For the record, artistic director Kathleen Gaffney ran a very tight ship at Studio Arena Theatre this year. This was the first and only season that she selected and oversaw entirely herself, and at the time they closed the doors, she was running a season surplus of over $100,000. Had she been allowed to finish out the year, that figured might have increased by half again as much. That’s on par with the surplus they’ve been running up at GeVa Theatre in Rochester, much lauded in other publications—and Gaffney did it with no marketing department, no development department, and no advertising budget.

Sadly, the mismanagement of her predecessors was impossible to overcome, and in the face of more than $3 million in accumulated debt, a $100,000 surplus seemed like nothing. Unable to cover the monthly accounts payable, the theater simply ran out of steam. When Studio Arena couldn’t come up with enough cash to mount their next show, bankruptcy was inevitable, and perhaps even a blessing. Now Studio Arena will have a chance to negotiate with its creditors, reorganize, and start again. Even with the bad publicity and damaged relationships, they still have a formidable legacy on which to build.

In recent weeks we’ve been hearing a lot about what went wrong. Yes, demographics changed—they always change. Yes, the cultural landscape changed—awareness of the competition is a part of doing business. Studio Arena failed to adapt to these changes.

One of the face-saving reasons Studio Arena gave for its failure was the departure of philanthropists from Buffalo. This sounds nicer than admitting to financial irresponsibility, mismanagement, artistic mediocrity, and general incompetence, but it’s just not true. Studio Arena Theatre did not go bankrupt because too many generous people left town, or because the county didn’t give them enough money. Who, pray tell, was going to give a whopping three million bailout to a theater after such spectacular mismanagement?

Studio Arena Theatre screwed up. They mismanaged their money; they spent far more than they could bring in; and they waited too long to do anything about it. By the time Gaffney arrived on the scene, the endowment had already been raided. That’s why they went bankrupt.

There is a mythology in the not-for-profit art world that would have us believe that evil funders and government agencies spitefully deprive “the culturals” of the money they deserve to be successful, and this is the source of all the woes of Western New York. When it comes to theater, this is a crock.

The Albright-Knox Art Gallery was, arguably, founded on philanthropy. Ditto for the Museum of Science. This is not true of Buffalo’s theaters.

The Buffalo theater boom did not happen because there were millionaires and philanthropic foundations lined up all along the streets looking to support the arts. The Buffalo theater community has benefitted more from the city’s economic decline than from philanthropy.

This is not the first time an arts boom has followed economic austerity. Remember La bohème? That’s why Montmartre became Montmartre. That’s why Broadway became Broadway. That’s why the East Village became the East Village; why Haight-Ashbury became Haight-Ashbury. The human impulse to create is irrepressible and the arts love low rents and empty loft spaces.

In the early 1980s, a group of kids with a theatrical dream could rent a storefront on Main Street in Buffalo for a song, and they did—again and again. For not much more, you could buy a whole building—or get the city to give you one. For minimal or no investment, a restaurateur could invite a theater group in and advertise dinner theater. Over the decades, those who would have been amateurs in previous generations, fancied themselves professionals. The community theater boom gave way to the theater professional theater boom. Even Studio Arena Theatre started as a community theater.

It takes very little to make theater. All you need is an actor and someone to watch that actor. That can be done for free. Anything else, including chairs for the audience to sit in, and a storefront for the actor to perform in, is extra. Guided by that dynamic, theater groups pop up in Buffalo all the time.

Naturally, most theaters would like to be able to afford some of those extras—like lavish costumes, a concession stand, and a living wage—and many of them don’t want to wait for things like the development of a paying audience before they get them. And so they hold their hats out, hoping somebody will believe in their aspirations strongly enough to help them skip to the head of the line.

The first time anyone suggested to me that there is too much theater in Buffalo, it was a representative of a prominent local philanthropic foundation. Shortly thereafter, I heard the assertion again, this time from a journalist. On the surface, the very idea seems to suggest a small town mentality in which there is an expectation that every individual should be able to see every play in town, or a myopic world view that thinks that all theater experiences should appeal to everyone. Can you imagine anyone suggesting that there is too much theater in New York City?

To be fair, the point that these individuals were actually trying to make was that there were too many theaters applying for funding. To me, this is an entirely different issue, and one that begs an entirely different set of questions.

