Now on PBS, Courtesy of the Tax Man

Thanks in part to a convenient tax loophole, you may soon be able to see the documentary “Mary Jane Colter: Housemaid of Dawn.”

In case you’re wondering, Colter was a pioneering female architect a century ago who helped spawn the Southwest-style design movement. Los Angeles filmmaker Karen Bartlett is telling her story in a 90-minute film made with seven years of painstaking effort-- and help from the U.S. Tax Code, which under a little-noticed arrangement known as fiscal sponsorship, allows her financial backers to write off their support as tax-deductible contributions.

The boom in TV documentaries has been widely reported. The industry leader, Bethesda, Md.-based Discovery Communications Inc., is spending more than $200 million to televise nearly 1,200 hours of nonfiction programming on its three cable channels this season--an annual growth rate of more than 20%--and several other channels are stepping up their offerings as well. That activity is stimulating business not only for commercial film producers, but for independents such as Bartlett.

Bartlett, the owner of Nemesis Productions, a sole proprietorship she runs from her Silver Lake cottage, expects to finish work in coming weeks on “Mary Jane Colter.”

“There is a lot of interest in this architect,” she said in her kitchen recently, leafing through a binder of old photographs. The “Housemaid of Dawn” subtitle is taken from a Navajo chant, reflecting the inspirations Colter drew upon to embellish such buildings as Los Angeles’ Union Station.

Bartlett describes an exhaustive effort to research her subject: shooting on location, poring through business records, locating and interviewing relatives. But her shrewdest move came two years into the project, when she obtained sponsorship from the Los Angeles-based International Documentary Assn., a nonprofit organization. The key is using the IDA’s tax-exempt umbrella.

With that cachet, Bartlett raised a good chunk of her film’s $250,000 budget. About $35,000 of that came from tax-deductible donations, mostly from heirs of Colter’s clients and the filmmaker’s friends.

“Colter” is one of 80 current IDA projects, a 14% increase over the previous year, with budgets ranging from $80,000 to $2 million, said Grace S. Ouchida, the group’s special projects coordinator.

The fiscal sponsor’s key role is to act as receiver. The filmmaker’s backers pay the sponsor. The backer claims payments as charitable contributions, deductible from federal income tax. The sponsor charges a fee--the IDA’s is 5%--with the rest going to the filmmaker.

To many people, that sounds like a tax dodge, acknowledges San Francisco attorney Gregory L. Colvin, author of “Fiscal Sponsorship--6 Ways to Do It Right” (Study Center Press, 1993). Nonetheless, he says, “public policy is that the sponsors are doing a public service by sponsoring the filmmakers.”

The sponsored work must be of a charitable purpose, often interpreted as something that is educational rather than purely entertaining. Internal Revenue Service agents also keep a close eye on these transactions to make sure they are done properly.

The IDA has its own rules. Projects are rejected if they contain extensive reenactments. That makes them docudramas, not documentaries, the group believes. Red flags go up, Ouchida said, when scenes are found to contain actors speaking dialogue.

The IDA also assigns its president emeritus, Emmy-award-winning TV producer Mel Stuart, to sift through the budgets. He frequently identifies underestimated accounts.

“You say you want to buy some stills from Life magazine,” says Stuart, an affable Hollywood veteran who turns flinty when it comes to money. “Well, that’s $650 a still. I’d say let’s think about whether you really need that still. You say you want to use a scene from ‘Some Like It Hot’? Then you’ve got to call United Artists, and it’ll cost you $4,000 a minute. You say you’re going to use ‘Eleanor Rigby’ to open the picture? Well, good luck. You’ll never get the rights.”

Producers said Stuart goads them into budgeting salaries for themselves, although many defer compensation until distribution fees begin to roll in.

Once a project is approved, Ouchida said, the IDA’s role becomes strictly fiduciary and the producer exercises artistic control. And when projects are finished, the filmmakers have unconditional power to market their work.

That provides a motivation that pleases Stuart no end. “I love it when documentary makers make money on this,” he chuckles. “Good for them!”

The use of fiscal sponsorship in some form is widespread among independent documentary filmmakers in the United States. For example, Ken Burns, who personifies success in the genre (“Baseball,” “The Civil War”), uses Public Broadcasting Service station WETA-TV in Washington as both co-producer and fiscal agent.

Burns said his latest project, “Lewis & Clark: The Journey of the Corps of Discovery” (to air Nov. 4-5), was made on a budget of $1.2 million, about 40% of which came from General Motors Corp. Most of the rest came from private foundations and public agencies, including the National Endowment for the Humanities.

Another independent documentarian, Jessica Yu, used IDA fiscal sponsorship to produce “Breathing Lessons, the Life and Work of Mark O’Brien,” which recounts the experiences of a poet and writer who lives in an iron lung. The film won an Academy Award last March for best short subject, and Cinemax snapped up a year of U.S. television rights. Overseas distribution is bringing in more revenue, Yu said.

Fiscal sponsorship also affords feature film producers a quick and easy way to launch pet documentary projects.

For example, a group that includes producer Peter O. Almond (“The Baby-Sitters Club”) arranged for the nonprofit Film Arts Foundation of San Francisco to sponsor the opening segment of a miniseries, “Forever Free,” about the plight of post-Civil War blacks.

It was launched with a $700,000 grant from the National Endowment for the Humanities, but when it got off the ground, Almond said, the producers started their own charitable organization, Forever Free Inc.

“It pays after a certain point to have your own nonprofit,” Almond says. “Ten percent off the top in our kind of production is a significant chunk.”

The five-part documentary will air in the 1999-00 season on PBS, which for years had a corner on TV documentaries.

Commercial documentary outlets are proliferating, with Discovery Communications’ all-nonfiction properties leading the way: Discovery Channel, the Learning Channel and Animal Planet. Two other outlets, the History Channel and A&E; Networks, devote substantial time to documentaries.

Bartlett, meanwhile, has signed a deal to distribute her film in visitor centers and bookstores in the national parks where the architect did some of her most enduring work. “Seven of her buildings are at the Grand Canyon. She designed the Desert View Watchtower on the South Rim,” Bartlett said.

Recently, Bartlett said, she has been preparing to contact other buyers. “Television is where our market is--it’s definitely A&E; or PBS or History Channel.”