The Kenneth Rainin Foundation has released The Bay Area Arts and Culture Organizational Sustainability Survey (PDF). This report examines trends from 2019 to 2023, affirming the challenges and highlighting opportunities that theater, dance and performing arts organizations faced as they navigated pandemic recovery. The findings also shine a spotlight on micro-organizations with budgets under $60,000, which are an often overlooked yet vital piece of the region’s cultural fabric. The Foundation commissioned SMU DataArts, the National Center for Arts Research, to conduct the research.
Since completing this research in 2024, the Bay Area arts and culture sector has encountered new challenges due to policy and funding shifts under the current administration, including the termination of millions of dollars of grants from the National Endowment for the Arts, the National Endowment for the Humanities and the Institute of Museum and Library Services. Simultaneously, escalating attacks on diversity and inclusion efforts and historically underrepresented communities have also created instability for those committed to equity and social progress.
While these findings offer relevant insights into navigating the evolving funding landscape, today’s organizations must also contend with an intensified climate of political and cultural insecurity as they work to sustain their missions. We remain committed to learning from the field and using these and other emerging insights to inform relevant, responsive support.
What We Wanted To Know
As a funder, we recognize that we can better support the arts community when we understand the realities of the ecosystem. Data is a key part of the story. Anecdotally, we were hearing from our grantees about the difficulties they were facing balancing budgets, maintaining steady cash flow and increasing earned and contributed income. We also watched as beloved arts organizations closed, unable to sustain amid significant financial pressures. Federal funding had dried up, audiences were slow to return and we all felt the pressure of inflation as expenses increased steadily. The Arts Program wanted to see how the data might reflect what we were hearing from grantees about their experiences in recovering from the pandemic.
One of the first questions we asked was: what are the key financial and operating trends we should pay attention to? Are they pointing in a positive or negative direction? Understanding the patterns can help us identify where our support can make an impact in the community.
We wondered if there were meaningful differences amongst performing arts disciplines. Anecdotally, theaters seemed to be hit the hardest. Seasons were paused, programming was scaled back, and, in some cases, theaters closed permanently. We weren’t hearing about the same impacts in the dance field. Was this a bias in coverage or was dance better positioned to navigate the challenges?
We also wanted to better understand the challenges and opportunities impacting micro-organizations, representing 27% of the Foundation’s current arts grantees and a key part of the ecosystem in the Bay Area.
And finally, amid the multi-layered difficulties, we wanted to know: where are the bright spots in this long period of recovery? Artists continue to commit to being here and making work for their communities. Are there bright spots that we can celebrate and build upon?
To develop the report, SMU DataArts evaluated the financial and operational trends of Bay Area theater, dance and performing arts organizations using data from the Internal Revenue Service and Cultural Data Project, alongside a tailored survey.
Bay area organizations are increasing in-person attendance and program offerings, but earned revenue is still in a recovery state.
Five Key Findings From The Report
- Performing arts organizations face revenue challenges amid rising costs and a shifting funding landscape. Theaters saw the gap between expenses and revenue widen between 2022 and 2023. And while one of the most obvious contributors to the rise in expenses is inflation, it’s worth noting that values-aligned expenses—like a desire to provide living wages and offer pay equity—have major cost implications.
- The experiences of dance and theater groups are different. Dance organizations were better able to manage expense growth, reporting an 8% surplus in 2019, which allowed them to weather closures and pauses on programming. They were more successful at covering more of their expenses with earned income. By contrast, theater expenses outpaced revenue to a greater degree compared to other genres, creating heightened financial challenges.
- In person attendance rates and program offerings are increasing, but earned revenue is still in a recovery state. Expanded education offerings and free community programs were a primary driver for increased attendance.
- Replacing the unprecedented pandemic federal funding remains a challenge. Foundation support is the only revenue stream keeping up with inflation, while corporate and trustee support is at a five year low. Individual support has grown in numbers but is not matching inflation. If inflation declines, strong individual support will remain vital for sustaining nonprofits.
- Micro-organizations are nimble and demonstrate resilience by investing in their communities and artists. Despite facing significant financial challenges, including being largely left out of the federal pandemic relief funding, micro-organizations demonstrated resilience. They increased programs and attendance, maintained or grew their workforce and prioritized community engagement and mission-focused recovery, even as expenses outpaced revenue growth.
Bright Spots For Bay Area Performing Arts
Recovery, though slow, is progressing with earned revenue increasing and audiences returning. Performing arts groups are investing in their artists and workforce, building worker sustainability. We recognize the important role foundations play in helping maintain a diverse and stable revenue mix. The Rainin Foundation remains committed to supporting the Bay Area arts community through grant programs like the New & Experimental Works (NEW) Program and the Open Spaces Program.
We also want to be in conversation with organizations and artists navigating this critical time to understand:
- Are they finding new revenue streams?
- Are they experimenting with new ideas to close the gap between revenue and expenses?
- Where are the roadblocks and how might funders support overcoming them?
- How are federal policy shifts impacting them?
We welcome your feedback and ideas.
Finding a stable balance of revenue sources that exceeds expenses will be critical in the next few years.
How We Will Use The Data
The findings help us understand the context and challenges our grantees and the broader arts community face, enabling us to refine and implement programs that support micro- to mid-sized dance and theater organizations. Additionally, the data and research will help us to better design programs that address key pressure points. We know this work is best done in collaboration with community and funding peers. We share what we’ve learned with the field to advance our mutual efforts. By aligning our efforts to support strategies that build greater stability, we can continue contributing to the long-term vibrancy of the Bay Area’s performing arts sector.
