if the theater company has received non-profit status from the IRS, it usually has to file one of the 990 forms> samll ones may only need to file a postcard "990" with certain info. the filing requirement should have been spelled out in the letter from the IRS granting non-profit status. in that case, that grant is not reported on your 1040 and the use of the grant must conform to its terms. if you have trouble understanding this you need to confer with a tax pro familiar with non-profits. failure to file has penalties
