Samantha Zimmerman talks ‘smart data’ to Arts Consultants Canada

DATA SMART: More Than “Show me the Money.”

By Samantha Zimmerman, Practice Manager, Senior Associate & Data Management Consultant (Young Associates)
Originally published in the May 2014 ACCA e-bulletin

We’ve all heard about data: the importance of data; the need to keep data safe; the value of turning raw data into actionable information. But what does it mean for our clients? Most organizations are already comfortable making strategic decisions based on their financial data, because GAAP provides guidelines for maintaining financial data so that it is viewed as SMART (Specific, Measureable, Attainable, Realistic, Timely); but what about our statistical data? Not only is there no one set of rules for dealing with statistical data, there are also privacy laws that dictate how we must collect, store and use data. It can all be very overwhelming.

The arts sector must also conform to CADAC which requires our clients to analyze and report their statistical and financial data to Government funders. CADAC and its partner funders across the country are becoming more rigorous and demanding in reconciling and verifying statistical data, which makes it even more important for organizations to properly track the necessary data required for CADAC reporting. More and more, clients have been reaching out to Young Associates in search of either full service data entry and processing, or targeted data management support with assistance in collecting data, pulling and reviewing periodic reports (monthly, annual), and reconciliation with bookkeeping software, as well as staff training or prospect research.

There is so much potential for data collection, but the majority of small and mid-size not-for-profit organizations often lack the human resources, the technology/software packages or the time to deal with all the data. We’ve all seen those organizations that are tracking their donations, event attendance and other lists in Excel spreadsheets. Much of the data stored in these Excel spreadsheets lives independently from other organizational data, and many of the lists lack standardization in the collection and presentation of the data.

While most of us are using Excel adequately, the majority will never use it to its full potential. Generally it’s seen as a tool for tracking static data; a moment in time, an individual project, or small pieces of information from a single cycle. How many years has a patron attended that event? How many donors are attending our events as well, and vice versa, are program participants returning as supporters? Young Associates has developed a proven system for helping organizations determine their data goals, and develop systems that work within the means of the organization to collect and analyze the data that gives the true picture. Where the mindset needs to change is not thinking of those Excel spreadsheets as a moment in time, but as a piece of a larger picture. Just as the financial information of the organization tells a story, the statistical data of an organization also has a story to tell.

New CRA Guidance on Arts Activities and Charitable Registration

Staff Post
By Jerry Smith

A recent post by Andrew Valentine with the Miller Thomson Law Firm shone some light on a new piece of guidance from the Canada Revenue Agency. If you are currently considering an application for – or already possess – charitable status, the CRA has recently delivered the final version of the Guidance for Arts Activities and Charitable Registration (Reference CG – 018, December 14, 2012).

Building on feedback from the sector, including organizations such as CAPACOA seeking a broader definition of who could qualify, this finalized version attempts to clarify what CRA finds as acceptable examples of appropriate purposes to merit charitable status.

First, there are three broad categories of arts-related activities that could qualify as charitable purposes under one or more of the four heads of charity, including:

• Advancement of education;
• Exhibitions, performances and presentations of artistic works;
• Activities that enhance an art form or style within the arts for the benefit of the public.

In particular, CRA has clarified and expanded details in its arts forms and styles appendix, thus opening the door for more presenter members of CAPACOA to garner or maintain standing as a charity.

If you are interested in exploring these ideas in more detail, these links will be of value:

• Arts Activities and Charitable Registration – CRA Guidance
• CAPACOA Provides Input on Charitable Registration for Presenters

L3C and the Arts

Staff Post
By Katie Chasowy

Back in November, I attended a symposium called L3C and the Arts at Columbia University in New York City. The event was designed to be discussion around how a new form of incorporation (the L3C) in the US can be used for arts organizations. I Live tweeted the event and the Storify of the tweets from the day can be found below.

Low-Profit Limited Liability Company (L3C) is a form of incorporation that is a hybrid between a for-profit business and a not-for-profit business. It was formed by augmenting the existing Limited Liability Company (LLC. We don’t have the equivalent in Canada; essentially it’s a hybrid of a sole proprietorship and a corporation). The L3C differs from the LLC in that the articles of organization (similar to articles of incorporation in a Canadian Not-For-Profit) must state one of the IRS’s charitable purposes. Because of this, an L3C can receive the money that charitable foundations must give each year (called Program Related Investments, or PRIs).

Basically, an L3C allows a company to accept investment and payout investors while still being able to receive funding from foundations. Champions of L3Cs say that it’s a great way to diversify revenue sources and raise capital to start an organization while critics of L3Cs say the form of organization isn’t so attractive because there isn’t the ability to issue tax receipts for donations.

The L3C and the Arts symposium brought together the co-founder of an L3C organization, a lawyer involved in the drafting of the L3C legislation for several states, the executive director of a theatre arts services organization , the executive director of a theatre organization with an L3C subsidiary organization, and the head of Columbia’s theatre program. After being briefed on the technical aspects of the L3C, the discussion then turned to how the L3C can work in the arts world.

Here’s some main points that brought up for how the L3C can work in the arts:

• The L3C is an interesting new tool to consider when forming new organizations, but will not work for all circumstances.
• An existing NFP should not change it’s form of organization to an L3C. It should be considered for organizing a new company or a new subsidiary business.
• The main drawback for arts companies is the inability to issue tax receipts for donations.
• It may be a good form for independent artist and smaller collectives, such as those who use crowd funding sites like indigogo to raise money.
• Art forms that have a higher capital potential (like film) may be more suited for the L3C than art forms with a lower capital potential (like visual arts organizations). Performing arts falls between film and visual arts.

I tried to keep a Canadian perspective in mind when listening to the discussion. The L3C form would not work exactly in Canada mainly because Canadian not-for-profits do not rely as heavily on foundation revenue as in the US. But, the discussion on how hybrid forms of organization can work in the arts was quite interesting and applicable for Canadian not-for-profits, especially with the introduction of the hybrid Community Contribution Companies in British Columbia.

Resources:
L3C and the Arts website
L3C and the Arts symposium archived video
L3C Wikipedia Page
Community Interest Company (UK hybrid)

Here’s the Storify of the event:

Creative Trust Gives the Young Associates Website a Stamp of Approval

Staff Post
by Anna Mathew

Creative Trust is a collaborative capacity building organization that helps Toronto’s mid-size and small performing arts companies develop skills and achieve financial health and balance. We’ve enjoyed working with them for a while now – Heather Young, Principal, is their Finance Manager.

These folks are leaders in the Toronto arts management scene. They have seen it all! That’s why we are absolutely thrilled here at Young Associates that Creative Trust featured us in a blog post titled Finances matter, cheering “the launch of a made-in-Canada website on financial matters and management in the arts” and daring anyone “to try to find anything as useful and interesting on the topic from anywhere else in the world.”

We’re blushing!

Thanks to Jini and the folks at Creative Trust for their stamp of approval. The Young Associates website is a work in progress and we could not be more excited about it. We promise we are working hard to get more content ready. Stay tuned for answers to FAQs, more tip sheets, more curated news, and a library of useful and relevant articles from around the Web. Join us on Twitter, LinkedIn and Google Plus if you would like to help spread the word about our free resources.