Pyramid.Inverted@gmail.com
April 2, 2024
In the wake of significant upheaval at Hot Docs International Documentary Film Festival, Inverted Pyramid thought it imperative to share our collected financial information for Hot Docs, for their fiscal years June 1, 2014 to May 31, 2022.
As with all Canadian charities, Hot Docs is legally bound to submit an annual charitable tax return through the Canada Revenue Agency. The annual returns for 2018 to 2022 fiscal years are publicly accessible through the CRA website, and Inverted Pyramid has independently retained their previously accessible records for 2015 to 2017.
According to these records, Hot Docs’ financials appear to be in excellent condition as of the end of their 2022 year, with a nearly $2 million accrued surplus generated between June 1, 2014 to May 31, 2022. This outlook paints a vastly different picture when compared to the extreme financial concern voiced by Hot Docs President Marie Nelson in a Globe and Mail article, dated March 8, 2024.
In the Globe and Mail article, Nelson raised the alarming concern that Hot Docs 2024 Festival may in fact be its last, without increased financial support from government. "We find ourselves dealing with significant operational challenges - so much so that it puts the sustainable future of the organization on quite shaky ground," she said in the interview. "And now we're running out of time."
"We had to approach this year with clear eyes on the financial outlook, and be as creative as possible in trying to make sure that we're providing an appropriate level of value for our audiences and corporate partners," Nelson continued. "But what we're saying is that we don't want it to be the last Hot Docs Festival." The interview took place shortly before the Festival announced that 10 of their film programmers had resigned in protest, and their Artistic Director resigned separately for “personal reasons”.
However, Inverted Pyramid's independent research shows that Hot Docs amassed a significant total surplus of $1.936 million dollars between June 1, 2014 and May 31, 2022 (representing their 2015-2022 Festivals). Only one year during this period did Hot Docs post a deficit (-$53,802 in 2018). Data for their 2023 and 2024 Festival years was not yet available as of the original time of publication of this article. However, once can only speculate that the details - when released - will not be pretty.
The information for Hot Docs 2015 to 2022 years - collected from the publicly available charitable tax returns available on the Canada Revenue Agency website - also shows a clear uptick in high-level salaries paid to Hot Docs' top earners in 2021 and 2022. In 2021, for the first time a Hot Docs employee made a salary more than $120,000, while in 2022 this jumped to two employees making between $160-200k and one employee making $120-160k. According to the CRA records publicly available, prior to 2021 no Hot Docs employee ever made more than a $119,999 salary between 2015 to 2020.
In the Globe and Mail article, Hot Docs’ President Marie Nelson blames the impacts of the COVID pandemic for Hot Docs' financial precarity. However, the financial record is clear that the height of COVID was some of Hot Docs most impressive years. In their 2021 Festival year, Hot Docs netted a $809,000 surplus that year alone. This year also saw Hot Docs' highest level of government funding ever, reaching $2.9 million (38.53% of their total budget), up from $1.3 million in 2020 (17.85% of their 2020 budget).
Hot Docs' 2022 Festival year was equally as impressive, with their highest ever total revenues of $8.98 million, with $2.8 million in government funding (31.32% of their total 2022 budget). This is a increase of 17% from their total revenues of $7.69 million in 2021 and an increase of 33% from their 2015 total revenues of $6.781 million.
Likewise, we see that various operating costs and expenses remained fairly static for the years on record, rising or falling in relation to the Festival’s overall budget. Hot Docs “occupancy costs” (presumably meaning their rent or other operating costs associated with their offices and Hot Docs Ted Rogers Cinema) remained more or less static from 2018 to 2022, ranging from $203-269k per year.
Similarly, “advertising” expenses remained fairly static, between $705-996k from 2016 to 2022. During the height of the COVID pandemic in 2020 and 2021, advertising dropped to $508-631k. But by 2022, advertising was back to a healthy $870k budget line for the year. Professional and consultant fees saw an overall increase from 2018 to 2022, with the 2022 budget of $481k nearly doubling the 2018 budget of $256k for this category.
