Steppenwolf's New Stage

Case Study

Steppenwolf’s New Stage A theater ensemble transforms into a company with a bottom line

By Tony Proscio and Clara Miller

Stanford Social Innovation Review Winter 2003

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Stanford Social Innovation Review 518 Memorial Way, Stanford, CA 94305-5015 Ph: 650-725-5399. Fax: 650-723-0516 Email: [email protected], www.ssireview.com CASE STUDY Steppenwolf’s NNEWEW Stage

A theater ensemble transforms into a company with a bottom line

by TONY PROSCIO AND CLARA MILLER

How does a nonprofit arts organization expand? How do artistic, executive, and board leadership roles evolve as an organization grows? What are the risks of growth? What are some principles that can guide arts and other nonprofit organizations through difficult financial waters?

Spend a few hours touring the offices, national arts institution has been told stages, production facilities, and other before. A less-told tale lurks offstage: real estate holdings of the Steppen- How did a company of unpaid artists, wolf Theatre Company in Chicago, armed with little more than borrowed and it can be hard to conjure the delin- props and greasepaint, funded mainly by quent outfit that a founder once box office receipts and a few small grants, described as “subtle as 400 Ex-Lax.” In transform itself into a $12 million-a-year a warren of cubicles and workstations, enterprise with real estate and other with blinking spreadsheets, scrolling assets approaching $30 million? OF STEPPENWOLF THEATREPHOTOGRAPHS COURTESY COMPANY databases, and network file servers To f ind out, we analyzed Steppen- whirring in every corner, tattered wolf’s audited financial statements for 18 posters from Sam Shepard’s “Buried individual years between 1977 and 2002. Child” and Lanford Wilson’s “Balm in We conducted interviews with eight Gilead” are the only reminders that Steppenwolf representatives, including this is the home of what one drama Chairman John N. Fox, and analyzed critic called “gangsta theater” – epi- historical data on ticket sales, subscrip- center of a ferocious and combustive tions, pricing, and personnel.1 dramatic style. Not surprisingly, consistent artistic The story of how a small troupe of excellence, maintained by a stable corps college undergraduates morphed into a of actors, writers, and directors, was a

66 STANFORD SOCIAL INNOVATION REVIEW ~ FOR PERSONAL USE ONLY ~ DO NOT DISTRIBUTE ~ www.ssireview.com Steppenwolf, which began in a church basement, eventually built this 510-seat, multimil- lion dollar facility, one of Chicago’s most desirable venues. But the foray into real estate brought with it a whole new set of challenges.

crucial part of Steppenwolf’s growth. which sat 88. In 1980, Steppenwolf and everyone taking [criticism] from all But the company also successfully moved to a 134-seat theater in Chicago. concerned.”2 aligned artistic mission with business Two years later, the company moved In 1982, Sinise and ensemble mem- realities, found the right moments to again, to a 211-seat facility – larger, but ber John Malkovich earned off-Broad- expand, and developed its board strate- hardly state-of-the-art: Ensemble mem- way Obie Awards for their perfor- gically over time. The story of how bers had to wad up moving blankets mances in Sam Shepard’s “True West.” they did it begins, in a sense, the first and staple them to the walls to cover Six years later, Steppenwolf had time art and business collided. holes in the plaster. another breakthrough – John Stein- Meanwhile, Steppenwolf’s reputa- beck’s “The Grapes of Wrath,” the first A Wild, Risk-Taking Physicality tion was solidifying. An article in Amer- play sanctioned by the Steinbeck estate. In 1974, Terry Kinney, Jeff Perry, and ican Theatre described the original Step- The show would open on Broadway in Gary Sinise, friends from Illinois State penwolf as developing “an ensemble 1990, earning ensemble member Frank University, started a theater group in vision of what acting could and should Galati Tony Awards for Best Director the basement of the Immaculate Con- be, proceeding in a spirit of constant and Best Play. The following year, Step- ception Church and School in High- verbal critique. … With little to do out penwolf moved into its own $8.28 mil- land Park, Ill. The following year, while in the ’burbs except rehearse, drink lion theater complex, with a 510-seat filling out papers of incorporation, beer, and talk about work, Steppen- mainstage and a 200-seat experimental they realized they needed a name. One wolf acquired some of the qualities theater, in Chicago’s Lincoln Park of them happened to be holding a copy that would characterize its later pro- neighborhood. In 1998, President Bill of “Steppenwolf,” the 1927 novel by ductions: a wild, risk-taking physicality, Clinton presented Steppenwolf with the German writer Hermann Hesse. It a willingness to push ideas and emo- the National Medal of Arts for out- was not a deep sense of artistic sym- tions to startling extremes, a fearless standing contribution to American the- metry, but rather a lack of anything confidence in their individual talents, ater. better, that prompted them to adopt and, perhaps most important, a non- Today, Steppenwolf has 25,000 sub- the name as their own. hierarchical family feeling. Most major scribers, and a 35-member ensemble, The company produced four shows, artistic decisions were made collec- many of whom have parallel careers in including “Grease” and “The Glass tively, with actors stepping outside to television and film. Perhaps best known Menagerie,” in the church basement, direct, directors moving inside to act, are Sinise, whose film credits include

