Zannie Voss. Using Data to Foster Thriving Arts Organizations.

Transcription

1 Using Data to Foster Thriving Arts Organizations Zannie Voss Director, NCAR Professor and Chair of Arts Management and Arts Entrepreneurship Meadows School of the Arts & Cox School of Business

2 Using Data to Foster Thriving Arts Organizations NCAR + TACA DALLAS ARTS ORGANIZATIONS: A NATIONAL COMPARISON Zannie Voss Director, NCAR Professor and Chair of Arts Management and Arts Entrepreneurship Meadows School of the Arts & Cox School of Business

3 SMU National Center for Arts Research (NCAR) Advancing the arts through evidence-based knowledge Vision Statement To act as a catalyst for the transformation and sustainability of the national arts and cultural community Mission Statement To be the leading provider of evidence-based insights that enable arts and cultural leaders to overcome challenges and increase impact

4 Partners Indices & Dashboard Creation IRS 990 s on 40,000+ arts organizations 400+ theaters nationally Data 14,000+ arts & cultural organizations Strategy

5 Modeling the Arts & Culture Ecosystem Arts & Cultural Organizations Operating characteristics, Decisions & Outcomes Cultural Data Project Theatre Communications Group NCCS IRS 990s Community Arts Dollar Activity* Arts & Culture Providers* Other Leisure Activities Socioeconomic & Demographic characteristics Census Bureau Cultural Data Project Public Arts Funding* NEA IMLS NASAA Cultural Data Project *These form the basis of our Arts Vibrancy Index metrics

6 SMU National Center for Arts Research (NCAR) Advancing the arts through evidence-based knowledge Mission Statement To be the leading provider of evidence-based insights that enable arts and cultural leaders to overcome challenges and increase impact What are the Important Questions to Ask about Health & Impact? Contributed revenue Earned revenue Expenses Marketing Impact Bottom Line Balance Sheet Community Engagement Program Activity Staffing What outcomes should we examine in order to answer the questions? Do we have data on those outcomes?

7 Dallas County compared with all 3,144 U.S. counties

8 Dallas County compared with all 3,144 U.S. counties A ranking of 95 means Dallas County is in the top 5%. That means there are about 157 counties that rank higher. Dallas County, TX (95) (100=top market) Arts dollars ranking: 97 Arts providers ranking: 92 Government grant activity: 65 Program revenue: 97 Contributed revenue: 97 Total expenses: 97 Total compensation: 95 Arts organization employees: 96 Independent artists: 74 Arts & entertainment employees: 93 Arts organizations: 84 State government dollars: 21 State government number: 52 Federal government dollars: 82 Federal government number: 77

9 Dallas-Plano-Irving Metro Division MSAs are delineated geographic areas consisting of one or more counties that have high social and economic integration with an urban core. Focusing on MSAs captures the network of suburbs that rise up around a city. Where the OMB breaks down 11 very large MSAs (population cores of 2.5 million or more) into Metropolitan Divisions, we do the same. Metropolitan Divisions function as distinct social, economic, and cultural areas within the larger MSA, kind of like MSAs within MSAs. Our Metro Division is Dallas-Plano-Irving.

10 Dallas-Plano-Irving Metro Division compared with 937 U.S. MSAs and Metro Divisions Ranking of 91 means there are about 87 MSAs that rank higher. Dallas County, TX (95) (100=top market) Dallas-Plano-Irving (91) (100=top market) Arts dollars ranking: 97 Program revenue: 97 Contributed revenue: 97 Total expenses: 97 Total compensation: 95 Arts dollars ranking: 94 Program revenue: 93 Contributed revenue: 94 Total expenses: 94 Total compensation: 91 Arts providers ranking: 92 Arts organization employees: 96 Independent artists: 74 Arts & entertainment employees: 93 Arts organizations: 84 Arts providers ranking: 84 Arts organization employees: 94 Independent artists: 68 Arts & entertainment employees: 84 Arts organizations: 78 Government grant activity: 65 State government dollars: 21 State government number: 52 Federal government dollars: 82 Federal government number: 77 Government grant activity: 57 State government dollars: 20 State government number: 54 Federal government dollars: 75 Federal government number: 62

