Arts Alert: Arts are #1 Among Nonprofits Disrupted By Covid-19
Arts are #1 Among Nonprofits Disrupted By Covid-19
A new study from the Minnesota Council of Nonprofits states that among nonprofits, the Arts sector is #1 in the level of disruption caused by the Covid-19 crisis: Nonprofit Activity Areas Reporting the Highest Levels of Disruption:
3. Human Services
4. Public Society Benefit/Education
"On average arts organizations in Minnesota receive half of their total revenue through ticket sales and special events, and one-third from charitable giving (largely corporate giving). Social distancing and large group gatherings canceled to slow the viral spread leads to financial challengesand operational disruptions. Canceled special fundraising events have been another pain point for nonprofits. While revenue from special fundraising events only accounts for 9 percent of total average annual revenue across all nonprofits, for arts organizations it accounts for 16 percent. Arts organizations are not only financially impacted by the cancellation of live performances but also more impacted by the cancelation of special fundraising events.”
Even worse, arts organizations had the lowest reserves, with 29% saying they will exhibit financial distress in less than three months, and an additional 39% between three and six months from today. A full 68% of arts organizations will be in financial crisis within six months. Meanwhile, there are predictions that social distancing will prevent community and arts gatherings for a year or more. How many months can the nonprofit organization operate in the current environment before exhibiting financial distress?ARTS:29%: Less than three months from today39%: Between three and six months from today12%: Between seven and nine months from today18%: Ten months or longer
"Nonprofits experienced sudden, catastrophic earned revenue loss beginning in mid-March due to public event, class, and conference cancellations and discontinuation of income-generating direct services. Among those hardest hit were performing arts organizations and museums who rely on ticket sales for live performances and exhibits. While Payroll Protection Program forgivable loans provided temporary relief to many nonprofit employers, large parts of the nonprofit sector were left out. As an economic collapse layers on top of the public health crisis, it is clear that no single organization can confront this new climate alone, and the recovery will be grim for many nonprofits."