Business as usual?

June 10, 2009

Via SmArts and Culture
A New York and California based consulting firm called Helicon have produced a very interesting piece of research The Economic Recession’s Impact on Cultural Organizations in the Puget Sound in which they interviewed 28 arts and cultural organisations about the impact of the recession.
The impacts are summarised as follows:

Foresighted are most resilient
Focus and nimbleness are more important than size or discipline
Missions remain fixed
Significant financial losses
Endowments have dropped 20-35%
Corporate contributions down 20-50%
Foundations and individual giving down 10-25%
Programs are being curtailed and/or adjusted for more popular appeal

What I found most interesting though was that their research found that organisations fell into the following categories:

Proactive (about 25% of interview sample): These organizations are aggressive in dealing
with the recession, both short and long term. They have projected budget and program
scenarios across multiple years; they have examined every budget line item and made
surgical and strategic cuts; they are keeping their boards, staff and key stakeholders well
informed about the challenges and the choices they are making. The leaders of these
groups are creative, energetic, and nimble. Some report actually being energized by the
current situation, stimulated by the pressure to think in new ways.
Informed (roughly 60% of interview sample): These organizations are actively
addressing near-term challenges. They have reviewed and adjusted current year
budgets. They are tracking expenses and income more closely than in previous years.
They are not yet thinking about long-term impacts, waiting until Spring to see what
happens to ticket sales, contributions, touring engagements, and other revenue. These
groups appear to have less experience with scenario planning than the first group, and
less data on which to build those scenarios.
In denial (roughly 15% of interview sample): These organizations are living in the present
and operating “business as usual.” Some reported that they have not felt the economic
downturn yet and expect this year’s budget to resemble last year’s. Some appear so
distracted by day-to-day pressures that they have not considered the larger
environment and longer-term view.

I wonder how those response would compare to the Irish situation? Only 25% of organisations consulted are looking beyond the short and near term….More interesting information to consider at the Theatre Forum Annual Conference today and tomorrow.
There’s a summary of the research here (in pdf and powerpoint formats).