When I first sat down with Vanessa Morosco during an audit field visit last fall, I wasn’t expecting to walk away with a whole new way of thinking about nonprofit finance. We were just chatting, the way you do between audit procedures — talking about the organization, how things were going, governance philosophies. But then she started talking about something that stopped me cold.
She was describing how the American Shakespeare Center thinks about the relationship between its departments, and specifically how the line between “earned revenue” and “contributed revenue” — the line every nonprofit draws — might actually be getting in the way. Not just strategically, but relationally.
I remember thinking: This makes so much sense. Why doesn’t everybody approach it this way?
We’ve been trying to get Vanessa on one of our quarterly not-for-profit webinar panels ever since. This spring, the schedules finally aligned — and I’m so glad they did.
The Fourth Wall, On Stage and Off
Vanessa is the Executive Artistic Director of the American Shakespeare Center in Staunton, Virginia, home of the world’s only replica of Shakespeare’s original Blackfriars Playhouse. And if you’ve never been there — stop what you’re doing and book tickets. It is a genuine jewel right here in our backyard.
What makes the Blackfriars unique is the same thing that defines Vanessa’s philosophy: there is no fourth wall. In modern theaters, when the lights go down and the stage lights go up, a barrier is created between the audience and the performers. That barrier didn’t exist in Shakespeare’s time. At the Globe and at the Blackfriars, performances were lit by the sun or by candles — the same light that illuminated both stage and audience. Actors could see the audience. The audience could see one another. Everyone was present, visible, and part of the experience together.
Vanessa calls this shared light — and she’s built an entire organizational framework around it.
The insight she brought to our webinar is this: most nonprofits recreate the fourth wall inside their own organizations. Not on a stage, but in how they structure their teams and pursue their revenue.
One Patron, Two Silos
Here’s the problem she put so clearly: think about a single person who buys a ticket on a Saturday night and then makes a gift on Giving Tuesday. In your financial statements, that person appears in two completely separate places — earned revenue and contributed revenue. But in real life, they’re just one person deciding, over and over again, whether to stay connected to your organization.
Marketing speaks to the ticket buyer. Development speaks to the donor. Each department does its job well — but separately. From the patron’s point of view, however, there is no separation. There is only one relationship.
This separation creates friction. Not because anyone is doing anything wrong, but because the system isn’t built to see the whole person. And over time, that friction shows up in the numbers: lower retention, higher acquisition costs, less reliable revenue.
Two years ago at the ASC, contributed revenue retention was at 20%, donor retention was at 28%, and it was projecting a $1 million gap. These were not abstract financial problems — they were the accumulated signal of a relationship structure that wasn’t working.
Finance as Behavior, Not Just Reporting
One of the things I found most compelling in Vanessa’s framework is how she reframes the role of financial data. Financials, she argues, are excellent at telling us what already happened — but they don’t drive behavior. They record it.
Every number on a financial statement reflects a human decision: someone chose to attend or not to attend, to return or not to return, to give or not to give. Retention isn’t just a percentage — it’s a measure of whether people are choosing to come back. Volatility isn’t just a financial issue — it’s a signal that something in the experience isn’t holding.
This reframe has real implications for how we think about the role of finance in a nonprofit. If financials are the record of behavior over time, then finance becomes one of the clearest lenses for seeing whether relationships are deepening or eroding — before the damage becomes irreversible.
What the ASC Actually Changed
Rather than just identifying the problem, Vanessa and her team made concrete structural changes to reduce friction and make it easier for patrons to stay connected.
They built a patron portal that allows people to see their full history with the organization and automatically applies membership benefits at the point of purchase. They automated renewal reminders at key moments so that members who intended to renew didn’t simply fall through the cracks. They shifted to a rolling membership model so that people could join on their own timeline rather than the organization’s — meeting patrons at the moment of entry rather than forcing them into a fixed renewal window. And they integrated membership offers into the ticket purchase flow, so that someone attending a show could deepen their relationship with the ASC in the same transaction.
Each of these changes had one thing in common: they reduced friction. They made it easier for someone who already wanted to say yes to actually do so.
The results followed. After implementing these changes in FY24, membership revenue grew 5%. The following year saw a 45% increase. This year brought another 30% increase. The goal for FY26 is to deepen those relationships further — through recognition, shared experiences, and more opportunities for connection — because as Vanessa put it, what sustains repeat behavior is relationship.
Tearing Down the Internal Fourth Wall
Getting there wasn’t without its challenges. I asked Vanessa about the biggest hurdles, and her answer surprised me slightly: one of the hardest things was getting board buy-in.
The board’s concern made sense. If marketing and development started working more closely together, would the financial reporting get muddy? The answer, she was clear, is no — earned revenue is still recorded as earned revenue, contributed revenue as contributed revenue. The categories don’t disappear. But the strategy connecting them becomes more coherent, and having confidence that financial integrity and integrated strategy can coexist was a significant piece of work.
There were also internal culture questions. The ASC now has one head overseeing both marketing and development — its Patron Loyalty Team, as it has been named. That name was a deliberate choice: it focuses everyone’s work on the same north star, whether your primary responsibility is selling tickets or cultivating gifts. And the department head carries dual titles — Director of Marketing and Director of Development — so she can communicate fluidly with any external partner without anyone getting lost in org chart semantics.
A First Step, for Any Organization
Toward the end of our session, I asked Vanessa what she’d tell someone who wanted to try this approach — say, a school with tuition revenue on one side and donor asks on the other. Her advice was practical: start by looking at your data for people who are showing up in both earned and contributed revenue categories. Find the places of friction. Identify what’s working in those relationships and build on it. Then look at whoever is only in one category and ask why they’re not in the other.
She shared a story of one adult learner who attended a six-part course at the ASC. This individual was recognized through their patron data as a long-time ticket buyer; Vanessa engaged him in a relationship-based conversation, and he ultimately made a major donation. That’s not a fundraising trick; it’s what happens when your systems are built to see the whole person.
Why This Matters to Me as an Auditor
I spend a lot of time with nonprofits. I look at their financials, their internal controls, and their governance structures. What Vanessa named so clearly is something I see all the time: organizations that are doing the right things in each separate function, but losing the relationship in the gap between them.
The financial statements will always need to separate earned revenue from contributed revenue — that’s not going away, nor should it. But the strategy that generates those numbers doesn’t have to be siloed. And when it isn’t, when you design your organization around the full arc of a patron’s relationship rather than their last transaction, the numbers eventually reflect that.
Shared light, as Vanessa described it: a live, communal experience where what happens between us shapes the outcome. That’s not just a theatrical philosophy. It’s a governance model.
If you’re running a nonprofit and you haven’t thought carefully about where your fourth wall is — it might be worth shining a little more light on it.
Jim Fries is an audit partner in the Harrisonburg office of Brown Edwards and the industry line leader for the firm’s not-for-profit practice. Brown Edwards serves as auditor for the American Shakespeare Center.