Project Create

the biography of a nonprofit

Archive for the month “January, 2012”

Fiscal Sponsorship

In my last post, I discussed some the steps Project Create is taking to become a legally recognized nonprofit organization. While this is one way to achieve nonprofit status, I want to discuss a very useful, alternative approach called a fiscal sponsorship

Instead of rewording a perfectly good explanation, here is an excerpt from Grantspace.org:

Fiscal sponsorship is a formal arrangement in which a 501(c)(3) public charity sponsors a project that may lack exempt status. This alternative to starting your own nonprofit allows you to seek grants and solicit tax-deductible donations under your sponsor’s exempt status

An important requirement is that the sponsored group’s activities must be in line with the sponsor’s mission because they are considered one legal entity. This means that if a charity’s mission is to provide food to the homeless, then an art based nonprofit (i.e. Project Create) most likely cannot use them as a fiscal sponsor.

The major benefit is that the sponsored group gains 501(c)(3) status faster than applying with the IRS, meaning it can begin operations that much sooner. The new program is subject to the bylaws and rules governing the sponsor, and in some agreements, the sponsor provides administrative oversight. In return, the sponsor receives a percentage of the donations and grants received in the sponsored group’s name.

Another plus is that a fiscal sponsorship can be temporary, allowing the sponsored group to apply for independent 501(c)(3) status and break away from the sponsor. This brings us back to Project Create’s journey. I fully intend to form an independent nonprofit, but I don’t want our mission to sit on the backburner while the IRS approves our application. Therefore, while we complete our filings, Project Create will also seek a fiscal sponsorship.

Finding a fiscal sponsor, however, does require some research. There are organizations such as the Fiscal Sponsor Directory that can help connect you with potential sponsors, but keep in mind that many people are applying for limited sponsorships. Another more obvious option is to research on your own and approach existing charities with similar missions.

After thoroughly researching the nonprofit field in New Orleans, I found a potential sponsor that was interested in sponsoring Project Create. We are negotiating with an education based nonprofit focused on afterschool and summer programs. We can use this group as a sponsor because our mission to increase art education and provide free resources to students is perfectly in line to accomodate its afterschool programs.

As soon as we sign our contract, I will provide more information on our sponsor.

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Some Legal Steps to Forming a Nonprofit

As I said in the beginning, this blog is meant to show you every step Project Create takes. Unfortunately, this also includes the boring, nitty gritty ones (read: anything that might require a lawyer).

Project Create’s transition from a thought bubble into a fully functioning business is a fairly complicated process. It involves quite a bit more than daydreaming about teaching Dolly Parton to paint, which I do. Daily. Alas, to ever meet Dolly, I need to take action and bring Project Create into legal existence.

 Here are the general steps Project Create will be taking to become a legal entity:

  1. File Articles of Incorporation: This step is equivalent to the birth of a company. The document is filed with the Secretary of State in the state where the nonprofit will operate. In Louisiana this costs $60 for a nonprofit and usually has a 3-5 day turn around. Most states allow you to file these online and can be done in 10 minutes. When the state issues a certificate of incorporation, the two documents together give the corporation its legal existence. Information you will need: Company name, purpose, address, incorporators, and board of directors (which I will discuss in a separate post).
  2. File for IRS Employer Identification Number: This is the employer equivalent of a social security number. This can be done online and is free.
  3. File with IRS for 501(c)(3) status: This designation is the lifeline for a nonprofit because it gives an organization a few benefits. First, 501(c)(3) nonprofits are exempt from federal income tax. A second major benefit is that donations made to a 501(c)(3) recognized charitable organization are tax deductible for donors.  Third, many federal, state, and local grant foundations will only award their grants to organizations with 501(c)(3) status. This filing can be done online and is bit more expensive ($850). It can take up to a year for a response.
  4. File for state tax exemptions: Louisiana has both state income tax and sales tax exemptions for federal 501(c)(3) recognized organizations. These filings can be done online and are free.

