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Formation:
Central Square Theater (CST) is the strategic business partnership of two non-profit professional theater companies. The Nora Theatre Company (Nora) and Underground Railway Theater (URT) collaborated to create a third nonprofit – Central Square Theater – which provides a centralized administration to enable greater resources and impact for the two partners. The greatest testament to the power of this collaboration thus far has been the creation of a new theatrical arts facility for the partners in one of the most blighted neighborhoods in Cambridge, MA. Each resident company maintains its unique identity while working in tandem to fuel long-term sustainability, stimulate creativity, and add value to the community. Founded in 1988, The Nora produces illuminating contemporary and modern classic theater and champions the voice of women. Since 1978, URT has created dynamic connections between high-quality professional theater and community by providing accessible education programs in schools, after-school venues and community centers. Combining actors, puppetry and music, URT also engages diverse audiences with original theater of compelling social content and great visual beauty. The Nora and URT formed their strategic partnership, Central Square Theater, based on the critical need for affordable production, rehearsal and education space, documented increase in demand for ticket sales, and strong complimentary programming. Upon signing an initial Alliance Agreement in 2002, URT and The Nora embarked on a comprehensive three-year strategic planning process. The theaters and their boards envisioned creating a state-of-the-art theatrical facility and a new collaborative model of engagement that would allow them to benefit from sharing staff, combining resources and thereby accomplishing a level of artistic and organizational achievement that could only be obtained by joining forces. The Boards and artistic directors of both theater companies drafted a business structure that will serve as a model for complementary arts organizations sharing responsibility for a cultural facility. The model entails a 501(c)(3) legal/accounting status for Central Square Theater, which provides centralized accounting, administration, and shared staff in development, finance, marketing, administration, strategic planning, and front and back of house positions. The Nora and URT each retain their 501(c)(3) status and artistic missions, and thus maintain their distinct identities.

Management:
The CST Alliance Agreement is a written expression of the partnership and goals – an artistic and philosophical statement, and a manual for practical management of the partnership. The Boards of Directors of the two resident companies hired Catherine Carr Kelly, MBA, formerly the Managing Director of URT and Campaign Manager for CST, as the first Executive Director in March, 2006 with a grant from the Boston Foundation. CST then moved forward on recruiting a Board of Directors, creating and signing bylaws, combining finance and operating functions, and designing and constructing the theater facility. CST was subsequently incorporated and became a 501(c)(3) not-for-profit organization.

Currently a CST Board of Directors of 9 volunteers, including Chairs from the Boards of the two resident theaters, provides strategic and financial oversight for the collaboration. The Boards of Directors of URT and The Nora continue to meet monthly with the CST Board to assess progress on shared goals. CST joint staff now includes: Operations Director, Technical Director, Marketing Manager, Development Manager, Artistic Administrator, Office Manager and Box Office Staff. URT maintains its own Artistic Director and Education Director; The Nora maintains an Artistic Director.


Challenges:
As part of ongoing strategic planning, CST conducts a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis for 7 key focus areas within the centralized organization: Governance, Organizational Structure, Fiscal Management, Marketing & Branding, Program (process and product), Development/Fundraising and Facilities. Each staff member, including part-time, hourly workers and volunteers, participates in the SWOT for her/his focus area, leading to identification of Goals, Objectives and Strategies. The Boards participate in a facilitator-led intensive review of current governance and decision-making processes. The SWOT analysis and Goals, Objectives and Strategies sections are completed after this review process. The review is designed specifically for the unique collaboration that is CST and includes feedback from funders, business and artistic partners and donors.

Impact:
The two resident theater companies continue to rely on critical commitment outcomes they identified at the start of the planning process:
•A shared understanding of what CST makes possible that the two theaters cannot achieve separately;
• A new streamlined management structure that identifies individual talents and shared functions;
• A blueprint for artistic collaborations;
• Increased diversity and community representation on Boards, committees, and staff;
• Sound financial goals tied to long-term resource development;
• Shared production, marketing, box office &front-of-house functions; and
• New community partnerships and new audiences.
CST is currently creating its 2011-13 Strategic Business Plan. CST uses a hybrid form of business planning that combines the format of an Action Plan (business planning model) centered on the identification of key focus areas and core priorities, and the structure of a traditional non-profit strategic plan, that supports the creation of broad goals, objectives and strategies for implementation. A “Recommendations” module within the planning structure describes newly formed ideas that emerge during planning. These nascent ideas typically require either more research or partnership creation before they can become truly viable action items.

Model:
CST’s unique business structure allows the theater companies to benefit from economies of scale, avoid costly duplication of effort, and streamline and focus programming activities—all while extending their reach to larger audiences and potential donors through more frequent and longer running theatrical productions in the new space. While many theater companies share space, no previous model has emerged in which two artistic entities share staff and resources through a separate but jointly governed nonprofit while maintaining artistic autonomy. With many cultural nonprofits competing for resources and serving similar communities, it is necessary for theater companies to partner, continuing their important creative work with a capacity greater than the sum of their parts. The Boston Foundation’s most recent publication, There for the Arts, highlights Central Square Theater as one of the organizations that has contributed to making Greater Boston one of the most culturally rich cities in the world.

