Since 2019, U.S. arts and cultural organizations have faced a global pandemic, inflationary pressures, shifting audience behaviors, and changes in public policy and government funding. To help navigate the increasingly complex challenges ahead, SMU DataArts analyzed trends based on financial data from 6,498 arts nonprofits that submitted a Cultural Data Profile between fiscal years 2019 and 2024.
The figures below reflect median values; while averages can be skewed by a few very large or small organizations, the median tells us what the “typical” organization is experiencing. Still, it’s important to note that conditions vary widely depending on organizational size, arts discipline, and geographic location. This analysis offers a baseline to help leaders understand where their experience aligns—or diverges—from broader trends.
The data shows that financial challenges are significant and growing as a majority of organizations are again seeing budget deficits. Arts nonprofits will need to take immediate action to minimize the impact on working capital and preserve critical programs and human capital.
Here are the key findings and their implications for the field.
Arts nonprofits’ revenue is down across all categories
Earned revenue, which includes income from ticket sales, memberships, tuition, and other programmatic offerings, has not kept pace with inflation but has gradually returned to pre-pandemic levels since 2022 as arts venues reopened. However, this trend reversed in 2024, when it declined 6% from the previous year.
Contributed revenue fell across all categories from 2023 to 2024. Government funding—which had already begun to decline following the end of pandemic relief programs—dropped by 26%. While that was anticipated, institutional grantmakers and individual donors also pulled back.
Foundation funding, which was stable between 2022 and 2023, declined 25% in 2024, falling below pre-pandemic levels. Giving from individuals, board members, and corporations all declined from 2023 to 2024 and are now also at or below 2019 levels. These declines to below pre-pandemic levels are particularly concerning because costs are now substantially higher than they were six years ago, due to inflation.
Facing revenue challenges, arts nonprofits cut expenses in 2024
In response to the declines in both earned and contributed revenue and in anticipation of future revenue uncertainty, arts nonprofits reduced spending in 2024. Median expenses fell by 8% from 2023—the first decline since 2021—as many organizations streamlined operations. The most significant cuts came in personnel, typically the largest expense category. After a period of rehiring and compensation improvements in a competitive job market, arts nonprofits reduced spending on personnel by 13%.
Budget deficits are once again widespread, reducing working capital
Working capital—calculated as current assets minus current liabilities—is a key indicator of short-term financial health. Before the pandemic, it was common for arts nonprofits to run small budget deficits or break even, making it difficult for them to build savings in the form of working capital to mitigate future disruptions. At the height of the pandemic, many were able to do so by reducing operations and receiving relief funds. In 2024, however, the median organization barely broke even. More than a quarter ran deficits of 10% or more in both 2023 and 2024.
One-third of arts nonprofits now report working capital equal to less than two months of expenses. That can leave organizations vulnerable to cash flow issues, especially when facing unexpected expenses or delayed funding disbursements. These conditions can restrict an organization’s ability to manage revenue risk, plan strategically, invest in new initiatives, and/or respond to community needs.
SMU DataArts will publish a full report on these national financial trends for arts nonprofits in July to explore shifts in individual revenue streams, changes in operations, and effects on field-wide financial health.
Navigating uncertainty
The type of action required to meet these financial challenges will be different for every organization. Arts nonprofits with more working capital have some time to make strategic changes. By contrast, those with depleted savings face immediate pressure to rethink strategies, structures, and sources of support. Strong budgeting practices, regular monitoring, and scenario planning are essential tools—especially in a time when few revenue streams can be considered fully reliable.
For many arts nonprofits, needed changes may involve:
- Realigning program offerings with community demand and audience capacity to pay. Follow your audience’s lead. For example, an organization might expand a popular fully funded education program, while eliminating programs where interest and support are declining.
- Reengaging reliable donors and leveraging board leadership. Enlist board members to reach out to top donors (especially if they have an existing relationship) to make a case for increased support.
- Exploring new funding sources or collaborative models with peer organizations, such as co-produced programs that open new funding streams or sharing administrative services and/or space. Formal collaborations, such as mergers, may make sense for some mission and culture-aligned organizations but require extensive strategic and financial planning.
- Rethinking staff structures to align with changing revenue realities. This could include anything from restructuring roles to downsizing.
Simply cutting costs may not lead to long-term sustainability, and organizations must be mindful that budget reductions can also reduce arts nonprofits’ revenue. Organizations experiencing financial strain must take decisive, informed action to restore stability and preserve mission-driven work.
Photo credit: yenwen via Getty Images
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