TABLE OF CONTENTS
INTRODUCTION
STATE OF THE ARTSPatricia C. Jones, Alliance for the Arts
WHO PAYS FOR THE ARTS?—2010Michael Hickey, The Municipal Art Society of New York
THE ECONOMICS OF THE NONPROFIT ARTS SECTOR IN NYC—A LOOK AT THE ECONOMIC IMPACTAnne Coates, The Municipal Art Society of New York
FINANCIAL CONDITION OF NEW YORK CITY NONPROFIT ARTS AND CULTURE ORGANIZATIONSHilda Polanco and John Summers, Fiscal Management Associates
FUTURE OF NYC ARTS RESEARCH: A POSTSCRIPTLane Harwell, Dance/NYC
Anne Coates, The Municipal Art Society of New York
METHODOLOGIES
APPENDIX
ACKNOWLEDGMENTS
2
4
12
19
20
24
25
28
29
ARTSDIGEST2012
Arts Digest 2012
2
When we look at the conversation about resilience and livability across the
globe, the highest-ranking cities boast a rich, vibrant and diverse cultural
life. New York City is no exception. Arts and culture have been central to The
Municipal Art Society of New York’s (MAS) mission since its founding in 1893
by architects, painters, sculptors and civic leaders to create murals and
monuments for New York’s public spaces. This thread of cultural activity has
been carried through the Adopt-a-Mural and Adopt-a-Monument programs,
our tours, our collaboration in Place Matters with City Lore, advocating for
good design over the years, and perhaps most recently through Tribute in
Light, a spectacular public art project done with Creative Time.
In 2011 MAS forged a new collaboration with the Alliance for the Arts that
would continue the strong legacy of research, advocacy and convenings
stewarded by that organization. From 1977 the Alliance was our city’s
leading researcher of arts and cultural activity.
As MAS is no stranger to the arts, neither is it a stranger to research. With
deep roots in evidence-based work to support its advocacy, in 2010 MAS
embarked on a new longitudinal measurement: the MAS Livability Survey.
In 2011, the Survey identified that New Yorkers in many parts of the city—
especially outside Manhattan—are not satisfied or do not connect with
their local arts and culture offerings. With our deepened arts advocacy
and research capacity, it is now possible for MAS to further examine this
challenge to livability in New York. And, in assuming this agenda at a time
when tools for data collection and analyses are shifting and strategic
policymaking and fund development are critical, MAS has the opportunity to
be of great service to the cultural field and our city.
MAS is pleased to publish this collection of research, which taken together
tell a story about the nonprofit arts community during the challenging
Introduction
1
1 The CDP enables arts organizations to enter financial, programmatic and operational data into a standardized online format. A number of funders in New York, among them New York City’s Department of Cultural Affairs and the New York State Council on the Arts, now require their applicants to complete CDP profiles as part of their funding applications. Organizations can then use the CDP to produce a variety of reports designed to help increase management capacity, identify strengths and challenges and inform decision making. The CDP licenses data for research purposes; MAS and the Alliance both obtained licenses to do the research contained in this publication.
economic downturn, which began in 2008 and cut deeply into the arts
community. They also tell a story that illustrates that despite challenges,
we now see signs of recovery and hopefulness.
There are many indicators of resilience and sustainability discussed
here—among them financial health, attendance, number of programs and
workforce. Overall, what we see is that despite the recent long economic
downturn, the nonprofit arts community is scrappy and nimble. Art making
and audience building have continued at the highest levels of creativity and
excellence, and New York City’s cultural community has been doing a terrific
high-wire act in keeping their doors open during these difficult past few years.
Each of the four articles in this collection reports on analysis that uses as its
sole data source the Cultural Data Project (CDP). The CDP is a longitudinal and
granular data set maintained by the Pew Charitable Trusts and is emerging
as the national standard for data collection in the arts and cultural sector.1
The analyses presented in this collection are varied, demonstrating not only
the depth of information available but also the different ways of interpreting
the data to weave a narrative of the resilience of the nonprofit arts sector.
This collection looks at the economics of the arts, the sources of income, the
general state of affairs, and some new ways of measuring the financial health
of the nonprofit cultural organizations that make this city so very livable.
What is impact and how do you measure it? New measures of impact are
in the works all around us—whether it be the vibrancy indicators being
developed by ArtPlace to measure its investments in creative placemaking
and therefore the impacts of these efforts on communities (which is at the
heart of MAS’s livability agenda), or the intrinsic impact model developed by
WolfBrown for Theatre Bay Area, looking at this heretofore elusive impact,
now quantifiable. It’s tantalizing to think about how this would be employed
for every discipline, and we look forward to it.
Arts Digest 2012
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The impacts of arts and cultural activity are many, and not all explored
here. We at MAS felt that a state of the arts could not be offered without
an economic impact piece but say wholeheartedly that it is not the only
impact to be considered.
Who Pays for the Arts? underscores what we all know: the face of
funding cultural activity has changed. More and more, especially for the
largest groups, earned income has outpaced contributions; but even for
the smallest organizations (as studied in the aggregate) it is a significant
piece of the funding pie.
The Alliance’s State of the Arts looks at a broader swath of cultural activity
than do the others, embracing the full potential of the data offered by the
CDP. Its report includes organizations whose offerings include cultural
activity, but not exclusively. These groups applied for support to one of the
funders requiring use of the CDP and therefore appear in the data for the
study years. It is a great reminder that cultural activity in this city happens
in many places beyond performance spaces, museums and historic
houses—including libraries, parks, media organizations (nonprofit television,
radio and online media) or higher education institutions that see arts and
culture as a key piece of their offerings.
We believe that the livability of this city—of any city—relies heavily on
a vibrant cultural life. In addition to publishing updates to the traditional
portfolio of Alliance research, all of which we believe are important to
understanding the nonprofit arts sector and its contributions, impacts,
opportunities and challenges, we asked Fiscal Management Associates
to help us think about what new indicators could be developed to help
us understand the health of the nonprofit arts field, which would, in turn,
help inform our work to support the arts in MAS’s livability agenda. We
are pleased to include those here.
We encourage our readers to take in the whole picture presented here,
through four different lenses. Each tells an important part of the story
about this field’s activity, impact and sustainability. There are a few
cautionary moments, to be sure; we hope that they will be viewed as
tools for nuanced understanding of some of the particular challenges
that the cultural community faces.
While this collection focuses on nonprofit cultural groups, we recognize
the finely woven network of goods, services and workers connected to this
sector. We also know that the nonprofit arts sector is closely connected to
the commercial one, often serving as a pipeline of work or talent.
At the same time that there has been a proliferation of new arts groups
entering the market and joining the ranks of 501(c)(3)s, there has been a
profound philanthropic shift since 2008 in a host of different ways—giving
levels, giving priorities, business models for grantmaking, among them.
There is a great story of opportunity to be told here—to leverage the
extraordinary public/private partnership in support of the arts (combined
with an ability to earn revenue) and to stimulate and nurture creativity and
engagement with one of New York City’s greatest assets: its cultural life.
There is a growing opportunity for short-, medium- and long-term
collaboration, partnership, merger and adoption of programs of one
organization to another, as MAS has done with the Alliance for the Arts.
And, there is an opportunity for new, or renewed, support for the arts—in
the form of philanthropic investments to ensure the cultural field’s resilience
through support for general operations, cash reserves and capacity building.
As MAS addresses our city’s resilience in all of its work, we have put the
arts—and their vibrancy, resilience and sustainability—at the core of our
work. This collection of research informs our work going forward, and we
hope it is of equal use to the cultural community and its supporters.
We hope you see in the data not only the challenges our arts and cultural
institutions face, but opportunity to strengthen the field. At MAS, we are
committed to advancing arts and culture to improve the livability of our
city, and to engaging policymakers, funders, sister advocates and the
wider cultural community in this effort. This digest establishes important
benchmarks and is only a starting point for discussion about where we are
now as a field and for where we are going.
Vin Cipolla, President
The Municipal Art Society of New York
INTRODUCTION
Arts Digest 2012
4
The Alliance for the Arts is pleased to be able to present this first
comprehensive look at the State of the Arts, a review of the economics,
services and well-being of more than 1,300 nonprofit arts organizations
based in New York City. The Alliance has been producing reports on the arts
in NYC, New York State and the metropolitan region since 1977, including
the influential 1983 The Arts as an Industry. This is the first time, however,
that we have been able to provide a comprehensive portrait of the city’s
arts organizations over a multiyear period, thanks to the data collected by
the Cultural Data Project.
It is particularly fortuitous that these data are available now, starting with
FY2008, for this has been a tumultuous period for the city as a whole,
including the nonprofit sector.
This report could not have been completed without the unstinting help of the
staff of the Cultural Data Project for reports and data analysis; it was made
possible by funding from the New York Community Trust and the Booth
Ferris Foundation and the New York City Department of Cultural Affairs.
The State of the Arts will be the final report by the Alliance for the Arts
which is shutting its doors by the end of this year. After 35 years serving
New York City’s cultural community, the board of trustees has decided that
the Alliance’s services to the field can best be fulfilled by the adoption of
key programs by two other critical NYC institutions—WNET for our online
cultural information services through NYC-ARTS and the Municipal Art
Society for our advocacy, research and convenings. We know that they will
both continue as strong stewards of our programs.
Summary
New York City, home to more than 1,300 nonprofit arts organizations, is
arguably the cultural capital of the United States. And these nonprofits—and
State of the ArtsPatricia C. Jones, Alliance for the Arts
the commercial theater, film, visual arts and music companies they have
spawned or influenced—play a critical role in the city’s economy. The 1,325
organizations that have contributed to this study have a combined annual
revenue of nearly $5.5 billion; while the majority are based in Manhattan,
they are located in all five boroughs and in every City Council district.
Source: Alliance for the Arts, Cultural Data Project
Arts Organizations by Discipline and Borough
Organization Type BRONX KINGS NEW YORK QUEENS RICHMOND TOTAL
Community Arts 4 19 39 14 4 80
Education & Instruction 7 21 71 3 4 106
History 4 7 19 7 5 42
Media Arts 3 28 82 3 1 117
Science & Nature 4 5 8 3 2 22
Museums & Visual Arts 6 15 77 12 3 113
Dance 2 30 93 4 1 130
Music 9 32 135 15 8 199
Other Performing Arts 5 23 59 6 2 95
Theater 6 39 184 17 5 251
Councils, Services & Support 2 15 100 9 0 126
Other 0 12 30 2 0 44
Total 52 246 897 95 35 1325
But this situation is relatively recent—before 1960 only 153 (11.5%) of the
current nonprofits were in business. In the next 20 years, coinciding with the
formation of the National Endowment for the Arts and the New York State
Council on the Arts, twice as many organizations (323) were formed, and
another 535 came into existence between 1980 and 1999, at a time when
Arts Digest 2012
5
the NYC Department of Cultural Affairs, recently formed as an independent
agency, expanded City funding to include organizations not located on
City-owned property. Even with the economic ups and downs of the past
decade, another 309 groups were started just in the 11 years since 2000.
