TABLE OF CONTENTS INTRODUCTION 2 STATE OF THE ARTS 4 Patricia C. Jones, Alliance for the Arts WHO PAYS FOR THE ARTS?—2010 12 Michael Hickey, The Municipal Art Society of New York THE ECONOMICS OF THE NONPROFIT ARTS SECTOR IN 19 NYC—A LOOK AT THE ECONOMIC IMPACT Anne Coates, The Municipal Art Society of New YorkARTS FINANCIAL CONDITION OF NEW YORK CITY NONPROFIT 20 ARTS AND CULTURE ORGANIZATIONS Hilda Polanco and John Summers, Fiscal Management Associates FUTURE OF NYC ARTS RESEARCH: A POSTSCRIPT 24DIGEST Lane Harwell, Dance/NYC Anne Coates, The Municipal Art Society of New York METHODOLOGIES 252012 APPENDIX 28 ACKNOWLEDGMENTS 29
IntroductionArts Digest2012 When we look at the conversation about resilience and livability across the economic downturn, which began in 2008 and cut deeply into the arts globe, the highest-ranking cities boast a rich, vibrant and diverse cultural community. They also tell a story that illustrates that despite challenges, life. New York City is no exception. Arts and culture have been central to The we now see signs of recovery and hopefulness. Municipal Art Society of New York’s (MAS) mission since its founding in 1893 There are many indicators of resilience and sustainability discussed by architects, painters, sculptors and civic leaders to create murals and here—among them ﬁnancial health, attendance, number of programs and monuments for New York’s public spaces. This thread of cultural activity has workforce. Overall, what we see is that despite the recent long economic been carried through the Adopt-a-Mural and Adopt-a-Monument programs, downturn, the nonproﬁt arts community is scrappy and nimble. Art making our tours, our collaboration in Place Matters with City Lore, advocating for and audience building have continued at the highest levels of creativity and good design over the years, and perhaps most recently through Tribute in excellence, and New York City’s cultural community has been doing a terriﬁc Light, a spectacular public art project done with Creative Time. high-wire act in keeping their doors open during these difﬁcult past few years. In 2011 MAS forged a new collaboration with the Alliance for the Arts that Each of the four articles in this collection reports on analysis that uses as its would continue the strong legacy of research, advocacy and convenings sole data source the Cultural Data Project (CDP). The CDP is a longitudinal and stewarded by that organization. From 1977 the Alliance was our city’s granular data set maintained by the Pew Charitable Trusts and is emerging leading researcher of arts and cultural activity. as the national standard for data collection in the arts and cultural sector.1 As MAS is no stranger to the arts, neither is it a stranger to research. With The analyses presented in this collection are varied, demonstrating not only deep roots in evidence-based work to support its advocacy, in 2010 MAS the depth of information available but also the different ways of interpreting embarked on a new longitudinal measurement: the MAS Livability Survey. the data to weave a narrative of the resilience of the nonproﬁt arts sector. In 2011, the Survey identiﬁed that New Yorkers in many parts of the city— This collection looks at the economics of the arts, the sources of income, the especially outside Manhattan—are not satisﬁed or do not connect with general state of affairs, and some new ways of measuring the ﬁnancial health their local arts and culture offerings. With our deepened arts advocacy of the nonproﬁt cultural organizations that make this city so very livable. and research capacity, it is now possible for MAS to further examine this What is impact and how do you measure it? New measures of impact are challenge to livability in New York. And, in assuming this agenda at a time in the works all around us—whether it be the vibrancy indicators being when tools for data collection and analyses are shifting and strategic developed by ArtPlace to measure its investments in creative placemaking policymaking and fund development are critical, MAS has the opportunity to and therefore the impacts of these efforts on communities (which is at the be of great service to the cultural ﬁeld and our city. heart of MAS’s livability agenda), or the intrinsic impact model developed by MAS is pleased to publish this collection of research, which taken together WolfBrown for Theatre Bay Area, looking at this heretofore elusive impact, tell a story about the nonproﬁt arts community during the challenging now quantiﬁable. It’s tantalizing to think about how this would be employed 1 for every discipline, and we look forward to it.2 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.