11 Market Clusters: 5 Individual Markets * Population: 1.5 million Ave. Expenses: $1.9 million S.F. L.A. Population: 10 million Ave. Expenses: $1.9 million Population: 7.3 million Ave. Expenses: $1.4 million Population: 14.1 million Ave. Expenses: $3.3 million New York DC Population: 4.6 million Ave. Expenses: $3.3 million The characteristics we chose for determining similar markets were population, density and size of arts and cultural organizations, state grant dollars in the market, and median income in the community. These 5 markets did not cluster with anyone else. *CDP Markets, only

12 Market Clusters: Other Large Markets *, Dallas, and Minneapolis/ St. Paul. 59.5% 38.3% Riverside Santa Ana San Diego Phoenix Dallas Atlanta Houston There is annual data on 401 organizations in, 40 in Dallas, and 345 total from the 7 Other Large Markets (an average of 49/market). *CDP Markets, only 7 Other Large Markets (ave. pop. 3.8 million) Dallas (pop. 4.4 million) (pop. 7.3 million)

13 Market Clusters: Other Large Markets *, Dallas, and Minneapolis/ St. Paul. $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 $39,086 $39,080 $40, % 38.3% Median Income Median Age Riverside Santa Ana San Diego Phoenix Dallas Atlanta Houston *CDP Markets, only 7 Other Large Markets (ave. pop. 3.8 million) Dallas (pop. 4.4 million) (pop. 7.3 million)

14 Market Clusters: Other Large Markets *, Dallas, and 25% 20% 15% 10% 5% Income Distribution, Education 22% 21% 22% 18% 17% 16% 10% 8% 7% 59.5% 38.3% Minneapolis/ St. Paul. 0% Percentage of households with median income >$200k Percentage of households in poverty Percentage of population with a bachelor's degree or higher Riverside Santa Ana San Diego Phoenix Dallas Atlanta Houston *CDP Markets, only 7 Other Large Markets (ave. pop. 3.8 million) Dallas (pop. 4.4 million) (pop. 7.3 million)

15 Market Clusters: Other Large Markets *, Dallas, and 35% 30% 25% 20% 15% 10% 5% 0% 8% 6% Percentage of the pop. Asian- American Ethnic/Cultural Diversity 8% 10% 20% 18% 59.5% Percentage of the pop. African- American 22% 34% 25% 38.3% Percentage of the pop. Hispanic/Latino Minneapolis/ St. Paul. Riverside Santa Ana San Diego Phoenix Dallas Atlanta Houston *CDP Markets, only 7 Other Large Markets (ave. pop. 3.8 million) Dallas (pop. 4.4 million) (pop. 7.3 million)

16 Market Clusters: Other Large Markets *, Dallas, and Millions 25% $3 20% $2 15% $2 10% $1 5% $1 0% $0 Average Income Organizational Distribution, Education Expenses & Revenues 22% 21% 22% $2.34$ % 17% 16% 10% $1.37 $1.36 8% $ % $1.12 7% $.86 $ % $.67 Percentage of households Ave. total with expenses median income (before >$200k depr.) Percentage of Ave. households unrestricted in contributed poverty revenue Percentage of population Ave. earned with a revenue bachelor's (before degree cap. Gains) or higher Minneapolis/ St. Paul. Distribution of Arts Organizations by Size Riverside Santa Ana San Diego Phoenix Large (over $1 million) Dallas Medium ($250,000 to $1 million) Houston Small (under $250,000) 100% 80% 60% 40% 20% 0% 28% 25% Atlanta 31% 29% 41% 46% Other Large Markets Dallas 14% 20% 66% *CDP Markets, only 7 Other Large Markets (ave. pop. 3.8 million) Dallas (pop. 4.4 million) (pop. 7.3 million)

17 To what extent do Earned Revenue and Unrestricted Contributed Revenue cover Total Expenses? 0% 20% 40% 60% 80% 100% Other Large Markets 48.0% 56.0% Dallas 38.3% 59.5% 48.6% 53.5% Earned revenue (less capital gains) Unrestricted contributed revenue Other Large Markets: Minneapolis, Atlanta, Houston, Phoenix, Riverside, San Diego, Anaheim-Irvine-Costa Mesa Dallas arts organizations support more expenses with contributed revenue and less expenses with earned revenue than arts organizations in Other Large Markets and.

18 To what extent do Earned Revenue and Unrestricted Contributed Revenue cover Total Expenses? 0% 20% 40% 60% 80% 100% Other Large Markets 48.0% 56.0% Dallas 38.3% 59.5% 48.6% 53.5% Earned revenue (less capital gains) Unrestricted contributed revenue Other Large Markets: Minneapolis, Atlanta, Houston, Phoenix, Riverside, San Diego, Anaheim-Irvine-Costa Mesa Dallas arts organizations support more expenses with contributed revenue and less expenses with earned revenue than arts organizations in Other Large Markets and.