However, there was a noted and concerning drop overall in revenues post-pandemic from "sales of goods and services", which is likely to be mainly comprised of memberships, ticket sales, concessions and merch. Pre-pandemic in 2019, these revenues were at $4.2 million. They dropped to $3 million in 2020, then $1.4 million in 2021, and $1.6 million in 2022. Even so, the organization was able to balance the books in all of these years, largely due it appears to increased government support.
Based on these financials, it is hard to imagine – with a nearly $2 million surplus and sound financial track record – how Hot Docs could now be facing possible financial insolvency, less than two years later. However, all of this is not to cast doubt on the financial precarity of Hot Docs. Inverted Pyramid has no doubt that there is legitimacy to Nelson’s March 2024 warning of short-term insolvency, with special government COVID funds drying up, and many interest-free government loans offered during the pandemic coming due (something that could also contribute to unusually large surpluses appearing on the books in 2021/22).
We can also see via the Internet Archive's Wayback Machine that Hot Docs made the move to increase Film Submission Fees for the 2024 Festival - a clear attempt to utilize filmmakers as a fundraising base to improve their bottom line. As seen on May 29, 2023, Hot Docs submission fees ranged from $25 to $65 for short films and $55 to $160 for feature films, a fee structure that had been in place since at least the 2017 Festival. Sometime between May 29 and November 30, 2023 those Film Submission Fees were increased marginally to $30 to $70 for short films and $60 to $175 for feature films.
This slow but sure increase of film submission fees has been something widely seen across the Film Festival sector over the past decade or more. It is something that Inverted Pyramid believes to be a wholly unethical method of fundraising -- putting the financial onus for paying for Festivals' operating costs on (mostly rejected) filmmakers. Ever-increasing film submission fees also actively counteracts participation from those historically marginalized from film festivals, which flies in the face of many Festival’s expressed equity, diversity and inclusion mandates. Inverted Pyramid calls on Hot Docs and all Film Festivals to reduce and eliminate film submission fees, especially for Festivals like Hot Docs who tout (and often profit from) EDI principles.
Ultimately, all of this begs the question, what happened so drastically between June 1, 2022 to the present that has led to a Festival with such sound historical financial management to be teetering on the brink of economic insolvency and organizational collapse?
Of course we can only speculate on what has happened here. But what is certain is that Hot Docs’ Executive Management and Board of Directors are ultimately the people responsible for the financial well-being of North America’s largest documentary film festival, and the only ones with access to the true financial outlook of the organization. There is no reason – COVID or otherwise – why these leaders should not have been able to use financial foresight to adapt and scale the Festival appropriately, to match their multi-million dollar annual budget. This is the job they have signed up for
The staff and board members who were active from June 1, 2022 to present are without doubt to blame if what President Nelson voiced to The Globe is accurate. This would include Hot Doc's former President Chris McDonald, who left the organization around May 2023, and former Artistic Director Shane Smith, who left Hot Docs around June 2023. This would also include current executives Nelson and Yang, as well as the Hot Docs Board of Directors, most notably co-chairs Lalita Krishna (also Co-Chair of the Toronto chapter of the Documentary Organization of Canada) and Robyn Mirsky (Executive Director of Rogers Communications, a major sponsor of Hot Docs). Hot Docs currently does not have a Board Treasurer listed on their website, and their Board of Directors has failed to publicly responded to any of the recent organizational tumult and serious allegations by resigned programmers.
It is also noted that the Hot Docs Board Treasurer Florence Narine has been removed from the Board & Staff page, sometime since April 25, 2024.
These are the individuals who are ultimately responsible for the financial management of this charity, as well as ensuring Hot Docs fosters a respectful, fair, organized and positive work environment. They are the ones who should be equipped to scale up or down their organizational activities to match their budget, as funding structures and availability changes.
As any administrator in the arts sector should keenly be aware of, special COVID funding has unequivocally dried up, and government arts budgets across the board are being pared down or at best frozen. In other words, austerity has arrived again to the arts. This has been widely and forcefully communicated to all of us working in the arts and comes as no surprise to many of the small and medium-sized Film Festivals across the country who have had their budgets slashed and frozen.
