The Business of Art

Financially burdened, nonprofit institutions struggle to make dreams come true

22-week tour of the United Kingdom in September 2004. The Dance Theatre’s school trains between 800 and 1,000 young people each year.

Though still impressed with the company, investors became wary that the Dance Theatre suffered from a case of founder’s syndrome — what happens when someone with wonderful talent and a strong commitment to his or her community starts a wildly successful organization and doesn’t know when to pass the reins. A former board member told the New York Daily News that investors were right to be concerned: “The problem we had was Arthur himself. Arthur wants to control everything. He’s not a manager.” Naidu says investors became concerned about the longevity of the organization and the poor management of its funds.

“So we complete this amazing tour of the U.K. and then find ourselves completely cash poor, with an accumulated deficit — over 36 years — of $2.3 million, which, in the scheme of things, is not a lot of money. But it is a lot of money when you have none,” says Naidu. The Dance Theatre was forced to place its main company and board of directors on hiatus indefinitely. Many of the administrative employees and instructors who ran the youth dance programs at the school were laid off, though several continued to volunteer. Funding from the Tsorchiemer Foundation allowed the organization’s summer program to continue.

But the Dance Theatre still had not faced the worst of the storm. The very next month, two weeks into the fall semester of the dance program, the company’s liability insurance was canceled because of late payments. On the same day, the organization’s insurance broker, Marsh McClennan, was indicted by New York State Attorney General Eliot Spitzer. “That was the straw that broke the camel’s back,” Naidu says, recalling the surreal scene around the conference table when board members were discussing what to do about the canceled insurance and a colleague ran in with the morning paper, which featured the story on the front page. “That was the first time in its history that the doors to The Dance Theatre of Harlem were closed.”

DANCING THROUGH BARRIERS
The turnaround came almost as soon as the doors of the school slammed shut. According to Naidu, an e-mail began to circulate stating that “there are 30 million black people in America. If every one of them sent a dollar, The Dance Theatre of Harlem would be out of trouble.” Envelopes containing dollar bills and even pocket change began pouring in from around the nation. “That was the beginning of the rebirth,” enthuses Naidu. “We began to talk to folks, rebuild our board.” The company brought in strategists like Kaiser to hammer out a recovery plan to leverage its internationally revered dance company.

The first step was to restructure the Dance Theatre’s management. Naidu became executive director and Mitchell was named artistic director, relinquishing a significant amount of control over financial decisions. Philanthropist Catherine B. Reynolds agreed to be the new chairman of the board. Those three positions create a traditional, not-for-profit

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