Executive Summary

Aimed at helping arts and cultural organizations consider key questions and variables as they plan for reopening and a post-COVID-19 future, this report estimates the pandemic’s effect on the nonprofit arts sector and identifies three critical propositions and four prompting questions for consideration.

Our estimates draw on historical financial, operating, and attendance data, as well as reported near-term decisions and impact to date.[1] The estimated aggregate -$6.8 billion net effect of the COVID-19 crisis on the nonprofit arts and culture sector equates to a deficit equivalent to 26% of expenses for the average organization, over the course of a year.

This report underscores that COVID-19 has created unprecedented challenges and proposes specific steps that can be taken to address the crisis while orienting toward sustained action and resiliency. These steps reflect three propositions that any organization can develop and align in order to achieve success: its value proposition, revenue proposition, and people proposition. We argue that these steps have the potential to differentiate the organizations that not only weather the crisis but grow through it.

The report recommends that each organization consider these four questions:

• What might the next year look like? Organizations that evaluate clearly their fixed costs, adaptive capabilities, cash reserves, community ties, and relational capital will approach planning with greater odds of addressing positively their survival and revival.
• What is the source of our strength? What do we do that is most meaningful and relevant to the community? Organizations that shift focus outward to communities will build stronger ties for a post-COVID-19 revival. How an organization carries out its purpose should vary over time as it innovates in response to changing community needs.
• How will we manage our people and revenue propositions to confront the new reality? Engaging artists, staff and board members in scenario planning, experimenting with new ways of working, and innovating new ways to generate income will be required for growth.
• When our doors reopen, whom will we gather? Resilient organizations will be those whose work is meaningful to a sufficiently large segment of the local community that cares whether it exists. Reopening will be an opportunity to send a signal about the role the organization wants to play in the local community moving forward.

This white paper is designed to help organizations think through these questions to withstand the current and future challenges.

We are grateful to the Andrew W. Mellon Foundation for facilitating contact with the following national service organizations, which generously provided data from their member surveys: 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.

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