The country’s nonprofit theatres are now firmly in the grip of the economic recession that has shaken the nation, according to Theatre Communications Group’s latest annual survey of nonprofit professional theatres. As theatres across the U.S. concentrate on surviving the economic down-turn and demonstrate a collective sophistication in the management skills necessary to weather the storm, they are paying for their survival in human and artistic terms—in the loss of full-time employment for artists, administrators and production/technical personnel; in scaled-back touring activity that erodes the theatres’ outreach efforts; and in reduced opportunities for developmental workshops and staged readings that are the source of new works for the American theatre.
The general slowdown reported by theatres in last year’s survey has become an out-and-out recession-defining reduction in economic activity in 1991. Although theatres were forced to curtail growth by cutting back expenses, earnings barely grew and growth in most categories of contributed income slowed significantly—or declined—causing half the field to end the season in a deficit position.
REPORT HIGHLIGHTS
* Half the nation’s theatres ended the year in the red, reporting operating deficits brought on by the recession and its impact on chronically fragile theatre economics.
* Eight theatres ceased operations in fiscal year 1991, bringing the five-year total to 25 closed theatres.
* Among a group of theatres studied over five years, expenses rose only slightly ahead of inflation, reflecting a year of no growth. Income failed either to cover expenses or keep pace with inflation.
* Curtailed production and performance activity, and increased ticket prices contributed to the first decline in attendance since the TCG survey began in 1973, reflecting the recession’s toll on the American entertainment dollar.
* Theatres expanded special productions and booked-in events, low-risk ways of generating box office revenue, but were forced to place artistic research and development on the back burner. thus raising serious concerns about the long-term development of the art form.
* Touring activity declined sharply, eroding the outreach of theatres to under-served audiences and remote communities that have little or no access to professional theatre.
* Box office income covered less than half of all expenses. The number of subscribers increased, but single-ticket sales declined, signifying little progress in developing new audiences for the theatre in the future.
* Theatres were able to maintain and increase their training and educational programs, in spite of other cutbacks.
* Compensation of artists, administrators and production/technical personnel increased, indicating improved salary levels. But the number of full-time and full-season employees decreased markedly as part-time and jobbed-in staff and artists rose, revealing that it is becoming increasingly difficult to earn a living in the American theatre.
* Grants and contributions rose faster than expenses, but not enough to close the earnings gap produced by a sluggish box office.
* Foundation grants outpaced growth in all other contribution sources, while corporations rallied somewhat from their poor showing the prior year.
* Contributions from individuals—traditionally the backbone of theatre support—failed to even keep pace with inflation in the face of the recession.
* Federal support from the National Endowment for the Arts remained essentially flat as the debate over the content of federally funded art continued.
* State arts agency grants to theatres declined in the face of widespread cuts in state arts appropriations.
SURVEY UNIVERSE: 1991 TOTALS FOR 181 THEATRES
The survey incorporates information from 184 nonprofit professional theatres situated in major metropolitan centers, rural communities, towns and suburbs across the United States. The participating theatres, representing 112 towns and cities in 42 states and the District of Columbia, embody the broad artistic, cultural and geographic range of the field. Together, these theatres played to a total audience of nearly 17 million during the 1990-91 season, including more than 956,000 season subscribers, and presented 48,695 performances of 2,277 productions.
The total number of actors, directors, designers, playwrights, and administrative and technical staff employed by the theatres was nearly 25,000. Budgets for the 184 participating theatres ranged in size from $52,600 to more than $10.3 million, representing a $337-million industry.
Nearly half the survey group—90 theatres—ended the season with operating deficits, with a year-end aggregate deficit of nearly $2.8 million, testifying to the effects of the recession on the chronically fragile economics of theatre.
Twenty-five TCG constituent and associate theatres have ceased operations in the five years of the study due to financial adversity and other hardships. Theatres closing in 1991 included Brass Tacks Theatre of Minneapolis, Long Island Stage of Huntington and Manhattan Punch Line. The Los Angeles Theatre Center, succumbing to long-standing economic pressures, closed its doors shortly following the end of fiscal 1991, representing the shuttering of one of the country’s largest and most active nonprofit resident theatres.