I will keep you updated as I complete these filings and Project Create becomes a living, breathing business. Also, look out for the next post on non legal steps (i.e. recruiting a board of directors, drafting a business plan, etc.).

The “Hold Your Horses” Disclaimer: Nothing in this blog is intended to be legal advice. If you are thinking about starting your own business, these are very important steps that should not be taken lightly. The internet is an amazing place and there are plenty of resources available on filing these documents. Please do enough research to ensure you are comfortable with the relevant legal jargon, or seek the help of an attorney.

Bartering for Art?

I think it is safe to say that one of the major inhibitors of creative expression is money. Art supplies are expensive and being a full time artist can certainly be a financial risk. Without a guaranteed return on investment, not a lot of people (including myself) can afford to create art without sacrifice.

When I was in high school I was lucky enough to have a job, but most of that money was spent on clothes (I had a misplaced obsession with turtlenecks back in the day), gas, and diner food with my friends. Not a lot was left over to spend on art supplies. This is one of the reasons why Project Create will be so valuable to New Orleans. With resources available for free to students and elderly, a huge portion of the New Orleans community can create art without worrying about the financial burden.

As Project Create develops, I am constantly thinking of new ways to benefit the “struggling” artist, financially or otherwise. I came across an article in the Huffington Post about a hospital in New York that exhanges healthcare for creative talent that reads:

Got talent, but can’t afford a visit to the doctor? A new program at the Lincoln Hospital in the Bronx is offering a unique healthcare option for uninsured artists and entertainers in exchange for their creativity.

Applicants will go through an interview process to demonstrate their work:

The process is quick and friendly. It is designed to assess what area of the hospital would be best suited for your artistic abilities, and it gives you the opportunity to learn more about this program.Executive Director Iris Jimenez-Hernandez explains the program, “We have a large artist community in the Bronx and northern Manhattan who often go without care. This (program) will change that and it allows artists to give back to their local community.”

Once artists are enrolled, they will be required to work with hospital staff on various tasks such as performing for hospital events and helping with creative art programs to help ailing patients.

For each hour worked, individuals earn $40 of healthcare which can be used on a range of services including doctor visits, emergency care, and even surgery procedures.

Renata Marinaro of the Eastern Region for the Actors’ Fund said artists generally make an annual salary of $24,000 and therefore, “They can’t afford that kind of money and they need to get their health care and this is an excellent way for them to get that health care and contribute to the community.”

The program, which started on Monday, comes at a time when the city’s jobless rate continues to rise. In December, it was reported that New York’s rate rose to 9 percent, with the private sector adding only 38,900 jobs in 2011.

Isn’t it great to find other people fighting the good fight? While Project Create has no intentions to offer healthcare to artists, this program does inspire some good ideas. Right now we are looking to encourage local artists and art students to volunteer, because volunteering has it’s own benefits. But the possibility of teaching a class in exchange for supplies is definitely something to think about. 

Do you have any ideas about how Project Create can make art less of a financial risk?

Project Create Business Model

By now I am sure you are wondering how Project Create will actually bring more creativity to New Orleans, which already has a vibrant and artistic culture. While that is true, there is also a very large sector of the population that still does not participate in art. These are the people Project Create is targeting.

With a lot of research and planning, I have written a business model that addresses all 5 modes of art participation. However, you will notice that I have reorganized them into 3 more practical outlets. Without further ado, here is my pitch:

Project Create will be an open art studio where clients can participate in three ways: Art Creation, Art Education, Art Support.

