Loading...

Earned Income Jumps For Nonprofits

Revenue increased 7 percent and attendance was up 3 percent for cultural groups in nearly a dozen metropolitan areas from 2009 to 2012, despite a decline in most sources of contributed support, including individual giving.

Total revenue, attendance, net assets and endowments all increased from 2009 to 2012, according to 2015 Portfolio: Culture Across Communities. The report is an 11-city snapshot by the Greater Philadelphia Cultural Alliance that paints a picture of recovery since the Great Recession for most nonprofit arts and culture organizations, rebuilding savings, investments and endowments.

Individual giving was down almost 10 percent and all sources of government income dropped an aggregate 28 percent, along with a 7 percent dip in corporate funding.

Nonprofit arts and culture groups saw an increase of 25.4 percent in earned income, 7.6 percent in net assets and 13.7 percent in endowments. Admission, ticket sales and tuition increased by 5 percent but subscription sales revenue dropped by 13 percent. Contributed income declined 3.5 percent while board giving was up 20 percent and foundation giving 9.2 percent.

Overall spending was flat, with a 1.6 percent drop in and six of the 10 metro regions, and seven of the 11 disciplines, reported reducing spending.

Almost 19 percent of organizations had deficits of more than 10 percent and about 42 percent did not report a surplus. “This finding was consistent across every community and every discipline,” according to the study’s authors. “Despite strong gains in aggregate, many groups struggled to balance budgets, reducing spending and shifting labor to part-time positions.”

The report covered more than 5,500 organizations in 11 regions: the san Francisco Bay Area, Boston, Chicago, Cleveland, Los Angeles, New York, Philadelphia, Phoenix, Pittsburgh, the Twin Cities of Minneapolis and Saint Paul, Minn., and Washington, D.C. Collectively, these areas have a combined 906,000 paid and volunteers positions and spend $13 billion annually, with a collective population of more than 75 million – nearly a quarter of the nation. The report relied on the most fiscal year data (2012) from the Cultural Data Project and is supported by a grant from the Doris Duke Charitable Foundation.

Only three regions saw increases in contributed funding: Bay Area, Boston, and Pittsburgh.

The report came up with four key implications for the future:

* Individuals are key since they constitute 45 percent of all revenue as well as employees and volunteers. “Engaging and engaging the next generation of cultural consumers, audiences and professionals will be key in reversing the trends of decline.”

* Cultural organizations must “embrace new strategies and do a better job of communicating the social significance and impact of their work” because of declines in arts education and a lack of exposure to the arts.

* Groups must think about audience development and engagement as a collective issue. Participation “is just a likely to occur online an in an informal setting as it is in traditional venues” and the cultural sector has struggled to respond to these shifts in behavior.

* Data collection, strong analysis and information-driven decisions can help organization adapt to changes

Among specific regions in the report:

The Bay Area had the highest increase in contributed revenue among 11 metros, at almost 40 percent, but individual giving dropped by 21 percent. It had the highest per-capital individual giving and attendance.

The highest increase in earned revenue was found in the Boston region, at 52 percent.

Los Angeles had the largest increase in attendance, almost 19 percent.

Chicago has the highest proportion of theaters of any other metro.

Cleveland has the highest proportion of revenue from earned income, at 59 percent, thanks to investments. It also had the largest increase in paid employment, almost 9 percent, but also the largest decline in spending, 7.4 percent. Cleveland had the fewer organizations in deficit, less than 35 percent.

The largest of any of the metros, New York generated almost 42 percent of the study’s total spending, represented almost 28 percent of the total organizations in the report, and had the highest attendance, at 69 million. It also had the highest percentage of organizations reporting a deficit – almost 46 percent. Spending per capital and government contributed income per capital were highest in the study.

Twin Cities has the highest proportion of corporate funding, at 5.5 percent, and had the highest percentage of state funding, almost 13 percent.

Washington, D.C. would have been second only to New York in total attendance, if the Smithsonian were included in its total but the nation’s capital has a the largest federally run cultural sector, which was not part of report. Most federally run institutions don’t participate in the Cultural Data Project.