SAMPLE GROUP: FIVE-YEAR TRENDS FOR 56 THEATRES
A sample group of 56 theatres, comprising the largest sample group studied since the survey began, provides detailed information and a five-year trend analysis for this report, beginning with 1987. These sample theatres range in budget size from $761,000 to more than $10.3 million and, together, account for nearly two-thirds of the total financial activity of the 184-theatre survey universe.
Expenses grew 4.8 percent for the sample group in 1991—faster than income, but barely outpacing the 4.5 percent inflation rate for the year. Income, falling short of inflation for the first time in the last five years, rose only 3.4 percent over the previous year and failed to cover operating expenses. This gap accounted for a collective operating deficit of $2.5 million for the sample theatres at the end of the year.
Looking more closely, six sample theatres reported 1991 deficits in excess of $250,000 and four posted deficits in each of the five years studied. Twenty-eight of the sample theatres—half the group—ended the year with operating deficits, reversing the surplus position of the previous year and creating the largest collective operating deficit in the five years studied.
Expenses for the sample theatres grew 35.5 percent over the five years of the study while earned income increased by 32.5 percent and contributed income rose 38.1 percent. When adjusted for inflation over the same five-year period, however, expenses grew 13.2 percent, earned income increased 10.6 percent and contributed income registered a 15.3 percent increase.
ATTENDANCE
For the first time in the history of this survey, the 1990-91 season saw the total aggregate attendance at sample theatres drop slightly from the prior year, as all resident, booked-in and touring productions played to 3.6 percent fewer total audience members than the year before. This attendance decline was caused in part by a reduction in total performance and production activity.
Sample theatres produced slightly fewer main series productions (including mainstage and second stage productions), and the number of main series performances also dropped somewhat, as each sample theatre presented an average of 25 main series performances, down from 262 performances the prior year. Half of the 56 theatres in the sample group experienced individual drops in attendance and the total audience for main series performances shrank 3.3 percent from the prior year.
Special productions, such as annual holiday offerings and other non-subscription events, have surged in activity over the past five years, as theatres have offered more such productions than ever before. A total of 23 sample theatres produced such special productions in 1991, up from just 14 theatres five years ago. The number of performances of these events has nearly tripled during that period, and the attendance has grown by more than 85 percent as theatres have turned to popular productions of holiday classics such as A Christmas Carol, proven box office successes such as Driving Miss Daisy and revivals of successful productions from previous seasons, to maximize box office income with a minimum of risk.
As another response to the failing economy, sample theatres offered more booked-in events, hosting the touring work of outside arts groups. Because booked-in events are generally known quantities that have been previously produced elsewhere they do not represent a large drain on a theatre’s artistic and production staff, and are often considered a relatively safe way to net additional earned income during times the theatre would otherwise be dark. These factors caused the presentation of booked in events to be undertaken by 22 theatres in 1991, up from 16 theatres hosting such programs the year before, as 20 percent more performances of booked-in events were offered to an audience that grew by 31 percent.
As many theatres have been forced to postpone the development of new work in the face of economic stress over the past two years, offerings such as workshops and play readings did not fare well at all. The number of such ancillary activities and the audiences they serve have declined significantly in each of the past two years. Over the five-year period, these performances have declined more than 35 percent, raising serious concerns about the development of works in progress, support for writers and other creative artists, and the long-term development of the art form itself. For theatres not accustomed to regular touring, 1991 was not a year to undertake such a venture. The inherent expense and potential financial risk involved in tours were clearly deterrents as touring activity reached a five-year low. Even among those with touring experience, only 17 of the 56 sample theatres reported income from touring, down from 27 that toured the previous year. The number of touring performances was down more than 20 percent from the previous year, while the audience for these performances was reduced more than 23 percent. This decline significantly erodes the outreach of theatre to underserved audiences and far-flung communities that do not otherwise have access to professional theatre.
EARNINGS
Earned income—comprised predominantly of box office receipts supplemented by revenues from touring, educational programs, interest and dividends, endowment earnings and concessions—rose a mere 1.9 percent in 1991, significantly behind the 9 percent and 12.2 percent growth rates in the prior two years. This dismal showing is largely attributable to the slowest increase in box office earnings of the five years studied.
BOX OFFICE
Although rising ticket prices apparently offset the drop in attendance and the reduction in the number of performances, and even produced a 2.3 percent rise in box office income, 1991 showed by far the smallest growth in five years. As a result, box office income from subscriptions and single-ticket sales, representing four-fifths of all earnings sources, covered less than half of all expenses.