The impacts of arts and cultural activity are many, and not all explored While this collection focuses on nonproﬁt cultural groups, we recognize here. We at MAS felt that a state of the arts could not be offered without the ﬁnely woven network of goods, services and workers connected to this an economic impact piece but say wholeheartedly that it is not the only sector. We also know that the nonproﬁt arts sector is closely connected toArts Digest impact to be considered. the commercial one, often serving as a pipeline of work or talent.2012 Who Pays for the Arts? underscores what we all know: the face of At the same time that there has been a proliferation of new arts groups funding cultural activity has changed. More and more, especially for the entering the market and joining the ranks of 501(c)(3)s, there has been aINTRODUCTION largest groups, earned income has outpaced contributions; but even for profound philanthropic shift since 2008 in a host of different ways—giving the smallest organizations (as studied in the aggregate) it is a signiﬁcant levels, giving priorities, business models for grantmaking, among them. piece of the funding pie. There is a great story of opportunity to be told here—to leverage the The Alliance’s State of the Arts looks at a broader swath of cultural activity extraordinary public/private partnership in support of the arts (combined than do the others, embracing the full potential of the data offered by the with an ability to earn revenue) and to stimulate and nurture creativity and CDP. Its report includes organizations whose offerings include cultural engagement with one of New York City’s greatest assets: its cultural life. activity, but not exclusively. These groups applied for support to one of the There is a growing opportunity for short-, medium- and long-term funders requiring use of the CDP and therefore appear in the data for the collaboration, partnership, merger and adoption of programs of one study years. It is a great reminder that cultural activity in this city happens organization to another, as MAS has done with the Alliance for the Arts. in many places beyond performance spaces, museums and historic houses—including libraries, parks, media organizations (nonproﬁt television, And, there is an opportunity for new, or renewed, support for the arts—in radio and online media) or higher education institutions that see arts and the form of philanthropic investments to ensure the cultural ﬁeld’s resilience culture as a key piece of their offerings. through support for general operations, cash reserves and capacity building. We believe that the livability of this city—of any city—relies heavily on As MAS addresses our city’s resilience in all of its work, we have put the a vibrant cultural life. In addition to publishing updates to the traditional arts—and their vibrancy, resilience and sustainability—at the core of our portfolio of Alliance research, all of which we believe are important to work. This collection of research informs our work going forward, and we understanding the nonproﬁt arts sector and its contributions, impacts, hope it is of equal use to the cultural community and its supporters. opportunities and challenges, we asked Fiscal Management Associates We hope you see in the data not only the challenges our arts and cultural to help us think about what new indicators could be developed to help institutions face, but opportunity to strengthen the ﬁeld. At MAS, we are us understand the health of the nonproﬁt arts ﬁeld, which would, in turn, committed to advancing arts and culture to improve the livability of our help inform our work to support the arts in MAS’s livability agenda. We city, and to engaging policymakers, funders, sister advocates and the are pleased to include those here. wider cultural community in this effort. This digest establishes important We encourage our readers to take in the whole picture presented here, benchmarks and is only a starting point for discussion about where we are through four different lenses. Each tells an important part of the story now as a ﬁeld and for where we are going. about this ﬁeld’s activity, impact and sustainability. There are a few Vin Cipolla, President cautionary moments, to be sure; we hope that they will be viewed as The Municipal Art Society of New York3 tools for nuanced understanding of some of the particular challenges that the cultural community faces.
State of the Arts Patricia C. Jones, Alliance for the ArtsArts Digest2012 The Alliance for the Arts is pleased to be able to present this ﬁrst the commercial theater, ﬁlm, visual arts and music companies they have comprehensive look at the State of the Arts, a review of the economics, spawned or inﬂuenced—play a critical role in the city’s economy. The 1,325 services and well-being of more than 1,300 nonproﬁt arts organizations organizations that have contributed to this study have a combined annual based in New York City. The Alliance has been producing reports on the arts revenue of nearly $5.5 billion; while the majority are based in Manhattan, in NYC, New York State and the metropolitan region since 1977, including they are located in all ﬁve boroughs and in every City Council district. the inﬂuential 1983 The Arts as an Industry. This is the ﬁrst time, however, Arts Organizations by Discipline and Borough 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 Organization Type BRONX KINGS NEW YORK QUEENS RICHMOND TOTAL the Cultural Data Project. Community Arts 4 19 39 14 4 80 Education & Instruction 7 21 71 3 4 106 It is particularly fortuitous that these data are available now, starting with History 4 7 19 7 5 42 