About neuroscience and music (mainly classical). Exploring the relationship of music and the brain based on experience of two careers.

February 25, 2014

What's 'charitable' about making music?

I am not a regular reader of Forbes but when my investment guy, Phil DeMuth, sends me a link to his column, I read it.

Phil's Forbes article, "The Death of Big Charity," opened my eyes. It was inspired by a book released this month by Ken Stern, former CEO of National Public Radio, With Charity for All. Reading it will, at the very least, make you think twice before donating to a non-profit, tax-exempt 'charitable' organization. 

Such as Gretna Music. 

In the US charities of all kinds (tax-exempt under section 501(c)(3) of the US tax code) number 1.1 million and collect $1.5 TRillion a year: educational, health, shelter for the homeless and animals, preservation of land, athletics (you knew that the NRA, NFL and hundreds of college Bowl Games are tax-exempt charitable institutions?), arts and culture, religious, and scientific research--to name a few categories.

If your organization achieves charitable status from the state and federal IRS, as has almost every applicant (at a rate of 50,000 per year) for decades, you have a 99.5% chance of keeping it forever, regardless of how (or whether) you carry out your charitable mission. No one ever checks.

One view of the main problem holds that charities focus more on getting donations and their own aggrandizement and continuation; less on their mission. They neglect "infrastructure," such as a system for rigorous financial checks and balances, or (horror) an effective plan for executing their mission. As accountability for their outcome, many offer only glossy promotional materials boasting of selected individual successes, not statistical results of careful studies proving they succeed in doing what they claim. Non-profit hospitals, for example, are no more charitable in any sense than for-profit hospitals. The main beneficiaries of many charities are the people who work for them and their executives, among them parish priests, many of whom can rake in compensation as huge as hedge-fund managers.

Regarding the performing arts we must adopt a very broad view of 'charity.' What's 'charitable' about an organization like the Metropolitan Opera? I mean, charitable enough to justify their handouts from federal and state taxpayers, most of whom haven't heard of Nessun Dorma. Stern: "With most tickets running into the hundreds of dollars, the opera is not just the playground of the wealthy; it is their gated community."

Before you close your checkbook let me make a brief case for giving us ("Small Charity") a tax-deductible(!) contribution in addition to buying a ticket for one of our concerts. 

Why can't we exist only on ticket revenue?

The kind of music we play, ever since the time of its origin, has required patrons because it was valued (understood, appreciated) mainly by a small segment of the population. Initially the patrons were royalty (some still are). Contemporary patrons are governments, individuals, universities, foundations, or corporations, each having their motivation, altruistic or not. Entertainment with broad popular appeal (like rock music or football) can bring more ticket revenue and even profits. Nevertheless, Bach, Beethoven and Brahms have survived for centuries! Their music is good and timeless.

What do we deliver in return for support (beyond 'enrichment' of lives)?

Employment for hundreds.
Gretna as a better place. (I know because I live here.)
Inspiration for residents and businesses to locate in Gretna.
Inspiration for young people to enter several fields of music.
Introduction of thousands to music and musicians they would never have heard.
Introduction of hundreds of people to hundreds of other people with similar interests.

What is our best (in hard numbers) measure of outcome?

We have survived 39 years through frugality, sound financial management and uncompromising quality of our 'product.'
"During the 2007-2009 recession the nationwide ranks of arts organizations swelled by more than three thousand--at a time when public participation in the arts was dropping and existing arts organizations had to fight for their piece of declining public support." 
--(Ken Stern)
We are now stronger than ever.

The moral of this story is that "Big Charity" may not survive our generation, but great art and music, and flowers, will.

The Death of Big Charity by Phil DeMuth

Music at Gretna, Inc., is a Pennsylvania non-profit corporation. A copy of the official registration and financial information may be obtained from the Pennsylvania Department of State by calling toll-free within Pennsylvania, 1-800-732-09999. Regsitration does not imply endorsement.

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