www.ssireview.com ~ FOR PERSONAL USE ONLY ~ DO NOT DISTRIBUTE ~ STANFORD SOCIAL INNOVATION REVIEW 67 “Apollo 13,” “Forrest Gump,” script for Steppenwolf: angry, raw, polit- and “The Green Mile,” and ical, overwhelming. But even if the Malkovich, who became a show sold out each night, it would not household name in 1999 cover costs. with the release of “Being By 1988, however, largely on the John Malkovich,” and who strength of continued artistic success, has a long list of film credits, Steppenwolf’s financial situation had from “Dangerous Liaisons” improved. The company was earning to “Adaptation.” $5,400 a year from each seat in its rented theater – three times what it An Era of Limits had been in 1982. Steppenwolf’s ensem- The first time the Steppen- ble grew apace, from the original three wolf board ever said no to to 25 by 1989. an artistic idea was in 1982. It was in 1988 that Steppenwolf pro- John Malkovich with In the beginning, the board duced “The Grapes of Wrath” – and Joan Allen in “Burn This.” members’ main role had critics across the country raved. In the Allen’s Tony for Best been to raise or contribute space of a single paragraph, Newsweek Actress helped spur enough to bridge the small called the show “stirring,” “sensitive,” Steppenwolf’s growth. gap between ticket receipts “elegiac,” “dynamic,” and “an act of and production costs, and cultural and moral reclamation.” provide actors with whatever resources moved, costs shot up. Rent was now Among the few equivocal reviews, New they could scrounge up. Decisions more than $1,300 a month; it had been York Times critic Frank Rich complained about producing plays and selling tick- $138 a month in the church basement. not that the company had taken on too ets were left to the artistic ensemble. At that time, earned income from grand a challenge, but the opposite: “The board consisted of the people the box office amounted to 75 to 80 Steinbeck’s novel may not have been who loaned [the actors] kitchen chairs,” percent of total income. The remain- quite good enough for Steppenwolf. recalls Bruce Sagan, a board member der came from board gifts, special and longtime trustee. Imposing an “era fundraising events, and small founda- We Had Never Raised a Penny of limits” was hardly what board mem- tion grants. Steppenwolf was self-suf- Even as Galati was posing with his Tony Award backstage at the Lunt-Fontanne Theatre, Steppenwolf’s ensemble was “Most major artistic decisions were made beginning to disperse. Artists don’t leave Steppenwolf, strictly speaking. It’s collectively, with actors stepping outside to something like a knighthood, conferred for life. But some were leaving Chicago, direct, directors moving inside to act, and and even the stage. Meanwhile, the board was under- { everyone taking criticism from all concerned.” } going a radical transformation. In 1982, the governing body had been enlarged bers had in mind. ficient, surviving mainly from produc- from its original eight members to 20, Steppenwolf had moved into its tion to production, from the proceeds and diversified to draw in Chicago’s 211-seat theater only after demand for of its artistic ingenuity. downtown leadership. The new mem- its productions had created waiting Perhaps that’s why the board balked bers included more professionals, cor- lists, extended runs, and sufficient pub- in 1982 when the actors wanted to porate executives, and foundation offi- lic clamor to make the 57 percent mount a production of Bertolt Brecht’s cials. In 1987, the company had growth in house size a reasonable bet. “Threepenny Opera,” a sprawling story commissioned a study, and determined Reasonable maybe, but not without of beggars, prostitutes, and thieves fea- that it needed still more top-level busi- controversy: One board member quit turing the cunning Mac the Knife, with ness executives. By the end of that year, over the move, arguing it was prema- music, multiple sets, and an army of it had 29 members, and within five ture and risky. But when the company extras. It was in many ways a perfect years it would have 42.