The arts (including universities with a strong arts focus; zoos, parks and
botanic gardens; public television and radio; historic houses and history
museums; and community arts programs) now permeate every facet of our
lives, and small organizations abound. In New York City, 406 groups (31%
of the total) have budgets of less than $100,000, and another 421 have
budgets between $100,000 and $500,000. At the other end of the scale, the
113 organizations with budgets of more than $5 million a year comprise
just 8.6% of the total number of groups, and another 238 have budgets
between $1 and $5 million.
In spite of this diversity, the largest groups receive the lion’s share of both
earned and contributed income. In the latest fiscal year reported, the
113 largest groups earned 89% of the total earned revenue for all 1,325
organizations and 80% of the total contributed income. They also received
88% of all NYC government support and 85% of government support at
all levels. The 974 groups with budgets of less than $1 million a year
brought in just 3% of the total earned revenue and 6.2% of all contributed
income, even though together they represent 73.5% of the total number
of groups in the city.
This study looks at the total impact of all 1,325 groups, but also breaks out
the data by budget size and discipline category. For those 535 groups which
reported fiscal data for 2008, 2009 and 2010, we look at the impact the current
recession has had on their finances and the services.
The Economics of the Arts
REVENUE
For the 1,325 NYC arts organizations in this study revenue was nearly
evenly divided between earned income of $2.707 billion and contributed
income of $2.727 billion the same year, for a total of $5.435 billion. The
vast majority of this income went to the 113 largest organizations—$4.604
billion. The remaining 1,212 organizations received some $831 million, with
$546 million contributed and $285 million earned in their latest fiscal year.
EXPENSES
Total expenses for all groups totaled $5.150 billion. Again, the majority of
this total was spent by the 115 largest groups (total expenses of $4.381
billion). So 8.6% of the organizations were responsible for 85% of total
expenditures and 86.7% of total income.
The largest expense category for all organizations is personnel, ranging
from a low of 43.6% of total costs for groups under $100,000 to a high of
59.6% for large organizations with budgets between $1 and $5 million. The
smallest groups spend just under 11% on salaried employees, and the most
on outside artists/performers, 24.5%. The two largest budget categories
spend the most on salaried employees—48% and 47.3% respectively—and
the least on outside artists/performers (3.3%) and professionals (3.8%), as
they were able to bring most of these functions in-house. This pattern held
true across all disciplines, in varying degrees. The smallest organizations
also spent the largest percentage on administrative and programming costs.
But with total expenses of just $19.2 million for 406 groups, none of these
categories represent a substantial expenditure per organization, where the
average budget size is just under $50,000.
New York City’s arts groups as a whole weathered the recent financial
storm in reasonably good shape. Income surpassed expenses by nearly
$285 million overall last fiscal year, and while most of this surplus was
earned by the largest groups ($224.5 million) groups in every other budget
category had surpluses ranging from 2% to 26% of income over expenses,
with the smallest groups faring the best.
EMPLOYMENT
Personnel costs are the largest single expense for all arts organizations
in NYC—artists and independent contractors for the small organizations
(under $500,000), salaried employees for the largest ones. In total, cultural
STATE OF THE ARTS
Arts Digest 2012
6
organizations employed 120,283 people in their latest fiscal year—23,310 full-
time and 32,905 part-time employees, and 64,068 independent contractors.
These numbers translate to 40,410 full-time equivalent employees and
represent just over 54% of total expenses. In addition, arts groups depend on
another 82,855 full- and part-time volunteers and 16,684 board members.
Only 12.6% of the smallest organizations reported any full-time employees;
14% reported employing 308 part-time employees; 85.5% reported hiring
10,234 independent contractors, most of whom were artists or program-
related (9,880). Many of these smallest groups also reported full- or part-time
volunteers, with 112 groups (27%) using 283 full-time volunteers and 308
organizations (74%) using nearly 8,000 part-time volunteers. At the other end
of the spectrum, the largest organizations reported employing nearly 19,000
individuals full-time and almost 20,000 part-time, most either artists or
program-related. Just over 100 of the organizations with budgets more than
$5 million reported also hiring more than 16,000 independent contractors,
including nearly 15,000 artists or program-related individuals.Almost half
(47%) of all groups now offer health insurance and make a contribution
toward the cost; 21% offer some form of pension or retirement plan.
Combined with the large number of part-time and independent workers, this
means that most individuals working for most arts groups are adequately
compensated, either salaried or with full-time employment or benefits.
The Arts and the Community
ATTENDANCE
More than 35.5 million people paid to attend arts events offered by New
York City arts groups, and groups reported a total audience of 155 million
for free events—including public radio and TV. Most were offered by
Manhattan-based groups, but more than 2.5 million people attended paid
events in Staten Island, 4.2 million in the Bronx, 6.7 million in Queens and
7.7 million in Brooklyn. The largest number of attendees visited museums,
science centers, and zoos and botanic gardens (nearly 9.6 million paid
visitors to museums and 7.3 million+ to science or nature centers.
PRODUCTIONS
In their latest fiscal year, New York City’s 1,300+ arts and culture
organizations presented:
�� 20,119 live productions
�� 56,446 performances
�� 4,242 exhibitions
�� 89,879 classes and lectures
�� 3,058 tours
�� 6,973 world or national premieres
�� 10,821 workshops or readings of new works
ADMISSION PRICES
The median ticket price across all arts groups and for all types of events
(excluding workshops) is $18.40, ranging from a low of $5 for history groups
to a high of $20 for performing arts organizations and a $10 average for
museums. For children, seniors and students median prices are lower,
averaging $10 a ticket. The spread of prices can be extreme—from a low of
$1 a ticket to highs over $1,000.
MEMBERSHIPS AND SUBSCRIPTIONS
Memberships and subscriptions remain the primary way many individuals
support the arts groups of their choice. The arts community has just under
2 million members and subscribers. Museums have the largest number
of committed supporters in the form of members—more than 420,000.
Media organizations, including libraries, public television and public radio,
have a strong membership base of over 408,000, and science and nature
organizations follow with 243,446 members. The performing arts, which
used to depend heavily on a strong subscriber base for much of their
financial stability, appear to be less dependent on subscribers today. Music
organizations, ranging in size from the Metropolitan Opera and the New
York Philharmonic to 64 groups with budgets under $100,000, have a total
subscription base of just 108,344, while dance groups have only 11,451
subscribers. Theater companies fell in between, with 92,418.
STATE OF THE ARTS
Arts Digest 2012
7
VOLUNTEER SUPPORT
Volunteers are critical to all arts groups, but especially to those with
budgets under $500,000. Six hundred groups—308 with budgets less than
$100,000 and 291 with budgets between $100,000 and $500,000—reported
having nearly 39,000 full- and part-time volunteers, as compared to only
3,500 employees. In addition, the smallest groups had nearly 3,000 board
members, or almost 10 times as many board members as staff, making
most of these groups largely volunteer directed and led. Again, the largest
organizations had the greatest number of volunteers per organization, with
67 groups reporting a total of 18,192 volunteers, and all 113 reporting a total
of 3,748 board members, for an average of 33 members per organization.
PROGRAMS FOR CHILDREN
Arts education and other programs for children continue to be an important
function of many groups. Some 10.25 million children and youth attended
events or visited arts groups in the study year, with 3 million attending
theater performances and another 1.5 million visiting science centers, zoos
and botanic gardens. Besides encouraging children to visit their institutions
individually, with family or friends, many organizations offer education
programs for school groups or take programs to the schools. A total of
122,634 school groups visited organizations in their latest fiscal year, and
organizations offered 7,505 off-site programs in the schools. A majority of
these programs were offered by visual arts groups, particularly science and
nature centers and museums and galleries. Education organizations and
museums offered the largest number of in-school programs, 2,078
and 1,057 respectively.
Recession Trends: 2008–2010
Five hundred fifty-four groups reported data for each of the past three years,
2008, 2009 and 2010. Thus, we can track the impact of the recession on a
significant number of arts groups and extrapolate to the field as a whole.
INCOME
In general, 2009 was a very difficult year for all groups, no matter their budget
size. Groups experienced substantial decreases in earned and contributed
income from 2008 to 2009. Contributed income dropped in nearly all
categories—especially in individual and foundation support—but the biggest
impact was in investment income where groups of all sizes experienced
substantial losses in both 2008 and 2009. Investment losses in 2008 totaled
more than $77 million, a loss that grew to more than $1.171 billion by 2009.
While all types and sizes of organizations experienced investment losses,
most smaller groups had less to lose; the largest losses were sustained
by the largest visual and performing arts organizations, which together
accounted for $62.6 million in losses in 2008 and $1.146 billion in 2009.
Luckily, most groups did not have to sell their investments in order to
meet their expenses, so the total realized investment losses in 2009 only
amounted to $93 million, as compared to more than $1 billion in unrealized
losses. By 2010 many of these investments had begun to turn around,
giving groups a positive return in 2010, for a total of $454.5 million in
investment and interest income, both realized and unrealized. Removing
all investment and interest income from total earned income in each of
the three years would have given these 554 groups $962 million in earned
income in 2008, $966 million in 2009 and $954 million in 2010. Admission
income grew over these three years, but this increase was offset by
decreases in most other categories.
Contributed income also fell in most categories over the past three years;
the one bright spot was government support, particularly NYC government,
which increased its support to these arts organizations by more than
$50 million from 2008 to 2009 to a total of $295 million. City support to
the largest organizations increased even more—$78 million or 44%—
increases that were offset by decreases to smaller organizations. While
the total fell back somewhat in 2010 as the City faced its own economic
problems, it still represented a 12.6% increase over 2008 and did much to
offset losses in other categories. State government support fell across all
budget categories, to $40.8 million in 2009 from $52.2 million in 2008, but
recovered partially to $45.3 million in 2010. Federal government support
increased in 2009 and 2010, from $33.4 million in 2008 to $43.7 million in
2009 to $58.4 million in 2010.
STATE OF THE ARTS
Arts Digest 2012
8
At the beginning of the recession in 2008 these 554 organizations as a
whole were still operating in the black—income exceeded expenses by
$169 million. By the following year, income had dropped by more than
half, but arts groups had not, as a whole, been able to reduce expenses.
Expenses actually increased by $75 million, resulting in a net loss of over
$1.3 billion—most of which, of course, was due to unrealized investment
losses. The biggest losers were museums and galleries, science and nature
centers and presenting organizations.
By 2010, as investments began to turn around, total income had once
again reversed and even increased over 2008 to $2.7 billion. At the same
time, organizations were able to reduce some expenses, so that their total
expenses totaled under $2.4 billion—a decrease of just under $64 million—
resulting in a net surplus of $332 million.
EXPENSES
One of the problems facing many arts groups is their high percentage of
fixed costs. As Professors Baumol and Bowen famously wrote in their study
of the performing arts in 1965, you can’t cut the number of players in a
symphony to make an orchestra more efficient. But groups did cut some
full-time employees—mostly in administration and fundraising—and hired
part-time employees instead. While they hired more artists/performers
and other program contractors, they gave them fewer hours, resulting
in a 7% decrease in spending on outside artists/performers and an 18%
decrease in program personnel funding over the three years. But facility
and administrative costs are harder to cut. Nearly all disciplines and budget
sizes saw an increase in facility expenses.