FY2008, for this has been a tumultuous period for the city as a whole, including the nonproﬁt sector. Media Arts 3 28 82 3 1 117 Science & Nature 4 5 8 3 2 22 This report could not have been completed without the unstinting help of the Museums & Visual Arts 6 15 77 12 3 113 staff of the Cultural Data Project for reports and data analysis; it was made Dance 2 30 93 4 1 130 possible by funding from the New York Community Trust and the Booth Music 9 32 135 15 8 199 Ferris Foundation and the New York City Department of Cultural Affairs. Other Performing Arts 5 23 59 6 2 95 The State of the Arts will be the ﬁnal report by the Alliance for the Arts Theater 6 39 184 17 5 251 which is shutting its doors by the end of this year. After 35 years serving Councils, Services & Support 2 15 100 9 0 126 New York City’s cultural community, the board of trustees has decided that Other 0 12 30 2 0 44 the Alliance’s services to the ﬁeld can best be fulﬁlled by the adoption of Total 52 246 897 95 35 1325 key programs by two other critical NYC institutions—WNET for our online Source: Alliance for the Arts, Cultural Data Project cultural information services through NYC-ARTS and the Municipal Art Society for our advocacy, research and convenings. We know that they will But this situation is relatively recent—before 1960 only 153 (11.5%) of the both continue as strong stewards of our programs. 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 Summary Council on the Arts, twice as many organizations (323) were formed, and New York City, home to more than 1,300 nonproﬁt arts organizations, is another 535 came into existence between 1980 and 1999, at a time when arguably the cultural capital of the United States. And these nonproﬁts—and4
the NYC Department of Cultural Affairs, recently formed as an independent vast majority of this income went to the 113 largest organizations—$4.604 agency, expanded City funding to include organizations not located on billion. The remaining 1,212 organizations received some $831 million, withArts Digest City-owned property. Even with the economic ups and downs of the past $546 million contributed and $285 million earned in their latest ﬁscal year.2012 decade, another 309 groups were started just in the 11 years since 2000. EXPENSES The arts (including universities with a strong arts focus; zoos, parks and Total expenses for all groups totaled $5.150 billion. Again, the majority ofSTATE OF THE ARTS botanic gardens; public television and radio; historic houses and history this total was spent by the 115 largest groups (total expenses of $4.381 museums; and community arts programs) now permeate every facet of our billion). So 8.6% of the organizations were responsible for 85% of total lives, and small organizations abound. In New York City, 406 groups (31% expenditures and 86.7% of total income. of the total) have budgets of less than $100,000, and another 421 have The largest expense category for all organizations is personnel, ranging budgets between $100,000 and $500,000. At the other end of the scale, the from a low of 43.6% of total costs for groups under $100,000 to a high of 113 organizations with budgets of more than $5 million a year comprise 59.6% for large organizations with budgets between $1 and $5 million. The just 8.6% of the total number of groups, and another 238 have budgets smallest groups spend just under 11% on salaried employees, and the most between $1 and $5 million. on outside artists/performers, 24.5%. The two largest budget categories In spite of this diversity, the largest groups receive the lion’s share of both spend the most on salaried employees—48% and 47.3% respectively—and earned and contributed income. In the latest ﬁscal year reported, the the least on outside artists/performers (3.3%) and professionals (3.8%), as 113 largest groups earned 89% of the total earned revenue for all 1,325 they were able to bring most of these functions in-house. This pattern held organizations and 80% of the total contributed income. They also received true across all disciplines, in varying degrees. The smallest organizations 88% of all NYC government support and 85% of government support at also spent the largest percentage on administrative and programming costs. all levels. The 974 groups with budgets of less than $1 million a year But with total expenses of just $19.2 million for 406 groups, none of these brought in just 3% of the total earned revenue and 6.2% of all contributed categories represent a substantial expenditure per organization, where the income, even though together they represent 73.5% of the total number average budget size is just under $50,000. of groups in the city. New York City’s arts groups as a whole weathered the recent ﬁnancial This study looks at the total impact of all 1,325 groups, but also breaks out storm in reasonably good shape. Income surpassed expenses by nearly the data by budget size and discipline category. For those 535 groups which $285 million overall last ﬁscal year, and while most of this surplus was reported ﬁscal data for 2008, 2009 and 2010, we look at the impact the current earned by the largest groups ($224.5 million) groups in every other budget recession has had on their ﬁnances and the services. category had surpluses ranging from 2% to 26% of income over expenses, with the smallest groups faring the best. The Economics of the Arts EMPLOYMENT REVENUE Personnel costs are the largest single expense for all arts organizations For the 1,325 NYC arts organizations in this study revenue was nearly in NYC—artists and independent contractors for the small organizations evenly divided between earned income of $2.707 billion and contributed5 (under $500,000), salaried employees for the largest ones. In total, cultural income of $2.727 billion the same year, for a total of $5.435 billion. The
