Giving Compass’ Take:
• Nonprofit arts organizations put in creative work to develop unique revenue structures that don’t rely solely on philanthropic capital.
• How can other nonprofit organizations employ blended financing tactics to achieve the same revenue?
Writing for Changing our World, Susan Raymond’s comprehensive white paper, ‘Creativity Takes Courage’ – Henri Matisse: A Briefing on Trends in Philanthropy and the Arts explores the economic and philanthropic underpinnings of nonprofit arts organizations in America. In a blog entry in onPhilanthropy on the topic, Raymond notes that:
“Despite rumors of its death, the arts, and the philanthropy that supports them, are alive and well across the nation — in part because the arts organizations, in comparison to other nonprofit sectors, have done a nearly unique job in developing surprisingly resilient revenue structures.”
So, what is this unique revenue structure of which she speaks? It seems that for arts organizations, “private direct and indirect contributions represent 43% of total revenue. Unlike other sectors, where the role of philanthropy can vary widely based on organization size, this 43% is fairly stable across organizational size. Whether an arts organization has $100,000 in assets or $50 million in assets, philanthropy is still the source of only about four of every 10 dollars in its revenue coffers. In turn, arts and culture organizations display surprising balance in their revenue structures, with about half of their revenues coming from earned income and about 11% from government, with the remaining philanthropic giving equally divided between foundations (corporate and independent) and individuals.”
While getting to this particular revenue mix may not be easy (in fact, Raymond suggests that arts organizations have been particularly creative and entrepreneurial in their efforts to achieve this mix), there seems to be a lesson here for other nonprofit organizations. Not unlike other investments, it appears that diversification is key.
Read the full article about funding and the arts by Caroline Heine at PhilanthroMedia.
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