In the Heart of the Beast Puppet and Mask Theatre

With roots going back to the 1970s, In the Heart of the Beast Puppet and Mask Theatre (HOTB) has staged innovative productions including the holiday community pageant La Natividad; has been crucial to Minneapolis’ celebratory, ritualistic May Day Parade; and through works in schools and spiritual investment in its multicultural Lake Street environment, has carried a vision of inclusion and the common good throughout its history.

While HOTB’s artistic direction had been consistent, with Sandy Spieler in the leadership role since 1977, its financial health reached a crisis point in the summer of 2014. The theater had been operating at a loss for four consecutive years, its net assets were negative, and it was unable to make payroll. The theater had seen the loss of a major funder, and a revaluing of its Art Deco cinema home the Avalon (containing a 300-seat theater and the company’s administrative offices) led to a sinking line of credit. The theater had no reserves with which to weather this storm so was using restricted funds to meet cash flow, which suddenly caused a perception in the community that the company stood on a knife’s edge.

“Staff were laid off,” said Executive Director Corrie Zoll, who, with a strong background in development and fundraising, was hired the following year as part of the changes that occurred in the wake of this crisis. Propel Nonprofits (formerly Nonprofits Assistance Fund) provided HOTB a loan in August 2014 so the theater could remain in operation and have time to begin restructuring.

“Propel Nonprofits was part of the transformation committee to get things back on track,” Zoll said. “It was very indicative of the way Propel Nonprofits looks beyond a specific need to the larger context of why this specific need has come up. They’re generally interested in working with organizations to make entire systems work and not just specific pieces.”

A crucial element of the reorganization was a loan that enabled the theater to buy itself out of its mortgage and shift the obligation to Propel Nonprofits at a lower interest rate—a sum that also included money allocated to needed building improvements. Additionally, Propel Nonprofits used a new equity builder/forgivable loan product that enables HOTB to reap forgiveness benefits if it contributes to a bank account dedicated to creating a cash reserve—thus using financial instruments to aid the organization in building capital for both its own present stability and future growth.

Simultaneously, Propel Nonprofits worked with a transformation committee including staffers and board members to redo HOTB’s financial systems, budgeting, reporting—what Zoll calls “rebuilding the entire financial infrastructure.”

“Another program I’m involved with is Propel Nonprofits’ Financial Leadership Cohort,” said Zoll. “All of these pieces fit together very well. Our loan officer is also my mentor on the cohort. We’re talking about, for example, making a financial dashboard of indicators for our organization, as well as working on budgeting processes in the same way.”

“It has been terrific to get to work with Corrie on so many different levels during this transition time at Heart of the Beast,” said Phil Hatlie, Senior Loan Officer at Nonprofits Assistance Fund.  “To have Corrie in the Financial Leadership Cohort at the same time Propel Nonprofits was providing financial guidance and loan support was the perfect way to be able to dig deep with him to strengthen HOTB’s financial systems.”

“There are big challenges ahead that we share with other great companies,” Zoll said. “And for us, we are also reminding ourselves that we will either need to make a significant additional adjustment in this building, or leave this building. The status quo of doing enough to get by isn’t something we will able to do for much longer.”

Indeed, even at a lower mortgage rate, the Avalon needs attention. It needs an overhaul of its HVAC system, and its administrative spaces and backstage areas are in need of updates.

Now HOTB is in a position to examine its mission, and how it should best pursue it, with the kind of clarity and strategy that is impossible to find when lurching through crisis. Securing reasonable terms on its mortgage, a line of credit, and an incentive to build cash reserves are all in place. The financial structure of the nonprofit company, which has held for some time but proved vulnerable to sudden collapse, has been shored up with purpose and intent.

HOTB is very much still in a rebuilding phase—its total staff has been pared down to 12, with only about half of those working full time. But it has announced a full season of stage productions after dramatic cutbacks in the past couple of years, and now there’s opportunity to see how a vision predicated on the global traditions of puppetry can translate in decades to come.

“There are organizations that have been around for a while and were established when the nonprofit model worked differently,” Zoll said. “It’s a key moment when it seems to me these organizations realize that the way we’ve always done things—even if it came from a really good place—simply isn’t working anymore. Propel Nonprofits is able to talk to you with the knowledge of a banker, but with the empathy of someone who is familiar with the organizational ecology you’re working in.”

To learn more about In the Heart of the Beast Puppet and Mask Theatre, go here.

Read the full, updated HOTB case study.