organizations employed 120,283 people in their latest ﬁscal year—23,310 full- PRODUCTIONS time and 32,905 part-time employees, and 64,068 independent contractors. In their latest ﬁscal year, New York City’s 1,300+ arts and cultureArts Digest These numbers translate to 40,410 full-time equivalent employees and organizations presented:2012 represent just over 54% of total expenses. In addition, arts groups depend on 20,119 live productions another 82,855 full- and part-time volunteers and 16,684 board members.STATE OF THE ARTS 56,446 performances Only 12.6% of the smallest organizations reported any full-time employees; 4,242 exhibitions 14% reported employing 308 part-time employees; 85.5% reported hiring 89,879 classes and lectures 10,234 independent contractors, most of whom were artists or program- 3,058 tours related (9,880). Many of these smallest groups also reported full- or part-time 6,973 world or national premieres volunteers, with 112 groups (27%) using 283 full-time volunteers and 308 10,821 workshops or readings of new works organizations (74%) using nearly 8,000 part-time volunteers. At the other end of the spectrum, the largest organizations reported employing nearly 19,000 ADMISSION PRICES individuals full-time and almost 20,000 part-time, most either artists or The median ticket price across all arts groups and for all types of events program-related. Just over 100 of the organizations with budgets more than (excluding workshops) is $18.40, ranging from a low of $5 for history groups $5 million reported also hiring more than 16,000 independent contractors, to a high of $20 for performing arts organizations and a $10 average for including nearly 15,000 artists or program-related individuals.Almost half museums. For children, seniors and students median prices are lower, (47%) of all groups now offer health insurance and make a contribution averaging $10 a ticket. The spread of prices can be extreme—from a low of toward the cost; 21% offer some form of pension or retirement plan. $1 a ticket to highs over $1,000. Combined with the large number of part-time and independent workers, this MEMBERSHIPS AND SUBSCRIPTIONS means that most individuals working for most arts groups are adequately Memberships and subscriptions remain the primary way many individuals compensated, either salaried or with full-time employment or beneﬁts. support the arts groups of their choice. The arts community has just under The Arts and the Community 2 million members and subscribers. Museums have the largest number of committed supporters in the form of members—more than 420,000. ATTENDANCE Media organizations, including libraries, public television and public radio, More than 35.5 million people paid to attend arts events offered by New have a strong membership base of over 408,000, and science and nature York City arts groups, and groups reported a total audience of 155 million organizations follow with 243,446 members. The performing arts, which for free events—including public radio and TV. Most were offered by used to depend heavily on a strong subscriber base for much of their Manhattan-based groups, but more than 2.5 million people attended paid ﬁnancial stability, appear to be less dependent on subscribers today. Music events in Staten Island, 4.2 million in the Bronx, 6.7 million in Queens and organizations, ranging in size from the Metropolitan Opera and the New 7.7 million in Brooklyn. The largest number of attendees visited museums, York Philharmonic to 64 groups with budgets under $100,000, have a total science centers, and zoos and botanic gardens (nearly 9.6 million paid subscription base of just 108,344, while dance groups have only 11,451 visitors to museums and 7.3 million+ to science or nature centers. subscribers. Theater companies fell in between, with 92,418.6
VOLUNTEER SUPPORT income from 2008 to 2009. Contributed income dropped in nearly all Volunteers are critical to all arts groups, but especially to those with categories—especially in individual and foundation support—but the biggestArts Digest budgets under $500,000. Six hundred groups—308 with budgets less than impact was in investment income where groups of all sizes experienced2012 $100,000 and 291 with budgets between $100,000 and $500,000—reported substantial losses in both 2008 and 2009. Investment losses in 2008 totaled having nearly 39,000 full- and part-time volunteers, as compared to only more than $77 million, a loss that grew to more than $1.171 billion by 2009.STATE OF THE ARTS 3,500 employees. In addition, the smallest groups had nearly 3,000 board While all types and sizes of organizations experienced investment losses, members, or almost 10 times as many board members as staff, making most smaller groups had less to lose; the largest losses were sustained most of these groups largely volunteer directed and led. Again, the largest by the largest visual and performing arts organizations, which together organizations had the greatest number of volunteers per organization, with accounted for $62.6 million in losses in 2008 and $1.146 billion in 2009. 