PERSONNEL
Although total salary costs increased slightly from 2008 to 2010, the
number of full-time employees fell by more than 10%, partially offset by
a 5% increase in part-time employees, particularly artists and program
employees. Groups also turned increasingly to independent contractors—
both artists/performers and program personnel—in order to continue
their programming at stable levels. The number of these artists/performers
STATE OF THE ARTS
increased by 27% over the three years and the number of program
personnel increased by 20%, though the full-time equivalents in these two
categories dropped by 15.5% and 13% respectively. Total volunteers grew
from 29,000 to 40,000, most to help with programs; measured as full-time
equivalents, the number of total volunteers also increased from 3,500 to
6,700, an increase of 92%.
ATTENDANCE
Even while these groups were struggling to raise funds and keep costs
under control, they were managing to increase their programming and
reach significantly larger audiences: between 2008 and 2010 the number of
attendees at all events, paid and unpaid, increased from more than 43 million
to nearly 81 million, and the percentage of the audience who attended for free
increased from 51% to 74%. (It should be noted, however, that nearly half of
the increase in the audience for free events came from media organizations,
including public TV and radio.) The number of attendees at paid events actually
dropped slightly over the three years, from 21.3 million to 20.9 million. This was
especially true for Manhattan-based organizations, where paid attendance
fell from 8.97 million in 2008 to just over 7.89 million in 2010. Subscribers also
decreased, particularly for dance, music and theater companies. The number
of performances, exhibitions, lectures and commissioned works all increased
slightly over the three years, although touring—which is particularly expensive
and often sponsor-dependent—fell by 80%.
Community Arts & Education Visual Arts (History, Science, Nature, Museums, Galleries) Performing Arts Service, Support and Other
Community Arts Education Total History Media Arts Science &
NatureMuseums &
Galleries Total Dance MusicOther
Performing Arts
Theater Total Service/Support Other Total
Total Number of Orgs 80 106 186 42 117 22 113 294 130 199 95 251 675 126 44 170
Smallest 31 18 49 6 34 1 8 49 42 97 28 96 263 27 18 45
Small 20 28 48 17 50 1 35 103 52 63 18 85 218 43 9 52
Medium 10 11 21 4 10 1 18 33 16 13 10 30 69 21 3 24
Large 14 38 52 9 15 7 26 57 15 19 28 31 93 25 11 36
Very Large 5 11 16 6 8 12 26 52 5 7 11 9 32 10 3 13
Borough Location
Brooklyn 19 21 40 7 28 5 15 55 30 32 23 39 124 15 12 27
Bronx 4 7 11 4 3 4 6 17 2 9 5 6 22 2 0 2
Manhattan 39 71 110 19 82 8 77 186 93 135 59 184 471 100 30 130
Queens 14 3 17 7 3 3 12 25 4 15 6 17 42 9 2 11
Staten Island 4 4 8 5 1 2 3 11 1 8 2 5 16 0 0 0
Average Expense ($) 1,561,714 6,592,825 4,428,906 2,227,310 5,297,173 29,858,710 9,906,145 8,468,035 1,298,309 2,902,894 5,406,233 1,249,834 2,331,491 1,536,018 1,581,172 1,547,705
Total Expense ($) 124,937,101 698,839,403 823,776,504 93,547,026 619,769,199 656,891,625 1,119,394,406 2,489,602,406 168,780,184 577,675,935 513,592,121 313,708,402 1,573,756,642 193,538,288 69,571,580 263,109,868
Total Revenue ($) 151,576,444 771,156,990 992,733,434 126,232,739 641,124,384 561,272,370 1,344,738,144 2,673,367,637 179,067,508 442,727,063 567,158,844 360,143,450 1,549,096,865 192,905,228 96,905,820 289,811,048
Earned/Contributed 36%/64% 76%/24% 69%/31% 21%/ 79% 24%/ 76% 38%/62% 64%/36% 47%/53% 62%/38% 43%/57% 38%/62% 54%/46% 46%/54% 38%/62% 38%/69% 36%/64%
Subscribers/ Members
46,260/47,786
19,236/7,721
65,496/55,507
1,200/33,436
67,023/408,235
0 /243,446
22,130/420,349
90,343 /1,105,466
11,451/3,624
108,344 /102,391
26,643 /48,278
92,418 /41,450
238,856 /195,743
28,482/158,464
658/16,621
29,140 /175,085
Paid Attendance 462,924 559,604 1,022,528 1,615,079 1,422,021 7,331,129 9,590,792 19,959,021 1,987,918 1,924,604 3,035,250 6,054,569 13,002,341 882,083 640,555 1,522,638
Children Attendance 135,801 294,892 430,693 669,472 624,916 1,545,568 863,002 3,702,958 358,004 274,415 680,941 3,029,263 4,343,623 1,486,121 291,175 1,777,296
Number of School Groups
939 8,356 9,295 15,010 10,750 29,725 27,997 83,482 1,246 5,214 4,496 4,186 15,142 13,313 1,402 14,715
Off-Site School Programs
131 2,178 2,309 407 398 242 1,507 2,104 427 504 348 742 2,021 906 165 1,071
Characteristics of CDP New York City Arts Organizations
Average Expense ($) 1,561,714 6,592,825 4,428,906 2,227,310 5,297,173 29,858,710 9,906,145 8,468,035 1,298,309 2,902,894 5,406,233 1,249,834 2,331,491 1,536,018 1,581,172 1,547,705
Total Expense ($) 124,937,101 698,839,403 823,776,504 93,547,026 619,769,199 656,891,625 1,119,394,406 2,489,602,406 168,780,184 577,675,935 513,592,121 313,708,402 1,573,756,642 193,538,288 69,571,580 263,109,868
Subscribers/Members
46,260/47,786
19,236/7,721
65,496/55,507
1,200/33,436
67,023/408,235
0 /243,446
22,130/420,349
90,343 /1,105,466
11,451/3,624
108,344 /102,391
26,643 /48,278
92,418 /41,450
238,856 /195,743
28,482/158,464
658/16,621
29,140 /175,085
Paid Attendance 462,924 559,604 1,022,528 1,615,079 1,422,021 7,331,129 9,590,792 19,959,021 1,987,918 1,924,604 3,035,250 6,054,569 13,002,341 882,083 640,555 1,522,638
Arts Digest 2012STATE OF THE ARTS
9
Community Arts & Education Visual Arts (History, Science, Nature, Museums, Galleries) Performing Arts Service, Support and Other
Community Arts Education Total History Media Arts Science &
NatureMuseums &
Galleries Total Dance MusicOther
Performing Arts
Theater Total Service/Support Other Total
Total Personnel Expenses ($)
69,424,917 459,314,469 528,739,386 46,412,306 341,451,424 375,406,663 488,799,850 1,252,070,243 107,990,875 358,303,587 225,533,026 173,138,345 864,965,833 102,459,877 38,396,893 140,856,770
% of Expenses 55.6% 65.7% 64.2% 49.6% 55.1% 57.1% 43.7% 50.3% 64.0% 62.0% 43.9% 55.2% 55.0% 52.9% 55.2% 53.5%
Facilities Expenses ($)
27,325,048 103,543,240 130,868,288 20,442,038 81,982,986 86,771,604 210,664,882 399,861,510 20,516,257 45,791,472 175,125,322 43,336,928 284,769,979 21,946,605 8,637,609 30,584,214
% of Expenses 22.0% 15.0% 16.0% 22.0% 13.0% 13.0% 19.0% 16.0% 12.0% 8.0% 34.0% 14.0% 18.0% 11.0% 12.0% 12.0%
Programming Expenses ($)
6,837,261 37,823,430 44,660,691 7,958,832 111,755,840 35,625,322 134,986,829 290,326,823 24,019,783 45,277,221 52,371,179 73,229,151 194,897,334 19,603,257 3,365,919 22,969,176
% of Expenses 5.5% 5.4% 5.4% 8.5% 18.0% 5.4% 12.1% 11.7% 14.2% 7.8% 10.2% 23.3% 12.4% 10.1% 4.8% 8.7%
Administrative Expenses ($)
21,349,875 98,158,264 119,508,139 18,733,850 84,578,949 159,088,036 284,942,995 547,343,830 16,253,269 128,303,655 60,562,594 24,003,978 229,123,496 49,528,549 19,171,159 68,699,708
% of Expenses 17.1% 14.1% 14.5% 20.0% 13.7% 24.2% 25.5% 22.0% 9.6% 22.2% 11.8% 7.7% 14.6% 25.6% 27.6% 26.1%
Total Employees 4,140 13,106 17,246 1,941 6,480 8,801 12,006 29,228 5,995 15,303 25,158 19,778 66,234 1,615 5,9961 7,576
Artists/Performers 1,966 6,676 8,642 876 1,349 459 1,838 4,522 3,586 10,370 17,124 11,394 42,473 3,657 664 4,322
Program 1,598 4,853 6,451 792 4,026 5,523 7,560 17,901 1,728 3,362 6,212 6,642 17,943 1,601 614 2,215
Fundraising 57 286 343 70 258 359 567 1,254 151 342 284 323 1,100 184 29 213
General Admin 519 1,291 1,809 203 846 2,460 2,042 5,551 531 1,230 1,538 1,419 4,717 518 308 827
%FT-%PT-%IC 26-22-52 24-32-44 24-29-46 27-28-45 50-16-33 42-26-32 42-18-40 43-21-36 11-38-51 11-35-53 6-17-77 6-43-51 8-31-62 16-19-65 34-19-47 20-19-61
Board/ Volunteers
1,037/1,676
1,500/12,951
2,537/14,627
738/2,015
1,343/3,694
627/4,517
1,939/4,827
4,647/15,053
1,164/2,031
2,149/20,436
1,241/5,138
2,429/13,193
6,983/40,798
1,848/7,605
669/4,772
2,517/12,377
Total Events 5,818 19,575 25,393 3,104 62,240 5,007 18,226 88,577 9,151 12,067 16,726 36,125 74,069 21,200 2,399 23,599
FY 2008 - FY 2010Trend Dataset
Expenses % Change 11.8% -4.0% -2.1% -13.2% 15.7% 0.3% -1.7% -0.6% -1.2% -10.7% 15.7% 6.3% 5.2% 0.0% -63.1% -17.2%
Expenses % Change Total
75.5% 6.4% 13.7% 8.0% 11.1% -5.6% 4.8% 2.6% 1.6% 0.6% 18.6% 25.1% 14.4% 3.2% -51.0% -9.8%
Revenue % Change (excluding unrealized investment income)
36.3% -4.1% 0.7% 8.4% 27.3% -44.4% -43.4% -39.7% -17.2% -25.8% 4.4% 8.5% -3.0% -3.0% -58.1% -17.5%
Paid Attendance % Change
-24.0% -3.0% -6.8% 0.4% 168.2% -0.9% 10.7% 5.3% 3.0% -37.0% -16.6% -1.7% -9.4% 18.3% -24.8% 8.8%
Characteristics of CDP New York City Arts Organizations, continued
Source: Alliance for the Arts, Cultural Data Project
Total Employees 4,140 13,106 17,246 1,941 6,480 8,801 12,006 29,228 5,995 15,303 25,158 19,778 66,234 1,615 5,9961 7,576
Artists/Performers 1,966 6,676 8,642 876 1,349 459 1,838 4,522 3,586 10,370 17,124 11,394 42,473 3,657 664 4,322
Program 1,598 4,853 6,451 792 4,026 5,523 7,560 17,901 1,728 3,362 6,212 6,642 17,943 1,601 614 2,215
Fundraising 57 286 343 70 258 359 567 1,254 151 342 284 323 1,100 184 29 213
General Admin 519 1,291 1,809 203 846 2,460 2,042 5,551 531 1,230 1,538 1,419 4,717 518 308 827
%FT-%PT-%IC 26-22-52 24-32-44 24-29-46 27-28-45 50-16-33 42-26-32 42-18-40 43-21-36 11-38-51 11-35-53 6-17-77 6-43-51 8-31-62 16-19-65 34-19-47 20-19-61
Total Events 5,818 19,575 25,393 3,104 62,240 5,007 18,226 88,577 9,151 12,067 16,726 36,125 74,069 21,200 2,399 23,599
Arts Digest 2012STATE OF THE ARTS
10
Arts Digest 2012
11
CONCLUSIONS
It is clear from the information presented here that the nonprofit arts
in New York City are both a robust economic generator and a source of
services used by New Yorkers citywide. Thanks to support from all sectors—
government, foundations, corporations and especially individuals—the arts
have survived the economic recession and are continuing to offer a wide
range of free and low-cost programs.
