You Want to Fly Who?! Avoiding Surprises in Production Costs

It’s probably happened to every theater producer.  You think your expenses are under control.  Ticket sales may be booming or they may need a kick in the seat, but production costs at least are manageable.  Then—like bad Shakespeare—expenses come out of nowhere.  Petty cash is nearly disappearing out of the box.  Receipts for reimbursement are piling high.  Your designers want to order ostrich feathers, moving lights, fog machines, and goldleaf paint—or they have already.  And your director is adding costumes, sets, cast members, and talking about flying characters that you never imagined leaving the ground.

How does a producer get back in control of expenses?  It’s possible, but it takes moving back a few steps to do it best.  Here are some ideas for managing production costs.

  • Read smart.  A producer should be able to read a script and estimate production costs.  It’s easy to count the characters and set locations, but there are dozens of other clues in a script too.  Is the show set in a specific period or location?  Anything other than modern costumes and common locations may cost more than expected.  Are there costumes changes?  Is any special make-up necessary?  Are there any unusual set pieces or props that may need to be bought or built?  How about special effects?  Even without plotting a light design, it may be possible to guess if any specials may be needed.  How about things like fog, haze, pyrotechnics or flying?  Each of these effects can drive up a production budget.  Knowing what costs to expect when first reading a script is the first step in avoiding surprises.
  • Get the director involved early.  A producer should have a good idea of what sets, props, lights, costumes and special effects may be involved in a production, but it’s the director who actually decides how the show will look on stage.  To ensure that a producer and director are on the same page (and have the same production in mind), get a director involved in planning and budgeting early.  Budgets of course may be limited or already decided and approved, but carefully reviewing a production budget with a director lets both parties know what to expect.  If the production budget is already set, give the director a copy and ask about any possible shortfalls.  Nine times out of ten, the director will say that it’s not enough.  In that case, talk about plans for casting, sets, lights, props, costumes, and effects and how the budget can best be used.  If possible, borrow from one production area to fund another—taking money from lighting for example to add to costumes.  Having the director aware of the budget, and being aware of the director’s vision, could save some conflicts later on.
  • Attend production meetings.  Meetings with a director and budget discussions shouldn’t stop after a first budget review.  Once designers and other artistic and technical staff are involved, part of regular production meetings should involve reviewing the budget.  If any new production elements are asked for or added, discuss whether the remaining budget will cover the cost.  If one element of production appears to be going over budget, discuss whether there may be savings available in another area.  Staying in contact with the director and designers is the best way to estimate how production costs may end up—and there’s no better time or place to do that than at production meetings.
  • Set—and follow—strict guidelines for petty cash, purchase orders, and receipt reimbursement.  Chances are that even with budgets set, reviewed and approved, someone will need, order or buy something unexpected that threatens to throw off the budget.  This is what rules are for.  The first production meeting should include a discussion of how petty cash is distributed, how purchases are to be made, and how receipts may be reimbursed.  If there are limits to how much petty cash is given at once or to whom, say it up front.  If purchase orders are required, emphasize that and explain the system—and (this is important) communicate to regular vendors when purchase orders are required so that nobody can go around the rules.  If reimbursements are made only up to a certain amount, say that up front too.  A producer shouldn’t be responsible for a team member who spends more that what was authorized and expects reimbursement.  Set rules and explain them—whether it’s that the guilty party must return the item, be responsible for the cost, or be reimbursed only if budgeted funds are available at the end of the production.
  • Go to rehearsals.  Like attending production meetings, going to rehearsals is one of the best ways to track and estimate costs.  If the director is talking about scene changes, costumes changes, or effects that a producer didn’t know about, bells and whistles should go off.  I don’t recommend confronting a director about this during a rehearsal or in front of the cast, but there should certainly be some discussion later.  Very likely though, if a producer has been meeting with the director and attending production meetings, there won’t be any surprises.  Going to rehearsals has other benefits too—it communicates to the director that you’re involved, supportive and available.  It sends the same message to the stage manager, designers who may be at rehearsals, and production staff, cast and crew.
  • Hold post-mortem meetings.  Whether everything has gone perfectly right and come under budget, or gone horribly wrong at many times the expected cost, a post-mortem production meeting is a good idea.  If there have been problems, everyone involved should discuss what went wrong and how to avoid it happening again.  The meeting shouldn’t be about finding or placing blame—it should be about finding solutions.  If communication was a problem, be honest about that and ask for input on ways communication can improve.  On the other hand, if something went especially right—particularly if some new problem was worked out or a new way to do something was involved—that should be discussed too.  In that case, you want to be sure that you can repeat what happened.  A post-mortem meeting is also a great time to thank everyone involved and to stay in contact about possible future projects together.

These are just a few suggestions for controlling production costs.  Obviously there are other ways—ways such as researching prices, buying things like lumber or paint in bulk when possible, borrowing items, or seeking out donations.  To keep the production team budget conscious though—and feel supported—frequent communication is the overriding suggestion.

Could This Be a Good Time for Fundraising? Surviving the Financial Crisis

There are jobs that are recession proof—teaching, health care, some technology, undertakers.  Their work will continue despite a downturn—a severe downturn—in the economy.  And then there’s us.  When money is tight, entertainment budgets are often the first to go.  So there go ticket sales.

Unfortunately, a bad economy doesn’t just affect ticket buyers.  Corporate sponsors, donors and foundations are also feeling the squeeze in decreased earnings, decreased interest, and devalued investments that they rely on to finance their funding.  There goes unearned income too.

Will nonprofit arts organizations be able to ride out this bad economy?  Debate in forums such as the Chronicle of Philanthropy online is strong on both sides.  The good news—if there is any good news—is that some experts think that giving will at least remain steady.  The bad news is that some others think that fundamental changes in the way that nonprofits are financed may be ahead.  Not all nonprofits will make it through to the other side and, some think, maybe not all of them should.  Like their commercial counterparts, nonprofits should deal with some competition in the marketplace.  If there’s no market for their services, or their target population is overserved, economics might dictate who survives and who doesn’t.

So, what’s the best way to survive the worst economy in decades and possibly a complete change in how nonprofit financing works?  The answer is to look internally.  Nonprofit organizations with the sharpest sense of who they are and what they do will have a fighting chance.  If a nonprofit can convey a clear mission and argue that its target population will go unserved without its programs, that organization is likely to find sources of funding. In other words, know who you are, what you do, and be as unique as possible.  Create a thorough list of questions (or contact me for one) for your board and staff to discuss where you are, where you’re going, and who you know that can help you to get there.

I also recommend, even during this bad economy, that arts organizations continue to seek new sources of funding from foundations and corporations.  But—and here’s the weird part—don’t expect to get it.  A large part of fundraising is socializing and persuasion.  Often, even in a good economy, a funder wants to get to know a nonprofit organization before committing to a significant grant or gift.  Rejections to applications don’t always mean that funders aren’t a good match or don’t understand or care about your programs; they often come with encouragement to apply again so the funder has more time to follow your organizational growth.  And you never know—you might impress some funders on your first try.  If not, don’t get discouraged by rejections or smaller-than-expected donations.  Use the bad economy as a time to build relationships, which is often a necessary phase of fundraising anyway.

So buck up and get to work.  Even though we’re not in an economic cycle where a lot of nonprofit arts organizations will grow, it is a good time for setting the groundwork for later growth.  Look inward, look outward, and start on the road to becoming stronger and more secure in the future.