Region’s Cultural Activity Rises during Recession, but Sector Still Hard Hit
2011 Portfolio: Individual Attendance & Giving Up, but Can’t Offset Economy’s Impact
Philadelphia, PA - Individuals were the heroes of the region’s cultural sector during the recession. In an analysis of the region’s cultural activity from FY 2007 to FY 2009, the Cultural Alliance documented a 20% increase in individual giving and a 5% increase in attendance at area cultural nonprofits. Overall, individuals pumped $406 million into the struggling cultural nonprofits sector in FY 2009, an increase of $47 million over FY07.
Individuals’ investments in the sector helped mitigate the damage done by the recession including the large drops in the values of investment portfolios, belt-tightening on the part of corporate and foundation donors and cuts to government funding. Those declines outweighed individuals’ efforts and pushed more of the area’s nonprofit arts organizations into the red. Excluding investment losses, revenues fell 12% overall for arts and cultural organizations. When those realized and unrealized investment and interest losses are factored in, total revenues fell 43%, or $527 million. These are some of the finding of the 2011 Portfolio, a report released today by the Greater Philadelphia Cultural Alliance.
“Arts and culture helps support our economy, unite our communities and educate our children, and, in return, the residents of the region have stepped up their support when we were most vulnerable,” said Tom Kaiden, Cultural Alliance President. “But while culture is highly valued, there are real challenges to non-profits.”
The 2011 Portfolio—supported by PNC—is an in-depth look at the area’s non-profit arts and cultural institutions, documenting a sector that draws 17 million visits annually, and employs a workforce of more than 24,000 staff and 38,000 volunteers.
“PNC understands the indelible mark that the arts and culture make in Southeastern Pennsylvania and the findings from this landmark report will continue to help business, civic and cultural leaders ensure a better future for this region,” said J. William Mills III, Regional President of PNC for Philadelphia and Southern New Jersey.
Several key themes emerged from the study:
During the recession, area residents bought more tickets and made more contributions to arts and cultural organizations. Between FY 2007 and FY 2009, Portfolio tracked increases in attendance (5%), personal giving (20%) and membership/subscriptions (8%). Overall, individuals are responsible for an increase of $47 million in earned and contributed revenues. This increase in support on the part of individual has been essential to keeping local arts organizations up and running during lean times.
Philadelphia’s nonprofit cultural and heritage organizations are an educational resource for the entire region. Last year, there were 34,000 visits by school groups to cultural organizations, and Portfolio organizations made nearly 3,000 visits to schools and classrooms.
Losses to investment portfolios, and cuts in corporate, foundation and government funding have pushed more of the area’s cultural organizations into the red. Excluding investment losses, revenues fell 12% for all arts and cultural organizations. When realized and unrealized investment and interest losses are factored in, total revenues fell 43%.
“The recession was very damaging. Cultural groups have been resourceful and are beginning to make up some of the losses, but it could take many years before their balance sheets fully recover” explained Nicholas Crosson, Cultural Alliance Research Analyst.
Other highlights of the report include:
Arts and culture continues to be a major regional employer. Among the total 405 Portfolio organizations, there are 24,000 employment positions, 20,000 of which are in artistic and programmatic areas -- employees who perform, teach, give tours, and work to preserve the cultural heritage of our region.
The recession forced cultural organizations to squeeze labor costs, and there was a drop (-2%) in full time equivalent (FTE) hours worked, even though the number of events grew slightly (1%).
In addition to paid staff, volunteers are a critical asset for the industry. The total number of volunteer and board positions (38,000) outnumbers total employment positions (24,000).
The arts remained affordable with the median price of admission holding at $15, less than one third of the median cost of production ($48).
There are almost 17 million visits to cultural organizations each year. This is equivalent to more than 4 visits for every resident of Southeastern Pennsylvania.
More than half of all visit (52%) are free. History organizations saw the highest level of attendance and the largest number of free visits.
Memberships and subscriptions totaled more than 740,000, and increased by 8% between FY 2007 and FY 2009.
Driven largely by declines in investments and interest, earned income dropped 62%. Excluding the category of investments and interest, earned income remained relatively stable (-1%). Contributed income fell 19% with reductions in government, corporate and foundation giving partially offset by an increase in individual giving.
Organizations deferred maintenance to keep the doors open. Expenditures on facilities-related categories, including major repairs, declined by 44%.
The sector continues to shift advertising and marketing activities online. Internet and web expenses increased across the board by 49%.
The 2011 Portfolio is based on detailed financial and organizational information reported by 405 cultural organizations to the Pennsylvania Cultural Data Project (CDP), a statewide data collection effort operated by The Pew Charitable Trusts. The figures presented in this report are for the most recent fiscal year available for each organization, in most cases FY 2009 or FY 2010.
In addition, recession trend analysis was used based on data collected from 276 organizations for FY 2007 to FY 2009. The complete list of organizations in the report is available at www.philaculture.org.
The CDP is a collaborative project of the Greater Philadelphia Cultural Alliance, the Greater Pittsburgh Arts Council, The Heinz Endowments, Pennsylvania Council on the Arts, The Pew Charitable Trusts, and William Penn Foundation. CDP was created to provide access to reliable data about the cultural sector in order to enhance both individual organizational capacity as well as the overall effectiveness of the nonprofit cultural community. Additional information on CDP is available at www.culturaldata.org. The 2011 Portfolio was made possible by The Pew Charitable Trusts, PNC, William Penn Foundation, and Dolfinger-McMahon Foundation.
The publication is available online at www.philaculture.org and printed copies are available upon request.
About the Greater Philadelphia Cultural Alliance
The Cultural Alliance’s work reflects these key principles: Arts and culture is an engine for economic growth. It has the power to elevate lives. It has the power to educate. We own it, as residents of the Greater Philadelphia region, because it comes from us. It helps individuals come together and grow as a community.
About PNC Arts Alive
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Individuals were the heroes of the region’s cultural sector during the recession. In an analysis of the region’s cultural activity from FY 2007 to FY 2009, the Cultural Alliance documented a 20% increase in individual giving and a 5% increase in attendance at area cultural nonprofits.