When Park Square Theatre approached Propel Nonprofits (formerly Nonprofits Assistance Fund) in the year 2000, the organization was at a crossroads. The theatre had been in existence for more than 30 years, but the business model just wasn’t working. They’d experienced some losses, and needed not only a loan to get back on their feet, but some strategic counsel for planning and building a framework for financial success in the future. As now-executive director Michael-jon Pease will tell you, the Park Square-Propel Nonprofits relationship may have been born out of “necessity and crisis”—but a decade-and-a-half later, the Park Square is a thriving business, empowering artists and attracting diverse audiences across their two stages. But it didn’t happen overnight.
“Our relationship has never been just about lender-borrower,” Michael-jon told us. “Propel Nonprofits has been there along the way to help us think through how we need to change our business model to more effectively use cash.” And while Park Square could have continued working with a more traditional bank partner, the level of support just wasn’t there. In addition, he said, “Propel Nonprofits understands our business and model. Run-of-the-mill commercial banks just can’t play that role.”
“I think one of the advantages of working with Propel Nonprofits over traditional lenders is that we truly want our partners to get better for the sake of getting better—not just to get the loan paid off,” said Janet Ogden-Brackett, Associate Director at Propel Nonprofits. “Our best partnerships come from sitting on the same side of the desk—being both lender and confidant/truth-teller.”
When Park Square’s business stabilized about six years ago, the leadership team started to “dream big,” and set out to discover how they could expand their presence and open an additional stage. With Propel Nonprofits’ strategic support, they developed a revenue model and capital campaign plan, and, despite having run the campaign in the middle of the recession, they still managed to raise $3 million.
The opening of the Boss Thrust Stage meant several things for Park Square. First, it meant they had a unique new market position in the Twin Cities, being the only theater of their budget size in Minnesota, and only the third professional producing theatre in the Twin Cities (along with The Guthrie and Children’s Theater, both in Minneapolis) to have two stages. It also led to a different funding and earned revenue mix, including from individual contributors, thanks to their expanded capacity and visibility. Finally, the opening of the Boss Stage meant Park Square would be in a place, financially, at which they could begin building cash reserves and endowments. The new model allowed them to iterate their product (show) mix in a way that was more nimble, sustainable, and responsive—helping ensure a more stable business for years to come.
When considering what advice he would offer to potential Propel Nonprofits partners, Michael-jon said, “Be transparent. Know your industry inside and out. And remember the gift is their ability to partner with you—the loan is the vehicle, but the partnership, mentoring and joint strategy is what it’s all about.”
“In general,” he said, “this new stage is the biggest risk we’ve ever taken, and I’m grateful we have the best partner to take it with.”