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Total assets were growing, too, estate investor. “We had a feasibility geously high interest rate.” along with revenue. In 1988, the year study for our capital campaign that But thereafter, many things went the lights went up on “The Grapes of said we’d be lucky to raise $2 million. right. The board found another devel- Wrath,” cash and investments totaled We weren’t anybody’s idea of a prime opment company run by a theater lover $1.25 million. The next year, spurred by borrower. So we went after a state to serve as construction manager for a the success of both that production bond issue for cultural institutions … favorable fee. Relying on Sagan’s real and “Miles from Home,” and a lucra- [and] we ended up with an outra- estate expertise, Steppenwolf served tive capital campaign, they were $4.6 million. With some of America’s most cel- ebrated actors and directors working in Lifetime Achievement rented space that suffered from major structural deficiencies, with spendable ince Steppenwolf’s inception in 1974, the company has staged over assets soaring, and with many more 300 plays, mostly in Chicago, but also in New York, Washington, D.C., potential subscribers than there were and numerous other cities in both the United States and abroad. seats, Steppenwolf’s next step was SAlong the way, the company has earned theater’s highest awards inevitable. It wanted a new home. and accolades. Here are some highlights: “This is a group of very ambitious people,” explained Martha Lavey, artis- 1974: The company is founded; produces four plays in an eight-month tic director. “They are not going to be period: “Rosencrantz and Guildenstern are Dead,” “The Glass Menagerie,” limited to one theater or even one city. “And Miss Reardon Drinks a Little,” and “Grease.” So our theater has to be good enough, including big enough, to keep their loy- 1982: Steppenwolf makes its New York City debut with Sam Shepard’s alty.” “True West.” Ensemble members John Malkovich and Frank Galati win off- A near-perfect opportunity pre- Broadway’s Obie Awards for performance and direction, respectively. sented itself in 1988. A private developer and theater lover proposed building the 1985: Steppenwolf wins its first Tony Award, for Regional Theatre Excel- group a performance and office build- lence. Steppenwolf ensemble members win two Obie Awards, a Drama ing as part of an imagined theater dis- Desk Award, and a Theatre World Award for directing and acting in Lan- trict on a property he owned in Lin- ford Wilson’s “Balm in Gilead.” Two other members win Theatre World coln Park. The company wouldn’t own Awards for their performances in Lyle Kessler’s “Orphans.” the building, but Steppenwolf wasn’t looking to build a real estate portfolio. 1988: Steppenwolf’s Joan Allen wins the Tony for Best Actress in Lanford It mainly wanted seats, space, and secu- Wilson’s “Burn This.” rity. The proposal was a neat fit. Steppenwolf launched a capital cam- 1990: “The Grapes of Wrath,” adapted from the Steinbeck novel and paign to provide $2 million for the con- directed by Steppenwolf’s Frank Galati, opens on Broadway, earning Tony struction. However, a year later, just as Awards for Best Play and Best Director, the Drama Desk Award for Best Direc- construction began, the developer’s tor/Play, and the Outer Critics Circle Award for Outstanding Broadway Play. business failed and the project halted. Steppenwolf’s board considered buy- 1993: Steppenwolf’s production of Tug Yourgrau’s “The Song of Jacob ing the property and taking over the Zulu” is nominated for six Tony Awards. project, but to do so, it would have needed to raise $5 million, and borrow 1996: Steppenwolf’s production of Sam Shepard’s “Buried Child” is nomi- $4 million more. This would be a nated for five Tony Awards. change in business: Steppenwolf would become a developer, landowner, and 2001: Steppenwolf wins a Tony and an Outer Critics Circle Award for Best highly leveraged debtor. Revival for Ken Kesey’s “One Flew Over the Cuckoo’s Nest.” The ensemble “We had never raised a penny of also wins the Drama League’s Unique Contribution to Theatre Award. capital,” recalls Sagan, a longtime real

