5 days ago
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.
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