Art Creation: Basic supplies for various media will be available. At opening day, we will support painting, drawing and needlework.  Within limits, these supplies can be checked out and used in the studio to create any art. When a client leaves the space, all unused materials must be returned. Storage will be provided for unfinished artwork that the artist can come back to finish. (Inventive Participation)

Art Education: Classes will be available for both general skills and product specific creation. In general skills classes, instructors will teach basic skills needed to ensure clients are comfortable in a particular medium (i.e. how to use a sewing machine). In product specific classes, students will be provided the resources and instruction needed to complete a particular piece of art (i.e. students leave with a finished painting). Seminars will also be provided to encourage clients to independently create and sell their work. (Interpretive Participation)

Art Support:  First, volunteers can apply to teach skills and product specific classes. Particularly, local art students will be invited to teach classes and develop leadership skills. The application process is a skills assessment to ensure clients receive proper training. Second, the general public can experience, view, and purchase art through the Project Create studio. The space will hold client developed cultural art displays and gallery events to showcase client work. (Interpretive, Curatorial, Observational, and Ambient Participation)

And here is the kicker:  While the general public can participate through monthly memberships and pay-per-use fees, the Project Create resources are available for free to the elderly and students in high school and below.

Many of you are wondering how am I going to start a business that gives away free resources with little (read: zero) start up capital. Even worse, how am I supposed to keep it running??? These are excellent questions, that I will address when I figure it out good answers.

Let me know what you think!

Researching The Competition

Now that I know the issues Project Create will address (the decline in art education and participation), it is time to start figuring out how those issues can be addressed. If you remember from my last post, I said that Project Create would promote the 5 modes of art participation that the National Endowment for the Arts identified (Inventive, Interpretive, Curatorial, Observational, and Ambient).

Building one business that promotes all 5 modes won’t be easy, but before I can even try to formulate a business model, I need to scope out the competition.  This is important because I need to make sure my idea for Project Create isn’t already in practice. There is no point in repeating efforts.

Since Project Create will be in New Orleans, I began researching the services already provided by existing local businesses, both nonprofit and for profit. I want to make it clear that I have the utmost respect and admiration for all art based businesses. I refer to them as competitors solely from a business perspective, because I need to know what art related services are available and where Project Create can fit in that market. My goal is not to take away their customers, but to fill in any gaps that allow more people to be creative. 

I found out that current New Orleans art organizations only target limited perspectives. For example:

  • Local art agencies provide funding and support for art programs but do not offer tangible resources to the general public (i.e. painting supplies).
  • Programs targeted towards art education in schools are curriculum based and do not allow students to seek out new art forms that interest them. Moreover, these programs are limited in scope and do not extend beyond the classroom.
  • There are external internship programs for young artists, but these are exclusive and do not support all artists, especially those less skilled. 
  • Adult classes are available, but these are generally inaccessible to the public because of their high costs or the type of instruction provided. For example, a skills course in painting can cost hundreds of dollars and only meet a few times a month. On the other end of the spectrum, there are low cost BYOB painting facilities for only around $40/class, but these offer only short, one-time experiences.

Unless I am mistaken, and please let me know if I am, no current organization addresses all 5 modes of participation and provides access to all members of the community. A major concern of mine is that there are very little resources for students to create art outside of school related programs. The same goes for adults whose schedules do not allow for consistent enrollment in a skills class with a set calendar.

This means the market is open for Project Create, and I need to address the current gaps New Orleans has. With this information, I can start forming a business model. In my next post I will share with you what I come up with.

As always, please share any comments and suggestions.

Why Project Create?

I decided to start a nonprofit because I wanted to encourage more people to be creative. To achieve that goal, I needed to understand the underlying reasons why people did not participate in the arts. To figure this out I did what any other educated person would do: I Googled it.

I started researching art education and participation in the arts, and I came across the National Endowment for the Arts (NEA). This is the agency that is largely responsible for federal support of the arts. The NEA extends its work through partnerships with state arts agencies, local leaders, other federal agencies, and the philanthropic sector.

The NEA periodically surveys American involvement in the arts, with the most recent survey taken in 2008. Since then, the NEA has released a number of reports based on the 2008 survey data – all of which, unsurprisingly, indicate a decline in art education and art participation.

