A new study from SMU projects a loss of $6.8 billion to the U.S. economy – from the devastating effects of the pandemic on American museums, theaters, music ensembles and dance companies. Called “In It for the Long Haul,” the study is from SMU DataArts, the largest cultural database in America — created in collaboration with the arts and entertainment consulting firm, TRG Arts.
The nearly $7 billion dollar loss the study predicts may actually be an optimistic figure. It assumes most arts groups will start up again by October. Yet Charlotte St. Martin, president of the Broadway League – the industry trade group — has said the most optimistic prediction for Broadway to re-open is September.
Zannie Giraud Voss is the SMU professor who co-wrote the report with Jill Robinson, the CEO of TRG Arts. Voss says the benchmark used for cultural institutions starting up again was drawn from different arts service organizations that have been polling their members. And the difficulty is that re-opening dates are a moving target (“idiosyncratic,” the report says). They vary widely from art to art, state to state and even within art forms — with summer theater and music festivals, for instance, struggling to open sooner, while other culture centers are already experimenting with forms of limited access.
In Texas, Governor Greg Abbott released guidelines two weeks ago for “reopening” the state’s economy. Museums and libraries were the only non-profit cultural groups to be included for reopening — and many were caught unawares by the guidelines. But some, including the Tyler Museum of Art and the Museum of Biblical Art and the National Center for Jewish Art in Dallas, have now reopened. In contrast, all of the performing arts groups were left in the dark about what they should be doing.
Voss points to an analysis by Colleen Dillenscheider, the chief market engagement officer at the research and development company IMPACTS. Her website, Know Your Own Bone, argues that already, audience members have different expectations about when they might attend the arts again – based on different cultural facilities. Although museums may find it a nightmare figuring out how they can monitor a wandering, clustering, bathroom-attending crowd, Dillenscheider argues that it’s precisely the relative freedom of movement in museum galleries that appeals to visitors. It will draw them back sooner. In contrast, confining people to seats in enclosed spaces – the way theaters and concert halls do — this will be greeted with “lessened demand.”
But when it comes to the SMU study’s projections about the financial devastation that’s still to come — those grim statistics are based on historical precedent. “In It For The Long Haul” draws on the painful financial aftermath of the 2008 recession. The report concludes that nonprofits can expect attendance, subscriptions, working capital and corporate giving not to return to pre-pandemic levels. Ever.
The recession already left them “permanently scarred” says Voss. She believes this will happen again with our damaged economy. The average organization will suffer what amounts to a 12-month deficit, equivalent to 26 percent of its budget.
That’s an average figure. Other financial effects of the coronavirus will also be felt in the cultural economy: As with the serious imbalances in the layoffs, suffering and access to medical care in the wider economy, so too with arts groups. The economic downturn has hit African-American and poorer communities harder than the white middle class. Similarly, “culturally specific” arts organizations are “particularly at risk,” the study says. These are ones drawing on African-American, Latinx, Native American and Asian-American cultures and audiences. That’s because — like small businesses and minority companies unable to get federal loan assistance — these arts groups often have less access to available cash.
But “In It For The Long Haul” also lists tactics cultural groups are exploring now, tactics that may prove adaptive and fruitful — including new partnerships, online educational endeavors, finding ways to use the arts to reduce stress and, of course, all the creative digital efforts, tours, concerts from home, backstage looks and Zoom-based productions they’ve been trying out.
“Are they able to continue to have some presence with the public?” Voss asks of arts groups. “What’s really difficult is when organizations just kind of put out the ‘closed’ sign and cease communicating with their communities.”
Voss predicts those arts organizations may likely survive that have resources to draw on and can stay mentally and administratively flexible. But they also need to think beyond survival – to what their communities need, asking what unique benefits does this cultural organization provide? She points to focusing and uniting audience development, donor engagement, community outreach and educational resources in the effort.
“This is a time for taking a leadership role,” Voss says. “People are going to want to come together. And it’s really the communal nature of arts participation that can be a strength to communities.”
The difficulty, of course, is that it’s precisely that communal nature of the arts that’s been shut down.
“In It For the Long Haul” is the first of what will be a series of such reports from SMU DataArts and TRG Arts.
The full release:
SMU DataArts and TRG Arts Release Report on Critical Strategies and Stuctures for Cultural Organizations During and Post-COVID-19
May 18, 2020 (Dallas, TX) – SMU DataArts and TRG Arts today release a white paper aimed at helping arts and culture organizations consider key questions and variables as they plan for reopening and a post-COVID-19 future. Titled “In It for the Long Haul” and co-authored by Dr. Zannie Giraud Voss, director of SMU DataArts, and Jill Robinson, CEO of TRG Arts, the report synthesizes survey data with historical and projected financial data to estimate the pandemic’s effect on the nonprofit arts sector and identifies three critical propositions along with related prompting questions for organizations to consider. The report underscores that COVID-19 has created unprecedented challenges for arts and culture organizations and proposes specific steps that organizations can take to address the crisis so that they can orient themselves toward sustained action. Voss and Robinson stress that those cultural organizations who have the bandwidth to think beyond near-term survival have an opportunity to contemplate their core values, strengths, and purpose coming out of the crisis—and that such analysis and preparatory work is imperative for organizational and sector health. The report can be read and downloaded here.
