The Heritage Foundation of Williamson County understands that a few but vocal members of the community have questions about the recent transition of The Franklin Theatre’s Board of Governors to an advisory board. This open letter should serve as clarification of the reasons behind the restructuring of the Foundation’s subsidiary.
- As a threshold matter, The Franklin Theatre is a nonprofit LLC wholly owned and operated by the Heritage Foundation, a 501(c)(3) nonprofit organization in Williamson County. The Theatre was purchased by angel donor Emily Magid in 2007 and gifted to the Heritage Foundation. Hundreds of community members donated to its more than $6 million restoration and rehabilitation campaign.
- More than a year after the Theatre’s grand re-opening, the Foundation formed the Franklin Theatre’s Board of Governors to assist in management. Governance and ultimate oversight remained with the Foundation Board of Directors. In recent years, however, the Theatre Board of Governors actively resisted the Foundation board’s oversight, claiming that it was independent and not a division of the Foundation.
- In addition, the Theatre’s executive director would not fully cooperate with the Heritage Foundation CEO and Board of Directors.
- In an attempt to rectify the issues, the Foundation board formed an ad hoc committee that included members of the Theatre Board of Governors to address these issues. After a year of efforts, the issues persisted.
- At the same time, at the recommendation of the Center for Nonprofit Management, the Foundation hired a nonprofit attorney to advise on best practices and governance structures for the Foundation and all its divisions.
- Upon reviewing the governance document for the Theatre, the attorney advised that the Foundation Board of Directors retained responsibility for governance issues and that the lack of cooperation from the Theatre Board of Governors created significant risk that the Foundation board could not fulfill its fiduciary duties to the nonprofit. To mitigate this risk, the attorney recommended The Franklin Theatre Board of Governors be converted into an advisory board, with the full intention that current Theatre governors would continue serving in that capacity. Every former governor was invited to join the advisory board and advised that they had the right to do so.
- As a consequence of the conversion of the Board of Governors, the Theatre executive director would now report to the Heritage Foundation Chief Executive Officer.
- These changes to the Theatre’s structure aligned it with the Foundation’s other divisions, the Downtown Franklin Association and the new Franklin Grove Estate & Gardens venture.
The Franklin Theatre will continue to operate successfully. However, above and beyond day-to-day operations, the Heritage Foundation also has a responsibility to ensure nonprofit best practices, such as substantial fundraising efforts in which the Foundation is adept, are implemented to protect the Theatre’s future. The Franklin Theatre will continue to function as a distinct subsidiary of the Foundation with a very qualified interim executive director in place, and its mission will still align with the Foundation’s mission of saving the places that matter and preserving the community’s cultural heritage.
In the eight years since the Theatre’s opening, the Heritage Foundation’s gross revenue has increased by 310%, and the organization has acquired over $10 million in real estate, including the purchase of the former O’More College of Design campus in downtown Franklin. This parent organization serves as a centralized support system with shared services for all its divisions. The Heritage Foundation stands behind its recent decisions 100% and believes that having consistent structure and best practices with its divisions is essential to continue evolving the organization into a professionally run, efficient nonprofit enterprise – which has already resulted in incredible growth and success.