CSPS in Cedar Rapids charts ‘sustainable’ path as it awaits return of tax-exempt status

CEDAR RAPIDS — Pioneering arts and culture organization CSPS is looking to raise around $120,000 by the end of 2022 to maintain its operations as it awaits the return of its tax-exempt status — a decision the organization’s leaders expect still is several months away.

One of the city’s most iconic arts organizations is charting a path toward sustainability and growth by taking steps to boost revenue, focus on fundraising and strengthen community connections, board president Monica Vernon said.

Leadership changes and COVID-19 disruptions already had dealt the group a blow as leaders worked to pay off more than $100,000 in debt. Then the Internal Revenue Service last July revoked the nonprofit’s 501(c)(3) status after it failed to file tax returns for three consecutive years — 2018, 2019 and 2020.

The revocation took effect Nov. 15, 2020, but the group was not notified until July 2021. CSPS promptly submitted tax forms for those three years, Vernon said, though it could be until the end of 2022 before CSPS regains its nonprofit status.

Evolution

In a recent pitch to the group’s supporters at CSPS Hall, at 1103 Third St. SE in the NewBo District, Vernon said it was “very difficult” for the group to lose its tax-exempt status, which caused CSPS to lose a number of grant and funding opportunities.

“We've gone through an evolution from founders who did an incredible job of opening an old building to the community and sharing just what can art be,” Vernon said. “... We've completely changed, … a completely new board and completely new staff.”

Jim Miller became CSPS executive director in January, succeeding Taylor Bergen — the first leader of the organization after the departure of the group’s founders, Mel Andringa and F. John Herbert.

CSPS wants to be in a more sustainable position, Vernon said, in part so that people have faith in the organization’s direction and trust that their donations will be well-spent.

While awaiting the reinstatement of its tax-exempt status, CSPS is prioritizing needed upgrades to facility lighting and technical equipment and diversifying revenue streams — the key to sustainability, Vernon said, because “you can't have your mission unless you get your finances” in order.

From June 2021 through May 2022, the organization reported $20,350 in monthly revenue, the largest share of that coming from retail tenant rent and programming.

CSPS’ monthly disbursements exceeded revenue — the “reality of the performing arts,” Vernon said — totaling $31,300 on average. A little more than one-third went toward staff salaries. The other major shares supported facilities and equipment and programming.

Revenue ideas

Boosting sponsorships and honing a strategy to engage corporations in the work of CSPS are pieces that would help make up this difference, Vernon said. Corporate contributions are currently the smallest slice of monthly revenue, followed by sponsorship revenue.

Vernon said CSPS is looking to rent much of the building, including the first-floor Black Box Theater and gallery space, to create predictable monthly revenue streams. Naming rights agreements for physical spaces and positions within CSPS also are possible.

“We have to look at this great, big, historic and cool building and say, ‘What parts of it are going to serve our mission and what parts of it are going to fuel our mission?’ ” Vernon said. “The fuel will come from those who rent, and we need that fuel to feed all the fires of creativity that are up here.”

The group also needs to seek more grants, organize annual fund drives and establish a “friends” program to tap into the community of people who love the venue and want to give back, Vernon said.

“I think we have to ask, and that's hard,” Vernon said. “We have to ask and say, ‘We need community support, and we need it at a certain level and we hope that you'll support us.’ ”

Ultimately, CSPS aspires to be an organization that all of Cedar Rapids can enjoy, Vernon said, and one that uplifts a diverse pool of local and regional talent.

“Right now, we’re doing the best we can to keep it going, to keep offering the arts to everybody,” Vernon told supporters. “It’s serious business.”

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