67 groups reporting a total of 18,192 volunteers, and all 113 reporting a total Luckily, most groups did not have to sell their investments in order to of 3,748 board members, for an average of 33 members per organization. meet their expenses, so the total realized investment losses in 2009 only PROGRAMS FOR CHILDREN amounted to $93 million, as compared to more than $1 billion in unrealized Arts education and other programs for children continue to be an important losses. By 2010 many of these investments had begun to turn around, function of many groups. Some 10.25 million children and youth attended giving groups a positive return in 2010, for a total of $454.5 million in events or visited arts groups in the study year, with 3 million attending investment and interest income, both realized and unrealized. Removing theater performances and another 1.5 million visiting science centers, zoos all investment and interest income from total earned income in each of and botanic gardens. Besides encouraging children to visit their institutions the three years would have given these 554 groups $962 million in earned individually, with family or friends, many organizations offer education income in 2008, $966 million in 2009 and $954 million in 2010. Admission programs for school groups or take programs to the schools. A total of income grew over these three years, but this increase was offset by 122,634 school groups visited organizations in their latest ﬁscal year, and decreases in most other categories. organizations offered 7,505 off-site programs in the schools. A majority of Contributed income also fell in most categories over the past three years; these programs were offered by visual arts groups, particularly science and the one bright spot was government support, particularly NYC government, nature centers and museums and galleries. Education organizations and which increased its support to these arts organizations by more than museums offered the largest number of in-school programs, 2,078 $50 million from 2008 to 2009 to a total of $295 million. City support to and 1,057 respectively. the largest organizations increased even more—$78 million or 44%— Recession Trends: 2008–2010 increases that were offset by decreases to smaller organizations. While the total fell back somewhat in 2010 as the City faced its own economic Five hundred ﬁfty-four groups reported data for each of the past three years, problems, it still represented a 12.6% increase over 2008 and did much to 2008, 2009 and 2010. Thus, we can track the impact of the recession on a offset losses in other categories. State government support fell across all signiﬁcant number of arts groups and extrapolate to the ﬁeld as a whole. budget categories, to $40.8 million in 2009 from $52.2 million in 2008, but INCOME recovered partially to $45.3 million in 2010. Federal government support7 In general, 2009 was a very difﬁcult year for all groups, no matter their budget increased in 2009 and 2010, from $33.4 million in 2008 to $43.7 million in size. Groups experienced substantial decreases in earned and contributed 2009 to $58.4 million in 2010.
At the beginning of the recession in 2008 these 554 organizations as a increased by 27% over the three years and the number of program whole were still operating in the black—income exceeded expenses by personnel increased by 20%, though the full-time equivalents in these twoArts Digest $169 million. By the following year, income had dropped by more than categories dropped by 15.5% and 13% respectively. Total volunteers grew2012 half, but arts groups had not, as a whole, been able to reduce expenses. from 29,000 to 40,000, most to help with programs; measured as full-time Expenses actually increased by $75 million, resulting in a net loss of over equivalents, the number of total volunteers also increased from 3,500 toSTATE OF THE ARTS $1.3 billion—most of which, of course, was due to unrealized investment 6,700, an increase of 92%. losses. The biggest losers were museums and galleries, science and nature ATTENDANCE centers and presenting organizations. Even while these groups were struggling to raise funds and keep costs By 2010, as investments began to turn around, total income had once under control, they were managing to increase their programming and again reversed and even increased over 2008 to $2.7 billion. At the same reach signiﬁcantly larger audiences: between 2008 and 2010 the number of time, organizations were able to reduce some expenses, so that their total attendees at all events, paid and unpaid, increased from more than 43 million expenses totaled under $2.4 billion—a decrease of just under $64 million— to nearly 81 million, and the percentage of the audience who attended for free resulting in a net surplus of $332 million. 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, EXPENSES including public TV and radio.) The number of attendees at paid events actually One of the problems facing many arts groups is their high percentage of dropped slightly over the three years, from 21.3 million to 20.9 million. This was ﬁxed costs. As Professors Baumol and Bowen famously wrote in their study especially true for Manhattan-based organizations, where paid attendance of the performing arts in 1965, you can’t cut the number of players in a fell from 8.97 million in 2008 to just over 7.89 million in 2010. Subscribers also symphony to make an orchestra more efﬁcient. But groups did cut some decreased, particularly for dance, music and theater companies. The number full-time employees—mostly in administration and fundraising—and hired of performances, exhibitions, lectures and commissioned works all increased part-time employees instead. While they hired more artists/performers slightly over the three years, although touring—which is particularly expensive and other program contractors, they gave them fewer hours, resulting and often sponsor-dependent—fell by 80%. 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 continue8 their programming at stable levels. The number of these artists/performers
