Photo by Justus Hayes, used under Creative Commons license

The Conundrum of Non-Profits


Photo by Justus Hayes, used under Creative Commons license
Photo by Justus Hayes, used under Creative Commons license

Today the Vancouver Playhouse announced it was closing down after Saturday’s show because they simply couldn’t afford to keep running. I’ve been hearing numbers of close to one million dollars in debt. I think it is terrible they have made this announcement, because anything having to close is bad news. I feel bad for the actors and other people who were employed by the Vancouver Playhouse over the past 49 years and I don’t envy the directors having to have a late night meeting to essentially disband what is considered an institution in downtown Vancouver. Twitter has been awash all afternoon reacting to their announcement, and the reactions have ranged from condolences and nostalgia to “non-surprise”.

Non-profits are a tricky beast. I’ve worked for and volunteered for a fair number of them, ranging from animal-focused or arts and culture, to my current employer, the local farmers market. I know how hard it is to start and run a non profit, having had first hand experience at creating a federally registered charity as well as other provincially mandated charities. To be clear, when I talk about “non-profits” in this post, I’m pulling from my experiences with an assortment of them and I’m not talking about any one in particular.

Getting off the Ground

There’s a conundrum in non-profits. In order for a non-profit to even get off the ground well, there first needs to be clear goals, mission, and values. This is hard to establish, because so often a non-profit starts after an individual or small group develops a desire to do something they deem to be a contribution to the greater good. It’s hard to remove one’s personal wants from the organizational goals. This is probably why so many groups or organizations pay homage to their founders – the founders plant the seeds and that deserves respect.

In order to succeed, a non-profit needs employees or volunteers to work fairly tirelessly promoting and acting on behalf of the goals/missions/values. Continuity helps in this; having the same group of people stick around long enough to hand off well explained responsibilities to the new people coming up the ranks helps immensely. In some instances, an organization can be 100 or 99% volunteer run, but generally as the group grows and expands and takes on more responsibility it will become inevitable that a person or group of people who are committed not only in spirit but also in monetary compensation may do better. In short, when someone is employed, they may very well be more reliable than a volunteer.

A Board of Directors usually steers the organization and do so using whatever judgement they deem to be the best for the group. Usually this works, and most directors are voted into their positions, although in very small organizations sometimes the required number of directors is all the committed volunteers there are. Directors generally follow the democratic process to arrive at decisions, although I have been involved in more than one group with “ghost” directors – people who have agreed to have their name on the paperwork but have no interest in the group.

Managing Success

Well intentioned people sitting on boards often struggle to manage organizational growth as success is experienced. Let’s be honest: you aren’t generally elected to a board because you are a bookkeeper or a professional fundraiser, for example, although that’s a boon to the organization if you are and are willing to share your skills with the group. Most people are generally elected to a board primarily because you are passionate about the organization and want to be involved.

The government doesn’t provide training with their BC societies or Canadian charity designations, and so many times the organization is left floundering a bit, and is ill prepared to run the organization. Let’s face it – “non-profit” means “doesn’t aim to make profit” but that doesn’t mean an organization isn’t responsible for thousands of dollars and complicated budgets, and it also means that profit can happen.  Most directors I know do the best they can with what they have and the organization does okay, whether by a particularly well matched director, employee, or volunteer.

Damage Control

But what if this doesn’t happen? What if the group realize they lack the skills necessary to do make the organization a success? Well, they’re usually going to do one of a handful of things:

Stop growing. If you can’t manage growth well, the surest way to ensure you don’t need special skills is to stop growing. Groups will stop undertaking new activities and focus only on managing the day to day, and often look to scale back where possible. No long term planning happens, and therefore, no risky ideas are explored and limited, if any, growth takes place. This is a stagnant but practical way to operate. No extra costs and no extra risks, but you limit the new supporters you will be able to attract.

Hire someone who can handle it or can teach you to handle it. This costs money, and sometimes those who govern organizations are faced with difficult decisions about reallocating budget to hire someone (as a consultant, contractor, or an employee) who can fulfill the goals and missions. This is so hard, because we all want our programs to have as much of the budget as possible, and skilled consultants are not cheap. You are paying someone to essentially guide you to doing a better job, and so there are long term rewards. But faced with cutting program X or honorarium Z or shutting down entirely, this one makes a lot of sense. This option tends to hurts feelings, though. No one likes hearing their funding got cut so that someone else could come and teach an organization how to “not suck”. This is the option that is often best for the organization, however, provided the person hired is well selected.

Muddle through in the name of “trying”. This is the poorest decision to make, and sadly, what I’ve seen as the most common one. This is when organizations green-light projects and activities that are detrimental to the future of the group; taking on debt the organization can’t afford because the directors like the idea, feel it is reflective of the organization, and desperately want to carry it out, but lack the resources to do it well.  This is a “head in the sand” approach to running a non profit, and this is where the conundrum is. How can an organization possibly do all the things the people involved are passionate about, and all things the people involved identify as being important, if they a) lack the skills to do it well themselves and b) don’t want to stop growth?

What I Can Do

I’m sad today for the Vancouver Playhouse and I wonder where it all went wrong. I don’t know that a lack of funding from various levels of government is the sole reason. It is terribly hard to run a non-profit well and even when it is run well there are so many challenges – funding being but one amongst many. Community support, committed volunteers, clear goals, and directors who have the right skills are all required to make an organization succeed.

So, today, I’m looking at the website of the Vagabond Players, my local community theatre group, to see what show I can afford tickets to. Community support is one way I can help ensure other arts groups don’t suffer the same fate as the Vancouver Playhouse. Anyone want to join me?



10 years ago