19 To what extent do programmatic and nonprogrammatic earned revenue and capital gains cover expenses? 60% 50% 40% 48.0% 6.4% 9.1% 38.8% 3.8% 0.8% 48.6% 6.3% 6.0% 30% 20% 38.5% 34.4% 42.9% 10% 0% Other Large Markets Dallas Capital gains Non-programmatic (i.e., rentals, interest income, etc.) Program Revenue (i.e., all revenue earned because people participated in your programs) Dallas arts organizations support less expenses with each area of earned revenue than arts organizations in Other Large Markets and.

20 To what extent do programmatic and nonprogrammatic earned revenue and capital gains cover expenses? 60% 50% 40% 48.0% 6.4% 9.1% 38.8% 3.8% 0.8% 48.6% 6.3% 6.0% 30% 20% 38.5% 34.4% 42.9% 10% 0% 8.4% 12.4% 8.4% Other Large Markets Dallas Membership & Subscription Revenue Capital gains Non-programmatic (i.e., rentals, interest income, etc.) Program Revenue (i.e., all revenue earned because people participated in your programs) The opposite is true of membership/subscription revenue.

21 To what extent does unrestricted support from each of these sources cover expenses? Unrestricted contributions Trustees Individuals Corporations Foundations Government Special Events United Arts, Parent, and Related Org. Support In-kind NARTR 0% 10% 20% 30% 40% 50% 60% 4% 6% 4% 8% 7% 3% 7% 4% 2% 4% 4% 5% 6% 2% 5% 4% 3% 5% 3% 3% 3% 3% 14% 4% Other Large Markets Dallas 56.0% 59.5% 53.5% Dallas organizations tend to cover more of their expenses with trustee giving, united fund and related organization support than Other Large Markets or,... 21% 15% 19%

22 To what extent does unrestricted support from each of these sources cover expenses? Unrestricted contributions Trustees Individuals Corporations Foundations Government Special Events United Arts, Parent, and Related Org. Support In-kind NARTR 0% 10% 20% 30% 40% 50% 60% 4% 6% 4% 8% 7% 3% 7% 4% 2% 4% 4% 5% 6% 2% 5% 4% 3% 5% 3% 3% 3% 3% 14% 4% Other Large Markets Dallas 56.0% 59.5% 53.5% Dallas whereas organizations Other Large tend Markets to cover and more of cover their more expenses government with trustee support giving, and NARTR united than fund Dallas. and There was 1% related or less organization difference in individual, support than corporate, Other foundation, Large Markets special or event,, and in-kind... support. 21% 15% 19%

23 What percentage of Unrestricted Contributed Revenue comes from each Government source? 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% Local 3.2% 5.6% 6.0% State 0.5% 1.5% 3.2% NEA/IMLS 0.3% 0.6% 2.0% Other Large Markets Dallas Dallas arts organizations have comparatively less support from all levels of government, particularly local and state.

24 What is the Fundraising Return on Investment and Marketing Return on Investment *? $8.88 $9 $8.63 $8.49 Other Large Markets Dallas $8 $7 $6 $5 $4 $3 $7.12 $6.09 $3.68 $2 $1 $0 Return on Fundraising Return on Marketing *Return on marketing includes all revenue earned due to people participating in program activity. Return on Fundraising is very similar for organizations in Dallas and Other Large Markets and higher in these markets than in.

25 What is the Fundraising Return on Investment and Marketing Return on Investment *? $8.88 $9 $8.63 Non-personnel costs only $8.49 Other Large Markets Dallas $8 $7 $6 $5 $4 $7.12 $6.09 $4.34 $3.68 $6.21 $3 $2 $1 $2.90 Includes personnel costs $0 Return on Fundraising Return on Marketing *Return on marketing includes all revenue earned due to people participating in program activity. Return on Fundraising is very similar for organizations in Dallas and Other Large Markets and in Other Large Markets or higher, in these and they markets spend proportionally than in. less on marketing personnel. However, Dallas arts organizations earn less program revenue for every dollar spent on marketing than those

