Latest news with #LarryBomback
Forbes
6 days ago
- Entertainment
- Forbes
When Code Performs: Arts Nonprofits Face A New Test
Larry Bomback is the founder of Strategic Nonprofit Finance. It was only recently that we laughed as AI-generated images gave us people with six-fingered hands. But now we watch digital actors question their own existence. Prompt theory, the viral trend that creates these AI reflections, is much more than online theater. It signals that machines can produce work so convincing that audiences confuse code with craft. I tested the idea at home. My mother, 79, stared at a prompt theory compilation on YouTube and asked, "What do you mean these aren't real people?" My daughter, 13, rolled her eyes and said, "Dad, you're four months late." For nonprofits, especially those rooted in human experience, this advance brings new pressure. If software can imitate the traits we call human, what happens to missions built on empathy, live connection and unique voice? And no industry feels the pressure more than arts and culture. Music, film, design and writing now roll out of prompt engines at near‑zero financial cost. I think it is perhaps the most frightening time in human history to be a creative. Six Risk Lines To Watch 1. Funding Drift: Grant panels chase novelty. AI creations look fresh, so dollars may move to tech pilots and away from live craft. 2. Workforce Erosion: The sector depends on part‑time artists. If AI replaces even 1 in 5 contracts, many will leave the field, draining skills that machines cannot hold, like improvisation or cultural context. 3. Intellectual Property Fog: Current laws have yet to catch up with the complexities of hybrid creative works. If a composer feeds their archive into a model that then writes a score, who owns it? 4. Authenticity Crisis: Audiences pay for a sense of real presence. Deepfake actors blur that line. If patrons feel deceived, they may pull back on both ticket purchases and charitable support. 5. Volunteer And Donor Fatigue: Many supporters give because they know musicians, dancers or playwrights by name. When art shifts to screens, personal ties can weaken and renewal rates slip. 6. Ethical Reputation Risk: In 2016, ING, Microsoft and TU Delft printed The Next Rembrandt, a data-driven canvas that looked like a lost work. They disclosed the method, yet the debate still rages over authorship and value. Human‑Centered Responses AI is not a fad. Telling artists to ignore it is like asking them to press CDs instead of livestream. A 2024 Society of Authors survey already shows that a quarter of illustrators and more than a third of translators have lost assignments to generative tools. Moreover, visual artists' median earnings in the U.K. have dropped 40% since 2010, with researchers calling AI "the straw that broke the camel's back." Unless we truly are living in the infinite prompt loop simulation that Elon Musk mused about back in 2016, we do still get to choose our response. For nonprofit arts groups, I think the answer is avoid morphing into tech companies, doubling down on what only people can do: Bring other people together to create shared, in-person experiences. Gen Z, digital natives by birth, are already signaling the demand. In a 2025 Live Nation study, 92% said they actively seek real-world experiences over online engagement, and 90% ranked "realness" and "authenticity" as life's top values. Reinforcing The Human With that in mind, here are ways that arts organizations can reinforce their human competitive advantage: 1. Make the process visible. Open rehearsals, studio livestreams and maker talks let supporters see sweat and revision. This narrative anchors value in effort, not just output. 2. Adopt authenticity labels. Create a simple tag system: "human‑made," "human‑AI hybrid," "machine‑generated." Clear labels help build trust. Show your supporters where that line is and then invite them to cross it with you. 3. Secure artist income. Offer paid residencies focused on craft that AI cannot mimic: site‑specific performance, participatory work or art rooted in local history. Tie funding to fair wages, not output volume. Quality over quantity. 4. Build digital rights clauses. Update contracts so artists keep training rights to their work or receive royalties if archives feed a model. 5. Create AI governance committees. Form small groups with artists, technologists, ethicists and board members to review projects. Publish the minutes. I believe that transparency helps discourage shortcut temptations. A Production For The People? As an example of a model embodying these concepts, here's a bold, human-first twist on the traditional season pass: Sell one production, experienced in five acts rather than separate shows. 1. Auditions: Open the doors to the tryouts. Subscribers witness unfiltered emotion and a wide range of talent. The casting room becomes the first stage. 2. Rehearsals: Offer a menu of rehearsal dates. Patrons drop in, watch scenes evolve and see how directors and actors solve problems in real time. 3. The Workshop: Bring the audience into the design studio. They watch sets, costumes and props take shape, and maybe even help craft a piece or two. 4. Tech And Dress: Give subscribers a seat for the first full run-through with lights, sound and orchestra. The tension and near-final polish make this a show of its own. 5. Opening Night: Finish with the premiere, where every earlier moment pays off. Nathan Fielder's The Rehearsal proved that process can be riveting art. Nonprofit theaters and opera companies can borrow that insight, turning each step of creation into a ticketed experience that deepens engagement and sustains revenue. No gimmicks. I believe this is a repeatable and cost-effective way to keep artistry thriving in an era that's been reshaped by history's greatest technological leap. Summing Up There's nothing wrong with using technology to assist in creating new work. But ideation must always begin in the human mind. Make sure to control the narrative by showing patrons how the work is made and how much of the budget is going to living artists. In today's fast-paced culture, slower creation can actually build deeper ties—as long as patrons feel genuinely engaged throughout the process. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Forbes
09-04-2025
- Business
