Museum as Tourist Attraction

An article in the Boston Globe yesterday announced the imminent re-opening of the Boston Tea Party Ship and Museum which has been closed since a fire destroyed its main building in 2007. I was initially pleased to think that a well known and loved non-profit was about to be reopened. As I read further in the article, however, I became confused by the language about loans and investments. A little more digging, and I discovered that the Museum is a for-profit tourist attraction of "Historic Tours of America" whose website describes them as "...an entertainment company which provides historically oriented vacation experiences for our guests..." A for-profit museum. What is the difference between a non-profit museum and a for-profit museum? What does this say for non-profit organizations generally?

My take is that non-profit organizations provide a benefit to the community at large, beyond entertainment. (See my previous discussion of North Shore Music Theater.) So the Tea Party Museum is a tourist attraction that might bring money to the city, but isn't serving a larger social cause. Non-profit museums provide educational and cultural programming to the community. That's why they are granted tax exemptions and why donors may claim deductions. Non-profits must have a community mission. They are supported by donors with a philanthropic intent. For-profits try to make money from users. Non-profits try to provide services to their users, while trying to maintain fiscal responsibility. Sometimes they are also supported by their "gate", the way for-profit entertainment venues are, but they provide much more to the community that ticket revenue doesn't generally pay for - that's why their donors can take those deductions.

What this article taught me is that as philanthropists we must pay close attention to the mission and programming of the organizations we support. And make sure they continue to serve the community - not just the interests of the "owners".

Let's talk about philanthropy and mission. Drop me an e-mail or give me a call.

When non-profits become for-profits.

The North Shore Music Theater has reopened, and many people in this part of Greater Boston are delighted. There's nothing like live musical theater, and the "in the round" stage at North Shore is especially appealing. (See this article from the Boston Globe.)

There's just one thing different - North Shore Music Theater was a non-profit organization. You may remember that last winter they went bankrupt and shut down. The property was taken back by the bank that held the mortgage, and that was the end of that. Until a Rhode Island theater owner, Willam Hanney, decided to buy the property from the bank, and re-open North Shore as a profit making venture.

This is good news for the community, but what does it say about non-profit theater? Why couldn't North Shore survive as a non-profit? They were saddled with debt due to a fire a number of years ago, and weren't positioned financially to weather the downturn. They tried raising the money they needed to survive, but with the economic disaster, and a late entry into fundraising, their efforts were doomed.

If they couldn't survive as a non-profit, how will Mr. Hanney make a profit? One way is staff size. The article noted above mentions that North Shore laid off 50 people when they closed down. Mr. Hanney plans to operate with a full-time staff of six. And I would guess that the education programs that were a big part of the theater's mission will no longer be offered.

So theater comes back to the North Shore of Boston, but a half-century old non-profit organization has disappeared. This can't be good for philanthropy.

Let me know if your philanthropic organization needs help building support. Let's keep non-profits non-profit.