Boeg/shutterstock
Boeg/shutterstock

Just how dire is the state of finance and fundraising for the performing arts?

Here’s how some of the respondents to Inside Philanthropy’s recent national survey described the cumulative impact of COVID-19 on the performing arts sector: “Hollowed out.” “Suffering.” “Financial havoc.” “The whole system is broken.” “Existential crisis.”

These chilling responses emerged in a larger poll of philanthropy professionals conducted by IP last month—including development officers, foundation reps, donors and consultants—to get a handle on their current priorities and challenges. (Check out all of our coverage of IP’s recent philanthropy surveys here).

A total of 187 respondents work in the performing arts, a sector that’s been devastated by the pandemic, as we’ve often reported. Seven months into the coronavirus crisis, countless organizations are on life support. In mid-September, Dr. Anthony Fauci said a vaccine would need to exist for at least a year before people could sit in a theater without a mask. And it’s clear organizations can’t count on substantial government assistance.

“The loss of revenue from the cancelation of ticketed performing arts events has been devastating,” said one fundraiser. “The transactional nature of our donors has resulted in a virtually total loss in sustaining donations from our patrons. While we have reduced expenses by 94% without local community support, we are in danger of becoming insolvent.”

It gets even worse. Unlike previous crises like the Great Recession, respondents aren’t sure funders will ride to the rescue. Many cited a widening gulf between their priorities and those of funders that have turned their attention to the era’s dominant issues of public health, food insecurity and racial justice.

“The arts and culture sector was greatly impacted by COVID shutdowns, and mandates for reduced capacity, but local philanthropic resources have been very focused on basic needs (food, shelter, social services), leaving arts and culture organizations to fend for themselves,” said another fundraiser.

Bottom line? The findings aren’t for the faint of heart. With that disclaimer out of the way, let’s dig into the data.

Organizations are “Losing Traction”

At 62%, a majority of the survey’s respondents from the performing arts sector identified themselves as “fundraisers,” while 16% identified themselves as a “foundation professional, corporate giving executive, or other philanthropic role.”

The Northeast had the greatest geographic representation, with 13.3% of respondents from the sector calling the region home, followed by the New York Tri-State area (12.8%), the Great Lakes (10.2%), Los Angeles/Southern California (10.2%), and the Southeast (8%).

A troubling 45% of respondents said they’ve noticed reduced funder interest and resources as a result of the current shifting of funds for COVID and racial justice, and 14% said the same is true as a result of a gradual trend over the years. Nineteen percent said interest and funding levels were about the same, and 25% reported gaining momentum through more funder interest and resources. (Respondents were able to select multiple entries.)

One donor summed up why so many performing arts organizations are running in place or falling behind: “During these times, the arts are taking a back seat to the pressing issues of nourishment, housing, justice and peace.”

Top Trends and Waning Funder Influence

The survey asked respondents to cite the two or three most important trends in the field. Below is a sampling of responses from those who work in the performing arts:

  • Virtual programming, including “how to create an atmosphere for patrons to pay for high quality arts content,” according to a fundraiser.
  • Calls for institutional funders to boost support to mid-sized arts organizations and BIPOC-led organizations.
  • The need for funders to maintain COVID-era levels of general operational support.
  • “Emerging artistic development” pathways that address “the gap years between training and career launch.”
  • Education and activities for children. “School closures additionally limit our music in-school programs,” said one fundraiser. “All of this in turn impacts specified funders in those areas.”

Meanwhile, 25% of respondents said “new wealth funders are exerting influence on my issues.” In contrast, 42% said these funders were not having “much influence on my issues,” while 30% said they were “not sure.”

“Limited wealthy donors continue to support, but the big gifts tend to go toward direct service,” said a fundraiser. “Seems like the status quo in our field in terms of who is giving, and some are maintaining while giving generously to urgent things like the elections.”

Democratizing Philanthropy, Racial Justice and Collaboration

The survey asked respondents from the performing arts sector to reflect on funders’ progress in addressing three key issues—democratizing philanthropy, ramping up support for racial justice, and working more closely with grant recipients.

On the first issue, the survey asked respondents to agree or disagree with the statement, “Some say there is a trend toward democratization of philanthropy, exemplified by such things as more diversity among decision makers, more influence on grantmaking priorities from the field, and more instances of participatory grantmaking practices.”

While most respondents from the performing arts sector agreed with the premise, only 10% said there is “truly a growing trend towards more democratization of philanthropy with more and more examples that can be documented.” Forty percent said “there are some good examples of democratization in philanthropy, but it is likely a trend that will happen very slowly over time.”

