Director’s Stipend for Non-Profit
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Topic: Director’s Stipend for Non-Profit
Posted By: henreallen
Subject: Director’s Stipend for Non-Profit
Date Posted: 1/10/05 at 12:44pm
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Does anyone know California state law on giving show Directors a stipend per play if you are a Non-Profit corp? An article in our by-laws states "No part of the net earnings of the Corporation shall inure to the benefit of or be distributable to its members, Directors, officers, or other private persons." We started giving $100.00 for directing a show. This apparently goes against our by-laws. Can it affect our standing with the IRS as non-profit, and if so what could happen. Personally i believe if we have to bribe someone to direct for a little bit of cash, then they shouldn't belong to our theater. Patrons come in support of the arts to make sure our community doesn't lose it's theater, not to pay for directors. Please help me out, I want to put an end to wasteful spending. |
Replies:
Posted By: Guests
Date Posted: 1/10/05 at 3:28pm
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I know of many non-profit, community theatres where
the Director of the show is the ONLY paid position, including set designers, lighting designers, costume designers, stage managers, crew, actors, etc. I do not consider this a "bribe" but as a necessary means of doing business. After all, aside from the stage manager, the Director is there from auditions to opening night, at every rehearsal, and must oversee the output of all the above-named departments. They are responsible for the overall look and "feel" of the production, and they experience many sleepless nights and frustrations trying to make their vision a reality. I can assure you, none of the directors are in it solely for the money, but it does encourage more professional, more experienced and more knowledgeable directors to take on a show if they know their time is being compensated. And having on board an established, professional director helps lure designers, stage managers, actors and others who are willing to work gratis just for the opportunity to be part of a well-run theatrical event. (If the production is a musical, it is also not uncommon to pay the Musical Director as well, for the very same reasons, plus they are usually responsible for recruiting musicians, rehearsing them as well as the singers, and very often conducting the orchestra for each and every performance.) If you are correctly reading your by-laws (which I'm not sure you are) then they need changing. It should be perfectly acceptable to pay a stipend for special consideration. After all, you pay the electric bill and the rent. You pay royalties (I hope!) If props or costumes need to be rented or built, you pay for time and materials. The fees of the director(s) should be lumped into the front-end, overall cost of doing the show. If the show is successful -- good for you! The profits for that show are then applied to the production of the next show. They are not disbursed amongst the cast, crew or anybody else who participated. This (I believe) is what your bylaws are telling you. And this must be where your confusion lies. After all is said and done, consulting an attorney or tax professional who is familiar with the laws of your state is always a good idea. |
Posted By: Scott B
Date Posted: 1/11/05 at 3:02am
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What you've noted in your bylaws is the same as just about any other bylaws that I've read ... and I've gone through a bunch. It's setup that way so no one from your group can profit from the productions. There are many, many, NPOs that pay stipends to directors and music directors. That doesn't mean they're profiting. I suppose if everyone on your board feels the same as you do ... that it's "wasteful spending" then you should find directors that will give freely of their time. That's what a board is for. If we could get directors for free ... ones that actually know what they're doing ... we would too. It's just that option doesn't exist for us. We're a small theatre group and routinely pay between $300 and $500 for a director. Throw in another $500 for the music director ... oh yeah the orchestra too. OUCH! We DO pay too much. |
Posted By: dougb
Date Posted: 1/18/05 at 12:25pm
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To go back to your original question: Net earnings is the income
minus expenses for the organization as a whole rather than a specific
expense item. Non profit organizations routinely pay people for
services provided. The IRS will not object to you paying a
director a REASONABLE amount to direct a play. When your by-laws
talk about the net earnings going to an individual they mean a Trustee
or the Executive Director being paid some or all of the end of year
earnings (profits if we were for profit organizations). This does
not prohibit a bonus if appropriate. I hear several times a year from people who want to start a non-profit organization to get grants and donations to pay themselves a salary. Most of these would not pass IRS scrutiny. If you pay director a small token compared to the total cost of the production or your total operating budget, no one is going to complain (well, someone will complain about anything). If your total budget for the year is $50,000 and you pay yourself $35,000 it is going to be looked at very closely. The basic idea is that any earnings (profits) your organization makes must be used to further the non profit goals of your organization. For example, if your Articles of Incorporation and By-laws state that the purpose of your organization is "to provide after school theatrical opportunities for at-risk youth" and you have a great financial year and decide to buy each Trustee a new car, you might have trouble convincing the IRS or your members (if you have any) that the expenditure furthered the purpose of your organization but if you spent the money to rent a larger facility so you could involve more at-risk kids, that would clearly further the purpose of your organization. Hope this helps. |
Posted By: kingsleya
Date Posted: 10/29/05 at 4:39pm
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Likely, the quote you are taking from your by-laws refers to directors of the organization not directors in the theatrical sense. |
Posted By: Guests
Date Posted: 10/30/05 at 4:56pm
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Also, the more successful your shows are (which is the whole purpose of recruiting qualified directors), the more successful your theatre will be overall. You will begin to develop a reputation for a fine night out. A great reward for a small amount! ------------- |
Posted By: castMe
Date Posted: 11/05/05 at 12:05am
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......regarding the "bribe" comment. A hundred bucks goes a small way in covering gas, phone, and out of pocket food on rehearsal days. I work for companies that do stipend and those that don't and the ones that do, do it because they can, not because they feel they have to. If you really feel that paying directors when possible is "wasteful spending" perhaps it is you who shouldn't belong to your theatre. ------------- Investigate. Imagine. Choose. |
Posted By: tristanrobin
Date Posted: 11/05/05 at 2:58pm
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"Patrons come in support of the arts to make sure our community
doesn't lose it's theater, not to pay for directors.? " Paying your directors IS one way to support the arts. Frankly, I know theatres that don't pay directors because they can't afford to do so - but I've NEVER known one that didn't pay because they thought the position wasn't worth a stipend. |
Posted By: Linda S
Date Posted: 11/05/05 at 3:19pm
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As board when we consider a production we look at the "cost of doing business". Paying a stipend for a director and music director are part of the cost of doing business. When you ask someone to take on the responsibility of a show being artistically successful the least you can do is to give then enough money to cover the gas and the babysitter. When I direct I am paid a stipend. By the time it is all said and done, with time off from work and unscheduled trips to theater, it usually only cost me a couple hundred dollars to direct a show. Yes. That is after the stipend. Linda |
Posted By: MartyW
Date Posted: 11/07/05 at 8:50am
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I direct for several companies.. They pay from zero to $400... Regardless of the stipend, I easily wind up at a loss of several hundred dollars in providing the "niceites" that are not always part of a budget... Not to mention the personal costs gas, food, flowers (to get me out of the dog house with my wife for spending so much time at the theater...) Stipends are not the reason I direct, but they sure help ease the pain..
------------- Marty W "Till next we trod the boards.." |
Posted By: Sueshoo
Date Posted: 11/07/05 at 9:51am
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We pay $400.00 to directors directing for us the first time. Returning directors get $500.00. However, we are considered to be on the low end for our area. ------------- Susan Life is not a Dress Rehearsal |