- Forbes
Nine Ways To Sustainable Funding: The Arts Sector And Special Vehicles
Larry Bomback is the founder of Strategic Nonprofit Finance. getty Arts organizations are constantly seeking innovative ways to build long-term financial sustainability. While traditional philanthropy and grant funding remain vital, they can leave organizations vulnerable to shifting economic conditions and donor priorities. Enter special purpose vehicles (SPVs)—or, more specifically, roll-up vehicles (RUVs)—which can help nonprofits to tap into new revenue streams by enabling stakeholders to invest directly in their work. Until recently, investing in private ventures was limited to accredited investors—people with high incomes or significant assets. That changed with the passage of the Jumpstart Our Business Startups (JOBS) Act of 2012, which introduced crowdfunding regulations. This allowed anyone to invest in private companies, opening the door for nonprofits to use RUVs to attract funding from everyday supporters. On top of this, with the proliferation of investment crowdfunding platforms like WeFunder, Republic and StartEngine, organizations can now more easily pool small contributions from a large number of investors. But while SPVs have been widely used in the startup world, I find that the nonprofit arts sector has been slow to explore this potential. With this in mind, here are nine ways arts organizations can leverage SPVs for growth and impact. Traditional arts funding relies heavily on wealthy donors, foundations and government grants. RUVs open the door to individuals who may not be high-net-worth philanthropists but are willing to invest in a project they believe in. In addition to using crowdfunding platforms, you can identify potential investors within your existing network, using surveys or direct outreach to gauge interest and educate them on how investment through an RUV works. When someone invests in an art project, they're no longer just a donor or a ticket buyer. They're an owner, and ownership breeds advocacy. They are more likely to promote it to their networks, increasing word-of-mouth marketing and strengthening the overall community. To help encourage this toward direct financial investment, you can design a communication plan to keep investors engaged and further encourage this type of advocacy. Many arts organizations operate like startups; they take creative risks, experiment with new ideas and work tirelessly to scale their impact. However, I believe they lack one major startup advantage: the ability to offer equity to employees and stakeholders. By structuring investments through SPVs, nonprofits can mimic the startup model, rewarding those who help drive success without violating their nonprofit status. Subscription-based platforms like Patreon or Kickstarter are fantastic for raising money, but they are not the same as ownership. Those models rely on ongoing goodwill, with no financial upside for supporters. Arts organizations tend to have passionate fan bases that rival those of professional sports teams and music artists. RUVs provide a way to monetize that enthusiasm, turning loyal supporters into real investors who feel even more connected to the work. If audiences are willing to spend hundreds of dollars on VIP experiences or exclusive content, why wouldn't they be interested in owning a piece of something they love? You can use your existing social media and marketing to create buzz around investment opportunities. Consider partnerships with influencers or industry figures to help legitimize and promote your project. The traditional model of arts philanthropy skews toward an older demographic. I find that SPVs appeal to younger generations who are accustomed to investing through crowdfunding, crypto and fractional ownership models. This approach allows organizations to cultivate lifelong relationships with new supporters for whom standard fundraising strategies may have previously overlooked. The nonprofit sector can sometimes be resistant to financial innovation. By adopting SPVs, arts organizations can signal to funders and audiences that they are forward-thinking and adaptable. This reputation for innovation can lead to greater institutional investment and a stronger position. Grants and donations are often one-time infusions of cash, while investment-based funding models create recurring opportunities. If a show, exhibition or production succeeds, investors might reinvest in future projects, providing a longer-term financial runway for the organization. You can identify projects within your organization that have long-term revenue potential, such as licensing, intellectual property or real estate. I believe SPVs and RUVs can provide a bridge to the future, offering a model that blends impact investing with artistic excellence. Those who embrace this shift early, engaging legal and financial experts along the way, can better position themselves to thrive in an increasingly competitive funding environment. One of the biggest questions nonprofits might have is how to structure an SPV or RUV while maintaining their nonprofit status. I believe the key is to create a separate for-profit entity (typically an LLC) under the nonprofit's umbrella. This LLC can manage a specific project or program that aligns with your organization's mission but also has revenue-generating potential. For example, a museum undertaking a major building expansion could use an RUV to invite donors to become investors in the real estate project rather than just contributors. If the museum later rents out space, licenses its brand or monetizes the new facility in other ways, investors could see a return on their participation. Similarly, a theater company launching a new show could establish an LLC specifically for that production, allowing patrons to invest in its future commercial success if it were to be licensed to Broadway or for film. I believe RUVs present a bold new way to build sustainable funding streams, engage supporters in a more meaningful way and help to ensure that creative institutions thrive in an increasingly competitive environment. I am certain that the organizations embracing this kind of financial innovation today will be the ones shaping the cultural landscape for generations to come. The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