For example, the survey indicated that less than 50% of 18 year-old Americans have any art education (compared to 67% in 1982), and only about 10% of adults created art within a 12 month period. The reports showed, without a doubt, that the most significant factor in adult participation in the arts is art education both as a child and as an adult. This means that as funding for art education in schools declines, the number of adults likely to participate in art will also decline. (If you have spare time and a lot of coffee please browse through these reports to understand how serious the decline in American art participation is).

Looking at these numbers, I realized I wanted to create a space that encouraged art participation for the entire community.  I wanted to provide art education that was accessible to ALL members of the community, regardless of demographics. 

My research also gave me the sense that art participation meant more than just creating art or going to museums. With a little more digging, I came across another NEA report that presented 5 distinct modes that a person can use to participate in art:

  1. Inventive Participation is the act of artistic creation that is unique and idiosyncratic, regardless of skill level (i.e. painting).
  2. Interpretive Participation is a creative act of  self-expression that adds value to pre-existing works of art or engages one in arts learning (i.e. learning to paint).
  3. Curatorial Participation is the creative act of purposefully selecting, organizing, and collecting art to the satisfaction of one’s own artistic sensibility (i.e. collecting art).
  4. Observational Participation occurs when you see or hear works of art created, curated, or performed by other people (i.e. visiting art museums)
  5. Ambient Participation includes encounters with art that the participant does not select (i.e seeing architecture and public art)

I thought about these modes and how I am lucky enough to participate in all of them. The NEA reports clearly indicate that a major portion of Americans do not participate in any modes, and this is truly unfortunate. Then it hit me – why not create a space that served as an outlet for all members of the community to participate in all 5 modes. I know this is a tall order, but this is the direction Project Create is going to take. This is why Project Create exists. 

It won’t be easy to implement, but stay tuned while I figure out how to make this work logistically. Until then, please send along any comments/questions/suggestions.  This is a work in progress and I would appreciate any feedback I can get.

It Started As An Idea

My name is Jordan, and I am just a guy working in the corporate world. I get up, go to work, sit at a desk, go home and repeat. The only creative decision I make in my day is what to buy for lunch.

What separates us from animals is our ability to create. We can create tools. We can create clothing, television, and wine!  Most importantly, we can create art. But so many of us don’t.

Somewhere along the way, we separated creativity from our daily lives. Art has become a luxury that too many people don’t think they can afford. Last year, government funding for the arts at the state level was reduced by 6%, and even worse, reduced by 8% at both the local and national levels. This is surprising, considering that countless studies have shown that art education has a positive impact on cognitive development, academic performance, and workplace creativity.

I have been lucky enough to teach a few painting classes at Arts N Spirits in Chicago. Most of the artists that take these classes are not professionals. They are people who rarely have the chance to be creative, not because they don’t want to, but because they are not encouraged to express their creativity or the resources to do so are not readily available. Why buy a set of paints if you were never taught to paint?

After each class my students left with smiles on their faces and artwork they created. Their creativity found expression. And just like that it hit me – the world would be a better place if everybody could express their creativity. Make art not war, right? Okay that might be a little too idealistic, but the point is, someone needs to bring creativity back to the masses.

Armed with this realization, I am volunteering to be that person. In July, I am moving to New Orleans, Louisiana. I am going to leave the corporate world behind to start Project Create, a nonprofit organization dedicated to bringing people back to their creative centers.

This blog is a (semi) transparent look into the creation and life of a nonprofit organization. This is where Project Create’s story begins. Here I will share with you my journey from zero to (hopefully!) hero. I will keep you updated on the development of Project Create as it grows from just another day-dreamed idea into reality.

So join me in this adventure. Experience the highs and lows of starting a company and enjoy. And if nothing else, I hope you are inspired to create something.

If you are interested in becoming a part of Project Create, or you have any suggestions, please leave a comment.

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