However, despite the sluggish box office, the total subscription audience for all resident productions grew slightly to reach a five-year high. Total subscribers to all series ranged from 900 to more than 45,000 and averaged 12,161 per theatre.
The increasingly sophisticated techniques employed by the marketing staffs of the sample theatres were sufficient to withstand the recession by actually strengthening the subscriber base at half the theatres in the group in 1991. Greater flexibility in season selection and creative packaging of mini-subscriptions and memberships wooed enough subscribers to result in a modest increase in subscription revenue. Still, subscription income, reflecting series-ticket price increases as well as the increased number of subscribers, fell short of yearly growth rates for the previous four years. In 1990, for example, subscription revenue had increased by 7.4 percent, well ahead of the 4.3 percent growth in 1991.
Although subscription sales remained reasonably strong considering the blighted economy, single ticket purchases did not live up to their potential, as many theatres—forced to cut marketing budgets—could not continue to place a growing emphasis on marketing to nonsubscribers and could not overcome the effect of the economy on individuals’ discretionary income. Single-ticket revenue, which grew at impressive rates in each of the first four years of the survey period, actually decreased by nearly one percent in 1991, another negative reverberation caused by the recession and programming cutbacks. This trend is of grave concern as subscribers age and theatres initially rely on single-ticket sales to develop a younger and more diverse audience for the future. Nevertheless, the recession spurred the widespread use of such creative marketing efforts as pay-what-you-can offers to recognize the recession’s toll on the American pocketbook.
As theatres balanced their need to raise ticket prices with ongoing efforts to maintain affordable theatregoing, subscription prices ranged from $4.00 to $42.00 per ticket to a mainstage production, with an average cost of $16.49, more than $1.00 higher than the 1990 average of $15.35. Single tickets to mainstage productions ranged from $5.00 to $42.00. The average single ticket cost an audience member $19.71 in 1991, up from the 1990 average of $18.13. While this price was still little more than half the average of $36.53 for a ticket to a Broadway show during the same season, as reported by the League of American Theatres and Producers, increases in pricing in the current recession environment—in addition to slightly reduced performance activity—may well have contributed to the drop in attendance.
OTHER EARNINGS
Income from touring activity decreased dramatically in 1991, registering a 33.5 percent loss from the previous year and representing a five-year low, due to the decline in the number of theatres touring, the reduced number of performances offered and the resulting shrinkage in admissions to the touring performances discussed earlier. Income from booked-in events, on the other hand, increased by nearly 10 percent, mirroring the soaring attendance and expanded performance activity.
Income from all combined training and educational programs—including theatre-operated conservatories and classes, humanities series and artists-in-the-schools programs—increased 11.5 percent in 1991, reaching a five-year high. While no new training programs were established in 1991, three more theatres reported revenue from educational outreach programs than in the previous year, despite earlier fears that the recession would seriously impede the theatres’ ability to continue this type of activity.
Among the 56 sample theatres, 33 have established endowment funds, a figure that has remained constant since 1988, reflecting little new growth in the number of theatres developing capital funds with future earning potential. Nevertheless, the size of endowment fund balances has grown considerably in the five years studied. In 1991, fund balances ranged from $2,000 to $19.3 million with a median of $816,000. Endowment assets totaled $71.5 million, nearly double the $36.9 million aggregate endowment fund balances reported by the sample theatres five years ago. The Guthrie Theater’s $25-million fundraising campaign, completed after the close of the survey year, included $18.1 million for a new endowment fund. When combined with its existing endowment, the Minneapolis-based theatre’s total endowment is more than $22 million, making it the largest theatre endowment in the country.
One-third of the 33 theatres with endowments reinvested all endowment earnings in 1991, either by board election or donor mandate. Endowment earnings used for operating purposes by the others increased nearly 13 percent over the previous year, in spite of rapidly declining interest rates. Still, endowment earnings covered less than 2 percent of aggregate expenses, and only three theatres covered more than 5 percent of their operating expenses from endowment-generated earnings.
Interest and dividends earned on operating fund investments increased only 3.8 percent in 1991, falling below double-digit growth for the first time in five years, due largely to the decline in interest rates for short-term accounts throughout the year.
