A new report prepared by SMU DataArts for the New York City Department of Cultural Affairs surveyed the impact of COVID-19 on arts and culture nonprofits in the city, and its findings are grim. Based on financial, staffing, and programmatic data self-reported by 810 respondents between April 24 and May 8, the research notably found a discrepancy in impact between large organizations and smaller ones. Meanwhile, artists — many of whom hold part-time jobs to sustain their studio practices — have largely bore the brunt of staffing cuts brought on by the pandemic.
During a three-month period, nonprofits with budgets under $250,000 incurred losses relative to between 20% and 30% of annual revenue, and reported unanticipated expenses equivalent to about 20% of annual expenses. Larger organizations, on the other hand, incurred annual revenue losses of about 15% of annual operating revenue and unanticipated expenses equivalent to only roughly 2% of annual expenses. While 11% of organizations across the board said they do not think they will emerge from the crisis, smaller institutions and performing arts nonprofits reported the greatest likelihood of insolvency.
More than a quarter of respondents said they had reduced their staff, amounting to 15,149 people being laid off or furloughed at those organizations. And while staff cuts at museums and institutions have been in the headlines for months, the new report sheds light on one group of workers that has been particularly impacted: artists.
Some of the greatest reductions to artist staffing levels have been in arts education organizations, which reported cutting over 2,100 artists, or 78% of artist staffing. (In many museums, educators are often hired on a part-time or freelance basis, attracting artists who need to maintain flexible schedules but leaving them without benefits, protections, and structure; these findings amplify their already uncertain labor conditions.) Arts Education-focused organizations also income losses of about 18% of annual their operating revenue.
Unsurprisingly, attendance and admission revenue took a sharp dive: almost all respondents reported profound impacts in this area, totaling to an aggregate loss of 16,439,818 patrons or 35% of annual attendance. Performing arts organizations, reliant on ticket sales that disappeared almost overnight, attribute most of their revenue loss to the dip in admissions. They’re also among the least prepared of all categories of respondents to face the downturn, having enough liquidity to cover only 2.1 months of expenses, according to this report.
Community-based organizations — which provide arts and cultural programs to a specific community, such as local celebrations and folk arts programming — are suffering the most financial distress, topping impact levels on revenue loss, unanticipated expenses, and lowest working capital. The report also notes that a higher percentage of community orgs are located in “low resource areas,” defined as lower income neighborhoods with fewer cultural resources.
The authors of the SMU DataArts reports conclude that “the overall picture is dire.” The combined financial impact of revenue losses and unanticipated expenses of the more than 800 respondents totals about $550,000,000, and SMU DataArts predicts a deficit of 26% amid arts and culture organizations between March 2020 and February 2021.
It also urges the sector to address the “disparate impact faced by certain communities,” warning of a threat to diversity in the arts.
“Whether the disproportionate health impact of COVID-19 on communities of color, fears of organization insolvency, or hiring and layoff decisions making staff at institutions less diverse, our sector, policy-makers, and all those who contribute to the vibrant arts and culture scene in New York City must come together to protect the sector and give it a chance to thrive in a post-COVID-19 world,” the report reads.
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