Return of 501c3 status opens the doors for theater group after a year of uncertainty
After nearly a year of anxiety and waiting, the Matchbox Children's Theatre (MCT) can now issue a sigh of relief after it was notified recently that its 501c3 nonprofit status had been reinstated.
In 2024, the children's theater was notified by the Internal Revenue Service that the company not only owed $70,000, but that it had also lost its non-profit status. This meant that not only was MCT in a hole, but it had lost the means to potentially pay it back and even cast into doubt the ability to continue operating.
A loss in non-profit status meant that MCT could not apply for grants or seek sponsorships until its status had been regained.
However, in comparison to an overall situation that actually tracks back to 2016, the final resolution actually came pretty quickly despite warnings that it could take another six months to get the verdict back.
"We're been holding it together with each other really well. Everyone's been really supportive of that," Executive Director Angela Sedgwick Perry said Monday morning, going on to say that they submitted the final paperwork at the beginning of July. "A month later we found we had already gotten the status. It was mind-blowing -- without caveats, amended requests. Without anything."
While MCT's problems can be dated back to 2016, Sedgwick Perry acknowledged late last year that they could have gone back further, but there was no clear trail that leads back prior to that.
A financial consultant hired in January of 2024 began to pull back the curtain on issues within the theater, which included alleged embezzlement, altered records and forgery by a person who was acting as the group's treasurer.
While no legal action was pursued because the costs would have outweighed the return, it was an indicator as to just how much trouble MCT was in, in part because of a lack of people with sufficient background knowledge to be treasurer.
"To go forward as I see it, 80% was innocent mistakes," Sedgwick Perry said. "But now 100% of it is learned and understood, which is positive."
A positive that comes as a breath of fresh air as the reinstatement is retroactive. A clean slate.
"Where we're at is an incredibly cool place," Sedgwick Perry said. "We can finally say we are fully reinstated with our 501c3 non profit status. We're good to go. All doors are open. Everything we've held on to we can now just explode and tackle and move forward."
Still, it doesn't come without acknowledging the set-backs. MCT has had to reduce its hired staff this past year as well as put a hold on some of its programming including that programming for elementary-aged students, something Sedgwick-Perry stated Monday would return next summer.
The experience has also come with some lessons, including on the financial end of things. Sedgwick Perry said that MCT will regain a contract with an accounting service as well as work with a knowledgeable treasurer. From that work, monthly reports will be generated so she and the board can track the flow of money in and out.
MCT has also learned what Sedgwick Perry described as the ability of learning to say "no," an unforeseen benefit of this last year which allowed those within MCT to look inward as an organization.
"Before the lost status we were still moving a mile a minute. It was too much," she said. "If you want to deliver excellence you definitely have to make sure to keep your focus and keep everyone passionately motivated and energized for that."
That starts, Sedgwick Perry said, with focusing on the core of what MCT is about -- delivering theater education and making sure that everything they do continues to connect back to that driving idea.
"As we get that status back more change will continue to happen, but all in good ways for Matchbox," she said. "Getting this mission to the kiddos and in turn helping the community grow in a really positive way."
Even though the last year has been a challenging turn for the company, through cuts and trimming, MCT was still able cut its $70,000 debt down to $22,000 and with the wheels rolling forward again, the company can now start looking ahead to the upcoming season with their first big event being the Halloween Warm-up at the Jay C. Hormel Nature Center in October. Auditions for that will be Sept. 4-5 while auditions for their first play will be on Oct. 24-25.
There will be another play in the spring next year as well as a fundraiser likely planned for around February between the two plays.
As part of that MCT will start focusing on looking for sponsorship for the two plays, which Sedgwick Perry said would be huge for MCT moving forward.
"If we could get a sponsor for the winter and spring production that would greatly help," she said, explaining that Second Act Thrift Store would then be able to concentrate on the overhead for MCT, which could then begin looking at expanding staff again. "We need to hire and be able to hire. Being able to be supported through the Second Act would be an absolute game changer for what we can bring to the community."
Some of what MCT plans to bring back to the community includes a partnership between the Austin High School drama club and MCT, bringing together both groups under one roof once a week starting in September.
"We're going to share all of our resources," Sedgwick Perry said. "They will be sharing their hands-on-deck, we'll be sharing our sewing machines, our costumes, our space -- all of our education materials will collide with a great handshake and happy kids."
Sedgwick Perry also said that MCT has started to work with both Riverland Theatre and Summerset Theatre in costume sharing, which is another step toward tying together Austin's theater community.