All other miscellaneous sources of earnings combined rose only 2.5 percent in 1991. Within this category, theatres reported a decrease in royalty income earned from subsequent stage, film, video and audio productions of works developed by sample theatres. Income from concessions, program advertising and rentals also dropped, due in part to a trend toward suspension of theatre-operated concession activities and program publication in favor of using outside vendors as a means of streamlining and reducing overhead expenses.
EXPENSES
Total operating expenses for the 56 sample theatres rose just 4.8 percent in the face of a 4.5 percent inflation rate, suggesting a no-growth situation in an art form that was already seriously undercapitalized. By comparison, operating budgets grew between 1.6 percent and 10.2 percent a year in the previous three years, causing the average operating budget of a sample theatre to increase from $2.8 million in 1987 to $3.8 million today. More than 30 percent of the sample group—primarily theatres located in the economically hard-hit northeast—were forced to reduce their operating budgets in 1991.
More than 60 percent of all theatre expenses continue to be devoted to compensation—of artists, administrative staffs, and production and technical personnel. Despite cutbacks in performance activity to reduce running costs and the theatres, struggles to balance their budgets in 1991, total salaries, fees, royalties and fringe benefits grew by 7.7 percent over the previous year, well beyond the inflation rate of 4.5 percent and slightly better than the prior year’s 7.5 percent growth.
The TCG survey categorizes theatre personnel in three main areas: artistic, production/technical and administrative. In each category, the number of full-time or seasonal employees decreased in 1991 from the prior year while the number of part-time or jobbed-in staff and artists increased. This shift in staffing and company patterns is indicative of institutional downsizing necessitated by the recession. While salary increases accompanied by reduced staffing suggest real gains in individual salary levels, they are also reflective of the actual loss of full-time jobs in the field due to economic hardship.
Most notably, sample theatres cited a particularly large 15 percent reduction in the number of seasonal actors on contract and a concomitant increase in jobbed-in performers, causing actor work weeks to drop slightly. (According to Actors’ Equity Association, actor work weeks under the LORT contract used by many of the sample theatres have shown a continuing drop since 1987.)
Expenses for salaries, fees, royalties and fringe benefits for artistic personnel—including playwrights, composers, actors, directors, designers, artistic directors and literary managers—rose just 4.4 percent, reflecting the curtailment of performance runs and loss of full-time positions.
Increasing somewhat more significantly were salary costs for production and technical employees, including carpenters, seamstresses, lighting technicians, properties artisans and stagehands, which rose 8.8 percent in spite of the drop in the number of full-time positions. In this category, the shift from full-time to a greater use of part-time workers indicates an increasing trend toward jobbing in labor for limited time periods.
Total compensation costs of the sample theatres for administrative employees—including managers, audience development professionals, fundraising staffs, business managers, box office and front-of-house staff-rose fastest, increasing 13.3 percent over the previous year. The number of full-time administrative jobs declined but many more part-time employees were brought on to staff telemarketing departments and other income-generating areas.
Despite many cases of theatres across the country furloughing employees and reducing the number of full-time staff members through attrition or layoffs, union contracts and other personnel factors dictated increases in fees and salaries in 1991 that had to be offset by cuts in other expense areas. In the face of skyrocketing increases in insurance premiums, occupancy costs and other fixed expenses, total non-personnel costs remained flat, showing virtually no increase over the prior year—a remarkable management feat, but one that will be difficult to sustain if the recession persists.
An examination of the sample theatres, spending patterns in 1991 reflects how much institutional stress was caused by the recession. This stress generated the need for an increase in income-producing jobs in fundraising and marketing departments, while the shift from full-time to part-time employees in artistic, administrative and technical areas indicates a restructuring of companies and staffs towards a leaner core with additional labor jobbed in when needed. This change in operation threatens to have a devastating impact on the labor pool for years to come, as artists, administrators and production/technical personnel find it increasingly difficult to make any kind of living in the theatre.
CONTRIBUTED INCOME
Grants and contributions grew 5.8 percent in 1991, ahead of the increase in expenses, but not enough to close the earnings gap.
Individual donors, corporations and foundations continued to be the three primary sources of contributed income, with foundations providing significantly more income than the previous year. Corporate support rallied somewhat from its poor showing last year, but theatres received a major jolt as contributions from individuals—historically the most steadily growing source of contributions—failed even to keep pace with inflation, reflecting another insidious effect of the recession. At the same time, combined support from all levels of government—federal, state and local—continued its downward spiral.