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As Ticket Sales Increased, so Did Fundraising ... major Deloitte client to see “The Road to Nirvana,” a play by Arthur Kopit. EARNED RAISED “There was nudity in the opening scene,” he recalls, “and the first 20 8,000 words started with ‘F.’ At intermission, we didn’t say very much. I think he was stunned.” 6,000 And Fox, who had taken the board position under the assumption that Steppenwolf was a first-rate company 4,000 with sophisticated business operations, had an even more unpleasant surprise $ in thousands in store. “Here we were several weeks 2,000 into the new season,” he remembers, “and the first play was on stage and the second play had been chosen. But 0 ’77 ’82 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 that was it. There was nothing after that. We were selling subscriptions based on possibilities.” Fox soon ... Prompting a New Reliance on Individual Donors learned that this was nothing new. INDIVIDUAL OTHER In fact, as the company approached its 20th anniversary, artistic decisions 4,000 were still being made haphazardly, much as they had been made in the church basement. With its ensemble 3,000 scattered worldwide, difficulties in plan- ning contributed to ad hoc decision making. There was now a paid staff, 2,000 but, according to Lavey, the composi- tion of the season and the choice of key $ in thousands artistic personnel was “still essentially 1,000 a group decision.” Furthermore, the Steppenwolf ensemble regarded its season as an artis- 0 tic and social bellwether, a running dra- ’77 ’82 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 matic commentary on the times. By keeping artistic options open, Lavey as its own general contractor. The new had been art was now managing real said, “We could respond to world 510-seat theater opened in mid-1991, estate – hungry seats and square feet events, jump on a new work, or rethink and, even 12 years later, it remains one that depreciate, need repairs, and insist an old work based on what was hap- of the most desirable performing on being heated, cooled, and cleaned, pening in the world, in our lives, in the spaces in Chicago (sidebar, p. 71). whether empty or full. theater. The idea of making commit- Yet, beneath the euphoria of a tailor- Sagan, for one, anticipated a major ments far in advance was disabling to made facility, board members were con- psychological shift. “This,” he told the many ensemble members.” fronted with a deeper problem. A new artists, “is going to change things.” All of this contributed to rising anx- building with twice the seating capac- iety among board members. And the- ity doesn’t automatically double rev- The Identity Crisis ater critics were noticing something enue, much less net revenue. Hard The week that Fox, vice chairman of else: The repertoire seemed weaker; assets must constantly generate rev- Deloitte Consulting Group, joined the the seasons were becoming uneven. enue. A company whose main product Steppenwolf board in 1993, he took a Concerned, Fox arranged for his

