April 06, 2012

Another Future for Bookstores

by Alan Beatts

If you've read this column much over the past few years, you know that my outlook for bookstores in the long term isn't very optimistic.  I think that the combination of internet sales and ebooks is going to result in most bookstores closing (although I'm not sure how soon that will happen).  I figure that a few smaller stores will stay open by gearing their business towards truly rare antiquarian material along with small press, high quality new books.

However, during a conversation with a fellow bookseller a few weeks ago, I realized that there was another possible future for some bookstores.

What if they were non-profit businesses geared towards supporting education and literacy?  Base on some cursory reading and my admittedly limited understanding of the state and federal rules about such things, it seems to me that it would be a viable model.  One of the endeavors that a 501c3 non-profit can engage in is education, and an argument could probably be made that by merely existing a bookstore promotes literacy.  But of course, there is much more that a bookstore could do to help with literacy in specific and education in general -- author events (just like they do now), classes, internships, and so on -- all would seem possible services.

I should point out that I'm not describing the sort of situation that has happened in the past fews years, in which a store in financial trouble will solicit donations from their customers and community to get through the tough times.  I don't want to seem too critical of other businesses -- running any small business is hard and subject to unique considerations and pressures that an outsider can only guess at -- but personally, I have a problem with the idea that it is acceptable for a privately-owned business to solicit donations.  At the end of the day, the business is still a privately-owned asset and so, really, the donations are in essence a hand-out that goes right into the owner's pocket.  I wouldn't give a donation in such a circumstance and I wouldn't ask for one in that situation either.

But converting a business into a real non-profit is a very different matter.  Consider this scenario:  After years of struggling, the owner of a bookstore finally decides to throw in the towel.  But rather than closing, he or she talks to the loyal customers and finds that there is a huge amount of support for the business.  So much support, in fact, that people are willing to put their money where their mouths are.  Owner asks around and finds an attorney who is willing to help set up a new organization pro bono.  Once the ball gets rolling, the non-profit is created with a board consisting of customers, community leaders, educators and so forth.  Next the non-profit starts raising money to purchase the store from the owner at a very reasonable price.  The price is reasonable in part because the sad reality now is that a bookstore usually sells for the price of the inventory at wholesale, which is not much.

Once the money is raised, the owner sells the shop and gets a seat on the board of the non-profit.  It's possible that the owner might want to retire at that point, in which case the board selects and hires a new manager to operate the store.  In that case, the owner agrees to stick around for six months to a year to coach the new manager.  Or, if the former owner still wants to work in bookselling, perhaps they are hired by the board to run the store.

Granted, it's tragic that someone who has worked for decades building a business gives up their ownership and becomes merely a board-member or an employee.  But compared to the alternatives, it's a win for everyone.  The community retains its bookstore and gains a valuable resource that will assist the local schools and students.  The former owner doesn't see what he or she has built over the years broken up for parts and sold at clearance.  Moreso, that former owner may be able to continue being a bookseller long past the point when they would have had to stop otherwise.  Plus, they might get a regular paycheck, which to most bookstore owners is a magical and mythical thing that only other people get.

Does that model of a true non-profit bookstore solve the financial and business problems facing bookstores today?  Nope, not at all.  But it does allow a break from income tax; in some states (although not California) it makes it legal to accept the services of volunteers; it opens up the possibility of grants and other sorts of aid, and it creates a structure under which people can make donations with the confidence that they are not merely lining someone else's pockets (the tax deduction doesn't hurt either).

I suspect that the hardest thing about such a transition would be the former owner making the jump from being the final authority to being an employee.  But, for most people who are hooked on bookselling, it's the bookselling that matters, not who's running the place.

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