INDIVIDUALS
Although donations from individuals continue to be the largest and therefore most important source of contributions to theatres, this donor category showed a disappointing 3.5 percent increase over the previous year’s giving. If this trend is not reversed, it could have a potentially disastrous effect on theatres, which had achieved double-digit growth in individual giving for each of the prior two years. Recognizing the huge untapped potential from private donors, fundraising professionals have concentrated many resources in this area of solicitation. Some theatres have recently instituted sophisticated telefundraising, major gift campaigns and computerized donor database systems to maximize individual giving, and many are currently establishing planned giving programs for the first time. While these efforts have produced an increasing number of donors, the recession seems to have taken a serious toll on the average size of the annual gift.
More than 137,000 people made donations to the 56 sample theatres, up from the prior year’s total individual donor base of approximately 132,000, averaging more than 2,450 donors per theatre. But total giving dollars did not correspond to the rise in the number of donors, and the average gift fell slightly from $123.53 in 1990 to $122.92 in 1991. While increases in the amount of contributions from individuals were reported by 36 theatres in the sample group, decreases were reported by the other 20 theatres, the largest number of decreases reported in the last three years.
Individual giving to U.S. charitable organizations and philanthropic causes as a whole grew by 5.2 percent in calendar year 1990, according to Giving USA: The Annual Report on Philanthropy. Although this finding is slightly healthier than the growth in individual giving to theatres in 1990-91 (which overlaps the Giving USA report by six months), it, too, represents a reduction in growth from the prior year. The American Association of Fund-Raising Counsel, publisher of the report, attributes the relatively small overall increase to the recession, also citing a decline in the growth of personal income, brought on by a drop in real weekly earnings in the private sector and a rise in unemployment; a drop in stock market prices; and a decline in the population growth among people in the prime giving age—35 through 64.
CORPORATIONS
Corporate support remained the second largest source of contributions to sample theatres in 1991. After below-inflation growth the year before, and in spite of nearly half the 1991 sample theatres reporting decreases in corporate giving dollars, contributions from business sources came in 7.6 percent ahead of the prior year. Sample theatres also experienced an increase in the number of corporate gifts, which rose nearly 5 percent to 5,488 gifts in 1991, while the average size of a corporate donation rose substantially from $2,261 to $2,322.
AT&T, the Dayton-Hudson Corporation, Humana Inc. and U.S. West led the list of corporate donors in total giving dollars to all theatres participating in the 1991 survey, while AT&T and Dayton-Hudson far outdistanced the others in number of theatres supported.
Sample theatres fared better in terms of corporate giving than the entire nonprofit sector which, according to Giving USA, registered an increase of only 5.4 percent. The report cites a drop in the rate of profits for the nation’s corporations as a factor in the virtual stagnation in business donations; a continuation of mergers and acquisitions activity; layoffs resulting in a smaller employee pool for matching gift programs; continued hardship in the energy, finance and real estate industries-and, of course, the recession.
A recent Business Committee for the Arts survey of its member corporations found that 57 percent of the respondents decreased their corporate support to the arts from their 1990 level. The average drop was 11 percent and was attributed to the recession, a decrease in company earnings and a shift away from giving to the arts towards education and human services. Of those businesses surveyed, only 30 percent increased their support to the arts in 1991. Even though the corporate membership of the Business Committee for the Arts is more predisposed to arts giving than the overall national corporate community, the majority cut their 1991 arts budgets and predicted that their giving will not increase in the current year either.
FOUNDATIONS
Growth in foundation grant dollars outpaced growth among all major donors in 1991, as foundations increased their theatre support by 12.6 percent. In this second consecutive year of double-digit growth, foundations have almost caught up to the level of corporate largesse for the first time since 1984, when corporate philanthropy for the arts moved into the second position among contributed income sources.
Despite persistent fear that more and more foundations will have to divert funds previously earmarked for arts groups to help remedy such pressing social problems as homelessness, the AIDS crisis and the state of public education, theatres continue to fare particularly well from this source of support. In fact, sample theatres substantially exceeded the 8.1 percent national growth rate of foundation giving to all charitable organizations as reported by Giving USA.
