Becoming an Arts Entrepreneur: First Steps (Part 1 of 2)

Now that you have gone through the initial process of discernment, it is time to literally get down to business. There are a number of simple but concrete steps that you'll want to get out of the way as soon as possible so that you can get on to the bigger picture of creating and promoting your product.

A big disclaimer: There are multi-volume books written on the steps that I am describing below. Please, avail yourself of many of them. The rules for not-for-profit organizations change constantly, so, before you act on any of the below, make sure you have read at least two of the best-selling books on this subject by established, trusted authors (read EVERYTHING by Michael Kaiser and Mal Warwick). I would also encourage you to devour everything from two of the best of the arts administration bloggers out there: Drew McManus, and Andrew Taylor.

Do your due diligence and become an expert on starting a corporation prior to taking even the first step — it will serve you very well in the long run.

Timing

From romance to career to finding a parking spot, life often comes down to timing. One question that, no doubt, looms over you when beginning this process is, "Can I complete the below steps while continuing to be employed somewhere else?" My unequivocal answer is not only should you continue your employment, you must! One of the last steps of this process — filing for not-for-profit status with the Internal Revenue Service — can often take up to a year or more. Additionally, in your first few years of operation, you will most likely need to be employed elsewhere to pay your own living expenses, etc., as you will want as much money as possible to go toward the creation and promotion of art.

The initial startup stage of any not-for-profit corporation can be slow going. You will need time not only to navigate through the many layers of government and corporate bureaucracy associated with forming a not-for-profit, but you will also need time to establish your product and cultivate a following to the extent where you can realistically begin to pay yourself for the work that you are doing as the organization's leader.

For the first three seasons of Seraphic Fire, I worked as the choir director and organist at a large church in Miami. I spent my free moments (about five percent of my total time) working on starting Seraphic Fire while I paid my rent and received health care through my "day gig." It was only in the fourth season of Seraphic Fire's existence that I quit the church to work full-time on Seraphic Fire, and even then I lived off my own savings for eight months before receiving my first paycheck. My experience is not unique; many of my arts-entrepreneur friends and colleagues continued to work other jobs in the nascent stages of their organizations.

The first 12 to 36 months will be full of endless "startup" tasks. The important thing to keep in mind is that your patience and methodical work will pay off in the end.

Name

While it may seem obvious, your organization is going to need a name. I would stress that this is one of the most important decisions that you will make at the beginning of your organization's life. You'll want a name that grabs attention and simultaneously communicates something about your organization. You will need a name not already in use by a corporation in your state and that doesn't infringe on any existing trademark. It will be the name that goes on all of your corporate documents in your initial filings.

Additionally — very important in the new arts economy — you'll want to check an online Internet-domain broker like GoDaddy to make sure the URL associated with your organization, [orgname].org, is available.

A caveat: Don't sweat it too much in the first weeks. If you need more time to ponder the best possible brand, go ahead and use a generic placeholder name — you can always change it or you can register a D.B.A ("Doing Business As") name in the future. Just to reassure you, Seraphic Fire began its life as "South Florida Friends of the Arts." There are certainly options for do-overs in the future; just make sure.

Mission

If you are reading this, you have a mission. Now, it's time to articulate that mission in a way that is easy to read and to understand. Your mission statement should be, at the very most, two sentences; if possible, you should try to keep it to only one. The goal of a mission statement is not to be ultra-specific — quite the opposite. You will want to keep it broad so as to give yourself some leeway in the future.

There are two questions that your mission statement will need to answer. The first:

• What problem is my organization solving?

You will want to name the community need that is filled by your organization. Your process of discernment regarding the wants of your various constituencies should lead you to a concrete idea about what is missing in your community, and what you can do to solve that.

• How does the purpose of my organization work into the International Revenue Service's not-for-profit schema?

If you plan to accept donations, pursue grants, and apply for local, state, and federal funding, you will need to have a purpose that is in line with section 501(c)3 of the Internal Revenue code. In section 501(c)3, there are a number of exempt purposes that an organization may have to qualify it for not-for-profit status. Those purposes are:

Exempt Purposes--Internal Revenue Code Section 501(c)(3)

The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency. For the most part, arts organizations will fall under the "education" section of charitable purposes. It is important that, in your mission statement, and in your initial incorporation documents, one of the exempt purposes is specifically used, so as to be very clear to IRS reviewers that your organization fits into the criterion of IRS section 501(c)3.