However, there are some issues that should be kept in mind. First, an
unprecedented number of nonprofit arts organizations have come into
existence over the past 20 years. A total of 578 of the current 1,325
organizations (44%) were founded between 1992 and 2011. Groups with
budgets under $5 million are already competing for a comparatively small
portion of total arts revenue. If groups continue to form at the pace they
have over the past few decades, it is hard to see where the increased
funding necessary to support them will come from.
Those groups with budgets under $100,000 survive thanks primarily to
individual support (from board members and volunteers as well as audience
and contributors) and government support. While few have paid staff,
they spend an average of 29% of their expenses on administrative costs.
Given the increasing competition for limited resources, this may be an
opportune time for funders and policymakers to consider innovative ways
to encourage the sharing of administrative costs and management staff,
including strategic mergers and other forms of collaborative behavior.
Although the field has bounced back from the enormous deficits of 2009,
it will take time for many of groups to recover from investment losses.
Luckily, while most groups had substantial realized losses from investments
and interest ($93 million total), this sum was dwarfed by unrealized losses
of more than $1 billion. But the extent to which the largest organizations
depend on investment income is something to be concerned about in the
future, as is the management and investment of those funds.
New York City’s nonprofit arts are a critical component of its role as an
international creative center. The large institutions, which account for
most of the public and private support, are major tourist attractions and
serve millions of visitors; the small- and mid-size organizations are critical
to their communities and are often the innovative engines that drive new
work and open new artistic possibilities. Yet, the majority of workers in the
field are underemployed, with most working part-time or as independent
contractors, and rarely receiving adequate benefits.
If NYC is to retain its preeminence as the nation’s cultural capital it will
need to find better ways to retain the artists and other employees who are
critical to that role.
Everyone concerned about the continued health of the cultural sector—
government, funders, corporate leaders, policymakers and individual
supporters—need to think carefully about new approaches to strengthen
the entire sector. We hope that this report has offered some insight into the
strengths and weaknesses of the sector, and that it will help all of us ensure
its future health.
Patricia C. Jones is an independent consultant who is currently serving as the Interim Executive
Director of Eyebeam Art + Technology Center. She led the Alliance for the Arts as Executive
Vice President from 1977-1990 and served as a trustee from 1990-2011. She is currently the
Alliance’s Acting Executive Director.
© 2012, Alliance for the Arts/The Municipal Art Society of New York. All Rights Reserved
STATE OF THE ARTS
Arts Digest 2012
12
Historically, Who Pays for the Arts?1 has attempted to answer the
fundamental question of how nonprofit cultural organizations in New York
City earn their daily bread. New York City is host to a tremendous variety
of cultural partners. They range from very small organizations run on a
shoestring budget by a single dedicated artist, to major cultural institutions
with hundreds of millions of dollars in total annual income and hundreds
of specialized staff. They also vary tremendously by geography, creative
aesthetic, operational structure and purpose. Naturally, making comparisons
among such a wide array of organizations is challenging. Nonetheless, Who
Pays for the Arts? offers a valuable framework for observing trends, and
raises important questions for future researchers to consider.
Summary Findings
Similar to previous iterations of Who Pays for the Arts?, this analysis
focuses on a single year of activity—from January 1 to December 31, 2010.
This creates a useful snapshot, and provides a basis to compare trends
within the sector year over year.
For the first time, this analysis makes use of data provided through the
Cultural Data Project (CDP), analyzing 723 organizations2 that reported
total income of nearly $2.5 billion in 2010. As in prior versions of this
report, the majority of total income went to a small group of very large
organizations. Just five organizations (all with annual incomes of more than
$100 million) accounted for nearly $1 billion of the total (or 40%), and just
40 organizations (all with budgets more than $10 million) accounted for $1.9
billion of the total (or 76%). Indeed, average income for all organizations in
2010 was $3.4 million, while the median income was less than $250,000,
indicating that all revenue categories were strongly skewed by these very
few large organizations. This is important because it poses challenges for
analysis (see the Methodologies section on page 25 for greater detail), but it
also illustrates an important reality: the overwhelming majority of New York
City cultural organizations are relatively small and locally based.
Overall, income from all sources was as follows:
�� Earned income represented 53% (or $1.3 billion) of total income for
New York City nonprofit cultural organizations in 2010
�� Private contributions were 30% (or $750 million)
�� Government contributions were 17% (or $420 million). Of this
amount, New York City funding represented $292 million in income, or
12% of all revenues reported.
These percentages are all consistent with the 2010 Who Pays for the Arts?
report (which looked at 2009 data), with private support being down slightly
(2%) from the prior year, and government support increasing slightly (3%)
from the same period. Note: the inclusion of capital commitments in the
2010 data for this report may impact comparisons to prior years’ studies
when capital commitments were not included as income.3
Average Income by Type and Size—2010
Source: The Municipal Art Society of New York, Cultural Data Project
< $100K $100K - $500K $500K - $1M $1M - $5M > $5M
Public Funding 9,444 53,060 125,458 392,877 5,305,559
Private Support 18,229 94,891 244,073 762,507 9,345,129
Earned Revenues 16,995 107,276 342,152 1,048,046 17,241,662
1
1 Who Pays for the Arts? was previously published by the Alliance for the Arts, now adopted and published by MAS.
2 Please see the Methodologies section beginning on page 25 for important details about this data set.
3 Please see the notes regarding the impact of capital contributions in Methodologies.
Who Pays for the Arts?—2010Michael Hickey, The Municipal Art Society of New York
Arts Digest 2012
13
While there are important similarities among organizations of all sizes
(for instance, all categories rely heavily on earned revenue as their primary
source of income), there is still significant variation between the ranges (for
small organizations, 38% of total income came through earned revenues,
while this number was more than 50% for the very largest organizations).
On the other hand, private contributions from individuals, foundations
and corporations make up a more substantial portion of income for the
very smallest organizations ($18,000 on average). This may simply indicate
that smaller organizations have fewer opportunities to maximize earned
revenues in comparison to larger groups, and must therefore rely more on
private support to help sustain their operations.
For smaller organizations, public support appears to play a slightly more
important role in comparison to their larger peers. A more detailed analysis
below shows that sources of public support (city, state and federal) can vary
greatly by organizational size.
The map in the Appendix shows that the great majority of organizations
captured by CDP are located in Manhattan, including the subset in this
report. Note that there are important exceptions not captured in this report,
as many cultural organizations and entities are not part of the CDP data
set (including for-profit cultural entities, individual artists and many small
cultural nonprofits that choose not to participate in CDP).
The detailed income analysis below looks more deeply at variations among
organizations by size, and also begins to examine how geography affects
the distribution of income streams.
Earned Revenues
As noted above, earned revenues are the primary source of income for
the nonprofit cultural sector. A more detailed breakdown of subcategories
within earned revenues offers some useful insights. As in prior years,
Admissions, Support from Individuals, and Other Earned Revenues are
the three leading revenue categories. The major impact of Other Earned
Revenues (comprising space rentals, merchandising, food services, parking,
touring, royalties, publications, interest on investments and miscellaneous
income) on overall income appears to indicate that many groups have
developed strategies to support their operations through alternative (and
frequently entrepreneurial) means.
Source: The Municipal Art Society of New York, Cultural Data Project
Total Income by Percentage—2010
Even within the category of Earned Income, there is significant variation by
organizational size.
Average Earned Income by Type and Size—2010
Source: The Municipal Art Society of New York, Cultural Data Project
For the very largest organizations Admissions and Other sources of income
account for nearly 75% of total earned revenues, while for the very smallest
organizations they account for barely 50%. For all organizations Tuition
WHO PAYS FOR THE ARTS?—2010
Arts Digest 2012
14
and Workshops and Contracted Services made up 25%–33% of all earned
income, with the exception of the very largest groups, where these two
categories combined shrink to just over 5%. Intuitively, one expects that
organizations vary their revenue strategies based on their size and capacity.
It is striking, however, that those organizations with more than $5 million in
annual income appear to have a very different strategy in comparison to
their smaller peers—relying much more heavily on both Admissions and
Other income rather than classes, workshops and contracted services.
As in other aspects of this analysis it’s important to view the scale of this
variation. The chart below provides average income in each of the earned
revenue categories by organizational size. This is telling for several reasons.
For smaller organizations, earned revenue streams are fairly consistent
across all five categories, while for larger organizations there is substantial
variation between categories. Importantly, for very large organizations
admissions and other income are dramatically larger on average than
for their peers. Indeed, even as income in all categories grows larger,
Admissions and Other income appear disproportionately higher for those
organizations with more than $5 million in annual income.
Source: The Municipal Art Society of New York, Cultural Data Project
Average Earned Revenues by Size and Category—2010
<$100K$100K-
$500K
$500K-
$1M$1M-$5M >$5M
Grand
Total
Admissions 5,269 22,852 63,222 252,769 6,104,121 604,986
Fundraising & Events 2,354 14,570 85,820 228,728 2,239,066 257,009
Contracted Services 3.721 20,060 57,005 147,293 519,003 87,440
Tuition & Workshops 2,008 18,650 54,862 158,084 730,160 107,127
Other 3,642 31,145 81,243 261,171 7,649,312 746,612
Avg Total Earned 16,995 107,276 342,152 1,048,046 17,241,662 1,803,264
The category of Other income remains a significant source of revenue for
organizations of all sizes, and indeed ranks as the largest earned revenue
category for 4 of the 5 income ranges. Larger groups collect nearly one-third
of their income from Other earned revenue sources ($7.6 million annually
on average for the very largest groups). The chart below further breaks out
Other income into a number of subcategories by organizational size, and
the top three subcategories are highlighted.