Nearly three-fifths of the sample theatres reported increases in the dollar amount of their foundation support during 1991. Although the aggregate number of foundation grants to sample theatres decreased marginally, the average amount of a foundation grant rose from $14,504 in 1990 to $16,374 in 1991. These findings appear to reflect the continued philosophy in foundation philanthropy to maximize effectiveness by making fewer but larger gifts which tend to benefit the larger, more visible theatres, and those located in communities with a sizable number of private foundations. Indeed, 9 of the 56 theatres in the sample group—16 percent—received more than half the total foundation grant dollars reported, a reminder that aggregate statistics cannot be used to generalize about the entire field.
The Wallace Funds, including the Lila A. and DeWitt Wallace Fund for Lincoln Center and the Lila Wallace-Reader’s Digest Fund, led giving to TCG theatres nationwide with nearly $2.2 million in grants reported by 9 theatres participating in the overall survey universe. The Shubert Foundation, which gave nearly $1.4 million in grants reported by 55 participating theatres, was second, and other leading foundations supporting theatres in 1991 were the Pew Charitable Trusts, the Morris & Gwendolyn Cafritz Foundation, the W. Alton Jones Foundation, the Hewlett Foundation, the Andrew W. Mellon Foundation and the Ford Foundation.
FEDERAL GOVERNMENT
Federal support to sample theatres, primarily from the National Endowment for the Arts, rose just 1.5 percent in 1991—the smallest increase in the five years studied—and covered only 3.2 percent of theatre expenses, the lowest portion in a steadily declining support pattern over the past decade. After adjusting for special NEA Challenge grants received by 8 of the 56 sample theatres, the federal support picture is even worse, with regular NEA program grants falling by 2.3 percent, the second consecutive decrease and the lowest income from NEA program grants of the five-year period. Since 1987, sample theatres have collectively lost nearly 5 percent in NEA program funds. When adjusted for inflation, this loss is more than 20 percent.
Forty-seven of the fifty-six sample theatres received grants from the NEA’s Professional Theater Companies category, the primary delivery system for federal support to American theatres. Grants ranged from $5,000 to $295,000 in 1991, with an average grant of $81,894. While 11 of the sample theatres received increases over their previous year’s grant amounts and one was reinstated on the funding roster, 21 had their NEA funding cut.
The congressional appropriation to the National Endowment for the Arts in the 1990 federal fiscal year—reported as income by theatres in the 1991 TCG survey—remained essentially flat at $171.3 million. Within the agency, the Theater Program’s budget was $10.8 million, virtually the same as the previous year and equal to the program’s budget a decade earlier in 1981.
These statistics arise out of a turbulent climate, as recipients of NEA grants in 1991 were required to accept the terms and conditions of the infamous anti-obscenity ban enacted by Congress in 1990, and NEA chairman John Frohnmayer’s strict interpretation of it in the form of a signed pledge. Several theatres, including the New York Shakespeare Festival, Oregon Shakespeare Festival and Cornerstone Theater Company, refused their NEA grants rather than sign such an oath. Grants to four solo performers recommended by the Theater Panel were denied by the National Council on the Arts. The Bella Lewitzky Dance Company based in Los Angeles, New School for Social Research in New York and Newport Harbor Art Museum in California filed lawsuits against the Endowment, claiming the pledge violated the First and Fifth Amendments to the U.S. Constitution, which protect free speech and due process of law. Theatre Communications Group marshaled a group of 162 nonprofit theatres and 69 distinguished theatre artists to file an amicus curiae brief on behalf of the cases, which were later settled in favor of the plaintiff arts groups, ending one of the more notorious chapters in NEA history.
But a new controversy raged throughout 1991 as Congress grappled with reauthorization of the agency, a process that generally occurs every four or five years. Scrutiny of the agency’s administrative procedures and continued public debate over content restrictions on federally funded art, fueled by the fundraising strategies of lobbying groups representing the religious right, resulted in legislation that chipped away at NEA program funds to increase the share of federal pass-through funds to the more politically expedient state arts agencies.
The final 1991 reauthorization bill—a three-year bill that, in an unusual parliamentary move, was folded into the 1991 appropriations bill—replaced the anti-obscenity ban with vague language centering on “general standards of decency,” while diminishing the role of peer-review panels, establishing new regulations for panel composition, and creating a new budget authority for arts education. Of immediate budgetary impact on NEA grant recipients was the erosion in program funds caused by an increase from 20 to 30 percent in the mandated bloc grants to state agencies. The state share, which will increase again—to 35 percent by 1993—cost the Theater Program $1.2 million in direct program funds in 1991, a reduction that is sure to further influence the federal support figures in next year’s survey.
