Greater Philadelphia Cultural Alliance

The Recession May Be Over, But Its Impact on Cultural Organizations Has Just Begun

The Recession May Be Over,
But Its Impact on Cultural Organizations Has Just Begun

FOR IMMEDIATE RELEASE
October 16, 2009
Greater Philadelphia Cultural Alliance
1616 Walnut Street, Suite 600
Philadelphia, PA 19103

Contact:
John McInerney
johnm@philaculture.org
215-399-3515

Philadelphia, PA – On September 14, the Dow Jones Industrial Average closed above 10,000, prompting some to declare, “The recession is over.”  While this may be true in the broader economy, greater Philadelphia’s cultural sector is just beginning to feel the full impact of the downturn. 

Cultural organizations are being particularly hard hit, because as non-profits they depend on contributions for more than half of their income.  So while ticket sales and admissions are holding steady, steep declines in philanthropy and investment income are clobbering the bottom line. 

In response, cultural organizations are drawing their belts ever-tighter in an effort to further reduce costs while maintaining the quality of their public programs.  As one local leader noted, “Agility and ability to lead change are vital skills right now, not just in our institution but within our local arts landscape.”

According to TempCheck, a periodic survey released today by the Greater Philadelphia Cultural Alliance, the trends over the past six months clearly indicate that while attendance remains strong, the lag effect of the economy is taking its toll on other forms of government, foundation and corporate support which are essential to keeping the arts accessible to all.

“In my thirty-five years, I’ve never seen it so tough,”said Peggy Amsterdam, President of the Greater Philadelphia Cultural Alliance.  “Arts organizations are doing everything they can to keep the doors open.  Thankfully, we’re not having to deal with an arts tax too.  That would have been the straw that broke the camel’s back.”

Findings of the most recent TempCheck survey include:

The Good News
•    One in four (26%) organizations report increased single ticket sales, up from 23% in April, 2009.
•    Nearly one in three (31%) organizations reports an increase in subscriptions and memberships, up from 20% in April.  
•    Contributions from individuals are trending slightly higher with 32% of organizations reporting increases, up from 30% in April.

The Bad News
•    Almost half (49%) of organizations report a drop in government support, compared to just 38% in April.
•    Thirty-six percent of organizations report decreases in foundation support, compared to only 24% in April.
•    Corporate support continues to decline, with 37% of organizations reporting decreases, compared to 34% in April
•    Thirty-eight percent of organizations report a loss in investments and other earned income. 

How Organizations are Responding
•    Forty percent of organizations have reduced their staff size or hours, almost double what was reported in April (23%).
•    More organizations are decreasing programming to lower costs (30% now compared to 13% in April). 
•    Half of all organizations (51%) are producing programs with lower budgets, compared to 42% in April
•    49% are altering programming to cut costs, compared to just 28% in April.
•    One-third of all organizations are reducing their marketing budgets, up from 27% in April. 

The Financial Outlook
•    Forty-three percent of organizations surveyed ended the most recent fiscal year in deficit. 
•    Similarly, 43% of organizations expect a deficit in the coming year, compared to just 34% in April.
•    Many organizations also lack reserves to carry them through additional “rainy days.”  More than one in four (28%) have less than one month of cash available, compared to 18% in April.

These results reflect the experience of ninety-nine 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 is fielding TempCheck on a regular basis to measure shifts over time.  A full copy of the finding is available at more results, including information about how the impact of the recession differs among various types of cultural organizations, click here

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

 

Philadelphia, PA – On September 14, the Dow Jones Industrial Average closed above 10,000, prompting some to declare, “The recession is over.” While this may be true in the broader economy, greater Philadelphia’s cultural sector is just beginning to feel the full impact of the downturn.

Cultural organizations are being particularly hard hit, because as non-profits they depend on contributions for more than half of their income. So while ticket sales and admissions are holding steady, steep declines in philanthropy and investment income are clobbering the bottom line.

In response, cultural organizations are drawing their belts ever-tighter in an effort to further reduce costs while maintaining the quality of their public programs. As one local leader noted, “Agility and ability to lead change are vital skills right now, not just in our institution but within our local arts landscape.”

According to TempCheck, a periodic survey released today by the Greater Philadelphia Cultural Alliance, the trends over the past six months clearly indicate that while attendance remains strong, the lag effect of the economy is taking its toll on other forms of government, foundation and corporate support which are essential to keeping the arts accessible to all.

“In my thirty-five years, I’ve never seen it so tough,”said Peggy Amsterdam, President of the Greater Philadelphia Cultural Alliance. “Arts organizations are doing everything they can to keep the doors open. Thankfully, we’re not having to deal with an arts tax too. That would have been the straw that broke the camel’s back.”