Half of respondents in the performing arts said that “most philanthropic professionals have come to believe that racial justice is important for the sector to confront and address, but most believe that not every foundation has a mission such that it makes sense to take on racial justice.” One such professional argued that “most philanthropic professionals still don’t grasp the concept of racial justice and intersectionality, etc., and are unable to fully see or be knowledgeable enough to integrate it into their mission.”

Thirty-eight percent of respondents in the performing arts field said “funder collaboration is increasing,” while 60% said collaboration is decreasing or about the same. Of this group, 33% said funder collaboration is “about the same, with not enough” collaboration. “I have seen major donors pull funding out of projects after months of work has been invested, leaving organizations/municipalities with major losses of staff time and investment,” said one nonprofit leader. “This has to stop, and they cannot change criteria mid-stream.”

Explaining the Disconnect

These numbers paint a bleak picture of a performing arts funding landscape that is contracting, in which funder collaboration is static or decreasing, and there’s little belief that the field is truly becoming more democratic.

To be fair, change doesn’t happen overnight in any philanthropic sector. And even the most strident pessimists need to acknowledge that many performing arts funders have stepped up heroically in the past seven months to keep organizations afloat. Nonetheless, the survey suggests real concern and dissatisfaction among many working in performing arts funding. Why is that?

Respondents posited multiple theories. One fundraiser pointed to a familiar refrain—funders’ inflexible adherence to grantmaking policies that favor large, well-resourced organizations. “Foundations want to fund organizations creating meaningful change in communities, but are unwilling to help fund new organizations led by BIPOC,” this respondent said. “Arcane and antiquated rules about budget size, operating on a deficit, and years of existence exclude deserving organizations that would be able to make meaningful changes.”

Meanwhile, another fundraiser noted that small performing arts organizations were being “lost in the shuffle” as “emergent social issues” take prominence. “This is understandable but lamentable,” the fundraiser said. “Small performing arts groups can be the ‘voice’ for many different issues and the needs of people in communities that might not have any other way to be heard.”

To this fundraiser’s point, for years, advocates have argued that the arts can complement an array of funder priorities. A foundation’s decision to fund a racial justice organization versus a performing arts organization isn’t a stark either/or proposition. Yet a closer look at respondent comments suggests that this correlation has yet to reach critical mass across the funder community.

“With such a heavy focus on basic human needs, I don’t think funders realize how critical the arts are to local economies, children’s education, racial equity work, and the mental health of the country,” said another fundraiser. One consultant made a similar point, saying, “Social justice and equity is hugely important, and reparations should be addressed. But moving limited resources from one sector to another is a losing game.”

“Light Those Small Torches”

In the long term, 59% of respondents said “the current economic downturn and long-term effects of a recession on populations with the greatest need” will have the “most pronounced effect” on nonprofit fundraising, followed by “the changing priorities of the philanthropic sector as it moves more resources toward justice and equity issues” (31%), and “the continued shrinking of government funding for social programs” (21%).

While most respondents from the performing arts field shared in a collective dread, they had differing ideas on what issues philanthropy should focus on moving forward.

The survey listed a menu of funding strategies and asked respondents to select those that most merit increasing attention and commitment from the philanthropic sector. Centering racial justice was the most popular strategy (33% of respondents), followed by public/private partnerships (30%), new funder/legacy funder coordination (29%), impact investing (28%), and coordinated campaigns to get billionaires to give more (28%).

Note that a majority of respondents did not agree on one strategy that warrants further investment, with only a third supporting the leading option. Similarly, prodding billionaires to dig deeper was the fifth most popular strategy. But some comments reveal a harsh rejection of this approach. “Too much lip service is being paid to billionaire philanthropists,” said a fundraiser. “The system that created these people is corrupt and they should not be celebrated.”

In other words, respondents told us what everyone already knew: There’s no clear solution for what ails the sector.

We’ve now come to the point in the post where I might ordinarily conclude with an optimistic quote from a respondent who believes philanthropy will pull the performing arts back from the brink. Unfortunately, I couldn’t find a single quote that hinted at something resembling optimism.

And so the best I can do is pass along the following quote from a donor, which reads less like a hopeful statement and more of a command to fellow funders: “Large foundations, private citizens and other philanthropic professionals need to reach down and light those small torches that keep the arts affordable for the general public.”

Share with cohorts