Data from NFF's 5th annual 'State of the Sector' survey reveals trends for the arts

FROM TC: Rebecca Thomas, VP of Strategy & Innovation for Nonprofit Finance Fund, emailed yesterday the just-released results of NFF's fifth annual State of the Sector survey. She wrote:

Of the nearly 6000 respondents, more than 900 were from the arts and culture sector. The data provides a wealth of information on operating and financial trends including: demand for programming, surpluses, liquidity, actions taken (and planned) in response to current challenges, board and funder engagement, and more. The arts-sector specific survey results are available in their entirety here. If you want to play around with the online data analyzer yourself, you can further filter by state, sector, operating expense and other dimensions with just a couple of clicks. A few of the highlights:

  • 31% of arts orgs ended FY12 with a deficit but 43% anticipate ending FY13 in the red
  • 64% reported increased program demand in 2012; 75% predict an increase this year
  • 40% of arts organizations reported some level of comfort talking to their funders about the need for reserves. This is 30% higher than for the entire nonprofit sector. Arts organizations, more than other sectors, also report greater comfort discussing with supporters cash flow, facilities and working capital needs.
  • Still, the sector remains split between the 'haves' and 'have nots': 60% of arts orgs reported having three months or less of cash on hand.
  • Only 37% of arts groups report regularly collecting data on the impact of their programs. This compares to 53% for all nonprofits nationally. 

Commentary: Arts orgs should make better use of the Cultural Data Project

Talia Gibas and Amanda Keil for, 3/5/13

For all of the predictions flying back and forth about what 2013 holds for the arts sector in the United States, one of the few things we can say with near-certainty is that 2013 will be a year of major transition for the Cultural Data Project (CDP). Our sector's largest-scale effort to quantify and streamline the "value" of arts across different regions, the CDP is breaking off from its original home at the Pew Charitable Trusts to become a separate nonprofit. The CDP has been a boon to research and advocacy efforts, but cultural organizations don't always hear about that work, or take full advantage of the CDP's resources. In 2012, the CDP conducted a survey of over 1,800 arts organizations charged with filling out a Data Profile every year. 68% of respondents had never read a report that includes CDP data...and more than 40% have never run an annual, trend, or comparison report. To some organizations, [the CDP] is simply a profile to complete in order to get a grant. To others, it is a resource that has been quite useful indeed. DanceWorks Chicago, for example, changed its entire accounting system to align with the format of the CDP. According to CEO Andreas B÷ttcher, many small organizations have little expertise in accounting, and until the advent of the CDP had no clear template to follow when setting up their books. Using the CDP was "onerous at first," he said, "but once you have it, you can build a business plan based on what you have to report." DanceWorks has also made use of comparison reports. B÷ttcher said they've shown funders, for example, that DanceWorks is one of only a few organizations of its size to offer health insurance to dancers. Comparison reports also affirmed other things the company was doing well, despite its relative youth: its 80 individual donors reflect a larger funding pool than those of comparable, older organizations, and its web-based donations are 300% higher.


Commentary: Nonprofits need open data to change the world

Lucy Bernholz for Harvard Business Review Blog Network, 3/14/13

Social sector organizations are in the business of changing the world, and the information they collect and use should be the catalyst for making that happen. They should be able to draw what they need about previous experiments, effective practices, and achieved outcomes, as well as what has failed and why. Here are two organizations doing just that: The Awesome Foundation enables funders on four continents to find great ideas to support. Open data was the key to scaling Awesome Foundation's core idea. Proposals are open, the process is easily copied, and local adaptation is encouraged. When you apply to one Awesome Foundation you do so knowing that other chapters may take an interest in your proposal, and that what you produce in Toronto will be shared with peers in Melbourne. CrisisCommons relies on open data to let others quickly learn from each other to reach people in immediate need. When the devastating earthquake hit Haiti in 2010 they had a ready-made network of project managers and techies all over the world. Within days the network organized lightweight mobile apps for crisis responders. The level of information-sharing that Awesome Foundation and CrisisCommons do is key to the organizations' ability to make a difference. But this is not the norm. Instead most organizations adopt an institutional replication model, where an organization focuses on reproducing the institution, not reusing the data. Most information organizations collect on their work never gets shared outside of their own staff meetings. Not because it's proprietary or scandalous, but because that's the way it was done in the pre-Internet, publish-it-once world. Nonprofits don't live in that world anymore, none of us do. If we're going to scale any of our efforts to solve social problems we've got to make much better use of the fastest scaling tool humans have ever built: open data.


Commentary: Using data to disrupt the status quo of the arts industry

Diane Ragsdale, blog Jumper, 3/24/13

A few years back Clay Lord interviewed me about the work on intrinsic impacts that Theatre Bay Area and Alan Brown were doing. At one point I said that I hoped their work could "help reframe the conversation about social value and about what it means to be a leading organization." I asked Clay: "Can we somehow use these new metrics to help us see the world [differently]? We need data that can help us see the field differently." Well, it would appear the Irvine Foundation has collected it. Moreover, armed with data and having gained a new understanding of the culture sector in its region, Irvine appears to be attempting to invert (or flatten?) the cultural hierarchy. Its new strategy is to fund organizations/programs that use hands-on participation to engage nontraditional audiences ahead of (or alongside?) organizations/programs designed primarily to provide passive entertainment for those already inclined to participate. Understandably, this shift has been a bit of a jolt to the cultural sector of the region. The critical response is telling. Irvine's new strategy is backed by solid research. So, what's the problem? Irvine is disrupting the status quo. The reason it's difficult for even incredibly worthy newcomers to rise in our sector is because incumbents continue to be privileged by the system. Over and over again we see rewards (fame, status, economic advantage) accruing to a small number of already established leading organizations. Even when foundations attempt to support diversity, somehow old, large, and largely white, professional institutions seem to benefit. When philanthropists give money to flagship resident theaters to do black plays instead of giving money to small black theaters to simply stay in business they may do so in a sincere attempt to encourage diversity in largely white theaters but what they legitimize is not "diversity" but rather "white theaters." Let's stop talking about diversity and talk instead about equality.  

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