26 How much Marketing Investment does it take to bring in one person, and how much Program Revenue is earned per attendee? Dallas organizations spend twice as much to bring in each attendee than organizations in Other Large Markets or but they then earn more per attendee once someone attends. $0 $5 $10 $15 $20 $25 Other Large Markets $3.76 $16.35 Dallas $7.98 $23.19 $3.29 $19.28 Marketing Expenses per Attendee Program Revenue per Attendee

27 How much Marketing Investment does it take to bring in one person, and how much Program Revenue is earned per attendee? $0 $5 $10 $15 $20 $25 Other Large Markets $3.76 $12.59 $16.35 Dallas $7.98 $15.21 $23.19 $3.29 $15.99 $19.28 Marketing Expenses per Attendee Program Revenue per Attendee The Dallas result organizations is that spend organizations twice as much earn to more bring net in program each attendee revenue than per organizations attendee than in those Other in Large Markets Dallas, or which earn but more they than then organizations earn more per in attendee Other Large once Markets. someone attends.

28 How many people are engaged per offering and what is the amount of total unrestricted operating revenue generated per program offering? $28,636 $25, People per offering $18,788 Revenue per offering 286 Other Large Markets Dallas Organizations in Other Large Markets and engage twice as many people per programmatic offering than do organizations in Dallas. They also generate higher revenue per offering.

29 How much is the total cost of serving each person (not including virtual attendance)? $0 $10 $20 $30 $40 $50 $60 $70 $80 Other Large Markets $42.36 Dallas $67.27 $45.73 Dallas organizations spend 1/3 rd more in total on programming, fundraising, and general administrative expenses for every attendee than organizations in Other Large Markets and.

30 How much revenue is directly invested in programs, considering all direct costs related to programs and then only the costs of paying artists and program personnel? 80% 70% 60% 68.8% Investment in Program 50% 40% 58.6% 60.2 Investment in Program Personnel 30% 20% 10% 36.2% 53.0% 40.1% 0% Other Large Markets Dallas Dallas organizations spend more resources on program than those in Other Large Markets and. They invest much more in artists and program personnel.

31 What is the Bottom Line relative to Expenses? 8.0% 6.0% 4.0% 4.6% 6.0% 2.0% 0.0% 1.2% 0.3% -2.0% -4.0% -6.0% -1.4% -1.3% -2.0% -3.5% -8.0% -7.0% Other Large Markets Dallas Unrestricted net surplus/deficit Operating surplus/deficit (before depr.) Operating surplus/deficit (after depr.) Dallas organizations average a negative bottom line regardless of how it is calculated. The effect of depreciation expenses heavily impacts organizations in Other Large Markets and.

32 What is the Bottom Line relative to Expenses? 8.0% 6.0% 4.0% 4.6% 6.0% 2.0% 0.0% 1.2% 0.3% -2.0% -4.0% -6.0% -1.4% -1.3% -2.0% -3.5% -8.0% -7.0% Other Large Markets Dallas Unrestricted net surplus/deficit Operating surplus/deficit (before depr.) Operating surplus/deficit (after depr.) However, Small and Medium organizations in Dallas average a positive bottom line across all measures. Across all markets: 1) Small organizations ran a positive average bottom line, and 2) the larger the organization, the more likely it is to run a deficit.

33 How many months of working capital does the organization have? What is the relationship between its access to readily available cash and its annual budget? % % -5% % 13% % -5.0 Other Large Markets Dallas Months of Working Capital Months of Available Cash Dallas organizations have fewer months of working capital and access to available cash than organizations in Other Large Markets and.

34 SUMMARY OF KEY TAKE-AWAYS Dallas arts organizations in the CDP: Benefit from higher trustee giving and related organization (i.e. TACA) funding. Have lower public funding at every level and lower NARTR, so less funding given in a prior year for future activity. Generate higher return on fundraising than but lower return on marketing than either or Other Large Markets. Spend twice as much to bring in each attendee than organizations in or Other Large Markets and earn more per person once someone attends. organizations net more program revenue per person than other markets. Attract fewer people per offering and revenue per offering, and serve fewer people relative their budget size. Invest more of their budgets in program and program personnel. Struggle to break even, keep up with cash flow needs and maintain access to cash, especially large organizations.

35 FOOD FOR THOUGHT It is great to have TACA in Dallas. What could we imagine for the arts in the city if we had TACA funding AND strong public arts funding? The marketing nut is critical to crack. What are the opportunities for programming that is compelling to Hispanics/Latinos, African-Americans and Asian-Americans in our community? They are the majority. These areas presents big opportunities for growth.

36 Thank you!