<$100K$100K-
$500K
$500K-
$1M$1M-$5M >$5M Total
Miscellenaeous Earned 21% 14% 9% 17% 32% 31%
Gift Shop & Merchandising 6% 10% 7% 3% 28% 25%
Rentals 20% 25% 24% 31% 14% 15%
Touring 21% 28% 13% 18% 7% 8%
Dividends & Interest 1% 4% 3% 11% 7% 7%
Concessions 4% 1% 1% 1% 7% 6%
Parking 0% 0% 0% 0% 2% 2%
Gallery Sales 12% 6% 34% 3% 1% 2%
Special Sponsorships 4% 6% 3% 3% 1% 1%
Advertising 6% 3% 3% 5% 0% 1%
Royalties 2% 3% 0% 2% 0% 0%
Media Subscriptions 2% 0% 1% 0% 0% 0%
Gains on Investment 1% 0% 2% 4% 0% 0%
Source: The Municipal Art Society of New York, Cultural Data Project
Percentage of “Other Income” by Size and Category—2010
On average, Miscellaneous Earned income totaled 31%, Gift Shop sales
totaled 25%, and Space Rentals totaled 15%. Overall (with the exception
of Miscellaneous Income), Space Rentals and Touring generated the
most other income for smaller organizations; with gallery sales providing
an important supplement (a remarkable 34% for mid-size organizations
between $500,000 and $1,000,000 in annual income). For the very largest
organizations, after miscellaneous income, gift shops and merchandising
were the most lucrative (accounting for more than 40% of all revenues
in this subcategory).
Note that in 2010, the very largest organizations showed losses on Realized
Gains on Net Assets (totaling more than $2 million in losses). Under better
WHO PAYS FOR THE ARTS?—2010
Arts Digest 2012
15
market conditions, it’s conceivable this source would have ranked higher in
Other Income for entities with more than $5 million in total annual revenues.
One would expect wide differences in the earned revenue strategies
between small and large organizations, but these dramatic differences
are worthy of further analysis.
Private Contributions
Support from individuals, corporations and foundations remains a crucial
element to overall organizational income. In 2010, organizations in the
data set collected nearly $750 million in private support, which comprised,
on average, 30% of all revenue. Smaller organizations surpassed other
categories by generating some 40% of their total income through private
sources, while the very largest organizations relied on private support for
less than 25% of their revenues. Indeed, in the analysis there is a clear
trend between the size of the organization and its reliance upon private
support (the clearest of all three major revenue categories: earned,
private and public).
Source: The Municipal Art Society of New York, Cultural Data Project
< $100K $100K - $500K $500K - $1M $1M - $5M > $5M
Foundations 6,388 48,361 141,812 395,731 2,193,895
Corporations 1,541 12,288 23,598 89,636 1,093,652
Individuals 10,370 34,243 78,663 277,140 6,066,582
Foundations
Corporations
Individuals
Average Private Support by Size—2010
The chart above breaks out average private support according to budget
size. Note that that the very smallest organizational category and the
very largest were particularly impacted by support from individuals. One
speculates that those organizations with more than $250,000 in annual
revenues more easily qualify for foundation and corporate support (in part
because many require a formal audit, an important accountability measure),
while the very largest organizations appear better able to secure large
contributions from high-net-worth supporters.
Income by Borough
The chart below indicates the percentage of each income source by New
York City borough. Manhattan appears to have stronger earned revenues
in comparison to other parts of the city. Possible reasons for this could
include that Manhattan-based organizations command higher ticket
prices, or attract more rentals, or are better able to maintain significant
relationships with corporate partners and foundations via proximity. While
such answers are beyond the scope of this report, they could be fruitful
areas for further analysis.
Source: The Municipal Art Society of New York, Cultural Data Project
Income by Borough—2010
Government Support
Private Support
Earned Revenue
Manhattan cultural organizations represent the overwhelming majority of
groups included in this study (68% of all those captured). It appears that
Manhattan does have a higher concentration of these groups than the
WHO PAYS FOR THE ARTS?—2010
Arts Digest 2012
16
other boroughs of New York City, although it is also possible that many
groups located outside Manhattan do not submit profiles to the CDP for
various reasons. Nonetheless, this study shows 87% of all income reported
being earned by Manhattan-based organizations.
Similar to overall income trends, the analysis shows that Manhattan-based
organizations also receive the majority of public support dollars.
Government Support
Total Government Support by Borough—2010
Source: The Municipal Art Society of New York, Cultural Data Project
# Groups / Borough
All Public Support
Total Federal Support
Total State Support
Total City Support
Bronx 32 21,146,650 3,456,090 3,759,400 13,806,660
Brooklyn 128 67,660,056 5,363,801 9,356,142 52,839,510
Manhattan 491 303,691,545 54,823,252 43,057,915 205,543,463
Queens 50 18,088,450 1,932,152 2,252,064 13,878,054
Staten Island 22 6,927,840 206,303 584,895 6,123,708
Total 723 417,514,541 65,781,598 59,010,416 292,191,395
# Groups / Borough
Avg Public Support
Avg Federal Support
Avg State Support
Average City Support
Bronx 32 5% 35% 34% 24%
Brooklyn 128 16% 14% 21% 23%
Manhattan 491 73% 36% 25% 23%
Queens 50 4% 12% 13% 15%
Staten Island 22 2% 3% 8% 15%
Average Government Support by Borough—2010
Source: The Municipal Art Society of New York, Cultural Data Project
While the majority of public support still flows to Manhattan, this appears
to occur because Manhattan-based groups receive more federal dollars
on average than their peers, while Bronx groups appear to receive more
funding on average from state sources. City support appears comparatively
well distributed among Bronx-, Brooklyn- and Manhattan-based groups,
with organizations in Queens and Staten Island receiving less than
organizations in the other three boroughs. These differences may be
affected by variations in average organizational size, among other issues,
and would benefit from further analysis.
While it’s difficult to tell how representative this data set may be of all
cultural activity, it clearly indicates that revenue concentrations
vary considerably geographically alongside the concentration of
cultural groups themselves.
Trends in Income: 1995–2010
Historically this report has examined income trends by comparing only
organizations for which data is available each year studied from 1995 to the
present. Surprisingly, over the years this comparison group has dwindled in
size from 374 originally to 114 organizations at present. This bears a closer
look in subsequent analyses.
Because fewer organizations are being counted, less income is being
recorded and analysis may therefore significantly underreport actual
revenue trends. Furthermore, this 114-member subgroup appears to
comprise larger organizations (as measured by overall income), which may
skew analysis and cause findings to inaccurately represent income trends
among all types of organizations, especially those that are smaller.
The trend analysis also attempts to compare organizations that have
reported their income over the years through several different sets of
data. As noted above (and as detailed in the Methodologies section), in the
current study capital contributions may be counted as income (whereas in
prior years capital contributions were not). It is expected that this would
cause income trends for the 2010 study group to be somewhat inflated
(especially from public sector sources, which tend to be larger
contributors to capital projects).
WHO PAYS FOR THE ARTS?—2010
Arts Digest 2012
17
Overall the study group shows a modest increase in total income from 2009
to 2010 (up 4.8% to $1.38 billion); the trend is quite mixed, with Earned
Income dropping by almost 13% in the same period, while Government
contributions were up nearly 130% from the prior year. As noted above,
the reduction in Earned Income may reflect the smaller population of the
survey, while the increase in Government support could reflect the inclusion
of capital dollars as income.
While this analysis provides some useful indication of changes within the
nonprofit cultural sector, further study would appear necessary. Overcoming
the challenges of comparing groups across multiple years presents certain
difficulties, yet it seems an important aspect of understanding how the
nonprofit cultural sector is responding to changing economic conditions, or
adapting new income generating strategies.
Summary Comments
The overwhelming majority (71%) of cultural organizations captured by CDP
in 2010 have budgets under $1 million in annual income. If we add those
organizations under $5 million in annual income, this includes fully 91% of
all organizations in this study. While there is substantial variation among
this population of small to mid-size cultural organizations in all income
categories, there are even greater variations between this 91% and the
remaining 9% of very large nonprofit culturals.
There are a number of areas where these differences are particularly
pronounced, and where further study could provide some compelling
insights into observed differences:
�� Large cultural nonprofits have developed endowments that provide
significant sources of ongoing operational support and stability, even
WHO PAYS FOR THE ARTS?—2010
Income Sources for Trend Sample for Specified Years from 1995 to 2010(in 2010 Dollars)
1995 1997 1999 2004 2005 2006 2007 2008 2009 2010
Government $146 134 142 118 115 117 125 127 126 288
Private Contributions $314 354 380 320 312 335 355 352 333 345
Earned Income $349 425 497 610 653 703 757 800 858 747
Source: The Municipal Art Society of New York, Cultural Data Project
Arts Digest 2012
18
despite downturns in the market during this period. Smaller nonprofits
most likely do not have the same opportunities to amass these
resources, leaving them less well situated to weather downturns.
�� Large organizations rely more on Admissions and Other Income
categories such as merchandising and gift shop sales. This ability
to merchandise based on a prominent brand is itself an asset that
smaller culturals are less likely to possess. This is perhaps why smaller
organizations tend to rely more on touring and space rentals as key
elements to their earned revenue strategies, attempting to maximize the
value of their artists and facilities.
�� Very small organizations seem to have substantial challenges accessing
private and corporate support, and must thus rely on a network of
individual funders to provide much of their private contributions. Very
large organizations appear to be successful at leveraging the support of
high-net-worth individuals so that contributions from this category are
dramatically larger than from corporations and foundations.
In terms of public support, it is worth noting that while Manhattan appears
to have more cultural nonprofits and therefore greater total income on
average New York City public support per organization is similar to that
of Brooklyn and the Bronx. This finding would benefit from greater analysis
to see how this might be affected by variables such as organizational size
and creative discipline.
Michael Hickey is a former community development banker and nonprofit executive. In
addition to his current work as an arts and economic development research fellow for the
Municipal Art Society, he also serves as an independent consultant to the nonprofit and
philanthropic sectors.
WHO PAYS FOR THE ARTS?—2010
Arts Digest 2012
19
The Alliance for the Arts pioneered this research with the Port Authority
of New York & New Jersey with the first academically correct study of
the economic impact of the arts and demonstrated to us all over two
decades how important the arts are as an industry. It is, indeed, a vibrant
industry, filled with creativity by its nature, tenacity and optimism (if
evidenced only by the number of new nonprofit arts groups founded since
2000, numbering more than 300). The diversity, creativity and breadth
of arts activity in New York City, as well as its dynamism, are important
contributors to our city’s economy.
This analysis estimates the impact that the nonprofit arts sector has on
the city’s economy, through expenditures made by those organizations,
and through the employment of thousands of New Yorkers. The multiplier
for this industry is approximately 2, which means for that every dollar of
direct spending, another $1 of economic activity is generated for New
York City. This is a strong multiplier for an economy such as New York City,
which is both large and mature. The multiplier is well grounded in that a
high proportion of workers and suppliers of services to the nonprofit arts
sector are actually located here in New York City, as well as recognizing that
there is still, as cited by the Alliance for the Arts, “some amount of leakage
to areas outside the city from the wages of commuters and from the
payments to suppliers based elsewhere.”1
There’s a finely woven network of services in this industry—jobs created, taxes
paid, and goods and services of other New York City businesses and workers.