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colleagues at Deloitte to undertake a identity crisis.” Steppenwolf needed to pay more of strategic plan. At the same time, the Meanwhile, the Deloitte strategic its fixed costs with predictable revenue board accepted an offer from founders plan painted a stark picture. Although such as subscriptions, the consultants Sinise, Perry, and Kinney to form an season subscriptions had been climbing concluded. But even under the best of executive artistic board, centralizing for years, the rate of increase had been circumstances, subscriptions eventu- and streamlining artistic decision mak- slowing, and in the 1993-94 season, the ally hit a ceiling: There are only so ing. It was not an easy change. Many company had lost a significant number many seats to sell, and ticket prices are ensemble members saw it as the unrav- of subscribers. Subscription sales had subject to market limits. Long-term eling of their communal life. Indeed, decreased as a percentage of total pro- “predictable revenue” would need to the company’s artistic director quit. duction revenue, from 67 percent in include proceeds from new sources of “As the group approaches its 20th 1990 to 55 percent in 1994. Single-ticket “subsidy revenue,” including an endow- season,” the Chicago Tribune wrote in sales, too, had recently dipped. Worse ment and recurring contributions from May 1995, “as its founding members still, Deloitte’s sample of six other a larger and more diverse base of con- near their own midlife years, Step- “peer” theaters showed less volatility tributors, especially individuals. penwolf is caught up in a tumultuous and much stronger subscription sales. The company’s strategic plan envi-

Coming Full Circle Yondorf Hall is just the latest in a series of real estate expansions. In Real estate investments bring ensemble back where it started 1994, the company purchased 67,000 square feet for a scenery construc- hen a private devel- 15 feet into the seats, putting the tion and special effects shop several oper offered to build actors precisely where Steppenwolf miles away. In 1996, it bought the Steppenwolf a new wants to be: in the audience’s lap garage adjoining the theater, both W theater in 1988, the (photo, p.67). as a source of parking revenue and troupe jumped at the chance. This, A few floors up, a black box studio as another black box venue in the despite the fact that the developer’s theater accommodates up to 250 garage’s enclosed first floor. plans were a bit ornate – complete people with its own box office and The garage theater is, in effect, a with coffers and chandeliers – for lobby area. At the time the theater re-creation of the company’s church- Steppenwolf’s brand of theatrical was built, the same floor provided basement origins: a flexible, unim- mayhem. comfortably for administrative offices posing 100-seat space for new plays, Within a year, though, the devel- next to the studio lobby. Other floors new directors, and productions in oper’s business had failed, and Step- offered scene and costume shops, a development. penwolf took on the construction recording studio, and storage space. “A lot of people on the ensemble project itself. It was a bold foray into Today, the administrative offices really want to hold on to that part of real estate, but it also meant that the are down the block, in the upper their roots,” says Claude Binder, Step- theater company was free to design floors of Yondorf Hall, a well-pre- penwolf’s general manager. The a building more in line with its served 1887 landmark bought by rough space, Binder adds – with its “gangsta” image. Steppenwolf in 1998. For several $12 seats on makeshift risers, sepa- Opened in 1991, the new theater, years, a bank has owned and occu- rated from the garage’s lobby only by which has a 510-seat mainstage, is pied the hall’s lower floors. At the curtains and partitions – “puts us back Steppenwolf through and through. time of this writing, the bank was where Steppenwolf always wants to The walls are rough cement and the slated to move out, and Steppenwolf be: in a position to try new scripts, get ceiling is a web of catwalks, wiring, planned to either take over the to know new actors and directors, and lighting grids that gives off a entire facility or lease it out – and challenge the smaller audiences feeling of naked infrastructure, yet depending on how much it can that really like breaking new ground, the acoustics and sightlines are flaw- charge for rent. The decision will and don’t expect a lot of creature less. The apron of the stage juts out have nothing to do with art. comforts.”