Who Pays for the Arts?—2010 Michael Hickey, The Municipal Art Society of New YorkArts Digest2012 Historically, Who Pays for the Arts?1 has attempted to answer the analysis (see the Methodologies section on page 25 for greater detail), but it fundamental question of how nonproﬁt cultural organizations in New York also illustrates an important reality: the overwhelming majority of New York City earn their daily bread. New York City is host to a tremendous variety City cultural organizations are relatively small and locally based. of cultural partners. They range from very small organizations run on a Overall, income from all sources was as follows: shoestring budget by a single dedicated artist, to major cultural institutions with hundreds of millions of dollars in total annual income and hundreds Earned income represented 53% (or $1.3 billion) of total income for of specialized staff. They also vary tremendously by geography, creative New York City nonproﬁt cultural organizations in 2010 aesthetic, operational structure and purpose. Naturally, making comparisons Private contributions were 30% (or $750 million) among such a wide array of organizations is challenging. Nonetheless, Who Government contributions were 17% (or $420 million). Of this Pays for the Arts? offers a valuable framework for observing trends, and amount, New York City funding represented $292 million in income, or raises important questions for future researchers to consider. 12% of all revenues reported. Summary Findings 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 Similar to previous iterations of Who Pays for the Arts?, this analysis (2%) from the prior year, and government support increasing slightly (3%) focuses on a single year of activity—from January 1 to December 31, 2010. from the same period. Note: the inclusion of capital commitments in the This creates a useful snapshot, and provides a basis to compare trends 2010 data for this report may impact comparisons to prior years’ studies within the sector year over year. when capital commitments were not included as income.3 For the ﬁrst time, this analysis makes use of data provided through the Average Income by Type and Size—2010 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 1 < $100K $100K - $500K $500K - $1M $1M - $5M > $5M few large organizations. This is important because it poses challenges for Public Funding 9,444 53,060 125,458 392,877 5,305,559 Private Support 18,229 94,891 244,073 762,507 9,345,12912 1 2 3 Who Pays for the Arts? was previously published by the Alliance for the Arts, now adopted and published by MAS. Please see the Methodologies section beginning on page 25 for important details about this data set. Please see the notes regarding the impact of capital contributions in Methodologies. Earned Revenues 16,995 107,276 342,152 Source: The Municipal Art Society of New York, Cultural Data Project 1,048,046 17,241,662
While there are important similarities among organizations of all sizes touring, royalties, publications, interest on investments and miscellaneous (for instance, all categories rely heavily on earned revenue as their primary income) on overall income appears to indicate that many groups haveArts Digest source of income), there is still signiﬁcant variation between the ranges (for developed strategies to support their operations through alternative (and2012 small organizations, 38% of total income came through earned revenues, frequently entrepreneurial) means. while this number was more than 50% for the very largest organizations). Total Income by Percentage—2010WHO PAYS FORTHE ARTS?—2010 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 Source: The Municipal Art Society of New York, Cultural Data Project captured by CDP are located in Manhattan, including the subset in this Even within the category of Earned Income, there is signiﬁcant variation by report. Note that there are important exceptions not captured in this report, organizational size. as many cultural organizations and entities are not part of the CDP data set (including for-proﬁt cultural entities, individual artists and many small Average Earned Income by Type and Size—2010 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 Source: The Municipal Art Society of New York, Cultural Data Project within earned revenues offers some useful insights. As in prior years, Admissions, Support from Individuals, and Other Earned Revenues are For the very largest organizations Admissions and Other sources of income the three leading revenue categories. The major impact of Other Earned account for nearly 75% of total earned revenues, while for the very smallest13 Revenues (comprising space rentals, merchandising, food services, parking, organizations they account for barely 50%. For all organizations Tuition
