Who Pays for the Arts?

Income for the Nonprofit Cultural Industry in New York City

Alliance for the Arts

2001, 36 pages. Alliance for the Arts, 330 West 42nd Street, Suite 1701, New York, NY 10036, 212-947-6340

Who Pays for the Arts? is a fascinating analysis of funding trends for 575 cultural institutions in New York City from 1995-1999. Although charts, graphs, and statistics fill the study, the information they present is explained clearly and simply.

Several interesting themes emerge from the data. One of the most intriguing is the vulnerability of small arts organizations, even in those years of relative prosperity and strong economic growth. Small organizations, defined as ones with annual operating budgets of less than $100,000, experienced a net loss of income equaling 12.1 percent, while all other arts organizations showed income increases.

Gains from the booming economy of the 1990s were reflected in the incomes of the largest organizations, which increased by 24 percent. Large and medium-sized organizations also experienced significant increases in income with an overall growth of 22 percent.

Another trend revealed by the study was the proportional decrease in government funding. Despite an increase of 20.6 percent in New York state funding, government funding as a whole decreased 2 percent during the same period. While this decrease sounds small, the effect on small organizations was dramatic. These groups experienced a net loss of 23 percent from government funding. Coupled with a 12 percent decrease in private contributions, the loss of government dollars resulted in a greater reliance on earned income.

While the analysis of government funding provided the most dramatic results, analysis of other income sources — earned income and private contributions — also revealed significant change in funding trends.

Earned income accounted for almost half of total operating income in 1999, increasing 30 percent between 1995 and 1999. The study divided this stream into admissions income and other earned income, such as space rentals, gift shops, parking, restaurants, publications, and memberships. Other earned income grew by an amazing 45 percent.

Private contributions, which equaled one third of total operating income, included income from individuals, foundations, corporations, and other sources. Donated income from individuals grew the fastest, increasing 33 percent and equaling 16 percent of the total income of all organizations surveyed. Visual arts organizations derived 43 percent of their income from private contributions.

Even though the data is not current, Who Pays for the Arts? provides an excellent template for studying the income streams of art organizations. While the study focused on New York, it can be helpful as a comparison or as a guide for creating studies in other regions. It provides insight into the successes and challenges of arts organizations and their quest for funding.

Cara Seitchek, Arts and Humanities Council of Montgomery County