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Case Study: Launching an Art Film Theater

How one couple started a nonprofit at midlife. Listen and learn.

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by Susan Crandell

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Brian and Sharon Burke had it made, retiring from public education in their mid-fifties with healthy pensions. Instead of taking an around-the-world cruise or puttering around the house, they continued working – this time for scarcely any pay – by opening the business of their dreams, an art film theater.

The full count of U.S. movie theaters is just north of 5,000, according to the National Association of Theatre Owners, and only a tiny fraction are single-screen operations like the Downing Film Center in Newburgh, New York, which has just 60 seats.

The story of how Brian and Sharon brought this business to life and made it a community gathering place – the mistakes they made, the lessons they learned – is a great primer for anyone starting a business on a shoestring and a prayer.

“I always loved movies,” Brian says. “As an assistant principal, I directed the talent show. When my son suggested we open a theater, I jumped at it. Our area has plenty of multiplexes but nothing that would play independent and foreign films.” The film center opened in the summer of 2006, and since then, the Burkes have never looked back. Their good humor, confidence and resilience has carried them through challenges and missteps to make their dream venture, where Brian takes tickets and Sharon pops corn, a success. I sat down with them before a Thursday matinee to hear what they've learned about running a small business. 

Before buying anything, think! The Burkes were lucky in securing a former gift shop in a gentrified district of Newburgh, with restaurants and a riverfront promenade across the street. But the property owner wouldn't let them bolt anything to the floor, so they couldn't create risers for stadium seating, which would give everybody a full view of the screen. Sharon and Brian call the original chairs they bought to furnish the Downing their biggest mistake. “They were $85 apiece. Opening night we had 75 chairs piled in there, all on the same level. It was a foreign film, and no one could see the subtitles,” Brian recalls. The Burkes solved the sightline issue with a stroke of ingenuity, replacing the upright chairs with loungers from Ikea – in effect lowering the seats instead of raising them. With everybody's gaze slanted upward, each row could view the screen, instead of the top of someone else's head.

Start as a nonprofit, if that's what you want to be. “We always wanted to become a 501(c)(3), but we ran as a profit-making venture for a while,” Brian says. Big mistake. This complicated the application process so much that it took four years to obtain nonprofit status. The Burkes launched the Downing with their savings, taking out a loan to purchase equipment. Before they could be approved for nonprofit status, they had to pay back every penny, and apply with a debt-free clean slate.

Market, market, market. The biggest challenge initially was getting the word out. “We've done fundraisers, having the opera here, Planned Parenthood, the Y. You get different types of people from each organization. We also had a Steve McQueen film festival the first year. That really helped,” Brian says. But the two things that have driven recognition most are an e-newsletter and the Downing's website. “We used the customer lists from two other businesses in our building, an art gallery and a wine club. That gave us our start.” Now the newsletter goes out to 3,000 people every week.

Hire the right professionals. “We have an excellent booking agent, who's been in the business for decades,” Brian says, adding that he did a lot of research to come up with the right name. “Hollywood knows him. He's the money man. He'll says, 'I'd stay away from that movie. You won't make any money.'” Sharon chimes in, “Brian shops for movies with his heart. Our agent shops with his head.”

Keep up with technology, but keep it friendly. “We used to do ticket sales by hand. People would phone in reservations. They didn't have to pay to reserve and sometimes they never showed up. Meanwhile we were holding the reservations and turning other people away,” Brain says. The Downing now has a simple online system to buy tickets with a credit card, but the Burkes are mindful that some of their clientele are wary of the internet. “We sell gift cards. You can use the number on the back to pay online, instead of giving your credit card number,” Sharon says.

Listen to your customers. “We made a mistake with concessions at the beginning,” Brian admits. “We wanted a cafe with fancy desserts and plunge coffeepots.” It took forever to brew coffee, and they were constantly throwing out half a pot. “We'd make regular and decaf, then someone would ask, 'Don't you have French vanilla?'” Sharon recalls. A customer suggested a single-serving machine, which became the perfect solution. Customers could pick from a dozen or more flavored coffees, and every cup was freshly made without any waste.

Consider affinity programs like membership. “Membership was something we always thought of to give the business extra funding, but for tax reasons we couldn't begin until we went nonprofit,” Brian says. In a couple of years, they've added 275 members at $40 a year ($35 for a senior discount), and hope to eventually hit 500. Members receive a discount on ticket prices, as well as special offers from restaurants and other local merchants.

Know when – and how – to ask for help. Recently, the Downing had to buy a digital projector because movies simply weren't available on old-fashioned film anymore. The tab was $60,000. Sharon and Brian took a deep breath and signed two loans. Then they launched a fundraising effort, which has succeeded beyond their dreams. Already their Drive to Digital has raised $51,000, including $20,000 in matching funds from an anonymous donor. “It's an amazing experience to see that outpouring of support,” Sharon says, adding proudly that all this money came from individuals, not businesses or professional groups.

Don't live your job 24/7. Sharon and Brian don't find it difficult to work together, but the film center had a way of taking over their lives. “We made a rule that we're not going to talk about the theater at home. We had to get the Downing out of our house. The lines between home and work blur. We have to be watchful about this,” Sharon says.

Plan for a future without you. “We didn't take salaries until last year, when the board of directors pointed out that if something happened to us, the place wouldn't survive,” Sharon says. The dream is to raise enough money to endow a salary, like a professorship. Right now, Brian and Sharon are taking minimal pay, which over time will grow to reasonable salaries. “The board told us we cannot do this gratis,” Brian says.

If you described the Downing to someone who's never been there, they'd roll their eyes. I've heard it referred to as “the dollar-ninety-eight screening room,” but always with a fond smile. This business is a example of the whole being so much more than the sum of its parts -- and a good lesson in what it takes to launch a community-based business. People love the Downing for its eccentricities, and they adore Sharon and Brian. Everybody feels like a stakeholder in the business, which is a key factor in the film center's success.

The Burkes dream of one day adding another screen, and offering educational programs. To that end, they hope to begin tapping into corporate and foundation funds. Meantime, they couldn't be happier with their new careers.

“We thought a lot about what we wanted to do,” Sharon says. “Many people who are retired pursue expensive hobbies – golf, skiing, boating. This is our passion. Our real motivation is that we want to stay connected to life -- the people, the movies, the pop culture.”