The Voice of Canadian Credit Unions
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Invigorating Arts Co-ops

Canadian artists are working collectively to revive creative communities from coast to coast

On gritty Gottingen Street in Halifax’s north end, the Bus Stop Theatre Cooperative, a lively storefront performance venue, is an incubator for emerging actors and performers.

Last year, for instance, it featured the Shakespeare by the Sea’s production, I Am My Own Wife. Housed in a former pharmacy, the 149-seat playhouse is a black box theatre, meaning the seating can be moved around, so the space is flexible enough to hold a concert, a show, a workshop, or a reception. About 1,600 kilometres away, the Aron Theatre’s brightly lit marquee means business is thriving. The only cinema in the village of Campbellford, Ontario, situated between Ottawa and Toronto on the Trent River, this modest one-screen movie house features a new film every week. If the Aron ever went dark, residents would have to drive for nearly an hour to reach the giant multiplex cinemas in larger centres.

What the Bus Stop and the Aron have in common is that both were once privately owned small businesses, struggling to survive, until their communities rallied around and transformed them into cooperatives. Doing so was a stabilizing force for both organizations. By changing priorities — putting members’ needs first and applying co-op values like self-help, equality and solidarity — members were able to resuscitate the businesses.

The place of art co-ops in Canada

In the Canadian economy, where the default small business model is still private enterprise, estimates suggest nearly one-third of startups fail. By contrast, co-ops can weather economic storms with resilience. Studies in several provinces have shown that after some years in business the survival rate for co-ops is considerably higher than that of private companies. Still, only a fraction of the 9,000 co-ops in the country are arts-based, even though forming one can be the best path to success for artists who have little financial clout in isolation.

“Artists of all sorts are the quintessential individuals,” says Larry Haiven, director of Co-operative Management Education programs, part of the Sobey School of Business at Saint Mary’s University in Halifax. “They operate on their own.” Haiven points out that this sense of independence has a downside. “When they are starting out they need help. They can’t go to the bank and ask for money to live on for a few years while they get established.”

There’s another reason that artists, who make up just one per cent of the labour force, haven’t established more co-ops, says Kevin Harding, director of co-op development for the British Columbia Co-operative Association (BCCA). “Artists are often seeking an alternative form of organization that empowers them, and co-ops are a great way to do it,” he says. “[But] there are some barriers to arts co-ops, in that not all granting bodies recognize co-ops as eligible incorporated entities — even non-profit co-ops! As such, arts co-ops are ineligible for certain grants. These arts funding bodies tend to push artists towards non-profit societies, which is sometimes an awkward fit.”

“Artists are often seeking an alternative form of organization that empowers them, and co-ops are a great way to do it”
—Kevin Harding

The arts co-ops that do exist usually come together for three reasons: marketing, sharing resources such as film equipment, or operating a venue. Since as far back as the 1960s, governments have recognized their value. The Canada Council, for example, has supported collectives that share ownership of expensive film equipment as a way to reach more budding filmmakers. Perhaps as a result, the film co-op model has proliferated in most regions with durable groups such as the Saskatchewan Filmpool Cooperative (1977), the Winnipeg Film Group (1974), and the Atlantic Filmmakers Co-operative (1974) leading the way.

Traditional artisans have also created marketing groups: the venerable Circle Craft Co-operative, launched in 1973 to serve B.C. craftspeople, is one example.

“We’re on the edge always,” says Paul Yard, originally a candle maker, who is the co-op’s longtime craft show producer. “I don’t know an arts organization that isn’t. But we’re successful because members rally when there’s a problem.”

During a lean year in the mid-1980s, the group left its small storefront and started a summer market on Vancouver’s Granville Island (then a new tourist destination), where it has become an anchor tenant today. After a successful summer at Expo 86, the co-op moved its Christmas market to the elegant Canada Place and then to the Vancouver Convention Centre. It now runs two major shows annually.

Clare Waqué, the Bus Stop Theatre’s founder and current operator, believes that Halifax needs a professionally run affordable venue to showcase budding talent and new work if the arts sector is going to survive, thrive and help the city develop. Rented more than 250 nights a year, the small but well-equipped centre is ideal for everyone from emerging artists to veterans.

Waqué fell in love with the Bus Stop Theatre when she produced a show there in 2008. Right after university in 2010 she invested in her dream, buying the theatre business and its building from founder Howard Beye. Applying her new energy, she doubled the business revenue, but still ran a deficit every year and couldn’t afford to hire staff. Faced with a substantial mortgage, she realized that her own social enterprise needed help from the wider community of arts supporters.

In 2012, she successfully pitched the idea of switching to a community business model. She views the cooperative format as a suitable compromise between her former social enterprise business run by one person, and a non-profit society that exists on grants and donations. In a tight nonprofit sector, established arts organizations absorb most of the available grant funding, leaving nothing for new players like Bus Stop Theatre, which, as a co-op, can turn to its members. The Bus Stop Theatre directors, who are still phasing in their management role, plan to hire an executive director. Waqué still owns the building, with rental tenants above the theatre, but will eventually shift the assets to the co-op.

The value of working together

ArtsCoop-PREVIEW_716 x 384Over at the Aron Theatre Cooperative, board president Russ Christianson says his motivation for getting involved was simple. “I didn’t want to lose the movie theatre,” he says, “because then we’d have to drive to Peterborough or Belleville, which is an hour and a half round trip.”