and Workshops and Contracted Services made up 25%–33% of all earned on average for the very largest groups). The chart below further breaks out income, with the exception of the very largest groups, where these two Other income into a number of subcategories by organizational size, andArts Digest categories combined shrink to just over 5%. Intuitively, one expects that the top three subcategories are highlighted.2012 organizations vary their revenue strategies based on their size and capacity. Percentage of “Other Income” by Size and Category—2010 It is striking, however, that those organizations with more than $5 million in $100K- $500K-WHO PAYS FOR annual income appear to have a very different strategy in comparison to <$100K $1M-$5M >$5M TotalTHE ARTS?—2010 $500K $1M their smaller peers—relying much more heavily on both Admissions and Miscellenaeous Earned 21% 14% 9% 17% 32% 31% Other income rather than classes, workshops and contracted services. Gift Shop & Merchandising 6% 10% 7% 3% 28% 25% As in other aspects of this analysis it’s important to view the scale of this Rentals 20% 25% 24% 31% 14% 15% variation. The chart below provides average income in each of the earned Touring 21% 28% 13% 18% 7% 8% revenue categories by organizational size. This is telling for several reasons. Dividends & Interest 1% 4% 3% 11% 7% 7% For smaller organizations, earned revenue streams are fairly consistent Concessions 4% 1% 1% 1% 7% 6% across all ﬁve categories, while for larger organizations there is substantial Parking 0% 0% 0% 0% 2% 2% variation between categories. Importantly, for very large organizations Gallery Sales 12% 6% 34% 3% 1% 2% admissions and other income are dramatically larger on average than Special Sponsorships 4% 6% 3% 3% 1% 1% for their peers. Indeed, even as income in all categories grows larger, Advertising 6% 3% 3% 5% 0% 1% Admissions and Other income appear disproportionately higher for those Royalties 2% 3% 0% 2% 0% 0% organizations with more than $5 million in annual income. Media Subscriptions 2% 0% 1% 0% 0% 0% Average Earned Revenues by Size and Category—2010 Gains on Investment 1% 0% 2% 4% 0% 0% $100K- $500K- Grand Source: The Municipal Art Society of New York, Cultural Data Project <$100K $1M-$5M >$5M $500K $1M Total On average, Miscellaneous Earned income totaled 31%, Gift Shop sales Admissions 5,269 22,852 63,222 252,769 6,104,121 604,986 totaled 25%, and Space Rentals totaled 15%. Overall (with the exception Fundraising & Events 2,354 14,570 85,820 228,728 2,239,066 257,009 of Miscellaneous Income), Space Rentals and Touring generated the Contracted Services 3.721 20,060 57,005 147,293 519,003 87,440 most other income for smaller organizations; with gallery sales providing Tuition & Workshops 2,008 18,650 54,862 158,084 730,160 107,127 an important supplement (a remarkable 34% for mid-size organizations Other 3,642 31,145 81,243 261,171 7,649,312 746,612 between $500,000 and $1,000,000 in annual income). For the very largest Avg Total Earned 16,995 107,276 342,152 1,048,046 17,241,662 1,803,264 organizations, after miscellaneous income, gift shops and merchandising Source: The Municipal Art Society of New York, Cultural Data Project were the most lucrative (accounting for more than 40% of all revenues The category of Other income remains a signiﬁcant source of revenue for in this subcategory). organizations of all sizes, and indeed ranks as the largest earned revenue Note that in 2010, the very largest organizations showed losses on Realized category for 4 of the 5 income ranges. Larger groups collect nearly one-third Gains on Net Assets (totaling more than $2 million in losses). Under better14 of their income from Other earned revenue sources ($7.6 million annually
market conditions, it’s conceivable this source would have ranked higher in The chart above breaks out average private support according to budget Other Income for entities with more than $5 million in total annual revenues. size. Note that that the very smallest organizational category and theArts Digest One would expect wide differences in the earned revenue strategies very largest were particularly impacted by support from individuals. One2012 between small and large organizations, but these dramatic differences speculates that those organizations with more than $250,000 in annual are worthy of further analysis. revenues more easily qualify for foundation and corporate support (in partWHO PAYS FOR because many require a formal audit, an important accountability measure),THE ARTS?—2010 Private Contributions while the very largest organizations appear better able to secure large Support from individuals, corporations and foundations remains a crucial contributions from high-net-worth supporters. element to overall organizational income. In 2010, organizations in the data set collected nearly $750 million in private support, which comprised, Income by Borough on average, 30% of all revenue. Smaller organizations surpassed other The chart below indicates the percentage of each income source by New categories by generating some 40% of their total income through private York City borough. Manhattan appears to have stronger earned revenues sources, while the very largest organizations relied on private support for in comparison to other parts of the city. Possible reasons for this could less than 25% of their revenues. Indeed, in the analysis there is a clear include that Manhattan-based organizations command higher ticket trend between the size of the organization and its reliance upon private prices, or attract more rentals, or are better able to maintain signiﬁcant support (the clearest of all three major revenue categories: earned, relationships with corporate partners and foundations via proximity. While private and public). such answers are beyond the scope of this report, they could be fruitful areas for further analysis. Average Private Support by Size—2010 Income by Borough—2010 Foundations Corporations Individuals Government Support Private Support Earned Revenue < $100K $100K - $500K $500K - $1M $1M - $5M > $5M Foundations 6,388 48,361 141,812 395,731 2,193,895 Source: The Municipal Art Society of New York, Cultural Data Project Corporations 1,541 12,288 23,598 89,636 1,093,652 Individuals 10,370 34,243 78,663 277,140 6,066,582 Manhattan cultural organizations represent the overwhelming majority of Source: The Municipal Art Society of New York, Cultural Data Project groups included in this study (68% of all those captured). It appears that Manhattan does have a higher concentration of these groups than the15
