The Nonprofit Bubble/Arriving With Baggage/Back to the Burbs | On Culture | Chicago Reader

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The Nonprofit Bubble/Arriving With Baggage/Back to the Burbs

A new study by the Donnelley Foundation reveals that for better or worse there's been an explosion of local not-for-profit arts groups.


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Just last month former NEA director Bill Ivey was in town to warn leaders of nonprofit arts organizations about rampant overgrowth in their field. For the last couple years he's been saying that the sector is out of step with the rest of the economy and probably can't be sustained. Citing national figures from Americans for the Arts, he noted that their number has mushroomed in the last 40 years, from about 7,700 to more than 40,000. Meanwhile, since the early 90s, the arts' share of the philanthropic pie has shrunk by nearly a third. He offered some hard-nosed advice on how to deal with it: Abort start-ups and put down the weak sisters, pronto. We are too many. Then (whew) he flew back home to Nashville.

For those who managed to dismiss the visiting doomsayer, there's now a homegrown piece of compelling evidence that makes his point. The Gaylord and Dorothy Donnelley Foundation last week released "The Arts Scan Project," an in-house study of nonprofit arts groups in the greater Chicago region (a 13-county area including small pieces of Wisconsin and Indiana). According to this research, at least 700 new groups founded since 1992 continue to operate--about twice as many as in the previous 15 years. As of summer 2006, the report says, there were about 1,158 active arts nonprofits in the area.

The guy behind this neat little exercise is Donnelley program director Paul Botts. The last time I spoke with Botts, he was managing director of Noble Fool Theatre Company, which was on the brink of bankruptcy just two years after moving into a unique Loop home built in part with $1 million in city funds. Three years ago Noble Fool abandoned both the venue and the city and then went bust anyway. Botts, who'd previously worked at the Nature Conservancy, surfaced in late 2005 at Donnelley.

"This foundation's been funding the arts in Chicago for decades," he says, "but for the last ten years, it's had a particular focus on providing general operating grants to organizations with budgets of under $1 million. When I got here I asked, 'How many of those groups are there?' and couldn't find a comprehensive answer." So he hired "really smart" intern Robert Sinnott to spend the summer analyzing data and produced the study in a matter of months. (It's available online at

Some of the results were less than startling, Botts says. "No one was surprised that nearly a third of the groups are theater companies, or that the biggest concentration is a sort of loop going up the north-side lakefront." They did find some city and suburban clusters they hadn't been aware of and noticed that the geographic spread to the burbs has recently slowed: contrary to what Botts had assumed, new groups are now much more likely to locate in the city. Also, the Art Institute (including its school) turned out to be an even bigger 800-pound gorilla than expected, generating more than a quarter of nonprofit revenues in the entire region (based on 2004 tax forms) all by itself. But the biggest surprise was the boom in the number of arts organizations: a more than 100 percent surge in start-ups during the last decade. "Absolutely no one I talked with expected that," he says.

Botts obviously hasn't been chatting with Ivey--his take on the megaspurt is downright sanguine. He says the study affirms Donnelley's commitment to small groups (it supports about 150 of them), whichit considers engines of creativity and vitality. In the universe of funders, he notes, "there aren't many of us doing that." As for art's shrinking share of philanthropy, he maintains that if the piece looks smaller, it's mostly because the overall size of the pie has under-gone staggering growth. "Funding continues to surge in this country, and if you look at the arts specific-ally--for-profit and nonprofit--they continue to boom. Is it a bubble that could collapse? We'll see."

Arriving With Baggage

Hubbard Street Dance Company's announcement last week that Jason Palmquist would fill Gail Kalver's shoes as executive director prompted some chatter. Palmquist, 35, is an Iowa native who spent a decade at the Kennedy Center before joining D.C.'s Washington Ballet Company as executive director two years ago. At the Kennedy he had an apparently smooth ride from intern to vice president of dance administration, but his short tenure at the Washington Ballet included the company's toughest times, with a long, nasty battle over unionization and a shutdown that was either a strike or a lockout, depending on who you ask. In the 2005-2006 season, it canceled two tours, a couple of Kennedy Center bookings, and half its Nutcracker performances and had to dip into facility maintenance funds to make up a $1 million revenue shortfall. The dancers' issues included excessive overtime, lack of job security, and the use of student performers. Two dancers active with the union, the American Guild of Musical Artists, were let go. But was any of this Palmquist's fault? In the eight years since 1999, when Septime Webre took over as artistic director, the company has burned through four top administrators.

"Two weeks after I came on board," Palmquist says, "I got a call from the union announcing that the dancers had chosen AGMA as their representative for collective bargaining. We proceeded to go through 15 months of negotiating a first contract--not an easy process. There were issues the company felt were matters of artistic control that were not appropriate in a collective bargaining agreement--for example, the size of the company in the future. We came to a final agreement in March 2006 and have been rebuilding since. Nutcracker this year was the most successful in the company's history, in terms of ticket sales, and we just came off a sold-out engagement at the Kennedy Center." Palmquist says Webre was the victim of "strategic negative publicity" during the union's campaign but has done "incredible things" with the company, expanding its size and repertoire and growing its annual budget from $3 million to $7.5 million. "There's been some churn at the administrative top," he says, and "lots of institutional growing pains. It was a really difficult time."

AGMA executive director Alan Gordon says the problems at Washington Ballet were resolved "when board president Kay Kendall told the lawyers to shut up," and were not Palmquist's fault. According to Gordon, "the dancers are sorry to see him go."

Back in the Burbs

Northlight Theatre announced this week that Tim Evans will be its new executive director. Evans ran the business side of Steppenwolf Theatre in its suburban-church-basement and early city days, then returned in 1992 and became director of marketing and communications. He created and produced the Traffic series and other special projects and from 2002 to 2006 was a producer for Steppenwolf Films, which made a single short movie before going into hibernation. He'll start at Northlight in April.

Art accompanying story in printed newspaper (not available in this archive): photo/Steve Vaccarello.

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