This analysis estimates the impact of the nonprofit arts sector2, including
in it direct expenditures of nonprofit arts groups, and of their audiences
and visitors, as well as the indirect and induced “ripple effect” of these
expenditures. This is an estimate of how the arts contribute to our economy.
The Economics of the Nonprofit Arts Sector in New York City— A Look at the Economic ImpactAnne Coates, The Municipal Art Society of New York
The direct impact of the arts in the study year is estimated at $3.9 billion.
The total impact, direct and indirect, of the nonprofit arts sector in New York
City for the study year is estimated to be $8.1 billion. When compared to
the total impact from the 2006 Arts as an Industry study, and adjusted for
inflation, we can estimate modest growth in the industry since that study,
despite the economic downturn of 2008. This is not surprising, given the
growth in the pipeline just prior to the beginning of the recession.
Still, we need to be cautious here, since we are not comparing “apples
to apples.” We cannot make a direct comparison to previous studies and
decisively conclude growth or a rate of growth due to the nature of the data
sets studied, the questions asked that generated the collection of data,
and the groups represented in each study. (While having a great degree of
overlap, there is not a 1:1 correlation between the study groups). Still, there
is sufficient overlap to infer modest growth here. And, there is a need to
pursue regular checks, using this new data source—which will make a year-
to-year comparison possible.
The nonprofit arts community has a more than $8 billion economic impact
on New York City each year. That is a substantial driver of economic activity,
something that takes place in neighborhoods all over the city and involves
thousands of cultural workers and millions of visitors and attendees.
And while social and intrinsic impacts are not the focus of this analysis, we
cannot forget them. We cannot ignore the intrinsic impacts of this activity—
the substantial impact to education, social fabric, the quality of life, the
creativity itself and the output of a volume of cultural vibrancy that some
argue is unequaled around the globe.
Anne Coates is Vice President, Arts and Cultural Development at The Municipal Art Society
of New York.
1
1 Alliance for the Arts, The Arts as an Industry: Their Economic Impact on New York City and New York State, 2006. 2 This analysis used a CDP data set from 2008, 2009, 2010 as with the State of the Arts analysis, which also appears in this publication, using the most recent year reported for each organization. However, large outliers were excluded from this estimate, as they heavily skewed the impact numbers. A more detailed explanation appears in the Methodologies section on page 25.
Arts Digest 2012
20
Recent years have been a financially challenging period for nonprofit arts
and cultural organizations in New York City. While nonprofit arts groups
are frequently used to making do in financially constrained circumstances,
evidence from a sample of more than 500 organizations shows that
organizations’ financial challenges have, on average, worsened since
2008’s global (and local) financial crisis and ensuing recession. The sections
below detail several measures of both operating activities and financial
position (in terms of resource accumulation, as well as the liquidity of these
resources), showing that the median nonprofit arts organization, already
in a challenging situation, was measurably (and negatively) affected by the
broader financial challenges.
Operating Results
The key metric we at FMA focus on for a single year’s financial performance
is operating results, or the extent to which an organization produces a
surplus (or deficit) from its operations.1 By this measure, their most recent
fiscal year was a challenging one for many nonprofit arts organizations,
as slightly more than half (53%) of New York City arts organizations ran an
operating deficit. The median operating margin2 for all organizations in this
sample was a negative 0.5%.
As may be expected, the recent recession resulted in a worsening of
operating results among these organizations. In fiscal 2008 (which for most
organizations in the sample ended prior to the economic crisis that fall),
47% of organizations ran an operating deficit (median margin of positive
0.1%), already indicating widespread financial challenges within the sector.
By fiscal 2009, that number had increased to 54% of organizations, with an
operating deficit and the median operating margin turned negative at -0.7%.
The 2010 numbers were practically identical to 2009.
Financial Condition of New York City Nonprofit Arts and Culture OrganizationsHilda Polanco and John Summers, Fiscal Management Associates
A majority of organizations in the New York City nonprofit arts sector,
then, are operating at a financial deficit, negating their ability to accumulate
reserves for future operations or to weather additional economic challenges.
Percentage of Organizations with Operating Deficits
Source: Fiscal Management Associates, Cultural Data Project
Median Operating Margin, All Organizations
Source: Fiscal Management Associates, Cultural Data Project1
1 In analyzing the financial statements of not-for-profit organizations, one should consider only unrestricted revenues in determining operating results. Also note that, for purposes of our analysis, operating
results do not include gains or losses from investments, whether realized or unrealized.
2 Operating margin is net income as a percentage of total income, here again excluding investment gains or losses.
Arts Digest 2012
21
Balance Sheet Metrics
Operating margins, of course, focus on a single year’s activities, so it is
important to also consider balance sheet–based metrics that show the
financial position of organizations as accumulated over time. (To editorialize
for a moment, if there is one lesson we would convey to stakeholders in
the nonprofit arts sector, including managers and boards, funders and
interested observers, it would be to give at least as much attention to the
balance sheet as to operating results in assessing the financial condition
of an organization. In our experience, balance sheet metrics are far too
often underemphasized or overlooked in this sector, resulting in a lack of
awareness of organizations’ true financial position and sustainability.) The
key question to be answered here is, what financial resources does an
organization have for purposes of carrying out its mission? An organization
with limited resources has a correspondingly limited ability to invest in
new programs, productions or collections; to guard against future financial
challenges or risks; or in extreme circumstances even to manage routine
cash flow and pay staff and creditors on a timely basis.
Some measure of an organization’s “net worth” is the key metric to
consider in assessing overall financial position and health. We at FMA pay
close attention to an organization’s liquid unrestricted net asset balance
(LUNA), which consists of that portion of an organization’s unrestricted
net assets that could be converted to cash relatively easily if necessary—
in essence, (unrestricted) current assets such as cash, receivables and
inventory along with investments in marketable securities.3 A challenge
for many organizations is that, while their balance sheet may show a
comfortable unrestricted net asset balance, some portion of that balance
may consist of a building, equipment, sets and props or other assets
that cannot realistically be “liquidated” to actually cover organizational
expenses. Our LUNA measure isolates that portion of an organization’s net
assets that can actually be used to cover expenses, maintain properties,
guard against downturns and pursue new opportunities.
Here again, we see a significant proportion of the city’s arts and culture
nonprofits in a financially precarious situation. For their most recent
reported fiscal year, the median organization had 1.5 months of operating
expenses available as liquid unrestricted net assets. This is well below a
commonly cited (if not often achieved) benchmark of 3 months of available
operating reserves; in fact only 38% of organizations in this sample reached
that level. Even more disconcertingly, 31% of organizations in the sample
actually had a negative LUNA balance, indicating that funds are in essence
being “borrowed” from restricted asset categories (or other sources) to
address the lack of liquid unrestricted net assets. Organizations with a
negative or only narrowly positive LUNA metric have very little financial
“cushion” with which to pursue opportunities or mitigate risks.
Percentage of Organizations with Negative Liquid Unrestricted Net Assets
Source: Fiscal Management Associates, Cultural Data Project
The three-year trend shows that many organizations in the city’s nonprofit
arts sector have been negatively affected by the economic downturn. In
fiscal 2008, the median organization had liquid unrestricted net assets equal
to 1.8 months of expenses; in 2009 that declined to a median of 1.5 months
of expenses. (2010 showed some rebound, to 1.7 months.) Similarly, the
percentage of organizations with a negative LUNA balance jumped from
25% in 2008 to 30% in 2009 (29% in 2010). 1
3 In nonprofit accounting, net assets are classified as unrestricted, temporarily restricted or permanently restricted based on the absence or presence of donor-imposed restrictions as to the use of the assets.
Unrestricted net assets carry no restriction as to their use and are therefore available at the discretion of an organization’s management and board. A positive unrestricted net asset balance does not
necessarily imply the liquidity of those assets, however.
FINANCIAL CONDITION OF NEW YORK CITY NONPROFIT ARTS AND CULTURE ORGANIZATIONS
Arts Digest 2012
22
If a negative LUNA balance is at the very least a warning sign to organizations
about the sustainability of their financial situation, a negative total net asset
balance is a true red flag. A negative total net asset balance means that an
organization’s liabilities exceed its total assets (technical insolvency), and
while not equivalent to default or bankruptcy, is clearly an unsustainable
position over the long term. Here again we see that recent years have
exacerbated the financial struggles of many nonprofit arts organizations.
Percentage of Organizations with Negative Total Net Assets
Source: Fiscal Management Associates, Cultural Data Project
In fiscal 2008, 8% of organizations in the sample were in a negative total
net asset position. In 2009, that number increased to 10%, and further
increased to 12% in 2010. For their most recently reported fiscal year,
nearly one out of every eight nonprofit arts organizations in New York City
was technically insolvent.
Segmentation Analysis
In analyzing financial data it is often appropriate to segment the data
according to organizations’ budget size, particularly when (as with New York
arts nonprofits) the range of budgets is so wide. We therefore segmented
for further analysis the 550 organizations included in the trend analysis by
their reported annual expenses and found that the overall trends discussed
above do mask some internal variation among organizations.
Budget RangeNumber of
Organizations(varies by year)
Percent of Sample(varies by year)
“Small” Less than $500,000 280-288 51%-52%
“Medium” $500,000 to $2.5 million 158-159 29%
“Large” $2.5 million to $20 million 82-90 15%-16%
“Institutional” Greater than $20 million 21-22 4%
Source: Fiscal Management Associates, Cultural Data Project
Looking at the data segmented by organization size provides a more
contextualized—and complicated—picture of the financial situation of
the city’s arts nonprofits. While in recent years larger organizations have
struggled more than smaller ones with maintaining profitable operations,
serious financial vulnerability remains more likely for smaller organizations
than for larger ones.
The table below shows median operating margins over the three-year
period for organizations in each budget category.
2008 2009 2010
Small 1.1% -1.2% 0.0%
Medium -0.4% 0.0% -0.1%
Large -0.7% -1.8% -2.6%
Institutional -3.8% -5.3% -10.8%
Operating Margin
Source: Fiscal Management Associates, Cultural Data Project
Small- and medium-size organizations have been, on average, able to
roughly break even operating results over the course of a year. On the other
hand, large- and institutional-size organizations have been more likely to
run substantial operating deficits, and to experience an increase in those
deficits over the course of the period.4 In general, we suspect that smaller
1
4 Note that operating results in this analysis do not include investment gains or losses, or (because of limitations in the data) spending rate draws from an endowment, which are more common among larger organizations
than smaller ones. Investment related income may, therefore, be able to subsidize some organizations’ operating losses, which may (or may not) be sustainable given the size of and returns on those endowments.
FINANCIAL CONDITION OF NEW YORK CITY NONPROFIT ARTS AND CULTURE ORGANIZATIONS
Arts Digest 2012
23
organizations have lower fixed costs and fewer long-term commitments,
therefore allowing them more flexibility to scale back programs or
operations when faced with limited revenues. Larger organizations, on the
other hand, often have very high fixed costs and commitments to programs
months or even years in advance, which limits their ability to scale back in
the short-term in order to avoid deficits (putting a premium on access to
financial reserves in such situations).