I have observed that theaters and other cultural institutions bewilder funding organizations—including government—and that funds are usually dispensed chaotically. Funders need to develop more coherent standards for funding the arts—or to make more of an effort to follow those that exist. They should also understand that sometimes what is best for the arts is to say no. In this context, the moment when potential funders finally told Studio Arena to get its house in order was refreshing and long overdue.

The New York State Council on the Arts provides a useful list of the criteria that they purportedly use when evaluating funding requests.

■ The artistic and programmatic quality of the program or activity.

■ The relationship of the proposed activities to the organization’s mission.

■ The managerial and fiscal competence, including the capability of the organization to carry out the proposed activities.

■ Service to the public, including the number of people served, and efforts to broaden and/or diversify the audience.

■ The nature and extent of programmatic interpretation, education, or orientation efforts for the benefit of the public.

■ The scarcity or availability of comparable services within the geographic area.

■ The nature and extent of other available earned revenue and/or public or private support.

In addition to these criteria for funding, NYSCA lists reasons specifically to deny funding. These, too, are instructive.

NYSCA will not, or is unlikely to, fund major expenditures for the establishment of new organizations. They will not cover the cost of managerial incompetence—no grants to cover accumulated deficits; no money for debt reductions.

NYSCA will not pay for programs that are essentially recreational, rehabilitational, or therapeutic. NYSCA is not into social service; they exist for cultural enrichment. This is about art.

They will not pay for competitions or contests. They will not cover the costs of hospitality or entertainment—not even for receptions, opening night parties, or fundraising benefits.

These guidelines give a pretty clear picture of what NYSCA is trying to do. They are helping improve and expand existing arts organizations that can demonstrate that they already do good quality work, are financially responsible, and are needed in their communities. That seems like a good plan.

I am especially heartened when I see NYSCA’s insistence on an organization living up to its professed mission. Too often, we have seen money given to the arts in a manner that actually diminishes excellence. The moment a theater adapts programming to fulfill funding requirements rather than an artistic passion, we are headed down a deadly path to mediocrity. And the moment funders encourage the journey down that path, they are complicitous. We shouldn’t be giving a mediocre product or a moribund organization a financial advantage over its more capable competition.

Nowhere does NYSCA coerce an agenda of diversity where such an agenda would be inappropriate. Still, within their formula, the Paul Robeson Theatre might be able to strengthen a case for funding, because their predominantly African-American audience represents an underserved population. At the same time, Shakespeare in Delaware Park serves a very broad, if predominantly white audience, and by that standard, might merit support. The Irish Classical Theatre company contributes to diversity by being Irish; the JRT by being Jewish, and so forth. Breadth and diversity are both valued. A gay theater can be a gay theater. Polish art is encouraged to be Polish.

Notably, the scarcity of similar services is taken into consideration in NYSCA’s criteria. Yes, Buffalo has many theaters, but there is a case to be made that not all audiences are being served. Newly arrived wannabes should have a hard time, unless and until they can prove they’ve got what it takes to compete—according to the criteria; if they are aiming for an audience that’s already being served, they need to be doing it better.

Funding can skew the playing field, as one theater tries to bump ahead in line, despite the lack of a track record, or even an audience. Too often aggressiveness is valued more highly than any theatrical artistry or vision at all.

Typically, theater practitioners found their own organizations when they can’t get the opportunities they desire at existing theaters. There is nothing wrong with this, but as my mother often reminded me while I was growing up, “The world does not owe you a living.” If fledgling theaters want to compete alongside more established theaters, then they need to get in there and do it. When they can prove their worth, their necessity, and their managerial acumen, then they can apply for funding and hope for the best. By the same token, a theater that can no longer fulfill its mission should be allowed to die and make room for someone else.

The misadventure at Studio Arena has left many in the theater community a bit shell-shocked, and with good reason. There is also a guilty sense of opportunity abroad, as every little David has seen Goliath stumble. It would be premature to count Studio Arena Theatre out of the game, however. And those who might feel philanthropic would do well to take in the entire picture when making decisions. Who is and who is not actually fulfilling a vital mission? Who actually is demonstrating responsible management, and representing a substantial audience? If Studio Arena comes through Chapter 11 refocused and reenergized, they may meet criteria for support better than they have in years.