www.ssireview.com ~ FOR PERSONAL USE ONLY ~ DO NOT DISTRIBUTE ~ STANFORD SOCIAL INNOVATION REVIEW 71 As Steppenwolf’s critical acclaim grew, the company formed an executive board to centralize artistic decisions. Some actors saw this as the unraveling of their communal life. now 60-member board in 2000, full board gatherings had become less effec- tive – mainly because of its unwieldy size. “We went from eight board meet- ings a year down to four,” Fox says, “but with more frequent committee meet- ings and more committees. The executive committee meets monthly, the finance committee meets six to eight times a year. There’s more work, but it’s more focused, with much more opportunity for involvement.” When recruiting new board members, he says, “We distinguish this board from others by saying, ‘You’re going to work hard.’” The transformation affected the artistic program as well. For starters, every season is now fully committed by the time subscribers send in their sioned a solution: spending even more, such promise, and in fact diminishes checks. And while Steppenwolf has lost assembling a larger staff to work on self-sufficiency. As Steppenwolf the ability to schedule productions on neglected artistic functions, fundraising, expanded, ticket sales no longer covered a whim, it has gained in other ways. and audience development. Following costs, and the troupe had to bolster its The streamlined artistic decision mak- the advice of the new artistic board and “subsidy” business – mainly fundraising ing, with authority vested in the artis- the consultants, the company also opted from individuals. Henceforth, Step- tic director and executive artistic board, to increase the size of its artistic staff. penwolf would be run by a staff larger, has made it possible for Steppenwolf Soon, the total number of employ- more diverse, and more specialized to open new lines of artistic endeavor ees would rise to 82, up from 46 in 1994. than the ensemble had ever been. What – projects that, in years past, the dis- Unearned revenue, mainly from contri- had been a company of artists became persed ensemble might never have been butions, climbed steadily, from 30 percent a company for artists. able to launch. In 1995, for instance, of revenue in 1995 to almost 50 percent Steppenwolf started a “New Plays Lab,” by 1999 (graph, p. 70). The development The Board Rolls Up Its Sleeves where writers and actors can workshop department, which had concentrated In 1996, the first year under the new original material. “It is the only Chicago on special events like gala evenings with administrative structure, contribu- series,” wrote the Chicago Sun-Times in ensemble celebrities, became a multi- tions jumped almost $1 million, and 1988, “that consistently places the faceted, fully professionalized program grew to nearly 40 percent of total resources of a major institution behind with individual strategies for corporate income, up from roughly 30 percent new work by younger artists.” donors and sponsors, foundations, gov- the year before. In 2000, Steppenwolf The company still takes risks, but ernment agencies, civic groups, small launched an $11 million endowment they have less of a do-or-die feel. In contributors, and wealthy patrons. Devel- campaign (at the time, its endow- the 2003 season, for example, Step- opment staff grew from three people in ment was a paltry $284,000) along- penwolf teamed up with Congo Square 1995 to 13 by the end of the decade. side a campaign to increase its annual Theatre Company, a three-year-old When for-profit companies grow, appeal fund by $10 million within African-American troupe, on a revival they do it for the promise of future three years. In two years, the endow- of Alice Childress’ 1962 play “Wedding profits. They invest in increased pro- ment campaign had raised $8.3 mil- Band,” which deals with race relations duction because they expect the growth lion and the annual fund had reached in South Carolina during World War I. to eventually cover all costs and result $8.7 million. It was a daring undertaking – a dis- in net revenue. In the nonprofit sec- All of which meant adjustments for turbing plot set in a nearly forgotten tor, growth (in this case, an expanded the board. By the end of the decade, era, written during the Civil Rights theater and more ticket sales) holds no says Fox, who took over as chair of the movement – and ticket sales were