other boroughs of New York City, although it is also possible that many on average than their peers, while Bronx groups appear to receive more groups located outside Manhattan do not submit proﬁles to the CDP for funding on average from state sources. City support appears comparativelyArts Digest various reasons. Nonetheless, this study shows 87% of all income reported well distributed among Bronx-, Brooklyn- and Manhattan-based groups,2012 being earned by Manhattan-based organizations. with organizations in Queens and Staten Island receiving less than organizations in the other three boroughs. These differences may be Similar to overall income trends, the analysis shows that Manhattan-basedWHO PAYS FOR affected by variations in average organizational size, among other issues,THE ARTS?—2010 organizations also receive the majority of public support dollars. and would beneﬁt from further analysis. Government Support While it’s difﬁcult to tell how representative this data set may be of all Total Government Support by Borough—2010 cultural activity, it clearly indicates that revenue concentrations # Groups / All Public Total Federal Total State Total City vary considerably geographically alongside the concentration of Borough Support Support Support Support cultural groups themselves. Bronx 32 21,146,650 3,456,090 3,759,400 13,806,660 Trends in Income: 1995–2010 Brooklyn 128 67,660,056 5,363,801 9,356,142 52,839,510 Historically this report has examined income trends by comparing only Manhattan 491 303,691,545 54,823,252 43,057,915 205,543,463 organizations for which data is available each year studied from 1995 to the Queens 50 18,088,450 1,932,152 2,252,064 13,878,054 present. Surprisingly, over the years this comparison group has dwindled in Staten Island 22 6,927,840 206,303 584,895 6,123,708 size from 374 originally to 114 organizations at present. This bears a closer Total 723 417,514,541 65,781,598 59,010,416 292,191,395 look in subsequent analyses. Source: The Municipal Art Society of New York, Cultural Data Project Because fewer organizations are being counted, less income is being recorded and analysis may therefore signiﬁcantly underreport actual Average Government Support by Borough—2010 revenue trends. Furthermore, this 114-member subgroup appears to # Groups / Avg Public Avg Federal Avg State Average City comprise larger organizations (as measured by overall income), which may Borough Support Support Support Support skew analysis and cause ﬁndings to inaccurately represent income trends Bronx 32 5% 35% 34% 24% among all types of organizations, especially those that are smaller. Brooklyn 128 16% 14% 21% 23% The trend analysis also attempts to compare organizations that have Manhattan 491 73% 36% 25% 23% reported their income over the years through several different sets of Queens 50 4% 12% 13% 15% data. As noted above (and as detailed in the Methodologies section), in the Staten Island 22 2% 3% 8% 15% current study capital contributions may be counted as income (whereas in Source: The Municipal Art Society of New York, Cultural Data Project prior years capital contributions were not). It is expected that this would cause income trends for the 2010 study group to be somewhat inﬂated While the majority of public support still ﬂows to Manhattan, this appears (especially from public sector sources, which tend to be larger16 to occur because Manhattan-based groups receive more federal dollars contributors to capital projects).
Income Sources for Trend Sample for Speciﬁed Years from 1995 to 2010 (in 2010 Dollars)Arts Digest2012WHO PAYS FORTHE ARTS?—2010 1995 1997 1999 2004 2005 2006 2007 2008 2009 2010 Government $146 134 142 118 115 117 125 127 126 288 Private $314 354 380 320 312 335 355 352 333 345 Contributions Earned Income $349 425 497 610 653 703 757 800 858 747 Source: The Municipal Art Society of New York, Cultural Data Project Overall the study group shows a modest increase in total income from 2009 Summary Comments to 2010 (up 4.8% to $1.38 billion); the trend is quite mixed, with Earned The overwhelming majority (71%) of cultural organizations captured by CDP Income dropping by almost 13% in the same period, while Government in 2010 have budgets under $1 million in annual income. If we add those contributions were up nearly 130% from the prior year. As noted above, organizations under $5 million in annual income, this includes fully 91% of the reduction in Earned Income may reﬂect the smaller population of the all organizations in this study. While there is substantial variation among survey, while the increase in Government support could reﬂect the inclusion this population of small to mid-size cultural organizations in all income of capital dollars as income. categories, there are even greater variations between this 91% and the While this analysis provides some useful indication of changes within the remaining 9% of very large nonproﬁt culturals. nonproﬁt cultural sector, further study would appear necessary. Overcoming There are a number of areas where these differences are particularly the challenges of comparing groups across multiple years presents certain pronounced, and where further study could provide some compelling difﬁculties, yet it seems an important aspect of understanding how the insights into observed differences: nonproﬁt cultural sector is responding to changing economic conditions, or adapting new income generating strategies. Large cultural nonproﬁts have developed endowments that provide17 signiﬁcant sources of ongoing operational support and stability, even