New Models; New Challenges

Here on the Aha! Blog, we strive to bring you the whole truth about the Aha! projects, from success to challenge to total conceptual reboot.

Take, for example, Theater Grottesco’s original concept of creating an LLC as an alternative capital campaign. Well, it turns out that SEC (the Securities and Exchange Commission) laws and regulations limit partners in an LLC to 35 people, each with a net worth of $1,000,000 or more, not including their homes. Suddenly the idea of offering shares to anyone with a spare $1,000 and an interest in downtown Santa Fe real estate seems pretty impractical.

But in true Aha! spirit, Grottesco has some new ideas:

In Model 1, a small group of partners invests substantial funding that is paid back with modest interest in 7-15 years. Investor motivation is less about return than community investment. However, in the current economy, this may present a more lucrative opportunity than standard securities or real estate. And the investments are understood to be risky. They may be transferred to a chosen non-profit organization as a tax-deduction as needed. Initial investments become a challenge to the general public to donate to the project in a conventional capital campaign. A third stage encourages volunteers to help build under the supervision of a licensed and insured contractor.

Model 2 is based upon the Calvert Community Investment model. A 501c3 solicits loans (not investments) of any size which are paid back with modest interest in 7-10 years. A 2nd campaign is then waged to repay the loans, a daunting prospect. On the other hand, with the low-interest loans, a theater could be created and we would be in a much stronger position to raise money the second time around.