What We've Learned About Contributed Revenue

This week we are starting a series of unpacking findings from our inaugural NCAR Report into small manageable chunks. We are going to begin by looking at Contributed Revenue. This information can be found in various places within the report. However, a good place to start for those visually inclined is to visit the contributed revenue tab on our website. Click here to be taken directly to those data visualizations.

To generate insights essential to our mission, we started with questions. For contributed revenue, we asked "To what extent do unrestriced contributions cover expenses?" In order to answer this question, the formula we used to calculate these findings was Unrestricted Contributed Revenue/Total Expenses (before depreciation). In future reports, we will unpack total 'unrestricted contributed revenue' into its component parts and report out on them separately. For each of the 8 indices, we report:

This post is going to focus on the first component of the report, Averages. This is what we learned:

  • In 2012, the average arts and cultural organization paid for just over half of its cash expenses – 53% -- with unrestricted contributed funds, a figure that has changed little over the past 5 years regardless of annual shifts in the mix of organizations represented.

When looking at averages by arts and cultural sectors, we found that:

  • Community-based organizations (e.g., arts centers, folk arts organizations, community celebrations) cover 73% of their expenses with contributed funds whereas performing arts centers support only 42% of expenses with contributions.
  • Symphonies and theatre companies both support 51% of expenses with unrestricted contributed revenue; this figure is 60% for opera companies and ‘other’ museums.
  • Performing arts centers supported the lowest level of expenses with unrestricted contributed revenue as compared with other groups.
  • Symphonies and theatre companies brought in the same average level of unrestricted contributed revenue relative to expenses, as did opera companies and ‘other’ museums.
  • Community organizations brought in high unrestricted contributed support relative to expenses.
  • Organizations that self-classify as general performing arts supported the highest level of expenses with unrestricted contributed revenue compared to other groups in 2012. This was primarily due to one large organization in a capital campaign.​​

With respect to averages by organizational size, we found that:

  • Unrestricted contributed revenue tends to cover a lower proportion of expenses as size increases, while average program revenue per attendee increases substantially with size.
  • The larger the organization, the less the dollar of operating revenue attracted per dollar spent on artists and program-related personnel; said otherwise, the larger the organization, the more operating revenue goes to payment of program-related personnel.
  • Despite shifts in the mix of arts organizations that participate in the surveys over time, all sizes of arts organizations have been remarkably consistent in the portion of their total expenses supported by unrestricted contributed revenue. For small organizations it ranges from 61.5% to 65.5%, for medium organizations it ranges between 57.3% and 62.8% and large organizations consistently support between 51.5% and 54.7% of their total expenses with unrestricted contributed revenue.

Delving into geographic market clusters deserves a post all on its own. Next week we will share these insights.

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See you in data-land!