|
YOUR FUTURE IN THE ARTS
My future in the arts? What are we
talking about...a course in The Art of Accruals...Cross-footing as a Form
of Modern Dance? Actually, no. We're talking about accounting and its
role in the enormous and fascinating arena that covers everything from
theater to opera to museums and ballet.
Introduction
When most accountants think of the non-profit sector,
they think of government and non-profit, with the emphasis on government.
Even in the traditional Government and Non-Profit Accounting Course, the
first two-thirds of the semester are generally occupied by government
accounting followed by a breathtaking race through hospitals, universities,
and finally, "other non-profits." Needless to say "other non-profits,"
the sector, which includes arts organizations (along with churches, voluntary
health and welfare organizations, labor unions, and a great many other
types of non-profits), receives little time and attention. Nevertheless,
it is very likely that you will have a "close encounter" with an arts
organization sometime in your career, either working for one directly,
having one as a client, or serving as a member of the non-profit organization's
board of directors.
Careers with Nonprofit Arts Organizations
Until recently, arts organizations did not hire professional
financial managers. When donations from private individuals and grants
from foundations and federal sources were plentiful, arts organizations
did not need sophisticated financial management and most were, quite frankly,
unwilling to pay the price to get it. That time has passed. Over the past
25 years, the volume of private donations to the arts has plummeted and
government sources, such as the National Endowment for the Arts, have
seriously limited the amount of money given to arts organizations.
Today, large arts organizations have separated their
management staff into two segments: the creative/artistic side and the
business/financial side. Large theaters, museums, operas, and ballets
hire business professionals. Depending on the law in your state, a specialization
in the arts may open a wonderful career opportunity while meeting your
150-hour requirement to sit for the CPA examination. There are educational
options at both the graduate and the undergraduate level.
Masters programs in arts administration have been created
to meet the need of arts organizations for trained business professionals.
Most of these masters programs are housed in the college of fine arts,
but require students to take approximately half of their courses in the
business college -- courses you may already have. If you have an interest
in the arts, a masters degree in arts administration can provide a ticket
to a career with a large arts organization. Alternatively, selected undergraduate
classes in the arts can provide a background in arts management and an
opportunity to either work for an arts organization or offer a public
accounting employer a new employee who has an unusual practice specialization.
Arts Organizations as Clients
If you work in public accounting, you may find yourself
auditing non-profit organizations in your first year on the job. Many
public accounting firms start new hires on non-profit jobs because most
non-profits end their fiscal year in the summer when new hires arrive,
and traditionally, the accounting for non-profits has been less complicated
than accounting for corporations.
Non-profits need audits for some of the same reasons
as for-profits -- to ensure the accuracy of their accounting records,
and to evaluate their systems of internal control. But primarily, they
need audited financial statements because such statements are demanded
by granting organizations including the federal government, state governments,
and private foundations.
Many non-profits also need tax advice. Although they
do not generally pay taxes, non-profits must file an informational tax
return each year. There are also certain activities of non-profit organizations,
which may be taxable. The Unrelated Business Income Tax (abbreviated "UBIT"
and pronounced "you-bit") applies to income producing activities which
are not central to the non-profit organization's mission. For example,
while a university does not pay tax on the earnings from its dormitories
and bookstore (activities central to the university's mission), they will
pay UBIT on income from the football program.
As important as taxes are simply because the Internal
Revenue Service gets grouchy if they aren't paid, a more serious potential
consequence involves an organization losing its tax-exempt status if too
large a portion of its income comes from UBIT activities. It is the accountant's
job to protect the non-profit organization from too much success in its
for-profit activities.
Service on the Board of a Non-Profit Organization
All accountants, particularly CPAs, find themselves
in demand for service on various non-profit boards of directors. It is
unlikely that you will end your career without serving as the treasurer
of your church, the business manager of your son's Boy Scout troop, or
the board of some other non-profit organization. It is easy to see why
accountants bring an important set of skills to the board; what is less
clear, but equally important, is the value that board service has for
the accountant. Volunteer service on the board of a non-profit organization
is an integral part of the job description for accountants in most public
accounting firm. Through such service, the accountant "networks" with
other professionals, establishes relationships which may eventually bring
business into the firm, and helps build name recognition for the accountant's
employer. At the same time, of course, the accountant provides important
services to the non-profit organization. While junior staff members may
serve on the board of the Boy Scouts, partners will find themselves on
the Board of the Symphony or the Ballet, serving side-by-side with powerful
business leaders and the mayor or president of the city council.
Preparing Your Credentials
If you have an interest in the non-profit arts sector,
start your planning now. Take your school or department's Government and
Non-Profit Accounting course. This material accounts for approximately
30% of one part of the CPA exam and it will give you a background in non-profit
accounting. If you have a particular interest in a specific art, for example
ballet or theater, consider taking some courses in the dance or theater
department to develop a better understanding of the issues involved in
these disciplines. Finally, courses (or a masters degree) in arts management
will put your accounting skills and your arts interests together in a
unique and marketable way.
Pamela Keltyka
Daverio School of Accountancy
University of Akron
Akron, Ohio 44325-4802
(330) 972-6745
pkeltyk@uakron.edu
Randy Pope
Director, Graduate Program in Theater Arts
College of Fine and Applied Arts
University of Akron
Akron, Ohio 44325-1005
Jerry Apple
Professor of Taxation
Daverio School of Accountancy
University of Akron
Akron, Ohio 44325-4802
|
