Hill Strategies Research on Finances and Attendance of Arts Organizations

The latest issue of Hill Strategies' Arts Research Monitor includes reports examining the situation of arts organizations, including Canadian statistics on art museums and galleries, artist-run centres, and performing arts presenters as well as an American report examining the sustainability of arts and culture organizations in select cities.

Click the link within each summary below to access the full report.
 

A Portrait of 77 Art Museums and Public Art Galleries

Understanding Canadian Arts Through CADAC Data

Canada Council for the Arts, March 2015
http://canadacouncil.ca/council/research/find-research/2015/portrait-of-77-art-museums-public-art-galleries

This report examines the finances and activities of 77 public art galleries “that receive recurring funding from the Visual Arts Section of the Canada Council for the Arts”, based on their financial and statistical data submitted to CADAC (Canadian Arts Data / Données sur les arts au Canada). The report cautions that “financial figures from CADAC are reconciled, while statistical data are not validated and represent what is reported by organizations and may include double counting.”

In 2013, the 77 galleries had total operating revenues of $245 million, 45% of which was received from government sources (all such sources, not just the Canada Council), 26% from earned revenues, 20% from private sector fundraising, and 9% from other revenue sources.

Between 2010 and 2013, the galleries’ total revenues decreased by 1% (not adjusted for inflation). Private sector revenues grew by 12%, and earned revenues increased by 3%. On the other hand, public sector revenues decreased by 7%, and other revenues decreased by 11%.

The galleries had 1,614 full-time equivalent staff members in 2013. Salaries and professional fees accounted for 47% of total expenses in that year. Over 3,800 people in 2013 were paid artist fees or artistic salaries in 2013, and 87% of these artists were Canadian (over 3,300). Artist fees and salaries represented about 16% of the galleries’ total expenses.

The report provides two specific benchmarks related to marketing and fundraising expenses. “For each dollar spent in marketing activities, art museums and galleries made $3.13 as total earned revenue.” Regarding fundraising, each $1 spent generated $3.82 in private sector revenues.

Collectively, the 77 galleries’ accumulated surplus stood at $28 million in 2013. Another important financial indicator is the working capital ratio, which is an indication of “the ability of an organization to meet its payment obligations as they become due”. The report indicates that “a ratio of less than 1% indicates financial vulnerability regarding the organization’s capacity to cover its short-term payables.” In 2013, the galleries’ working capital ratio was 0.95%.

The galleries presented 1,057 exhibitions in 2013, of which the vast majority were presented locally (907, or 86%). Of the 8,436 artists featured in local exhibitions, 81% were Canadian. Total attendance at local exhibitions was 4.4 million. In addition, 1.3 million people participated in arts education activities at reporting galleries. Galleries also engaged 15,500 people via 72 artist-in-residence projects and over 6,000 people via 237 professional training and development programs.
 

A Portrait of 75 Artist-Run Centres

Understanding Canadian Arts Through CADAC Data

Canada Council for the Arts, September 2015
http://canadacouncil.ca/council/research/find-research/2015/portrait-of-artist-run-centres

Based on financial and statistical data reported to CADAC (Canadian Arts Data / Données sur les arts au Canada), this report outlines the finances and activities of 75 artist-run centres “that receive recurring funding from the Visual Arts Section of the Canada Council for the Arts”.  One of the limitations of statistical data from CADAC is that “statistical data are not validated and represent what is reported by organizations and may include double counting”. Financial information, on the other hand, is reconciled by CADAC staff.

In 2013, the 75 artist-run centres had total operating revenues of about $18 million, 73% of which was received from government sources (including 42% from the Canada Council), 15% from private sector fundraising, and 11% from earned revenues.

Between 2010 and 2013, total revenues increased by 8% (not adjusted for inflation). All three of the major revenue sources increased: private sector revenues by 27%, earned revenues by 26%, and public sector revenues by just 2%.

The 75 centres had 183 full-time equivalent staff members in 2013. Salaries and professional fees accounted for 26% of total expenses in that year. Artist fees and artistic salaries were paid to almost 3,800 people, 81% of whom were Canadian (3,057). Artist fees and salaries represented about 16% of the centres’ total expenses.

Two specific benchmarks related to marketing and fundraising expenses are provided in the report. For every $1 spent on marketing activities, the 75 centres generated $1.46 in earned revenue. For every $1 spent on fundraising, the centres raised $4.06 in private sector revenues.

The 75 centres (collectively) reported an accumulated surplus of $3.7 million in 2013. Their working capital ratio was 1.54%. This ratio provides an indication of “the ability of an organization to meet its payment obligations as they become due”. A separate Canada Council report (on art galleries) indicates that “a ratio of less than 1% indicates financial vulnerability regarding the organization’s capacity to cover its short-term payables.”