STATE GOVERNMENT
For the second year in a row, sample theatres reported a decline in state government funding, which dropped 5.4 percent from the prior year. The average 1991 grant to sample theatres from state arts agencies was $100,375, down from the $105,823 average grant in the previous year.
While all but four sample theatres (two of which are located in the District of Columbia and have no state government) received support from their state arts agencies, 26 experienced decreases (the most, by far, in five years), 25 reported increased grants and one was level-funded.
Total legislative appropriations to all state arts agencies in fiscal 1991 fell more than 10 percent, according to the National Assembly of State Arts Agencies (NASAA), as state governments across the country wrestled with severe budget deficits and revenue shortfalls. Of the 56 state and territorial arts agencies, 25 received reduced appropriations in 1991.
State arts agency appropriations were slashed by more than 20 percent in Massachusetts, Michigan, New Jersey, New York, Rhode Island and Virginia. Sample theatres in Maine, Massachusetts, North Carolina, New Jersey and Pennsylvania reported cuts in excess of 20 percent in their annual state arts agency grants. Not surprisingly, most of these are states in the northeast, the first region in the country to feel the financial effects of the recession. Yet state arts agencies appropriations were increased by more than 20 percent in Hawaii, Idaho, Indiana, Kentucky, New Mexico and Utah.
Economists expect that states will face chronic revenue shortages throughout the next decade, making continued widespread cuts in state arts agency appropriations almost a certainty and practically ensuring that the increase in NEA bloc grants to the state agencies will merely replace lost state funds and will not, as originally intended by Congress, increase state funding of artists, and arts groups.
CITY AND COUNTY GOVERNMENT
Municipal and county support to sample theatres in 1991 increased by 6.3 percent, but this increase represented the lowest growth rate in the past five years. Although local governments are still a relatively small source of support for most theatres, accounting for less than 2 percent of operating expenses of sample theatres, the number of theatres receiving funding from this source had grown steadily over the course of the survey until this year, when local government budget cuts in Milwaukee, Philadelphia and Springfield, Mass., resulted in the loss of local grant funds to three sample theatres.
Nevertheless, significant support exceeding $150,000 was provided to sample theatres in 1991 by the cities of San Francisco, Montgomery, Ala., La Jolla, Calif., San Diego, St. Louis and Buffalo, N.Y. as well as by Erie County, N.Y.
OTHER CONTRIBUTIONS
Twelve of the fifty-six theatres in the sample group received contributions from united arts funds—combined fundraising campaigns that receive donations from local corporations, foundations and individuals. Income from this source of support registered a 7.6 percent increase over the prior year. Revenues from special events such as galas, auctions and other benefits reversed the decline in growth reported last year and registered a 10.1 percent increase in 1991.
Additional contributed income from in-kind contributions—donated services, materials and facilities recorded in audited financial statements at fair market value—was reported by 24 theatres in the sample group, and grew by nearly 20 percent over the previous year.
Other miscellaneous sources of contributed income included cash donations from sheltering organizations, predominantly universities and museums, that not only provide in-kind support of theatre space and related facilities, but also make significant cash contributions.
LOOKING AHEAD
The economic outlook for nonprofit theatres in the near future is as grim, by all accounts, as it is for the rest of the nation. There has been virtually no financial relief as the recession continues into 1992—instead, the scope of the crisis has broadened, as the economic malaise that was originally concentrated in the northeast and south of the U.S. has now begun to spread across the rest of the country.
The real and psychological toll of the recession on American pocketbooks affects ticket sales as well as individual donations, and corporate support—though still significant in some theatres—continues to suffer from the depressed business economy. The short-term forecast for foundation support is also worrisome, as total foundation assets, invested heavily in the stagnant stock market, dropped by nearly 3 percent in calendar 1990—a dip that will not be felt until fiscal 1992, since most foundations authorize funds several years in advance.