Luckily, in Canada we have collective organizations like the Independent Media Arts Alliance and others (CARFAC, MANO, etc.) who exist in large part to advocate for media arts organizations and film festivals in times of austerity like what we now face. However, Festivals like Hot Docs, TIFF and VIFF have historically refused to engage in collective action with their peers. Instead, these Festivals tend to use their clout to lobby government directly for their sole interests, instead of working collectively with their sector peers to reinforce the precarity that many, many organizations in the arts are currently facing.
It's time for Hot Docs to re-evaluate what it means to be engaged in their community and what it means to actually serve their charitable goals. Perhaps this is part and parcel of why nearly their entire programming team is making a united stand which can only be seen in opposition to current management. We at Inverted Pyramid unequivocally support these programmers, and encourage them to be more forthcoming about their intentions and rationale behind their mass resignation.
More broadly, this is a moment in history is one that will necessitate arts organizations to come together to fight for fair funding and compensation, especially for their entry-level and middle management staff and or artists. Special COVID funding aside, Arts Organizations have seen their budgets frozen by all parties and levels of governmnet for decades, meaning that simple cost of living wage increases, benefits and pension contributions are nearly impossible for most of our most cherished arts organizations, like Hot Docs. It has led to increasingly precarious work, high turnover rates, burnout, low morale and lower quality of work and life for arts workers, and lower quality services for artists and the general public. The Arts Sector in Canada is a huge economic driver and employer, and it’s time that all levels of government commited to basic cost of living budget increases for these organizations and individual artist grants. To achieve this, Arts Organizations are going to have to work together with the greater public to advocate for these priorities. Unilateral actions will only divide the sector overall.
These are important discussions that affect Hot Docs and film festivals across the country, but also our Arts Sector as a whole. We hope this moment for self-reflection and change comes not too late. With a bit of luck, Hot Docs will survive to see better years, and our most beloved arts organizations will also survive yet another wave of government imposed austerity.
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ADDITIONAL ARTICLES:
The following articles are listed to provide greater context about the recent financial and organizational crisis at Hot Docs Documentary Film Festval.
"Hot docs 'Running out of time' as organization sounds alarm over film festival's future"
The Globe and Mail, 11 Mar 2024, Barry Hertz
“Hot Docs Programmers Resign En Masse (Includes Update)” POV Magazine, 25 Mar 2024, Pat Mullen
"Hot Docs artistic director, programmers quit ahead of 2024 run" CBC, 26 Mar 2024, Saloni Bhugra
"Taking Stock of Hot Docs: The first three decades" POV Magazine, 27 Mar 2024, Ezra Winton
"Hot Docs programmers explain mass exit amid “chaotic, unprofessional, discriminatory environment, fest responds” Screen Daily, 26 Mar 2024, Ben Dalton
"Hot Docs 2024 Press Conference", Hot Docs YouTube Livestream, 26 Mar 2024, Hot Docs
"DOC Statement About Hot Docs", The Documentary Organization of Canada, 2 April 2024, The Documentary Organization of Canada’s National Board of Directors
"Hot Docs’ corporate-sponsored, U.S.-centric model has failed audiences and staff", The Breach, 3 April 2024, Ezra Winton
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**Please note, all the financial information in this article is sourced from the Canada Revenue Agency's publicly accessible Charitable Tax Returns for "Hot Docs". We have confirmed that Hot Docs Film Festival, Ted Rogers Theatre and Hot Docs Industry programming are all operated through "Hot Docs" registered not-for-profit incorporated charity, from which we got the above financials. However, there are limitations to this information and it is always possible that Hot Docs operates part of it's business through other organizations or registered businesses that are legally separate from "Hot Docs" the not-for-profit charity. For these reasons, the financial details above are not necessarily exhaustive, and they are only what we know from an external, public perspective. Without confirmation from the Board of Directors or upper Executive Management is difficult to know if the financial information presented here is complete.
To access these original reports, you can visit the Hot Docs Registry here, or look up "Hot Docs" in the CRA Charity search here.
Anyone with more information (or to point out any false or misleading information above) is encouraged to contact us at Pyramid.Inverted@gmail.com
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