examines an organization’s past financial trends to help inform their future planning. NFF completed an NBA to understand OtB’s historical financial trends and current situation.

As a result of the NBA findings and recommendations and as a part of their continued consulting relationship with NFF, OtB was able to engage in creative scenario planning and program profitability modeling in order to help management and Board members set program priorities and improve their financial bottom line. OtB also needed a better way to tell their financial story.

NFF provided OtB with an additional set of financial tools so they could communicate their position to supporters, donors, colleagues, and policy-makers. These tools concentrated on asset management as well as profit and loss analysis, helping OtB use all their financial data to make a compelling case.

How Well Did It Work?

OtB’s initial goals in participating in this Initiative were to establish operating and building reserve funds, create an endowment and retire long-term liabilities. Did they accomplish what they set out to accomplish?

Let’s take a look! Over the four-year period of the MPO Initiative, with the help and guidance of NFF, OtB:

• Established a $250,000 cash reserve and a $100,000 building fund. Retired all long-term liabilities, more than $121,000. Met the terms of and received a $250,000 challenge grant from a local foundation to establish an endowment.
• Created and began implementation of a full Systems Replacement Plan to care for and fund their building and equipment.
• Developed new initiatives and tools for programming and administration of their organization, including OtB.tv, an innovative on-demand online broadcast of On the Boards performances, and the Organization Dashboard, a snapshot to gauge the health of all parts of the company—from financial performance to audience satisfaction to artistic achievement—which is used by Board and staff as a touchstone for all planning. 
• Strengthened their balance sheet and their liquidity significantly, allowing more flexibility for their future operations. 

As of June 30, 2010, OtB was a $1.2 million organization with total net assets of more than $3.6 million. After completing their work with NFF in the DDCF-funded MPO Initiative, OtB is now in a strong financial position, able to support their building costs, and to provide the Seattle community with outstanding arts programming for years to come.