One way to view the McCarter Theater is as an organization with a grand purpose. As managing director Tim Shields puts it, McCarter’s mission is “to provide enlightenment and enjoyment … As Mister Shakespeare once wrote, we hold a mirror up to nature … we tell people things about themselves, their place in the world and in the community, and help them to be able to empathize with the stories we are telling and to be transported to another level of understanding.”

Another way to look at the theater is as a small business. A nonprofit business, but a business nonetheless, with 80 full-time employees, that took in $12,086,900 in fiscal year 2016 and spent almost all of it, leaving a surplus of $163,500. Making this business function well while at the same time providing the artistic enlightenment that is the true purpose of the theater is a balancing act that every performing arts organization must follow, and it is one that Shields has been doing since he joined McCarter in 2009.

Shields is leaving McCarter this fall to take a job at the Old Globe Theater in San Diego, and McCarter began a search for his replacement as soon as the announcement was made in July.

He says the term “nonprofit” is something of a misnomer. He prefers “social profit,” a phrase coined by David Grant, which highlights the main difference between a group like McCarter and a for-profit business. “We are here for a reason other than simply making money,” he says.

Like businesses, nonprofit groups keep track of their financial health by measuring income and expenses and trying to balance the two. Unlike a for-profit company, which distributes profits to owners or shareholders, nonprofit groups strive to spend their entire budget on their missions. “My slogan is, ‘all the art that we can afford, but not a penny more,’” Shields says. “We push ourselves inside this building to produce the very best theater at the highest level we know how to do.”

But just what is “the best” theater? Is it the popular show that packs the theater with patrons, or is it the artistic coup that succeeds in its mission to enlighten, though potentially on a smaller scale? For McCarter, it has to be both. Behind each theatrical season is meticulous calculation. Debbie Bisno, resident producer at McCarter, works with Artistic Director Emily Mann to set every year’s lineup of theatrical productions and says getting a good mix of different plays and musicals is key to the success of McCarter.

Although the theater gets income from corporate and academic donations, state grants, and its endowment fund, the majority of its budget comes from ticket sales, meaning that pleasing audiences is key to the theatre’s continued existence.

The McCarter Theater Center includes two performance spaces: the 1,100-seat main theater and the 360-seat Berlind Theater. Each theatrical season includes just three productions on the smaller stage and two productions on the main stage, plus “A Christmas Carol.” This year’s theatrical season includes “Simpatico,” a tragicomic play by Sam Shepard starring Michael Shannon of Boardwalk Empire; “A Night with Janis Joplin,” a musical; “Stones in his Pockets,” a comedy; “Crowns,” a musical about black women and their church hats; and, as every year, “A Christmas Carol.”

The productions often bring in talent from the New York theater scene. McCarter leases apartments throughout Princeton where actors can stay during theatrical runs. Some cast members stay there, while others choose to hop the Dinky back to their homes in the city every night. (Cast members running for the train station immediately after the final curtain is not an uncommon sight.)

Bisno says each McCarter season usually includes a classic (such as Shakespeare) or a re-imagined classic, a musical piece, and a comedy, and that the theater especially seeks to produce work involving women and people of color. There is a board covered in sticky notes at the McCarter offices, where the staff keep track of potential productions for the coming year.

“Curating a theater season is an art,” Bisno says. “It’s kind of like creating a cocktail, and it also requires responding to the moment. If you want to be in theater, you want to do work that resonates with what’s happening in the moment. We are not a political theater, but we’ve always been a theater that responded to the political and social moment, and I think the audience here in Princeton and the surrounding area enjoys being able to engage on that level as well as just having fun.

‘We don’t do five shows that are fluff. We try to infuse the season with meaty drama, fun, and something that feels like a spectacular event. We include something with a new voice, and something that’s a classic or a reimagination of a classic. It’s a puzzle, in its way, and it’s fun.”

Invariably, some of these productions are riskier while others are more likely to be crowd pleasers, but the element of risk is always present. “Nothing’s a sure thing,” Bisno says. “Nobody has a crystal ball.”

Risk in a theatrical production in the nonprofit world is a bit different than risk for commercial theater. Bisno knows the differences well, since she has spent her career in both arenas. Bisno came to McCarter in 2016 directly off of Broadway, where she produced “Mothers & Sons,” “Grace,” “Annie,” “War Horse,” “Hair,” “The Merchant of Venice,” and other Broadway and off-Broadway productions. Before that she was a founder of Roadworks Productions, a nonprofit theater group in Chicago.

Bisno notes that Broadway productions are typically funded by groups of private investors. Each show is its own venture that ends with the production. When the show shuts down, the profit (if there is one) is distributed to the investors.

“You have sort of one-off creations,” Bisno says.

On Broadway shows are either musicals, which are likely to attract big audiences, or are plays, which typically require a big Hollywood actor as a draw, which means they can’t run for very long.

On the other hand, nonprofit groups like McCarter create entire runs of shows and are intended to build a community of loyal theater-goers. “There’s a sense that maybe you will be able to do a little riskier work in a season,” she says. “We’re not leading with profit-making on our mind; we’re leading with the artistic compass first, whereas in the commercial realm those things would probably be inverted.”

On the other hand, “safe” productions like already-popular musicals are not going to lead to breakout success. The biggest hits that have emerged in recent years started as passion projects. Who would have predicted that a hip-hop musical about Alexander Hamilton would be a huge hit?

McCarter created an unexpected hit in 2012 with the original production of “Vanya and Sonia and Masha and Spike,” written by Christopher Durang. The show is an offbeat comedy derived from the works of Chekhov and proved to be a breakout success. A year after its debut it moved to Broadway, won the Tony Award for best play, and was subsequently shown at around 130 theaters around the country.

