PA Senate Votes to Eliminate Cultural Funding Despite Increasing Public Demand for Arts

May 7, 2009
Greater Philadelphia Cultural Alliance
1616 Walnut St., Suite 600
Philadelphia, PA 19103

Contact: John McInerney
johnm@philaculture.org
215-399-3515
 
Philadelphia, PA – On Wednesday, May 6, in its latest budget proposal, the Pennsylvania Senate moved to eliminate cultural funding.  Ironically, the proposal comes at a time when arts organizations in the region are struggling to meet increased public demand for their programs and services. 

According to TempCheck, a periodic survey released today by the Greater Philadelphia Cultural Alliance, public demand for arts and culture is growing just as resources to provide it, like state funding, are drying up.  And cultural organizations are doing everything they can to survive in the face of this adversity.
 
"Since typical admission fees cover less than half the cost of production, cultural organizations are walking a tightrope between increasing interest and decreasing resources," said Peggy Amsterdam, President of the Greater Philadelphia Cultural Alliance. "This survey shows they are doing everything possible to adapt to a new economic reality without sacrificing high-quality programs and services.  Further cuts in support, like those proposed by the Pennsylvania Senate, could force many cultural organizations to close their doors to the public at a time of increasing need."  

Cultural managers are noticing the trend, and working hard to increase access without reducing quality. Noted one TempCheck respondent, “We try to offer events at various price levels to serve the entire community at all economic levels.”

Findings of the survey include:

Individuals, as attendees and donors, are stepping up to the plate.

• Single ticket sales are holding even or growing for 4 out of 5 cultural organizations.
• Almost three quarters (72%) report stable or increased Individual giving.  

Yet cultural organizations are struggling to meet this public demand with fewer resources.

• One-third report declines in Corporate support.
• Government funding remains down, with 38% reporting declines.
• Investment and other earned income also remains low, with just over half (53%) of organizations reporting decreases.
• Foundation support is relatively stable, with the exception of Performing arts organizations, where 29% of the groups have seen decreases.

Arts organizations are cutting production costs, but not frequency. 

• The percentage of organizations who have produced programs with lower budgets has almost doubled, from 23% in January 2009 to 42 percent now.
• Almost one-third (29%) have already or expect to reduce staff in order to lower costs.
• Forty- three percent of organizations are considering cutting their marketing budgets, compared to just 34% in January.

Cultural organizations are pursuing collaborations, consolidations, and mergers, with almost half reporting that they are considering this or have already done so.  But as one cultural manager noted, “We're looking more aggressively for partnerships that can help us to defray the cost of some event production - unfortunately, no one else has any money either!”

Large cultural organizations (those with budgets between $1-10 million) are particularly vulnerable at present.

• They are twice as likely to have decreased programming in order to lower costs
• Two in five Large organizations report a drop of greater than 25 percent in Corporate support.
• Half of these organizations have already reduced staff, or plan to in the near future in order to lower costs.
• Large organizations are twice as likely to expect a deficit at the end of the current budget year, and 71% feel their situation is likely to get worse over the next six months (compared to 43% of organizations overall).

Despite dire prospects, cultural organizations appear well-managed and are preparing to weather the recession. Cultural managers have always operated under the framework of doing more with less, so while the recession presents a daunting challenge, it is not an entirely unfamiliar one.

• Forty-two percent of organizations have prepared for the rainy day with cash reserves of 1-3 months' worth of expenses immediately available. Another quarter of organizations surveyed have access to 6 months or more cash if needed.
• One-third are expecting deficits in the current fiscal year, and 2 in 5 expect things to get worse over the next six months.

These results reflect the experience of eighty organizations representing a wide range of budget sizes and disciplines who responded to a questionnaire assessing the effects of the economy on their fundraising, programming, and other activities. The Cultural Alliance plans to field TempCheck on a regular basis to measure shifts over time. The survey will next be administered in October 2009.

The public can learn more about the Cultural Alliance’s research and advocacy efforts by signing up to receive advocacy alerts from the Cultural Alliance’s Online Action Center at www.philaculture.org

For more information about the results, please contact John McInerney, Vice President of Marketing and Communications, at 215-399-3515 or johnm@philaculture.org.

The Greater Philadelphia Cultural Alliance is a leadership organization of over 375 nonprofit arts and cultural institutions located primarily in the five counties of southeastern Pennsylvania.  Its mission is to make Greater Philadelphia one of the foremost creative regions of the world. More information at www.philaculture.org