Breaking down the analysis by budget size also provides important context
for the observation above that, among the sample as a whole, roughly one
in eight organizations is technically insolvent (total liabilities exceeding total
assets). As the table below shows, this condition is much more likely among
smaller organizations in the sample.
2008 2009 2010
Small 11.6% 15.3% 15.8%
Medium 7.7% 11.0% 13.2%
Large 4.7% 2.5% 3.9%
Institutional 0.0% 0.0% 0.0%
Percentage of Organizations with Negative Total Net Assets
Source: Fiscal Management Associates, Cultural Data Project
Note that the bulk of organizations in a negative total net asset position are
in the small- and medium-size categories, and that that percentage grew
across each of the three years in the analysis. Organizations in this situation
require close attention from management and boards (as well as donors
and other stakeholders) to ensure that financial challenges are resolved in
such a way as to maintain organizational sustainability.
Conclusion
While the analysis here only includes three (very eventful) years’ worth of
data, it points to trends that should continue to be monitored at both the
sector-wide and organizational levels. Whether the trends seen since 2008
will reverse as the broader economic recovery progresses, or represent a
longer-term adjustment of the financial reality of the nonprofit arts sector, is
an issue that will require more time and data to evaluate. In the meantime,
however, we hope that the analysis presented here highlights some
important trends and themes for the sector’s leaders to consider.
Foremost among those trends is the decline in (already small) operating
margins across the sector, so much so that more than half of the
organizations in our sample are experiencing operating deficits. operating
deficits. While smaller organizations appear to have been less affected by
this trend than larger ones, perhaps because of greater operating flexibility,
very few organizations appear to have the ability to consistently generate
the surpluses necessary to build reserves for future operations (or to
mitigate against further economic challenges).
Additionally, while the trend of increasing levels of insolvency (negative
total net assets) is mostly concentrated among smaller organizations, the
lack of a financial “cushion” in the form of liquid unrestricted reserves is
a concern across the board. Median reserve levels for organizations at all
budget categories hover around the two-month mark, meaning that many
organizations lack the resources to invest substantially in new programs or
infrastructure or to guard against future financial challenges or risks.
Given the factors unique to any particular organization, there is no one-
size-fits-all solution to the challenges facing the sector. But the importance
of liquid unrestricted reserves to organizations’ long term financial health
and sustainability, and the difficulty of generating such reserves in the
current environment, should be a top consideration for the sector’s leaders,
funders and stakeholders.
Hilda Polanco is Managing Director and John Summers is Manager of Research and
Development at FMA (Fiscal Management Associates). FMA is a management consulting
firm to nonprofit organizations focused on helping its clients in the arts and culture and
other sectors with financial and business planning, fiscal infrastructure development, and
outsourced accounting services.
FINANCIAL CONDITION OF NEW YORK CITY NONPROFIT ARTS AND CULTURE ORGANIZATIONS
Arts Digest 2012
24
This digest both extends the Municipal Art Society of New York (MAS) and
the Alliance for the Arts’ legacies of research and breaks new ground.
It offers not one point of view on sector health or impact, but multiple
perspectives on how our arts institutions are working and creating value
in a difficult economic climate. The patterns of activity and the financial
dynamics discussed in State of the Arts, Who Pays for the Arts?—2010, and
The Economics of the Nonprofit Arts Sector in NYC demonstrate, at least
in part, resilience and growth. The Financial Condition of New York City
Nonprofit Arts and Culture Organizations, which closes the digest, offers a
much starker view, calling into question the long-term sustainability of the
arts and culture in our city.
If, as the Financial Condition of New York City Nonprofit Arts and Culture
Organizations found, nearly one out of every eight arts groups is technically
insolvent (negative total net assets), this does not mean that doomsday
bells are tolling. Rather, it means that we—all of us working together—
have the responsibility to gauge solvency over time, create policy and
invest the appropriate resources to ensure organizational adaptability to
socioeconomic and environmental shifts.
Arts research is only as strong as the data it is based on. The Cultural Data
Project (CDP) provides far more regular and accurate data than has been
previously available to researchers. In publishing this digest, which tracks
data over time, MAS goes beyond the first-ever reports driven by the CDP,
which offer time-specific snapshots: the State of the Arts and Dance/NYC’s
discipline-specific State of NYC Dance. It also suggests new directions
for using the CDP to measure the arts’ economic impact and financial
condition, and possibilities for future NYC arts research.
As a foundation for advocacy, arts research is a critical driver for policy
and fund development, awareness building and improved management
Future of NYC Arts Research: A PostscriptLane Harwell, Dance/NYCAnne Coates, The Municipal Art Society of New York
practices. The need for arts research is heightened in climates—right
now, in our city—where responsiveness and strategy are required to face
challenge and change. MAS is committed to help meeting this need in the
context of its livability agenda—to understanding the arts and culture as
catalysts for making New York a more livable city.
As MAS builds its research agenda, it will look to this digest and beyond
to explore what information is most useful to arts organizations and their
supporters. There is untapped opportunity in the CDP for comparative arts
studies between cities to recognize competitiveness, unity and geographic
dynamism. As with the State of NYC Dance, there is opportunity to
illuminate disciplinary distinctions, blurred boundaries and synergies. There
are individual success stories—institutions bucking financial trends—which
may offer clues for good, scalable practice. But understanding the arts as
a catalyst for livability, integral to urban planning, design and preservation,
also requires looking beyond institutions both to artists and the commercial
arts, and across service and business sectors. There is value in looking
citywide and at specific neighborhoods, to better understand the
opportunities and challenges for the arts to be leaders in the sustainability
and resilience of our diverse communities.
Again, this digest may provoke not one conversation, but many. Ultimately,
it is an invitation to arts organizations and their supporters—policymakers,
investors and sister service organizations alike—to join MAS in realizing the
future of NYC arts research. Working together, we can imagine and create
new research exploration that will strengthen the arts and change New
Yorkers lives for the better.
Lane Harwell is Director of Dance/NYC and serves as the chair of the new MAS Arts Advisory
Committee. Anne Coates is Vice President, Arts and Cultural Development, at The Municipal
Art Society of New York.
Arts Digest 2012
25
MethodologiesThis digest was informed by a long history of knowledge and data published in multiple
reports by the Alliance for the Arts. That organization’s studies drew upon data from a
number of sources over time—including the City’s Department of Cultural Affairs, the New
York State Council on the Arts, 990 annual federal filings, individual surveys and personal
follow-up. This collection of research, however, relies solely on data provided through the
Cultural Data Project (CDP). This rich resource offers highly detailed information regarding
the economic activity of individual arts and culture organizations.
Except where noted below, the following notes apply to all analyses in this digest.
The data set used in each of the analyses in this publication is limited to nonprofit cultural
organizations located in New York City that use the CDP to create the financial documents
needed to apply for support from their funders, including the New York State Council on
the Arts and the New York City Department of Cultural Affairs.
Data used is from the most recent fiscal year of those available for each organization.
Availability is based on two main factors: a data profile was submitted by a cultural
organization for a particular year (2008, 2009 and 2010), and that data profile was verified
and categorized as “review complete.” Those organizations whose profiles had not
achieved review complete status cannot be included in any licensed analysis. Each analysis
identifies the year(s) of data studied. All data are self-reported by the organizations, and
the organizations alone are responsible for their accuracy.
For-profit cultural institutions, individual artists, and nonprofit cultural organizations
that do not apply for funding from New York City, New York State or other CDP
participating funders are not included in this analysis. Thus, very large for-profit cultural
enterprises (like major Broadway theaters) and very small creative leaders (such as an
unincorporated dance company or theater troupe) are not included in any of the analyses
in this publication.
While there are important advantages to working with CDP data, there are challenges in
comparing these results with those from prior Alliance reports. There are also inherent
challenges within the CDP where reporting may not be consistent in certain categories.
The main challenges encountered by the analysts included:
�� Organizations using the CDP have a certain amount of discretion in how they report
capital contributions and capital expenses along with other types of income and
expense. Some organizations did not include this data in the income and expense
sections, but instead reflected them in their balance sheets in their CDP data profile;
but others did include capital income and expense in their income and expense
statement reporting. This is particularly troublesome as capital contributions and
expenses tend to be large in comparison to other categories of income and expense,
and can dramatically skew findings. Ideally, capital contributions and expenses would
be clearly segregated from other types of income and expense reporting to allow for
clearer analysis, but that is beyond the scope of this report. Unrealized net gains on
investments were excluded from income analysis.
DEFINITION OF TERMSThe following terms and categories are used throughout all articles in this publication:
EARNED REVENUES are broken into five categories:
��� ADMISSIONS and box office income derived from events, exhibitions and
performances, as well as subscriptions and memberships paid for these same services
over the course of the season or year
��� FUNDRAISING AND EVENTS includes sponsorships and funds raised through special
events hosted by the organization
��� CONTRACTED SERVICES captures revenues from programs offered for education,
special populations, and direct services
��� TUITIONS AND WORKSHOPS comprises revenues from group contracted activities,
classes and tours
�� OTHER INCOME consists of revenues from space rentals, merchandising, food
services, parking, touring, royalties, publications, interest on investments (for those
organizations large enough to hold endowments or other invested assets), and
miscellaneous earned income.
PRIVATE CONTRIBUTIONS are generated from the following:
��� INDIVIDUALS including contributions from board members
��� FOUNDATIONS not including sponsorships, but focused instead on grants and gifts
��� CORPORATIONS also not including sponsorships—only grants and gifts.
GOVERNMENT FUNDING is broken into three groupings:
��� CITY OF NEW YORK including funds received from the Department of Cultural Affairs
(DCA), and City agencies including the Department of Education, Department for the
Aging, the Department of Community Development, and the borough presidents
��� STATE OF NEW YORK consisting of support provided by the New York State Council
on the Arts (NYSCA) and other New York State agencies including the Department of
Education and the Natural Heritage Trust
Arts Digest 2012
26
��� FEDERAL comprising the National Endowment for the Arts (NEA) and other agencies
such as the National Endowment for the Humanities, Institute for Museum and
Library Services, the National Science Foundation and the National Aeronautics
and Space Administration.
STATE OF THE ARTSTwo datasets were used: Fiscal Year Data from 1,325 organizations that reported data for
their most recent fiscal year from 2008, 2009 and 2010 (however, in most cases FY2009 or
FY2010); and Trend Data from 554 organizations that reported their data for each of the
three years. All organizations represented in the Trend Data are also included in the
Fiscal Year Data.
For those organizations reporting returns for all three years whose income fluctuations
resulted in a changing income category, their final category in FY2010 determined their
category position for the entire three-year period in this analysis.
The following were used to group organizations based on their self-selected type and
primary activities:
�� COMMUNITY ARTS & CULTURE—providing arts and cultural programs to a specific
community, including geographic, ethnic, linguistic or religious
�� EDUCATION AND INSTRUCTION—providing music, visual and performing arts
instruction, including schools and colleges
�� MUSEUMS, GALLERIES AND VISUAL ARTS—creating or displaying visual media
�� MEDIA ARTS—working in print, sound or visual media, including nonprofit radio and
television, publishers, libraries, film and video producers, and film theaters
�� HISTORY—preserving and presenting history, historical collections or artifacts,
including history museums, historic sites, and archives
�� SCIENCE AND NATURE—including science museums, horticultural organizations, zoos,
planetariums and parks.
