LACMA’s recent decision to end weekend film programs highlights the financial straits many arts organizations find themselves in. Deep into this recession, as many nonprofits face extraordinary financial challenges, there is some evidence that arts institutions – fine arts and performing arts – are more vulnerable to declining revenues when there is an economic downturn than are other areas of the nonprofit sector.
On July 24 at Charity Navigator, in a post about layoffs at nonprofits, Sandra Miniuti noted, “As previously discussed in this blog, arts charities often suffer worse than other types of nonprofits during a recession.” In just such a discussion on May 1, 2008, Emily Navarro wrote, “When the economy starts to turn sour, consumers cut back on their unnecessary expenses. Charitable donations in general are often the first to go when recession looms. Some donors will still open their wallets for charities helping the less fortunate, but what about those organizations whose missions are less humanitarian in nature, like arts organizations? Most donors would rather give their money to a food bank or homeless shelter than an opera or orchestra.”
Ten months ago, Mike Boehm wrote in the LA Times of the financial challenges confronting arts organizations. Speaking of music and dance companies, he suggested that attendance had declined in 2001 and never fully recovered; he spoke of dance as “the canary in the coal mine.” In contrast, he thought that museums “have had an easier ride,” though that’s not saying it hasn’t been bumpy.
On June 16, the Washington Post reported on two studies showing declining audiences for museums. (Hat tip to Charity Navigator again.) One study of eighth graders by the National Assessment of Educational Progress found that “the percentage of students who reported visiting an art museum, gallery, or exhibit with their class decreased from 22 percent in 1997 to 16 percent in 2008.” A study by the NEA found that fewer adults were visiting museums. “American audiences for the arts are getting older, and their numbers are declining, according to new research released today by the National Endowment for the Arts.”
On July 13, Barclays Wealth released the results of a survey of 500 high net worth investors in the United Kingdom and the United States. While overall giving among this group declined an average of two to three percent, the report revealed that three-quarters of those surveyed had not decreased their charitable giving; more than one in four had increased giving. “When asked where they would make cuts if the downturn continued, respondents identified luxury goods, eating out, holidays and travel and staff as more expendable than charitable giving.”
While this represented good news for philanthropy (if not for the restaurant and travel industries), not all philanthropic causes fared equally well. Health and medicine, children’s charities, and the environment rated highest – with commitments from individuals surveyed to do more in these areas.
In contrast to their commitment to humanitarian, environmental and social causes, high net worth individuals looked less favorably on religion, arts groups, and animal organizations: “The future is less certain for the traditional recipients of charitable donations, such as the arts and religious organizations.”
Finally, on July 22 two professors of management at UC Davis published a study of how tax incentives affect charitable contributions. The results revealed that donations to some types of charities are much more sensitive to levels of charitable deductions, than gifts to other types of charities. The study found that contributions related to health, human services, and public and social benefit – “charities that provide basic goods and services to humans” – were less likely to be affected by tax incentives, than were gifts related to private education, arts and culture, the environment, animals, and foreign affairs – “charities that appeal to higher human needs, animals, and the environment.”
This is relevant to our discussion insofar as it shows that donors are relatively less committed to the arts, come what may, than they are to social services and humanitarian causes. This represents more bad news (relative to some other areas of the nonprofit sector) for the arts – especially since donors may regard this as a time when urgent social needs are an even higher priority than usual.
I don’t have much to add except to note that the debate that LACMA’s recent announcement invited – about film as an art form and LACMA’s commitment to it – while vitally important, is only one data point in a misfortune of larger dimensions: many arts institutions are making painful cutbacks to their programs as revenues diminish.