A Year Into the Pandemic, the Greater Philadelphia Cultural Alliance Projects a Staggering $371.7m Total Revenue Loss for Arts & Culture

In a sector-wide analysis rooted in a survey of nearly 300 organizations, arts and culture reports stunning and ongoing losses, representing approximately a $1 million loss each day for the sector since March 2020

March 17, 2021 (PHILADELPHIA, PA) – The Greater Philadelphia Cultural Alliance (Cultural Alliance) today issued its COVID-19 Economic Impact Report, which provides the most complete view thus far of the economic, social, and programmatic damage inflicted on the region’s arts and culture sector by the pandemic. The report represents the combined results of two surveys conducted by the Cultural Alliance, the first of which was conducted from October - November 2020 and the second, which was conducted from January - February 2021. From the reported revenue loss figures of survey respondents as well as projections informed by sector-wide analysis, the Cultural Alliance estimates the total revenue loss for the sector since the pandemic began in March 2020 is $371.7 million. This reflects an actual loss of $305.6 million between March and December 2020 and an anticipated revenue loss of $66.1 million between January and March 2021.

289 organizations participated over these two surveys with 248 organizations participating in the most recent survey. 225 organizations completed both surveys. From the survey respondents alone, several key findings emerge, previewing a financial and workforce crisis for arts and culture as well as a devastating impact on the Philadelphia region’s long-term prospects for recovery.
Organizations on the Brink

• 41% of responding organizations (102 organizations) are not likely to survive beyond Fall 2021 on current contributed and earned income streams.
  
  • The 102 organizations, which the Cultural Alliance has categorized as “at-risk” based on their responses, represent every budget category, all five counties and nearly every artistic discipline.
    • 72% of “at-risk” organizations have budgets under $1 million.
    • 18% of “at-risk” organizations have budgets from $1-3 million.
    • 10% of “at-risk” organizations have budgets over $3 million.
• 59% of “at-risk” organizations report “limited cash savings and reserves” as one of their top financial concerns.
• If these 102 “at-risk” organizations cease to exist by the end of 2021, the Greater Philadelphia cultural sector will lose critical programs that:
  
  • Address racial justice (41 organizations)
  • Serve the LGBTQ+ community (22 organizations)
  • Provide accessibility to the arts for people with disabilities (21 organizations)
  • Create workforce development opportunities (21 organizations)

Areas of Greatest Concern

• 46% of survey respondents (114 organizations)  report right now – January – June 2021 – as the period of their most urgent financial need and greatest risk.
  
  • This number soars to 76% (189 organizations) when that period is extended by just three months to the end of September 2021. 
• The top financial concerns among all respondent organizations are:
  
  • Reduced earned revenue (87%)
  • Reduced philanthropic giving (63%)
• The median level for earned income in FY2020 was 23% compared to 40% in FY2019.

A Decimated Workforce

• The 248 organizations that completed the second survey, which addressed job loss, report 6,569 cultural workers have been affected by the pandemic.
• 2,452 positions were eliminated through layoffs or furloughs.
  
  • Performing arts organizations represent 53% of all laid-off and furloughed workers.
  • Organizations with budgets over $15 million experienced the largest number of layoffs and furloughs.
• 801 positions saw reduced hours.
• 3,316 contractors had their work cancelled or significantly reduced.
  
  • Organizations with budgets under $1 million represent half of all contractor cancellations and/or reductions.

Vulnerable Populations Have Lost Access to the Arts

• 38% of respondent organizations have cancelled or significantly reduced social impact programming serving vulnerable populations since the pandemic began.
• Those most affected by these cancellations or reductions in service are populations in congregate settings such as schools, senior living residences, criminal justice systems, group homes and medical facilities.
  
  • While understandable given the limitations on in-person activities and technological constraints within these environments, it is unknown whether these programs will be restored in a post-COVID environment due to financial constraints and reduced staff capacity.

“This data is clear and should give every elected official, philanthropic partner and corporate steward tremendous pause,” said Priscilla M. Luce, Interim President and CEO of the Cultural Alliance. “Arts and culture has been sounding the alarm about the devastating effect of the COVID-19 pandemic on the sector, especially since the second mandated closure over the 2020 holiday season. The sector urgently needs help and while the revenue and job losses are startling, we must focus on the fact that 102 organizations identified themselves as being unable to survive beyond fall 2021 without new philanthropic dollars, additional public support, or the elimination of operating restrictions to support earned income. A loss such as that will change the cultural fabric of the Philadelphia region and could alter Philadelphia’s identity as a world-class city and international destination.”

Responding organizations reported annual budgets ranging from $2,000 to $55 million and represented every artistic discipline. Although this data set is only a portion of the arts and culture organizations in the five-county Philadelphia region, it is representative of the full cultural ecosystem. Survey participants from the second survey, conducted January – February 2021, are broken down by budget category below:

• Annual Budget Under $249,000: 23.4%
• Annual Budget of $250,000 - $999,999: 42.3%
• Annual Budget of $1 million - $9.9 million: 25.8%
• Annual Budget of $10 million - $15 million+: 8.5%

“This new data represents organizations of all budget sizes and goes beyond just the revenue loss,” said Luce. “It reflects the duality of the role that arts and culture plays in the life of this region. We are both a vital business sector and an essential partner in our communities, highlighting our shared humanity, creating connection, and fostering access to the arts. We embrace these roles, but the data shows that we cannot sustain them without financial relief. No part of the sector has been unaffected by the COVID-19 crisis. All cultural organizations, regardless of size, need support, not only to remain afloat in the short-term but also, to establish a robust, long-term solution, which transitions the sector from recovery to sustainability.”

Informed by the data, the Cultural Alliance has developed four key recommendations to be collaboratively addressed by the philanthropic, corporate, and civic sectors, as well as the arts and culture community:

1. Arts and culture organizations need immediate financial relief from federal stimulus and a long-term plan, in collaboration with the philanthropic community, to first ensure survival and then, achieve sustainability.
2. Earned income opportunities must be restored, by gradually lifting COVID-19 occupancy limits, restoring organizations to full capacity as soon as it is safely possible. We also ask officials to ease the burden of obtaining permits for outdoor summer performances.
3. A collaborative, sector-wide marketing campaign must be launched to address audience readiness concerns, alongside collaborations with Visit Philadelphia and the Philadelphia Convention and Visitors Bureau to ensure that arts and culture are integrated into forthcoming tourism efforts.
4. Standards for fair pay and benefits within the arts and culture sector, equitable with other industries, must be established. Funding for arts projects and jobs for artists need to be included in plans for community development initiatives.

“These recommendations aim to preserve and sustain as many of our region’s arts and culture organizations as possible into 2022 and beyond,” said Luce. “Although there are likely to be mergers and closures due to the pandemic, we must be sure that any such contraction does not cause unintended and permanent collateral damage. Simply put, if we allow for the unmitigated erosion of the sector, there will be dire consequences not just in driving tourism and hospitality for the region but in our ability to attract and retain top talent who want to live and work in a culturally vibrant city.”

To read the full report and methodology, please visit www.philaculture.org.

About Greater Philadelphia Cultural Alliance

Established in 1972, the Greater Philadelphia Cultural Alliance is the region’s leading arts and cultural advocacy, research and marketing organization. Our mission is to “lead, strengthen and amplify the voices of a cultural community that ignites creativity, inspires people and is essential for a healthy region.” Our membership includes more than 450 organizations ranging from museums and dance companies to community art centers, historic sites, music ensembles and zoos. For more information on the Cultural Alliance, please visit www.philaculture.org.