Efficiencies achieved:
A major planning focus for Central Square Theater has been the practical coordination and application of streamlined financial management policies and creation and implementation of organizational structure. The financial efficiencies that have been achieved by the collaboration between The Nora Theatre Company and Underground Railway Theater are a direct result of engaging in strategic business planning together. The following financial efficiencies have been achieved:

•     The creation of a new structure that features three corporate entities (Central Square Theater is a new 501-c3) with overlapping Boards and centralized accounting. By establishing both control and financial interest, the three entities benefit from consolidated financial statements (one audit) and a common management team.
•     A preferential lease arrangement significantly below market rate ($4.30 dollars per square foot as opposed to $30-35 dollar rate commanded by market for this area) as a result of the landlord’s (MIT) belief in the strength and commitment to the success of the collaboration.
•     Joint budgeting and financial management that allows for greater fiscal control and marked efficiencies in terms of money management, prudent and ongoing oversight from a strategic perspective supplied by the centralized Director of Finance to the daily management operations driven by the joint positions of Executive Director.
•     A new system of annual production planning for each theater company that incorporates rigorous feasibility testing of funding opportunities, earned income projections and expense analysis by newly centralized departments of development, marketing and operations.
•     Cost savings in every area for each theater company as they greatly expand production schedules and overall programming. Areas of cost savings that are a direct benefit of economies of scale include but are not limited to marketing services (design and print) and advertising and mailing.
•     Cultivation of a joint donor base (from 150 to over 1200 individual donors) for the ongoing operations of the Theater.
•     Increased financial commitment from individual capital campaign donors converting to annual major donors and from foundations that considered each individual company (alone) too small to consider for funding.
* Community benefits have been great and range from the addition of collaborative programming with other non-profit organizations, which includes hosting over 50 city-wide events in the new theater to the creation of marketing partnerships that allow for deeply subsidized tickets to shows.
* The partnership has made possible community outreach on an unprecedented scale: community groups and non-profits enter into the conversation long before the production is staged--working to ensure that the depiction of communities is authentic and that the understanding and overcoming of barriers to accessible theater are realized. (Productions such as Ti Jean and His Brothers has sparked over 50 community partnerships with Haitian and Caribbean groups in Cambridge and Boston.)

To track these efficiencies the Finance Committee of the CST Board of Directors sets annual goals for the organization and reviews regular reports from the Executive Director. Both goal setting and progress reports are reviewed by the theater company Boards as well.

The following operating efficiencies have been achieved by this collaboration:
•     Implementation of the CST model organizational structure —
o     hiring of 8 centralized positions, in marketing, administration, executive leadership, fundraising, finance and front-of-house staff;
o     operational support for the Artistic Directors of the resident companies and stewardship of a new organizational culture that allows for complete sharing of resources while balancing the individual needs of each organization;
o     creation of an Executive Leadership model that shepherded an intensive 18-month space/design planning process for the new theatrical arts and administrative space that jointly serves the work of both companies in perpetuity;
o     construction of the new facility with full adherence to the agreed upon design plans; and
o     implementation of a transition plan for physically bringing together the three entities that culminates with the move into the new theater.
•     Creation of a Central Square Theater Board of Directors, currently at nine members, drawing from the legal, artistic, academic and business communities as well from the Central Square neighborhood and including the Artistic Directors of each resident company and the presidents of each company’s Board —
o     implementation of a unique partnership nominating process that includes members of each individual Board; and
o     development of oversight function for budgeting and other operational activities.




Evolution:
Underground Railway Theater and The Nora Theatre Company, theaters in residence at CST, decided to collaborate based on their similiar need for permanent performance space and their complimentary yet diffentiated missions. The collaboration has produced numerous benefits that neither company could have achieved alone. The collaboration allowed for the joint fundraising to build the Central Square Theater--an extraordinary feat for two small theater companies--and the increase in budget from a combined budget of $750K to over $1.3M in FY10. Additionally--the theaters, together, raised over $3.2M to build out the theater space. Programs have increased by more than 100%--with both companies combined producing over 200 performances per year and reaching total audiences of over 25,000 people. The management structure was chosen from an intensive study of different models and a complete analysis of each organizations needs and the shortcomings of their prior structures. In the formation of the collaboration, there were significant challenges around the forming of a new umbrella entity, Central Square Theater. Executive staff needed to fully understand the existing company cultures and work to espouse a new culture for the combined entity. The boards were able to overcome these differences through a year of regular joint meetings that encouraged diverse working groups--made up of both boards and community members-- and the development of a new, shared "language" in which to discuss the partnership and the new model. Success of the collaboration has been measured through the implementation and monitoring of the strategic plan which measures success against established benchmarks in the plan; the Executive Committee, comprising executive staff, as well as the individual Chairs of the Boards of Directors of the resident companies, track the ways in which these efficiencies are manifest by production successes (increased ticket sales, positive reviews, etc.) and program successes such as increased community outreach, more and stronger partnerships with community organizations and other groups. An additional benefit of the collaborative model is the involvement of the Harvard Alumnae program, Community Action Partners, which has paired Central Square Theater with nine business executives to assist in the review of the past two seasons and in the process of creating an innovative business model that will use regression analysis to create a metric that helps to plan sustainable season programs. This group, CAP, was attracted to CST due to our unique business model.




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