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respectable, but far from the year’s best. cost of managing and maintaining the Reliance on a handful of big grants can “This is exactly the kind of project,” building exceeded any income boost. be comparatively luxurious, but a says Michael Gennaro, former execu- And that was a permanent change. change of government policy or adverse tive director, “that the presence of an A new theater with more seats – decisions in a few boardrooms can wipe endowment and a strong annual rather than a step toward self-sufficiency out big percentages of revenue. Indi- fundraising campaign make possible. – is a permanent step toward depen- viduals might come and go, but if the You can take a little more risk, and you dence on the kindness of strangers. If total number of individual donors is can plan more responsibly for the risks self-sufficiency had been the goal, Step- great enough, giving remains consis- you take, when you know there’s a penwolf was closer to achieving it in tent over time. Moreover, gifts from financial backstop there.” the 1970s than it has ever been since. individual donors are invaluable because Nearly all of its costs in those years were they are unrestricted: The money can be Steppenwolf’s Lessons covered through earned income from used where it is needed, jut like ticket How does a nonprofit arts organization box office receipts. Steppenwolf’s suc- and subscription revenue. expand? How do artistic, executive, and cess demanded expenditures that its box For organizations like Steppenwolf board leadership roles evolve as an orga- office couldn’t cover. that want to grow in size, prominence, nization grows? It is tempting to view So, what are some principles that and artistic innovation, subsidy is all but success in the arts as a triumph solely can guide arts and other nonprofit orga- indispensable. The more diverse the of talent and vision, wherein stable nizations through difficult financial sources of subsidy, the more reliable business and capital structure are the waters? Steppenwolf is sustainable today revenue will be. In this respect, true sus- natural rewards of creative genius. In because of its deep investment in devel- tainability means departing from “self- reality, art, business operations, and opment, and its move to a diversified and sufficiency” – probably for good. capital form something like the walls of labor-intensive appeal – not just to cor- 1 This case study was adapted from a more exten- a pyramid: If any one side grows, the porations, big foundations, and gov- sive monograph “Rising in Stages,” funded by the Ford Foundation. The original piece can be down- other two must change accordingly, or ernment, but to individual donors loaded at www.nonprofitfinancefund.org. Non- the whole structure comes apart. (graph, p. 70). Today, contributions are profit Finance Fund researchers Alice Fisher, Jason Confronted with public disappoint- approaching half of all revenue. What Kuschner, and Wells Chen contributed to this report. ment, audience disaffection, and incip- makes the solo donors significant is not 2 Coe, R. “Steppenwolf Howls Again,” American The- ient financial losses, Steppenwolf bol- just that they had been an underused atre 13, no. 5 (May-June 1996). stered all three walls at once. Its board resource, but that their greater num- recognized the economic and manage- bers make them a source of stability. ment issues, and by the time the needs became acute, it had the right mix of members to diagnose and address the problem. Development staff ballooned TONY PROSCIO is a freelance writer and a consultant to foundations and nonprofit just as the operation was starting to organizations, including the Nonprofit Finance Fund. He is the author of “In Other strain at the seams. At the same time, the Words” and “Bad Words for Good,” essays on philanthropic jargon published by the founders’ growing concern about the Edna McConnell Clark Foundation. He is co-author of “Comeback Cities: A Blueprint direction and quality of the artistic prod- for Urban Neighborhood Revival” (Boulder, CO: Westview Press, 2000). Proscio formerly uct forced them to act, forming an artis- served as New York City’s deputy commissioner of Homeless Services. He established tic committee to oversee decision mak- Miami’s Homes for South Florida, a bank consortium for community-development lend- ing. Steppenwolf’s great strength was ing, and later became associate editor of the Miami Herald, where he was lead editorial that it responded as an organization, writer on economic issues. not only with alarm, but with a plan. CLARA MILLER is founder, president, and CEO of Nonprofit Finance Fund, a national What are the risks of growth? With leader in social enterprise finance. In 1996, President Clinton appointed Miller to the its new theater, Steppenwolf increased U.S. Treasury Department’s Community Development Advisory Board. She became square footage by a factor of seven, chair in 1999, completing her term in 2001. Miller previously worked for the New York increasing seats by a factor of three. Yes, Community Trust. She is an advisory board member of the Stanford Social Innovation the new space instantly provided room Review. to grow. But just as growth in space exceeded growth in seating capacity, the

www.ssireview.com ~ FOR PERSONAL USE ONLY ~ DO NOT DISTRIBUTE ~ STANFORD SOCIAL INNOVATION REVIEW 73 Congratulations! You have reached the end of this article. But before closing the PDF file, consider the following-- it's likely that my professor will want to talk about this in class.

What might the topics be?

-Can I identify the phases of a board of directors in this article?

-Can I identify the three parts of a strategic plan?

-Does there seem to be a reason why things worked out for Steppenwolf?

-Can I think of one place where making a decision in the other direction would have changed the course of the company?

-And in case there are bonus points, have I ever heard of Steppenwolf Theater? Have I gone to their website and clicked around a little bit to see how things are today?