The show created a financial windfall for its creators, but not McCarter. Shields says the theater saw “five-figure” checks every year from the show’s production around the country.

If McCarter were a for-profit venture, Shields says it would be unlikely to produce experimental shows like this, and that its ticket prices would be much more expensive. “We would simply charge whatever the market would bear, and we would just produce the very most popular plays that we know how to produce,” he says. “Don’t get me wrong. We don’t think of theater as going to school. You don’t come just to be educated. Enlightened entertainment is what we’re about.”

The more enlightened of the entertainment ventures are balanced out by reliable income generators, but these would also would grow stale if they were never updated. McCarter relies on “A Christmas Carol” to fill seats every year. “It’s an important piece of business for us, and clearly the revenues attached to it help us to do the rest of what we do at the theater,” Shields says. Last year, after 16 years in use, the show’s sets and props had become “decrepit” and in need of an update.

The theater spent $1 million to create an all-new version of the show that altered the story as well as the scenery. “We were saying that we hoped and expected the audience to find this to their liking,” Shields says. “There is some risk endemic to the process of change. We were gratified to find again that we had a record-breaking audience. It was more than we predicted in advance.”

One parallel between for-profit business and nonprofits is fundraising. When she worked on Broadway, Bisno had to pitch investors on each production. “On Broadway you’re creating an entity in which you engage with limited partners to actually invest and have a piece in launching a production, like a restaurant or a building. You’re putting together a little business in expectation or at least in hope of a return.”

Bisno says typical Broadway investors do it for fun, and to be part of the artistic community. “I always tell people, if this is your last $25,000, don’t do it. You should get your roof fixed instead.”

In the nonprofit world, fundraising is tied to the board of directors; prominent community members who often join the theater with some motivations similar to those of Broadway investors: a desire to contribute to the arts. Shields says that in the classic formulation, a board member must contribute “time, talent, and treasure,” to the group.

“Good board members give generously of all of that,” Shields says. “They’re present to help. They look out for the community’s interest and make sure the organization is run effectively. We also ask that our board members be among our leading contributors.”

Running a nonprofit is more challenging in times of economic hardship, and Shields was thrown right into the fire when he joined McCarter in 2009, as the economy was in the midst of a downturn.

Shields had grown up in Pittsburgh and studied theater at Carnegie Mellon University. The eldest of four boys to a bank manager father, Shields was the only person in his family who went into the arts. Early in his career he was McCarter’s business manager and general manager from 1983 to 1992. Before his return to McCarter Shields was managing director of the Milwaukee Repertory Theater for 10 years and held administrative and board positions at various theaters in the Midwest and New Jersey.

When Shields returned to McCarter he found it in a bad spot. “Those who were around will recall that was the peak of a major economic displacement,” Shields says. “My initial couple of years there were about making sure McCarter would continue to survive.”

Patrons were feeling the economic pressure, and there were fewer donations and fewer people spending money on tickets to shows. “We were out of balance,” Shields says. “What we were trying to spend was greater than the amount coming in.”

To put things back in balance, Shields did what many organizations did under those circumstances: he cut staff and expenses while trying not to cut down on the quality of the performances. “We unfortunately had to let some staff go,” he says.

Some of those cuts were to the marketing department, which Shields viewed as a sacrifice to the long-term growth of the theater in favor of keeping the doors open in the short term. There was a salary freeze, and the theater stopped contributing to the employee retirement fund. Travel was also frozen.

Shields says he could have chosen to cut back on the performing budget instead, spending less to produce the same shows. But then the quality would have suffered. “There would be a way, I imagine, to do what we do at some lower expense level, but not at this level of quality,” he says. “We push ourselves to work at the very highest professional level, recognizing that there is a price that comes along with that.”

To Shields, it was a better business decision to squeeze the staff than to risk disappointing the audience members who were still buying tickets, and upon whom the future of the theater depended.

After three years of austerity, the economy recovered, and Shields began to bring back the perks. As the economy stabilized, contributions came back, and the theater was able to add $10 million to its endowment fund.

McCarter has also modernized its business in several ways. Shields says the organization is putting the finishing touches on a new website that will allow it to do more business online and has been improving its marketing practices to “make the right kind of offer to the right kind of patron at the right time.”

The neighborhood around McCarter is changing too. This October Princeton University will open the Lewis Center for the Arts, a complex that includes a dance building, a music building, and its own theater.

“Since the new Lewis Center won’t be open until October, we’ve not yet seen any discernible effect, at least as it concerns the public,” Shields says. “Behind the scenes we’re engaged with our colleagues at the Lewis Center to be able to work together on artistic projects that will come to fruition at some point in the future.”

In addition to contributions and audience support, McCarter gets about 5 percent of its budget from grants from the state arts council, which is funded by a tax on hotel and motel occupants. The National Endowment for the Arts funds individual projects at about $30,000 a year, but that is not a significant source of income.

Many modern companies have informed their marketing efforts with extreme amounts of data about their customers. McCarter Theater does survey its subscribers to gather data on its audience, but Shields says it does not have a great deal of research data on the demographics of its supporters. Nationwide, surveys suggest a theatrical audience that skews older, wealthier, and female. In 2015 a survey by the Broadway League found that 68 percent of its audience was women, 80 percent of whom were white, with an average age of 44 and a high level of income and education.

Shields says McCarter has a diverse audience, with the demographics changing with each performance. For example, a show about Cuban themes is likely to draw more Cuban-American patrons to the theater.

But to Shields, the theater isn’t about targeting specific groups of customers. “One of our jobs is to try to convince those audiences to come back and to convince them to see something that is not specific to their interest,” he says. “Our stories are universal. There’s something at McCarter for everyone.”

McCarter Theater Center, 91 University Place, Princeton 08540. 609-258-2787. Emily Mann, artistic director. www.mccarter.org.

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