“In It for the Long Haul” outlines a set of critical questions that Voss and Robinson propose as vital for organizations to consider in order to not only weather COVID-19, but to grow through the crisis. The researchers advocate for consideration of these questions to help shift energy away from desperation and defeat toward passion for communities that organizations were formed to serve. Topics addressed include financial projections for the next year, considering sources of strength related to core mission and values, management of personnel and revenue, community relevance, and audience development. Voss and Robinson provide analysis of each area, with the goal of catalyzing discussion among organization boards and staff.
To ground these conversations in the financial ramifications of COVID-19, the researchers have created estimates that draw on historical financial, operating, and attendance data as well as arts and cultural organizations’ reported COVID-19-related decisions and impact to date. Voss and Robinson estimate that the aggregate impact of COVID-19 on finances of U.S. nonprofit arts and cultural organizations with annual budgets over $50,000 is a net loss of $6.8 billion, equating to a deficit equivalent to 26% of expenses for the average organization. The predictions assist in considering longer-term macro effects of the current crisis on the field, while inviting conversations about the deficit level the average organization can reasonably expect.
To compile these estimates, Voss and Robinson worked with The Andrew W. Mellon Foundation, which facilitated contact with national service organizations for access to their member surveys. The organizations that provided data from their members include: Theatre Communications Group, Association of Art Museum Directors, Association of Performing Arts Professionals, the League of American Orchestras, Chamber Music America, The International Association of Blacks in Dance, and First Peoples Fund.
“Recent months have created a tremendously dynamic and hostile environment for arts organizations around the world,” said Voss, director of SMU DataArts. “The goal of this report is to help support the sector as organizations shift their thinking from the short-term crisis to their plan for reopening at an appropriate time, and to initiate conversations around reimagining, resilience, and adaptability. While planning for the future is a challenging undertaking for many organizations, it is now of even higher importance. The white paper presents context to help individual arts organizations and the field so that we can work to sustain a sector that is so crucial to the social fabric, health, vibrancy, and economic well-being of our society. We are here as a resource to help support organizations during this challenging time.”
“Arts and cultural leaders are facing so much fear and uncertainty, and I daresay grief, as they move through this crisis. But we see many of them moving through that now, resolving to use this experience to plan and imagine differently than ever before,” said Robinson, CEO of TRG Arts. “We’re inspired by that and believe that the insights provided in ‘The Long Haul’ provide a framework for the organizational change and thinking needed to revolutionize and evolve the sector’s future. Now is the time to believe and be bold.”
SMU DataArts is a national hub for data resources, analysis, and insights for the arts and culture sector. Through high quality data and evidence-based resources and insights, SMU DataArts works to empower arts and cultural leaders to help them overcome challenges and increase impact. Led by Zannie Voss, the research collective has released a number of groundbreaking research reports for the cultural sector, including the most recent publication Theatres at the Crossroads: Overcoming Downtrends & Protecting Your Organization Through Future Downturns. SMU DataArts also produces the Arts Vibrancy Index, which highlights the 40 most arts-vibrant communities in America.
TRG Arts (The Results Group for the Arts) is a data-driven international management consulting agency that teaches arts and cultural professionals a patron-based approach to increasing sustainable revenue, and provides aggregated arts consumer analytics and research tools to global communities and policy makers. TRG collects and analyzes live purchase and individual contribution data from hundreds of organizations free of charge through its COVID-19 Sector Benchmark Dashboard. TRG shares its crisis counsel and best practices through a free, weekly webinar series, TRG 30; on the TRG 30 Virtual Network on LinkedIn, where arts professionals gather and have their questions answered by TRG consultants; and on the TRG blog.
The report is the first report in a series that will be released over the next three months by SMU DataArts and collaborators. The next report—created in tandem with The Wallace Foundation—will explore the strategies employed by high-performing arts organizations and will be released in the coming weeks.
Please visit SMU DataArts’ website for more information and to read “In It for the Long Haul.”
About SMU DataArts
SMU DataArts, the National Center for Arts Research, is a joint project of the Meadows School of the Arts and Cox School of Business at Southern Methodist University. SMU DataArts compiles and analyzes data on arts organizations and their communities nationwide and develops reports on important issues in arts management and patronage. Its findings are available free of charge to arts leaders, funders, policymakers, researchers, and the general public. The vision of SMU DataArts is to build a national culture of data-driven decision-making for those who want to see the arts and culture sector thrive. Its mission is to empower arts and cultural leaders with high-quality data and evidence-based resources and insights that help them to overcome challenges and increase impact. To work toward these goals, SMU DataArts integrates data from its Cultural Data Profile, its partner TRG Arts, and other national and government sources such as Theatre Communications Group, the National Endowment for the Arts, the Census Bureau, and IRS 990s. Publications include white papers on culturally specific arts organizations, the egalitarian nature of the arts in America, gender equity in art museum directorships, and more. SMU DataArts also publishes reports on the health of the U.S. arts and cultural sector and the annual Arts Vibrancy Index, which highlights the 40 most arts-vibrant communities around the country. For more information, visit www.culturaldata.org.
About TRG Arts
TRG Arts is an international, data-driven change agency consulting with arts and cultural executive leaders, marketers, and fundraisers on a patron loyalty-based approach to increasing sustainable revenue. Experts in the arts sector for 25 years, TRG Arts has earned a reputation unsurpassed for achieving results and building successful business models for nonprofit and commercial arts and cultural organizations. TRG Arts is an industry pioneer in areas including audience loyalty development, membership and the subscription model, and dynamic pricing. TRG Arts believes in the transformative power of arts and culture, and that positive, profound change in the business model of arts organizations can lead to artistic innovation and the ability to inspire entire communities. Visit https://trgarts.com/
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