CYT works to make finances perform
Nonprofit performing arts group solicits help of leader from sister organization to eliminate debt
Saturday, October 23, 2010
• Nov. 5-14: Christian Youth Theater Vancouver will present “The Little Mermaid.”
• Nov. 5-6: CYT Portland Eastside will present “Cinderella.”
• Nov. 19-21: CYT Beaverton will present “Schoolhouse Rock Live!”
• Dec. 3-12: CYT Vancouver East will present “Fiddler on the Roof, Jr.”
For more information, visit http://www.cytvanport.org.
For years, Christian Youth Theater Vancouver/Portland was a shining example among the area’s performing arts groups.
But as the faith-based nonprofit continued to put on shows last year, it found itself in fiscal crisis — short on cash, high on debt and leaving bills unpaid.
After replacing its board and laying off staff, the group now finds itself emerging from debt with the help of a visiting leader on loan from CYT Chicago.
According to tax documents, CYT brought in about $660,000 last year, but incurred about $650,000 in expenses. And that doesn’t include bills that went unpaid, driving the group $75,000 into the red.
“They were bringing in a lot of money but spending every penny,” said Justin Parks, executive artistic director of CYT Chicago, the largest group in the national CYT organization. Parks helped establish CYT Vancouver/Portland and is here through June to help the group shore up its finances.
Big spending combined with naiveté about cash flow and lagging effects of the recession — dwindling ticket sales, donations, advertising and class and camp registration fees — left CYT scrambling to stay afloat, Parks said.
Ticket sales and class and camp registration fees make up about 75 percent of CYT’s total revenue, and all were down last year as families had to tighten their own belts.
CYT served about 1,700 youths last season, fewer than in previous years. The organization reduced class fees and increased scholarships to help make the program more affordable for families during the economic downturn, but it did not make comparable cuts to its spending.
Compounding that problem, shows that in the past would have generated $20,000 or more in ticket sales grossed closer to $13,000 last year.
Too much success too fast contributed to CYT’s current financial problems. The organization grew rapidly, moving into larger, more expensive office space and hiring additional full-time staff. Money came in fast, but it flowed out almost as quickly. Leadership did not grasp the importance of having a financial cushion, Parks said.
Cash flow is typically tight over the summer, because the company doesn’t put on shows during those months. The group didn’t do a good job of planning for seasonal ebbs, Parks said, and in the summer of 2009 it faced a crisis.
CYT found itself $75,000 in debt. The organization cut its office staff from six to two full-time people and one part-time employee and moved to less-expensive headquarters. The previous board stepped down (on their own terms, Parks said), and all new volunteers have come in the past year.
With help from CYT Chicago and the national CYT organization, CYT Vancouver/Portland had already slashed its debt significantly by the time Parks arrived in August with his wife and four young children to begin his 10-month stay.
For six months, CYT Chicago will cover his salary (this was to be his sabbatical). He hopes that CYT Vancouver/Portland will be able to pay him enough to at least cover his living expenses for the remaining four months, but he is willing to dip into his family’s savings if need be.
CYT has brought its debt down to about $20,000 and is taking steps to live within its means. That sometimes means not getting to do the shows organizers would like — royalties can be upwards of $5,000 per run — and choosing more affordable theater spaces to rent for productions.
“We’re really making tough decisions, but they’re for the good of the company,” Parks said. “Because of those tough decisions, I’m confident we’re going to be able to pull ourselves out of debt and be on solid financial footing by the end of the school year.”
Parks hopes to have expenses down to about $500,000 this year, with revenues at $550,000.
“So we have the necessary space to not only pay off what we owe but also have a cushion, so we can withstand a bad summer or a bad show,” he said.
Looking to the future
Cutting expenses is one part of the equation, but Parks also has launched a fundraising campaign to help pay for necessary upgrades such as a new sound system and microphones that will cost about $20,000. In late September, Parks set out to get 20 people to pledge $1,000 each. As of Monday, he had nine pledges.
Parks is confident that the new board will be able to continue his fundraising and cost-slashing efforts and to keep expenses in line with earnings after he returns to the Midwest. And that’s crucial, since communities and families need groups like CYT, Parks said.
“We’re preparing the leaders of tomorrow for this community,” he said. “When you find something you’re good at as a kid, it drastically changes the trajectory of your life. Finding the things you’re gifted at is food for your soul.”