As Relief Funding Dwindles, Arts and Culture Seek New Revenue Sources
8-minute read
April 26, 2024; updated July 25, 2024
Through COVID-19 shutdowns, reopening, and ongoing adjustments to new audience behaviors, relief funding has been a bulwark for the cultural sector. Much of this funding – especially from federal sources – has already been awarded, with a few key re-granting programs winding down through 2026. In public forums and internal discussions, many are wondering what the revenue landscape for arts and culture will look like after that point. Is there a revenue engine emerging that might fill this gap?
To answer this question and others we analyzed data from FY 2019 to 2023 collected from 734 organizations through the Cultural Data Profile.
Key Findings
- Greater reliance on contributed revenue was especially pronounced through FY 2022, and remains a trend, with contributed revenue accounting for 53% of total operating revenue in FY 2023.
- Unrestricted Contributions rose by 6% in inflation-adjusted dollars over the five-year period. This rise was driven primarily by government funding, a trend especially pronounced for large organizations.
- On average, unrestricted contributions for BIPOC organizations in this study outpaced inflation by 54%. This growth was largely driven by increases in giving from institutional sources.
- Among major private support stakeholder groups, only foundation support increased above inflation, on average. This was the case for organizations of every ilk.
- Earned revenue is recovering, but has not caught up to inflation or fully rebounded in terms of the percentage of organizational expenses it covers.
Inflation is an important backdrop to these trends, as the power of each dollar raised has decreased over the last few years. While some funding sources appear to remain steady without accounting for inflation, factoring in rising prices reveals a decline in terms of the buying power provided to organizations. Experiences have also varied by organization budget size, and by whether the organization self identifies as having a mission rooted in Black, Indigenous, or People of Color communities (abbreviated as BIPOC in this analysis). We explore all these dynamics within this analysis.
Changing Revenue Composition
Total operating revenue in FY 2023 neared its return to pre-pandemic levels in inflation adjusted dollars, though its composition shifted. Organizations became – and remain – more dependent on contributed revenue for their survival.
Magnitude and Composition of Unrestricted Operating Revenue, 2019-2023
Earned revenue experienced an impressive recovery since FY 2021, but has not fully returned to its pre-pandemic levels, either as a percentage of overall revenue or in real terms accounting for inflation.
Investment revenue rose to 11% of total operating revenue in 2021, possibly due to many organizations’ decision to increase their endowment draws to offset earned revenue losses at a time when the S&P 500 generated impressive returns. The presence of investment revenue was widespread across organizations in the cohort, including the majority of medium and large organizations and roughly one-third of small organizations. Nearly half of BIPOC organizations reported investment revenue at least once during the five years.
Inflation represents an important aspect of this overall picture. Operating revenue was 16% higher in 2023 than in 2019 in nominal terms, but 3% lower once inflation is taken into account.
Shifts in Earned Revenue
Organizations experienced significant shakeups in earned revenue through this five-year period. Signs of recovery are visible as many sources of earned revenue approach or exceed 2019 levels, but no earned revenue sources have recovered to pre-pandemic levels when accounting for inflation.
Trends in Earned Revenue by Source, 2019-2023
Earned Revenue Sources Adjusted for Inflation
| Source | 2019 | 2023 | % Change | Inf. Adj. % Change |
| Single Ticket/Admission | $358,679 | $394,086 | 10% | -8% |
| Subscriber/Member Revenue | $302,287 | $96,290 | -68% | -73% |
| Education | $115,834 | $116,789 | 1% | -15% |
| Rentals | $115,500 | $87,264 | -24% | -37% |
| Concessions/Parking/Publications | $76,775 | $85,245 | 11% | -7% |
| Contracted Svcs/Touring Fees | $66,865 | $68,118 | 2% | -14% |
Ticket and Admissions sales, which served as the largest source of earned revenue for the average organization in the cohort, have bounced back since 2021, rebounding 10% higher in absolute dollars over time, and only 8% shy of their pre-pandemic levels in inflation-adjusted dollars. BIPOC organizations saw even more pronounced growth with single ticket/admissions revenue outpacing inflation by 7%.
A closer look at ticket prices and attendance, as detailed in the table below, reveals further insights into the driving factors behind this recovery. Attendance is down more than single ticket revenue, so we can infer that, overall, there’s more volume being sold towards the higher end of single ticket prices than the low end. This pattern is especially pronounced for for medium and large organizations. This is a reminder that inflation affects not just the spending power of the organizations but also the price sensitivity of many ticket buyers.
