A Very Short but Angst-Filled Story in Nonprofit Numbers

October 8, 2014; Urban Institute

If you were interested in understanding at a macro level why some arts organizations are still in such a financial tailspin, you should take a peek at the latest “Nonprofit Sector in Brief” report from the Urban Institute. Here is what we see in the report’s statistics from Table 4, but the comments and generalizations are our own.

The recession, of course, did not hit all arts organizations equally hard:

Change in Revenue for Organizations in Arts, Culture and Humanities

2002 – 2007	+ 26.1	Thought balloon: “No reason to believe that things will not go well. Let’s invest.”
2007 – 2012	– 13.1	Thought balloon: “Debt, loss of endowment, loss of audience revenue…can we make it?”

The change in revenue for arts, culture, and humanities nonprofits was the highest negative change in revenue among all categories of organizations

Change in Expenses

2002 – 2007	+ 13.2	Thought balloon: “Sure, we are investing, but let’s be sensible and keep some aside.”
2007 – 2012	– 2.2	Thought Balloon: “We did reduce expenses, but we thought it would have turned around sooner… maybe we waited too long and did not cut enough.”

Change in Assets

2002 – 2007	+ 34.1	Thought balloon: “We are smart, well led organizations with foresight.”
2007 – 2012	– 6.0	Thought balloon: “We should have relooked at our business plan years ago.”

NPQ has covered any number of stories over these past few years about arts organizations struggling with this environment across the country. Between 2007 and 1012, the number of organizations listed in the field of arts, culture, and humanities declined from 37,867 to 28,482, or by approximately one-third. It was by far the highest decline in any field.

The annual report on the sector from the Urban Institute explains a lot. We will bring you more tomorrow.—Ruth McCambridge