Image by Pictures of Money. Creative Commons
This Part 3 of our series which looks at different ways you can bring money into your theatre company. Take a look and Part 1 which covers Major Donors, Minor Donors, Ticket Sales and Personal Investment or Part 2 which deals with Corporate Social Responsibility, Sponsorship and Fundraisers.
What: Your theatre group offer classes, workshops, talks, corporate activities and any other activity related to your theatre work. You’re basically renting out the skills of the company members on behalf of the company.
How: The company can then pay people it’s hired out. For example, you hire one of your company members out as a teacher for £30 per hour and pay them £15, the company making £15. This uses the equity of the brand you’ve built up to secure the position that they would not be able to secure the role without, giving you both money and work.
Pros: It makes it easier to hire people out and is wonderful marketing for your productions. It shows investors you’re diversifying your income and allows members to come and go depending on the project but you can maintain a regular service. Your members are happy because you’re finding them extra opportunities and you are adding value to your brand if it is fulfilling a core mission.
Cons: Can unfocus the group’s purpose. It also takes a LOT of marketing to be anything more than a bit of bonus income on the side. You also need to be aware of contracting laws, and ensure you have clear communication about expectations between you and the company members you’re sourcing work for.
What: Someone gives you a small or large amount of money and you say they’ll receive more money than they put in. But they may not.
How: Use a crowdfunding platform that lets you do this, or ask people personally and set up a private agreement. They can be investing personally as a hobby or professionally as a business model ( buzz words for this are Angel Investors and Venture Capitalists),
Pros: Someone else is taking risk with you and are on the same journey. They are more invested in your success than a donor because they gain if you gain so may offer you valuable advice or access to their contacts. It’s a lump sum that you can use right now which is very useful.
Cons: You need to make your venture successful more times than not, else people won’t invest. You need to know why they are investing so you can give them the perks they want (it’s probably not just about the return for them – there’s lots of safer places to put money). You usually have to use their money in a directed way and potentially open up your books so they can see it’s profitable. To gain investors you have to network and know people who will invest which means networking outside of theatre circles. You have to be good at asking. You also have to know about investment contracts, codes of conduct and good practice. It can also take a long time to woo investors so this should never be seen as a quick cash injection, rather part of a long term strategy.
What: Taking money from people or an organisation with the understanding you’ll pay it back – with interest.
How: ‘Non-secured loans’ (no asset ownership required) can be from government backed initiatives such as Start Up Loans (which is what we used in 2015 to launch gobo) – or they could be from friends and family. You usually have to find the right one, fill out an application and submit yourself to credit checks and interviews. There are also ‘secured loans’ which means the person you borrow from can take the asset (e.g. your house) if you can’t pay them back in cash – these are what you’ll be more likely to get from your bank.
Pros: Solves immediate cash flow issues. You can do what you like with the money.
Cons: There may be interest. If it’s with no interest you will still pay for it in gratitude so there’s the potential to be beholden to someone. You HAVE to make the money back. Or people get very unhappy very quickly and you can break a lot of trust, possibly getting into very deep waters if it’s with an organisation such as a bank which will threaten your creditworthiness for future. You have to be good at asking, and/or going through the right procedure and paperwork.
You’ll see that many of these have more cons than pros or the other way around – but it is more about the weighting of each one in comparison to your specific situation. Which ones makes use of your strengths? Are you already plugged into the right networks? Do you have money to make more money with? Is your production already a sound investment? How much time do you have till you need the money?
So next time you feel miffed or downright offended that your application wasn’t successful, just remember, there’s more ways to attract funds than asking grant makers.
To note – If you are sinking cash into a production that is unlikely to make more than you spend then you need to consider – very seriously – what the non-monetary benefits are of the performance and if it is worth the cash equivalent that you will use. Remember, if you’re shows can’t support you, then you’ll burn out and leave the industry. We’ll be sad to lose you. If you would like more advice on this, stay signed up to our Inside Track newsletter so you’ll know when we continue our series on money, or take a read of our guest post by Rafe Beckley who gives some great advice on money management.
- Our blog on understanding your value is very useful for defining who would be most interested (which you can then choose a fundraising method to suit).
- 1000 True Fans is an article that should make you feel less hopeless about how much you need to raise.
- What is Open Accounting? Find out from our guest author Rafe Beckley.