In 2013, the artist-run centres presented 747 exhibitions, the vast majority of which were presented locally (686, or 92%). Ninety-one percent of the 8,436 artists featured in local exhibitions were Canadian. Total attendance at local exhibitions was 625,600 in 2013. In addition, 1.3 million people participated in arts education activities at reporting centres. Artist-run centres also produced 114 professional training and development programs (4,270 participants), 242 artist-in-residence projects, and 61 conferences.
 

Trends Among Recipients of the Canada Arts Presentation Fund, 2003-2012

CAPACOA, November 10, 2015
http://www.capacoa.ca/en/services/research-and-development/capf-data

This article highlights the financial situation of performing arts presenters between 2003-04 and 2011-12 based on aggregated data from 531 presenters receiving federal funding through the Canada Arts Presentation Fund. For the 531 presenters as a group, private sector revenues accounted for a larger proportion of revenues (40%) than earned revenues (36%) and public sector funding (24%) in 2011-12.

Private sector revenues were highest for the organizations with the highest revenues (43% for the six recipients with revenues averaging $12 million). There was no consistent pattern in earned revenues, although the 60 presenters with the second-highest average revenues ($2 million) had the highest proportion of earned revenues (50%). As a proportion of total revenues, public sector revenues were much higher for the lowest budget organizations (46% for the 228 presenters with revenues averaging $100,000) than for the highest revenue organizations (22% for the six recipients with revenues averaging $12 million).

In terms of 2011-12 expenses, presentation costs represented the largest share (38%), followed by promotion, marketing, and audience development (21%), venue costs (18%), administration (9%), and other expenses (12%). Artist fees represented about 27% of total expenses, with nearly $3 in every $4 in fees going to Canadian artists (72%). Administration costs were much higher for lower budget presenters (16% in the two smallest revenue groups) than for the highest revenue organizations (8%).

Overall revenues grew significantly over the eight-year period, from just under $300 million in 2003-04 to $522 million in 2011-12. (These figures have not been adjusted for inflation.)  Despite the growth in revenues, 2011-12 was the only year where the presenters reported a collective deficit.

The article cautions that attendance data may be less reliable than financial data, because presenters’ reported attendance figures “cannot be verified in the same way as audited financial statements”. That being said, total attendance at the 531 presenters is estimated at “more than 20 million attendees per year” (including both free and paid attendance).
 

Birth and Mortality Rates of Arts and Cultural Organizations (ACOs), 1990-2010

National Endowment for the Arts, 2013
Authors: The Foundation Center and the National Center for Charitable Statistics, The Urban Institute
http://permanent.access.gpo.gov/gpo58069/Research-Art-Works-Harvard.pdf

Using official filings of arts and culture charities with at least $50,000 in revenues, this American report examines the sustainability of organizations between 1990 and 2010 in six metropolitan areas: Atlanta, Boston, Chicago, Detroit, Miami, and San Francisco. In the context of the arts, the report defines sustainability “as a community’s capacity to support the resiliency and long-term vitality of their unique cultural assets, contributing to a more vibrant cultural infrastructure for the nation as a whole”.

Across the six metropolitan areas, there were 1,613 arts and culture organizations in 1990, 2,704 in 2000, and 3,682 in 2010. For every arts and culture organization in 1990, there were 1.7 organizations in 2000 and 2.3 organizations in 2010. Each of the six metropolitan areas experienced significant growth in arts and culture organizations during this timeframe.

Concerning organizations that existed in 1990, there was a 76% survival rate in the six metropolitan areas after one decade (i.e., 76% of organizations that were active in 1990 remained active in 2000). Over the whole 20-year period, there was a 64% survival rate. There were moderate differences in the 20-year survival rates between the metropolitan areas, ranging from 59% in Atlanta and Detroit to 66% in San Francisco.

Examined differently, 54% of the organizations that were active in 2010 were new (i.e., not active or reporting in 1990), while the other 46% had existed in 1990.

Compared with the average 64% survival rate over the 20-year period, which organizations were most likely to survive? The report finds that organizations with revenues above $5 million had the highest survival rates (86% for those with revenues between $5 million and $10 million and 92% for those with revenues over $10 million). The lowest survival rates were among the smallest organizations (44% for those with revenues between $50,000 and $59,999 and 52% for those between $60,000 and $79,999).

Arts and culture organizations with higher levels of assets were also more likely to survive. Organizations with total assets of $250,000 or more had the highest survival rates (84% for those with assets between $250,000 and $499,999, 87% for those with assets between $500,000 and $1 million, and 85% for those with assets of $1 million or more). The lowest survival rates were among organizations with assets below $10,000 (56%).

Among cultural disciplines, humanities and music organizations were most likely to survive (survival rates of 78% and 74%, respectively). Dance organizations were least likely to survive (55%).

Data in the report also indicate that organizations with very high contributed revenues (i.e., public and private fundraising) were least likely to survive: only 52% of organizations with contributed revenues of 90% or more in 1990 were still active in 2000. Similarly, 52% of organizations with contributed revenues of 90% or more in 2000 were still active in 2010.

The report did not examine the possible impacts of policy, funding, or engagement patterns on the sustainability of arts and culture organizations.