The Aron was facing closure in 2009. The movie industry had gone digital and the owner wanted to retire rather than invest in new equipment. Christianson was a business consultant who had worked with new cooperatives for more than 25 years. He saw an opportunity to volunteer in his own community of 3,500 people. “Co-ops are well suited to any situation where there is a clearly identified need and people realize that the only way to get the need fulfilled is to work together,” says Christianson. “By getting people involved you get all those positive feelings about ownership, decision-making and democracy.”

Christianson and his group appealed to the broader municipality of Trent Hills (population 12,000) and created a cooperative in order to buy the enterprise in 2011. The founding board of directors became hands-on managers at the Aron Theatre Cooperative. The group financed the purchase by selling $31,000 worth of bonds and 160 memberships to the community. They negotiated with the vendor who agreed to hold the mortgage. They knew they had to go digital to be competitive, so they took that money and upgraded. The first board devised the marketing strategy, contracted with movie booking agents, and managed everything from rentals to popcorn sales. Gradually, the directors have been able to pull back now that they have an operations manager, the theatre’s only full-time employee.

Started in 1949 in an old livery stable, in its heyday the movie house had 330 seats. “All the farmers and families came,” says Christianson. The previous owner took out half the seats, expanded the concession and created a retail space, which the co-op now uses for meetings or rentals. There is money to hire high school students as casual concession workers, while two volunteer movie hosts greet the audience and run the projector. The theatre now has 140 seats, but the profitability break-even point is much lower — about 50 seats.

“There is way more legroom than there used to be. People really like it because it’s so comfortable,” says Christianson. “We’re doing everything we can to make the experience as pleasurable as possible so people will come back. People have a really strong emotional connection to the theatre.”

Community support and sweat equity are what make the cooperative a success. But sustainable growth depends on access to capital. Balancing those two challenges is what makes managing co-ops quite different from other businesses. There are two pillars, says Haiven: the traditional skills such as marketing and the co-op skills such as an emphasis on people management and conflict resolution. “You have to get co-ops; you have to understand why they’re important, but you can’t afford to go bankrupt either,” he says. “If they’re just a business, they will lose the support of members.”

A capital problem

Access to capital is the biggest problem, says Haiven. Co-ops are formed to pool resources, but those funds are usually from individuals. “Most co-ops fail because they don’t have the capital pool — they don’t have deep pockets,” he says. “Along comes the possibility of expansion, but co-ops can’t fund it through retained earnings, so they have to go to a lender. They overextend themselves and have liquidity problems.”

To address this problem, taking inspiration from the United Nations Year of the Co-operative, in 2012, the Canadian Co-operative Investment Fund (CCIF) began soliciting donations to support programs for new co-ops. A recent $10 million donation from The Co-operators, an insurance giant in Canada, brings the total to more than $24 million. The CCIF plans to work with credit unions and caisses populaires to create a distribution network for the loans.

Arts organizations are by nature more entrepreneurial than others and have diverse revenue streams from grants, benefactors and box offices, says Catherine Ludgate, manager of community investment for B.C.-based Vancity (509,000 members, $18.6 billion in assets). Vancity provides not only loans and bursaries to new co-op organizers but also technical start-up assistance. The social capital is the glue that holds the model together. “Where people have a real commitment to a principled community structure, they will work very hard to keep that structure whole, they will work unpaid hours, they do whatever it takes,” she says.

“I think most credit unions could be reminded that it’s in our DNA: we are co-ops ourselves.  Sometimes as a sector we’re guilty of becoming too bank-like. We forget our roots”
—Catherine Ludgate

“Those kinds of organizations can weather downturns far more easily than for-profit structure where people simply fold up the numbered company and walk away.” To groups complaining that lending institutions are not approachable when it comes to financing a co-op, Ludgate responds, “I think most credit unions could be reminded that it’s in our DNA: we are co-ops ourselves,” she says, adding that co-ops helping co-ops is one of the guiding principles of the movement. “Sometimes as a sector we’re guilty of becoming too bank-like. We forget our roots. It’s simpler to sign a loan agreement with one person rather than five board members to sign that resolution. It’s more work, but it’s worth doing.”

Emerging arts co-ops

New arts co-ops are now popping up, inspired by earlier ones. In Vancouver, recent startups include the Wood Shop Workers Co-op, where the three members use scrap wood from pallets and construction sites to build furniture and accessories. At the Terminal City Glass Co-op, members can take classes or book kiln time and studio space to create blown glass art.

Sometimes, co-ops can be a mixture of models. In the fall of 2014, four Vancouver arts groups — all non-profit societies — formed a cooperative to manage a downtown studio space in a vacant part of the CBC building. The PuSh International Performing Arts Festival, Music on Main society, DOXA Documentary Film Festival, and Touchstone Theatre formed the 110 Arts Cooperative to pool resources and gain valuable rehearsal and administrative space, all in a central location. Dubbed The Post at 750, the centre is available for rentals and will likely become a hub for creativity in the city.

Since they are a reflection of their members, arts co-ops are as different as Shakespeare and Justin Bieber. Whether the mandate is showing movies or selling pottery, arts co-ops generally capture the public imagination and maintain broad support. It’s all hard work but very rewarding to participate in the success of a community venture, says Christianson. “That’s Aron’s tagline: Be part of the fun.” ◊


Vitals

Organization: Wood Shop Workers Co-op

Location: Vancouver, B.C.

Number of members: 3

Hero: The wood pallet

Super power: Upcycling — recycling “waste” products and transforming them into custom-made furniture and accessories like handles, desks, bed frames, and more. ♦