In today’s rapidly changing nonprofit landscape, nonprofit arts organizations are facing significant challenges. Many nonprofit arts groups are rethinking how they demonstrate community value as expectations shift.  Traditional models of fundraising, ticket sales, and audience engagement no longer meet funder expectations. The conversation between Stephen Halasnik and Alan Harrison highlights a core shift taking place: arts organizations and community impact must now be directly connected. Organizations that can measure and demonstrate their impact are the ones best positioned to survive and thrive.

Harrison’s career spans more than 300 theater productions on and off Broadway. He is the author of the Scene Change series, which argues that arts nonprofits must rethink their missions, focus on outcomes, and demonstrate tangible benefits to their communities in order to survive.

How Nonprofit Arts Organizations Connect Art and Community Impact

Harrison notes that a nonprofit arts organization is not defined by artistic excellence alone. Its purpose is to use art as a tool to improve the community. Large institutions have traditionally equated success with audience size or ticket revenue, but these metrics do not necessarily align with the charitable purpose required under Section 501(c)(3) of the IRS Code.

Historically, courts such as the Plumstead ruling in 1980 allowed arts organizations to receive donations even when their activities were not explicitly charitable. Harrison stresses that producing art for art’s sake is not a tax exempt activity. He cites the IRS guidelines for charitable organizations, which emphasize community benefit and measurable improvement.

From Entertainment to Education: Measuring True Impact

Harrison distinguishes between teaching and educating. Teaching can occur simply by presenting material, but education requires measurable understanding and growth. Many arts nonprofits offer educational programs without meaningful follow up.

“You can invite a thousand schoolchildren to a play, but if you do not measure what they learned, you have not educated them,” he says.

This distinction is increasingly important as donors and governments prioritize measurable outcomes. Research from the National Endowment for the Arts shows a long term decline in arts funding, a trend accelerated by the pandemic. Communities want organizations that improve education, wellbeing, or social outcomes, not simply those that provide entertainment.

The Consequences of Stagnant Mission Strategies

Many nonprofit arts organizations continue to rely on outdated mission statements that list programs rather than articulate community benefits. “A mission is supposed to be the guiding principle, the boss,” Harrison explains. “It is what the board reports to because the mission reflects community needs.”

Without alignment to the community needs even prestigious institutions risk losing relevance and funding. Halasnik adds that effective mission strategies support organizational resilience by making adaptation easier during periods of uncertainty or crisis.

Case Study: Out of Hand Theater’s Transformation

Out of Hand Theater in Atlanta demonstrates the value of measuring impact. Facing financial pressures, the organization partnered with Emory University’s Science Department to quantify social outcomes of its programs. Through this partnership, Out of Hand measured improvements in audience understanding of social justice issues.

As a result, the organization grew from a $75,000 company into a $2 million operation, now one of the largest theater groups in Georgia. Corporate funders supported the organization because of its measurable community impact rather than ticket sales. Harvard’s review of the initiative further reinforced its significance.

Academic resources such as the Stanford Social Innovation Review offer additional research on measuring nonprofit outcomes.

Louisville Orchestra: Art as a Life Saving Tool

The Louisville Orchestra provides another compelling example. By combining classical music with local genres and performing in rural communities, the orchestra achieved measurable social impact. A student who had struggled academically reported that attending a concert inspired her to join her school band, providing emotional and mental health benefits.

Harrison emphasizes that anecdotal stories paired with structured follow up illustrate that arts programs can achieve demonstrable social outcomes.

The Role of Boards in Nonprofit Accountability

Harrison criticizes the corporate mindset that leads many nonprofit boards to focus primarily on financial reporting rather than community benefit. Boards often ask about profit and loss before they ask how many people were served or what improvements occurred.

Boards can implement key performance indicators similar to those used in the for profit sector. Charity Navigator provides examples of KPIs such as individuals served, follow up engagement, and measurable improvements in wellbeing or education.

Measuring What Matters: Data and Storytelling

While art can be subjective, impact is measurable. Harrison encourages arts nonprofits to combine storytelling with data to demonstrate their effectiveness. Educational programs can incorporate pre assessments, post assessments, longitudinal tracking, and community surveys.

Arts interventions in healthcare, such as music therapy for anxiety or depression, can be tracked through partnerships with medical professionals. Halasnik notes that measurable outcomes help organizations refine programs, improve funding applications, and strengthen credibility.

Community Centered Mission for Nonprofit Arts Organizations: From Concept to Practice

Successful arts nonprofits prioritize community needs over organizational convenience or artistic preference. Harrison stresses identifying challenges such as homelessness, social inequities, or mental health issues and designing programs that address them using art as the mechanism for change.

Examples include Voices of Our City in San Diego, which engages unhoused individuals through music, and Arts Capacity, which creates programming for individuals who are incarcerated.

Preparing for 2026 and Beyond

Nonprofit arts groups relying on outdated subscription or ticket sale models are likely to face increased challenges. Harrison argues that organizations must prioritize mission driven impact, measurable outcomes, and community partnerships to remain viable.

He recommends embedding follow up processes, evaluation metrics, and intentionality into every program.

Self Care for Leaders of Nonprofit Arts Groups

Halasnik concludes the discussion by emphasizing the importance of self care for nonprofit leaders. Addressing community challenges requires endurance, and burnout can undermine mission fulfillment. Resources on leadership wellbeing are available through the Nonprofit Leadership Alliance and Harvard Kennedy School.

Conclusion: Shifting from Art Production to Community Transformation

The conversation between Stephen Halasnik and Alan Harrison makes clear that the future of arts organizations and community impact is inseparable. Artistic excellence alone is no longer enough. Funders, stakeholders, and communities are looking for measurable improvements in education, wellbeing, and social outcomes. For nonprofit arts organizations, connecting artistic work to measurable community impact is no longer optional. By integrating mission alignment, evaluation practices, and community engagement, nonprofit arts organizations can evolve with purpose and create lasting, demonstrable impact.

About The Experts

Alan Harrison is a writer, father, performer, consultant, recovering artist, and the author of the industry best-seller “Scene Change: Why Today’s Nonprofit Arts Organizations Have to Stop Producing Art and Start Producing Impact,” “Scene Change 2: The Five REAL Responsibilities of Nonprofit Arts Boards,” and his newest book, “Scene Change 3: The Ones Who Get It.” For 30 years, he has led, produced, directed, promoted, raised money for, starred and failed in over 300 theatrical productions on and Off-Broadway and at prestigious (and not so prestigious) nonprofit arts organizations across the country. He’s also a two-time “Jeopardy!” champion.

Stephen Halasnik is a Managing Partner at Financing Solutions, which is the largest provider of lines of credit to small nonprofits in 48 states since 2012. Mr. Halasnik has hosted the popular The Nonprofit MBA Podcast since 2018. The podcast brings experts together to discuss fundraising, nonprofit grants, executive director leadership, nonprofit boards, and other essential topics. You can learn more about the nonprofit line of credit program here or call 862-207-4118.