�� DANCE—performing all types of dance
�� THEATER—performing play and other theatrical productions, including theater
companies and related organizations
�� MUSIC—performing vocal or instrumental music, including opera companies,
orchestras, bands and ensembles
�� OTHER PERFORMING ARTS—performing or presenting multi-disciplinary work, including
performance venues and festivals
�� COUNCILS, SERVICES AND SUPPORT—providing support services to the sector as a
whole, to organizations in a specific discipline category, or to individual artists. These
groups generally do not engage directly in the production or presentation of artistic work
�� OTHER—organizations that do not fit in any of the above category.
WHO PAYS FOR THE ARTS?—2010 Of the organizations that had “review complete” data for 2010 there were 723
organizations with data available for study. Within this dataset, seven organizations
were excluded from analysis because they had only partial information (i.e., less than 12
months of information reported). An additional 10 organizations that dedicate a significant
part of their operations to cultural practices (such as the city parks, public libraries and
universities), but for which it was not possible to segment non-arts-related activity or
personnel were also excluded from this analysis. While such organizations should be
viewed as being in the cultural orbit, they were omitted here in an effort to focus on
organizations for which cultural activity is their primary mission. There is interesting data
in the CDP about these omitted organizations, and an examination of them at some future
point could be useful and compelling.
Organizations are divided according to several factors to help better observe differences
between groups of different sizes and missions. This analysis uses the following size
categories (determined by an organization’s total annual income):
Less than $100,000 268 organizations
$100,000 to $500,000 175 organizations
$500,000 to $1,000,000 70 organizations
$1,000,000 to $5,000,000 146 organizations
Greater than $5,000,000 64 organizations1
DISCIPLINESAlthough the CDP relies on the National Assembly of State Arts Agencies to define its
discipline categories, the categories outlined below compare to those previously used in
the last Alliance for the Arts’ Who Pays for the Arts? report:
��� VISUAL ARTS include art, history and science museums, historical societies,
organizations dedicated to drawing, painting and sculpture, film and video,
architecture and design, and photography
��� PERFORMING ARTS are comprised of dance, theater, music and presenting
organizations such as concert halls and performing arts centers
��� LIVING COLLECTIONS are limited to botanical gardens, zoos and aquariums;
��� OTHER contains arts councils, multidisciplinary, service and
arts education organizations.
Average income for all organizations in 2010 was $3.4 million, while the median income
was less than $250,000. This means that a few very large organizations (more than $100
million in annual income) strongly affect (or skew) the results of this analysis, affecting how
trends and comparisons within and between categories are observed. While the analyses
1
1 Note that for analysis actual categories comprise revenues up to but not including the maximum value in that category (e.g., $100,000–$999,999.99, rather than $1 million).
METHODOLOGIES
Arts Digest 2012
27
attempt to compensate for this by creating categories for organizations of various sizes,
some categories (such as organizations with more than $5 million in annual income)
contain generalizations of widely divergent organizations that may not well summarize the
breadth of their economic experiences.
Unrealized net gains on assets were not counted in this analysis as revenues. While these
do not have a cash impact on an organization, they are an important indicator of an
organization’s overall fiscal strength, particularly for the very largest organizations with
substantial endowments or invested holdings. In 2010, total unrealized gains on net assets
were $510 million, of which 77% ($393 million) was held by the 10 largest organizations.
In many cases this analysis uses the average value of an income category. An average
can provide a clearer measure than an aggregate value (common to Alliance reports, and
which simply provides the aggregate value of all groups in a given category). For example,
while the 268 organizations with less than $100,000 in annual income had aggregate
total income of $12 million, the average total income per group was just $45,000. Using
averaged values provides a more precise picture of how individual organizations in a given
category compare to organizations in another category.
Some Other Income categories were not included in this analysis (such as contributions
from corporate affiliates, in-kind support, and net assets released from restrictions). The
total amount excluded from the analysis was less than $3 million of the total $2.5 billion.
THE ECONOMICS OF THE NONPROFIT ARTS SECTOR IN NEW YORK CITY—A LOOK AT THE ECONOMIC IMPACT The data used in this impact analysis was derived from the blended CDP data set from
2008, 2009 and 2010 of 1,325 organizations. MAS attempted to model more closely the
list of organizations—and types of organizations—used in economic impact analysis
conducted by the Alliance for the Arts in 2006. As a result, organizations whose primary
purpose was not arts and culture (e.g., higher education institutions) were excluded from
the impact analysis. Thus, their large total expenditures, including salaries, were excluded
from the direct and consequently indirect impact figures. We cannot make a 1:1 correlation
between this study set and that used in 2006 due to the nature of data sets studied, the
questions asked that generated the collection of data and the groups represented in each
study. Because the data spanned three years, 2009 was used as the measure year.
An important aspect of the economic impact analysis of a business or industry is the
accurate estimation of its indirect impact on a region’s output and jobs, sometimes
referred to as the “ripple effect.” All business spending initiates a ripple effect, which can
be captured by a multiplier—essentially the number of times an initial round of spending
is multiplied as it ripples through the economy. To produce a given output, a business will
make local purchases (inputs) from utilities, wholesalers and providers of professional
services, among many others. In addition, they pay their workers, who in turn spend a large
part of their paycheck locally, thereby producing even more spending in the region. Finally,
the spending initiated in this second round generates a third and then successive rounds
as the impacted firms make purchases in the region. This spending process does not go
on indefinitely, because each round adds less to spending than the previous round, with
spending additions eventually reaching zero. As determined by the multiplier, the sum of
these rounds reaches a limit, which can be quite significant compared with the first round
of spending, although it will rarely equal it.
Industry multipliers are difficult to estimate, especially for a region. When used correctly,
input-output (I-O) models are widely regarded as giving the best estimates of industry
multipliers. A widely used I-O model, and the one used in this study, is RIMS II (Regional
Input-Output Modeling System), developed by the U.S. Department of Commerce. Impacts
are usually calculated on an annual basis.
FINANCIAL CONDITION OF NEW YORK CITY NONPROFIT ARTS AND CULTURE ORGANIZATIONSThe analysis by Fiscal Management Associates is based on a sample of New York City arts
and culture organizations that reported data to the CDP, an online system that captures
financial, programmatic and operational data from arts and cultural organizations. Analysis
referring to the “most recent fiscal year” is an aggregation of data from the most recent
fiscal year reported by each organization in the sample. Analysis of trends from 2008
through 2010 is based only on data from those organizations that have data profiles for
each of the three years (a total of 550 organizations).
The organizations in the sample represent the full breadth of New York City nonprofit
arts organizations, with expense budgets ranging from less than $1,000 to more than
$400 million. The median annual expense budget of all organizations in the sample is
approximately $650,000.
A small number of clearly erroneous data profiles were removed from the sample.
APPENDIXA total of 1,228 groups from the study sample of 1,325 for the State of the Arts analysis are
plotted here. Groups with P.O. boxes or unplottable addresses in their profiles are excluded.
METHODOLOGIES
Appendix
State of the Arts Organizations by
City Council District
NotesPopulation Size: 1,228Source: Alliance for the Arts, Cultural Data ProjectFrom most recent fiscal year reported to CDP, 2008-2010See Methodologies for details
Queens
Bronx
Manhattan
Brooklyn
Staten Island
Arts Digest 2012
29
AcknowledgmentsTHE MUNICIPAL ART SOCIETY OF NEW YORK
BOARD OFFICERS
Eugenie L. Birch, Chair
Vin Cipolla, President
Susan K. Freedman, Vice Chair
James M. Clark, Jr., Treasurer
Frances A. Resheske, Secretary
Earl D. Weiner, Esq., General Counsel
Arts Digest 2012 is an initiative of The Municipal Art Society of New York.
This work grows out of a newly formed collaboration with the Alliance for
the Arts, a pioneer in arts research.
MAS would like to thank the following individuals and organizations; without
their support and participation this report would not be possible.
Editor
Anne Coates, Vice President, Arts and Cultural Development
The Municipal Art Society of New York
State of the Arts
Patricia C. Jones
Who Pays for the Arts?—2010
Michael J. Hickey
Daniel Arnow
Kimberly Rubin
The Economics of the Nonprofit Arts Sector in NYC—A Look
at the Economic Impact
Anne Coates, The Municipal Art Society of New York
Thomas J. Spitnzas
Catherine Lanier
Financial Condition of New York City Nonprofit Arts
and Culture Organizations
Fiscal Management Associates
Hilda Polanco
John Summers
Future of NYC Arts Research: a Postscript
Lane Harwell, Dance/NYC
Anne Coates, The Municipal Art Society of New York
CULTURAL DATA PROJECT
Arin Sullivan
Neville Vakharia
Christopher Caltagirone
CULTURAL DATA PROJECT—NEW YORK TASK FORCE
Alliance of Resident Theatres / New York
Arts & Cultural Council for Greater Rochester
Asian American Arts Alliance
Doris Duke Charitable Foundation
The Field
Harlem Arts Alliance
New York City Department of Cultural Affairs
The New York Community Trust
New York State Council on the Arts
The John R. Oishei Foundation
Time Warner Inc.
MAS ARTS ADVISORY COMMITTEE
Alberta Arthurs
Patricia Cruz
Lane Harwell
Mary Miss
Special thanks to Rita Carrier, Lane Harwell, Catherine Lanier, and Earl Weiner.
Arts Digest 2012
30
ALLIANCE FOR THE ARTS TRUSTEES: J.P. Versace, Chairman, Ashton Hawkins,
Chairman Emeritus, Laurie Beckelman, Stephanie French, Karen Gifford,
Paul Gunther, Martha Newton, Susan Ralston, András Szántó, Larry Warsh,
Joanne Stern, Life Trustee
The Trustees of the Alliance thank the following for their support of the
Alliance’s research agenda: Bloomberg Philanthropies, Booth Ferris
Foundation, Leona and Harry B. Helmsley Charitable Trust, and New York
Community Trust, as well as public support from the New York State Council
on the Arts and the New York City Department of Cultural Affairs.
The data used for this report was provided by the Cultural Data Project
(CDP), a collaborative project of the Greater Philadelphia Cultural Alliance,
The Greater Pittsburgh Arts Council, Pennsylvania Council on the Arts,
The Pew Charitable Trusts, The William Penn Foundation and The Heinz
Endowments, created to strengthen arts and culture by documenting and
disseminating information on the arts and culture sector. Any interpretation
of the data is the view of The Municipal Art Society of New York, the Alliance
for the Arts, and Fiscal Management Associates and does not reflect the
views of the Cultural Data Project. For more information on the Cultural
Data Project, visit www.culturaldata.org.
ACKNOWLEDGMENTS
This report is a sponsored project of the New York Foundation for the
Arts, with funding from the New York City of Cultural Affairs, Kate D. Levin,
Commissioner.
MAS would like to thank Fiscal Management Associates for its in-kind
support for this project.
The Municipal Art Society of New York
111 West 57th Street
New York, NY 10019
© 2012, The Municipal Art Society of New York. All Rights Reserved
DESIGN
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