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dinner theatre legalities

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Topic: dinner theatre legalities

Posted By: lesann82
Subject: dinner theatre legalities
Date Posted: 10/10/05 at 8:36am

I was recently told that as a nonprofit theatre group, we could not perform at a restaurant doing a dinner theatre play...we were hired by the restaurant. This supposedly compromises our nonprofit status because our perfomrance was going to provide income for a for-profit business. The alternative would be for us to hire the restaurant....we would pay them for use of the location and as caterer. We'd have the same ticket cut, but we'd be paying them. This would mean a ton of extra paper work for our poor bookkeeper. I have been doing dinner theatre for years and have never heard of this. I can't think of a single situation in which we perform for a profit organization...library...nonprofit; church...nonprofit; shcool..nonprofit. Is this true?

Replies:

Posted By: dougb
Date Posted: 10/10/05 at 12:37pm

I'm not a lawyer but I think you are wrong. You wouldn't lose your non profit status if a for-profit made a donation to you so why would you lose it because they pay you to do a show? We have done lots of dinner theater in local restaurants - the price of the dinner includes a ticket to the show. What is the difference between people paying directly for a ticket or having the venus collect it for you or having the restauraunt include it in the price of the meal? The restauraunt is not making money off your show, they are making money off the meals they sell. Your agreement with them is either a fixed amount or so much per meal sold. In either case, you keep all that money.

Remember that the non profit test is what you do with the money you make. As long as any excess (income less expenses) goes to further the charitable purpose of your organization and not to an individual or group of individuals I think you should be ok.

To go further, why would that be any different than any for-profit venue who books in a show done by a non-profit? We have been booked into many for-profit resorts in our area and have rented their venues too. Does it make any difference who collects the money? I don't think so.

As I said I am not a lawyer but I can't see how we could lose our non-profit status because we do a show in a for-profit venue, restauraunt or not.

Posted By: Tallsor
Date Posted: 10/10/05 at 2:54pm

You might want to see if there's a local version of the Volunteer Lawyers & Accountants group ( http://www.vlany.org - www.vlany.org ) in your area to get legal advice for cheap (or even pro bono) just to make sure.

However, I agree with the second - you're no more providing income for them than you are for Samuel French (or whoever you got your scripts from) or the local hardware store that you bought your building materials from, etc.

Angie

Posted By: lesann82
Date Posted: 10/11/05 at 10:54pm

I agree with both of you...and have been doing dinner theatre like this for years. This comment actually came from an Attorney for the Arts in our area...a friend's newly formed theatre group used them to fill out their paperwork and he told them to avoid dinner theatre like the plague because it was not a nonprofit event. It makes no sense to me, either. I will investigate further and see what I can find. Thanks to both of you for your input.

Posted By: Dustmac
Date Posted: 10/15/05 at 10:13pm

We don't do any dinner theatre in our area anymore but we used to and we never lost our non-profit status. One of our board members is married to an attorney so we make sure we aren't breaking any laws.

Posted By: Gaafa
Date Posted: 10/16/05 at 2:06am

I don?t know your laws!
But I think your not for profit status, would only concern how you conduct your Incorporated group, not how others may profit by your endeavours.
I?m sure the local cafes & business do profit in some way, from any group, during rehearsals & shows.
Put the question to your Taxation department!

-------------
Joe
Western Gondawandaland
turn right @ Perth.
Hear the light & see the sound.
Toi Toi Toi Chookas {{"chook [chicken] it is"}
May you always play
to a full house}

Posted By: lesann82
Date Posted: 10/18/05 at 9:09am

Great idea! I think I'll ask him how the law (in his opinion) perceives the fact that the restarants and shops benefit from added foot traffic and therefore income when our Shakespeare group performs free in our town square.

I can't believe his advice was correct. But, he did say to the group, "If you are forming a new theatre group, avoid dinner theatre like the plague. It's illegal and you could jeopardize your nonprofit status." I will most definitely keep researching this and let you all know what happens. Thanks to everyone for your help.

Posted By: MartyW
Date Posted: 10/18/05 at 1:15pm

Not a lawyer here either, but we have been down the 501 C3 road a few times. Each time the results have come back about the same. It doesn?t really matter how you make it. (Don?t rob banks, that?s not covered here), and it doesn?t matter if you pay for things or pay people. It only matters how you spend it. You can: Pay your bills, provide for your facilities up keep, and pay your production costs. You can?t: Take your membership on an all expense paid cruise. Bottom line is that the funds are used as stated in your state approved bylaws/constitution and following your states code/revised code on the conduct of not for profit/non profit organizations. Most simply state that the proceeds can?t be used for the direct ?benefit of the membership? (Darn, I always wanted a cruise!)