All mission statements should start in the following way: "The mission of [NAME OF ORGANIZATION] is to..." After stating the previous boilerplate, you will want to, in one or two clauses, outline the broad need you are filling. For example, a chamber music ensemble that has a strong dedication to performing new music by living composers would have a mission that would read something like the following:

The mission of New Chamber Music Ensemble is to educate and edify the general public through performances of new works by living composers.

A not-for-profit art gallery dedicated to displaying and selling the works of artists from economically disadvantaged areas could have a mission stating:

The mission of Underrepresented Art Gallery is to educate and inform the public about works created by artists who reside and create in disadvantaged areas of City Name.

Each of the above fictional organizations would, no doubt, have a much more nuanced idea about the work that it does; that nuanced description, however, is more suited for bylaws, websites, grant proposals, press releases, and annual reports. In short, keep your mission concise to allow for clarity.

Money

A wise man once said: "Money is everything until you have enough." Up to this point, we have spoken mostly in philosophical terms about the nature of a not-for-profit organization. This is, however, where it starts to get VERY real. Between incorporation fees, not-for-profit filing fees, a dedicated web address and email account, and basic office supplies, you will need cash to get off the ground.

Here is where you are most likely to find the money to complete these steps:

1. YOUR BANK ACCOUNT: I surmise that, far and away, the most common place for the cultural entrepreneur to find startup funds is in his or her own pocket. When it comes to your mission and purpose, there is no one you will find more dedicated than yourself. As the eventual corporate leader, your willingness to be an initial funder of your own idea will instill confidence in others, who will realize that you have skin in the game. Whether you give the money as a donation or as an interest-free loan, to be paid back or forgiven later, invest in yourself, and keep detailed documentation for the future. It is a very powerful statement to others that you are both a founder and a backer of your own organization.

1. YOUR FAMILY AND CLOSE FRIENDS: If the thought of asking your family and friends to contribute to your organization strikes you as distasteful, you are in the wrong business. Get out now. Whether it be your great aunt or your best friend, you are going to need their help. Hopefully, these people have been hearing you talk about your idea for a long time, and they will be the ones who will have a personal interest in your success. They don't have to give large amounts; whether it be $5 or $500, it all adds up. Be willing to ask your family and friends in person — they will be much more likely to give to you if they are not simply copied on a mass email. Your passion will show; it is, for the moment, the only currency you have in your fundraising activities, so use it to the greatest extent possible.

1. YOUR BELIEVERS: No doubt there have been a number of individuals involved in getting you to the point where you are taking the steps to form an actual corporation. These are the people with whom you consulted to discuss need, mission, product, etc. Hopefully, many of these folks are very well connected to the cause you are championing. These people are your believers. They will be the ones to help you through both contributions and sweat equity. Ask each and every one of them for some sort of contribution. Make it clear that you have decided to tackle the problem or need head-on and will need funds to pay for startup costs. If they truly believe in your cause, they will either donate to you themselves, or introduce you to their friends who can.

Finding the initial funding to accomplish the necessary steps toward incorporation is definitely a need, not a want. This is the point where the rubber hits the road — if you start out establishing the fact that you are not afraid to ask for small amounts of money for your cause, then you will not be emotionally stunted when you have to start requesting larger amounts. Go for it — the worst thing someone can say is "No"!

COMING SOON IN PART 2:

• Forming a board of directors,

• Establishing your workplace,

• Convening your first meeting,

• Incorporation,

• Opening a bank account,

• Filing for not-for-profit status!

Previous posts in this series by Patrick Dupré Quigley:

• Becoming an Arts Entrepreneur - or, Don't Quit Your Day Job

• Establishing a firm foundation

Patrick Dupré Quigley is a two-time Grammy-nominated conductor, founder of the professional vocal chamber ensemble Seraphic Fire, and a frequent guest conductor across the United States. He has conducted the New World Symphony, the San Francisco Symphony's Community of Music Makers series, the San Antonio Symphony, the Louisiana Philharmonic, the Naples Philharmonic, and will make his Carnegie Hall and Mobile Symphony debuts later this season. He's on Twitter at @PDQuigley.

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