Ticket Prices and In-Person Attendance
| Small Organizations | 2019 | 2023 | % Change |
| Single ticket low price | $11.39 | $8.64 | -22% |
| Single ticket high price | $34.15 | $58.30 | 71% |
| In-person attendance | 16,091 | 15,229 | -5% |
| Single ticket/Admissions revenue | $20,254 | $20,771 | 3% |
| Medium Organizations | 2019 | 2023 | % Change |
| Single ticket low price | $12.65 | $11.20 | -11% |
| Single ticket high price | $51.94 | $77.38 | 49% |
| In-person attendance | 32,190 | 24,887 | -23% |
| Single ticket/Admissions revenue | $72,734 | $69,926 | -4% |
| Large Organizations | 2019 | 2023 | % Change |
| Single ticket low price | $9.87 | $9.86 | -2% |
| Single ticket high price | $73.01 | $91.02 | 25% |
| In-person attendance | 103,649 | 76,331 | -26% |
| Single ticket/Admissions revenue | $1,239,712 | $1,373,397 | 11% |
Previous research conducted on Chicago-area organizations showed that declines in attendance were most pronounced in theatres and other performing arts organizations, while museums and education organizations have fared slightly better. A number of studies confirm that the earlier organizations were able to resume in-person activity, the sooner their attendees and associated revenue returned.
Subscription and Membership revenue had been on a long downward trend heading into the pandemic. It has made an even slower recovery, showing indications of a permanent reduction. These trends hold constant across organization size.
Earned Revenue Mix Varies by Organization Size
The earned revenue mix of organizations in 2023 varies by budget size. Tickets and admissions play an important role across all budget sizes, but their prominence is most pronounced for large organizations. Education revenue plays a major role for small and medium organizations. Both rentals and contracts and tours play an increasingly important role as budget size decreases.
Contributed Revenue Saved Organizations, Largely Due to Government Funding
As we saw at the beginning of this article, contributed revenue has made up a consistently larger portion of organizations funding since 2021. Total contributed revenue growth exceeded inflation by 6% from 2019 to 2023, a growth of 26% in non-inflation adjusted dollars. The biggest source of that growth was government funding, with an additional increase in foundation support.
Unrestricted Contributed Revenue by Source, 2019-2023
An unprecedented level of federal relief funding fulfilled its intended purpose of keeping many organizations afloat during the pandemic and saving jobs in the arts. Government revenue supported an increasingly larger portion of the average organization’s expenses over the past four years, rising from 4% in 2019 up to 17% in 2021 and 2022 then down to 9% in 2023. The wind down of these relief programs is already evident in the data, and will continue as the last trickle of federal relief funding makes its way through local government re-granting programs, where funds are required to be disbursed by 2026.
This trend was consistent across organization size, though the relative importance of local, state, and federal funding sources varied across budget categories. Local and state funding consistently played a more important role for small organizations. The reverse is true for federal funding, which tends to support a lower percentage of expenses as organization size decreases Large organizations were the biggest beneficiaries of government support from programs such as the Small Business Administration’s Payroll Protection Program and Shuttered Venue Operating Grants. Federal grants supported 1% of their expenses in 2019, 13% in 2022, and 4% in 2023.
Foundation Support Outpaces Inflation
In terms of private sources, foundations increased their support while levels of support from all other sources remained steady or decreased slightly over the period in absolute dollars. However, taking inflation into account reveals that individual, trustee, and corporate support all declined over the five-year period in terms of real buying power provided to organizations. Donors may renew at the same dollar amount year after year without thinking much about the fact that those dollars don’t go as far during periods of higher inflation.
Private Funding Sources Adjusted for Inflation
| Source | 2019 | 2023 | % Change | Inf. Adj. % Change |
| Trustees | $63,705 | $60,565 | -5% | -20% |
| Other Individuals | $288,451 | $310,094 | 8% | -10% |
| Foundations | $102,270 | $155,830 | 52% | 28% |
| Corporations | $52,108 | $41,342 | -21% | -33% |
In contrast to findings reported by a smaller set of trend organizations early this year, growth in foundation giving was the experience for organizations of every size. In inflation adjusted dollars, foundation giving grew 27% for small orgs, 16% for medium, and 30% for large.
Institutional Support was Key for BIPOC Organizations
Individual and trustee giving did not keep pace with inflation for organizations of any mission focus across the five-year period, but this experience was especially pronounced for BIPOC organizations. For this group, giving from trustees and other individuals rose briefly starting in 2020 but had fallen below pre-pandemic levels by 2023.
The opposite was true for institutional funding. Organizations of all types saw triple digit growth in government support over the five-year period, with BIPOC organizations seeing a remarkable 285% increase in inflation adjusted dollars of total government support. Nevertheless, their average dollars received remained far lower than for their non-BIPOC peers. BIPOC organizations also saw especially pronounced increases in foundation giving, outpacing inflation by 76% from 2019 to 2023.
Private and Public Support Trends by Source, BIPOC Organizations 2019-2023
Private and Public Support Trends by Source, Non-BIPOC Organizations 2019-2023