time management write things down avoid procrastination keep your desk and files organized...
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Time Management
• Write things down• Avoid procrastination• Keep your desk and files organized• Systematize• Plan adequate sleep• Attend a speed reading class• Develop your communication skills• Develop your people network• Do daily planning• Prioritize it• Don’t get out of balance in your life• Take a lunch break
Risk Strategy
Steps to mitigate risk:
1.Identifying risk2.Measuring it3.Formulating strategies to limit it4.Carrying out specific tactics to implement those strategies5.Continuously monitoring the effort
Risk Strategy
Risk Management Tools:1.Insurance2.environmental issues3.financial safeguards4.security services5.backup systems 6.government regulations 7.each business will have different types of risks8.Contingency planning for other potential hazards is just as important as insuring against losses.
Disclaimer on What Comes Next
• Your accountant knows more than me.
• This isn’t legal or financial advice, just information you can use when you’re ready to consult with an accountant or attorney.
Non-Profit Route
• Incorporate as a Non-profit in the State
• Apply for tax exempt status with the IRS
• Profits are reinvested to mission:– “No part of the net earnings of the Corporation
shall inure to the benefit of, or be distributable to, its directors, officers, or other private persons, except … to pay reasonable compensation for services rendered …”
Non-Profit Advantages
• Tax Exempt
• Donations to 501c3 are Deductible
• Eligibility for grants
• Formal structure means organization exists beyond its founders
• Limited liability
Non-Profit Disadvantages
• High cost of incorporation
• Greater paperwork burden: taxes, records
• Shared Control: Board of Directors
• Public Scrutiny: Open Tax Filings
Sole Proprietorship
• You are the company
• No incorporation or other, separate filing– Will still have to comply with State & Local
laws and ordinances
• Full liability
Limited Liability Corp (LLC)
• Limited Liability
• Tax filing is part of personal tax return
• Less paperwork or scrutiny than other corporate forms
• Most flexible corporate form – can have multiple owners
• Difficult to transfer ownership
S-Corp
• Limited Liability
• Losses are deducted on tax returns
• May carry tax advantages above LLC
• More paperwork than LLC
C-Corp
• Unlimited number of shareholders
• Attractive for Venture Capitalists
• May retain & accumulate earnings from year-to-year
• Carries greatest burden of paperwork and scrutiny
• Faces double taxation
Alternatives
• L3C: Low-Profit LLC– Available in: IL, LA, ME, MI, NC, UT, VT, WY– IRS: Program Related Investment– For-profit venture to support charitable activity
• B Corporation– Not a Corporate Form, but a Certification– Triple Bottom Line: People, Planet, Profit– Regular Audit
Fiscal Sponsorship
• Sponsored Organization may raise tax-deductible contributions, passed through a 501c3 organization
• Good alternative for arts organization or artist who does not want to incorporate as a non-profit
• Typically, project-based• Fractured Atlas is the largest fiscal
sponsor of any type in the US
“Exempt Purposes” :: IRC 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.
Arts Money
• Half of all dollars come fromearned revenue
• Organizations and artists who can figure out a way to sell goods (e.g., a painting) & services (e.g., teaching) present a stronger case for support when asking for government or foundation money.
Individual Giving
• Contributed revenue from individuals come second to earned revenue
• Economics and altruism– People with substantial assets & income are
advised to give– People give to people they trust & believe in,
want to make the world a better place.
• Video: Why did Kenny give?
Individual Giving
• Through Earned Revenue– Best case: this is your primary source– Set aside for investments: improves your
position for grants
• Through Contributed Income– Appeal Letters– Begin with non-monetary contributions– Events come with caveats
Individual Giving
• Find them!– Start with your inner circle and work out– The creative economy is a social economy– Get people involved with your art– Pursue networking opportunities– Get contact info, keep people informed
Institutional Giving
• Very competitive, decreases year-to-year
• Corporate Marketing
• Corporate Giving
• Private Foundations
• Government Agencies
Distribution of Foundation Grants
Arts & Culture11%
Education24%
Environment & Animals7%Health
22%
Human Services15%
World Peace3%
Public Affairs12%
Social Sciences1%
Other0%
Religion2%
Science & Tech3%
Source: Foundation Center (2010)
Foundation Grants: Arts & Culture
0
500
1000
1500
2000
2500
3000
3500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Government Support
• Quality of Life
• Often provide first institutional support
• Interest of the government: health, safety welfare of the people
• Interest of the people: diversity, inclusion, peer reviewed
Private Foundations
• In most cases, offer grants only to 501c3 nonprofit organizations
• In some cases, they do not allow for fiscal sponsorship
• Foundations are required to give a minimum of 5% of their assets annually
Corporate Giving
• Charitable giving policies align with bottom line
• Reasons: Brand recognition, new product marketing, highlight goodwill
• Ways: employee matching, cash grants, donated products, sponsorships, in-kind
Three videos for bed time
• Grant Makers on Their Rolehttp://www.youtube.com/watch?v=ZeGoOybL3K0
• GrantCraft: Amplifying New Voices– Part 1
http://www.youtube.com/watch?v=jffCUUHbua8
– Part 2http://www.youtube.com/watch?v=iQLmiR1PccQ
Free Sources for Finding Grants
• NYFA Source @ nyfa.org– Includes regional & discipline-specific grants– Includes residency programs
• The Foundation Center @ fdncenter.org– Can visit library location in Atlanta for free
• Corporate Websites– Look for “Community Giving,” “Corporate
Contributions,” or “Community Relations”
Additional Resources
• Scholarship or Fellowship programs
• Local Arts Councils
• Foundation Center subscription:$19.95 per month
3-Year Forecast
• Profit = Net Income
• (Gross Income = Income before Expenses)
• Net Income = Revenue – Expenses
How many units will you sell?
Estimate: Quantity SoldProducts/Services Year 1 Year 2 Year 3 Total Yr 1-3
Paintings 5 8 15 28
Tickets 500 1000 1500 3000
How much revenue will that generate?
Estimate: Revenue
Products/Services Price Year 1 Year 2 Year 3
Total Yr 1-3
Paintings $1,500 $7,500 $12,000 $22,500 $42,000
Tickets $25 $12,500 $25,000 $37,500 $75,000
Total Revenue $20,000 $37,000 $60,000 $117,000
(5 pieces sold x $1,500)
What are your one-time costs?
Estimate: Fixed Costs
Operating Expenses Assumptions Year 1 Year 2 Year 3
TotalYr 1-3
Website Hosting $10 / month $120 $120 $120 $360
Graphic Designer estimated $500 $1,000 $1,200 $2,700
Subtotal $620 $1,120 $1,320 $3,060
Cost Overrun 20% $124 $224 $264 $5,760
Total Costs $744 $1,344 $1,584 $8,820
What supplies do you need for each unit?
Estimate: Per-Unit Costs – Paintings
MaterialsCost Per
Unit Year 1 Year 2 Year 3TotalYr 1-3
Canvas $100 $500 $800 $1,500 $2,800
Paint $40 $200 $320 $600 $1,120
Total $700 $1,120 $2,100 $3,920
(5 pieces sold x $500)
How does it all add up?
Estimate: Net Income / Loss
Year 1 Year 2 Year 3TotalYr 1-3
Total Revenue $20,000 $37,000 $60,000 $117,000
Total Costs $1,444 $2,464 $3,684 $7,592
Net Profit (The Bottom Line) $18,556 $34,536 $56,316 $109,408
How many do you need to sell?
Breakeven Point:
units 55.01360$
744$
140$500,1$
744$
:1Year
unitper Cost unit per Price
Costs Fixed