All indications are that the outlook for federal, state and local government funding of nonprofit theatres is bleak. The Bush Administration’s federal deficit projection for fiscal 1992 currently stands at $399 billion; 29 states cut their budgets by more than $7.5 billion in fiscal 1991; and nearly 40 percent of all counties with populations over 100,000 are facing budget deficits in 1992 with budget cuts planned by 91 percent of those counties. When the economic climate finally changes, it will take years to restore funding from state and local arts agencies to pre-recession levels, and the NEA—which continues to be embroiled in controversy—may be permanently hobbled by punitive legislation passed by Congress.
So, for at least the foreseeable future, nonprofit theatres seem to have little choice but to continue to find the delicate balance between financial necessity and artistic purpose. Undoubtedly, some theatres will be unable to achieve that balance and some may be forced to close their doors. There will be a distinct danger to artists and other theatre personnel who will find it increasingly difficult to make a living in the theatre. The decrease in audience does not bode well for a field that is struggling to compete with other media and is concerned about reaching young people and attracting them to the uniqueness of live performance. And the reduction in workshops and staged readings raises troubling questions about the field’s ability to explore new work for the theatre.
But the fact that the overwhelming majority of theatres are able to continue producing at their current level, in spite of cutbacks in many cases, is a testimony to the strong leadership and management skills demonstrated by artistic directors, managers and their staffs, as well as an extraordinary commitment of theatre trustees, who have been charged with guiding their institutions through a most challenging economic climate. Together they will need to reexamine their structures and missions to ensure survival and progress in the face of that climate.
METHODOLOGY
TCG has conducted national surveys annually since 1974. “Theatre Facts 91” covers theatre fiscal years ending between Sept. 1, 1990 and Aug. 31, 1991. Data from the participating sample theatres was verified against certified financial audits. Inflation information is based on the Consumer Price Index (all urban consumers) for the period ending June 30, 1991 and was obtained from the U.S. Department of Commerce’s Bureau of Labor Statistics. Under the direction of Barbara Janowitz, the survey was conducted and research data compiled by John Federico with the assistance of Lisa Yoffee and Ed DuRante, all members of TCG’s Management Services staff.
The composition of the sample group changes slightly each year that TCG conducts this survey, depending on which theatres have provided data for all years studied. Therefore, “Theatre Facts 91” includes recalculation of all five years for the participating theatres and cannot be compared with the published results of earlier TCG surveys based on a slightly different sample group.
1991 Sample Group Theatres
A Contemporary Theatre, Actors Theatre of Louisville, Alabama Shakespeare Festival, Alley Theatre, Alliance Theatre Company, American Conservatory Theatre, American Repertory Theatre, American Stage Festival, Arena Stage, Arizona Theatre Company, Barter Theatre, Berkeley Repertory Theatre, Capital Repertory Company, Center Stage, The Children’s Theatre Company, Cincinnati Playhouse in the Park, Circle Repertory Company, The Cleveland Play House, Cumberland County Playhouse, Dallas Theater Center, Fulton Opera House, George Street Playhouse, Goodman Theatre, Great Lakes Theater Festival, The Guthrie Theater, Hartford Stage Company, Huntington Theatre Company, Indiana Repertory Theatre, Intiman Theatre Company, La Jolla Playhouse, Lamb’s Players, Theatre, Long Wharf Theatre.
Also, Manhattan Theatre Club, Mark Taper Forum, McCarter Theatre Center for the Performing Arts, Milwaukee Repertory Theater, Missouri Repertory Theatre, New Jersey Shakespeare Festival, Northlight Theatre, Old Globe Theatre, The People’s Light and Theatre Company, Perseverance Theatre, Philadelphia Drama Guild, Pioneer Theatre Company, Pittsburgh Public Theater, Play-Makers Repertory Company, Portland Stage Company, The Repertory Theatre of St. Louis, Seattle Repertory Theatre, Shakespeare Theatre at the Folger, South Coast Repertory, Stage West, Studio Arena Theatre, Syracuse Stage, Theatre Virginia and Yale Repertory Theatre. (A complete list of the 184 participating theatres in the survey universe is available from TCG.)
SURVEY UNIVERSE
1991 Totals for 184 Theatres
PRODUCTIVITY
Attendance 16,860,484
Subscribers 956,257
Performances 48,695
Productions 2,277
FINANCES
Earnings $ 202,568,667
Contributions $ 131,332,227
Total Income $ 333,900,894
Total Expenses $ 336,681,065
Deficit ($2.780,171)
WORK FORCE
Artistic 12,593
Administrative 5,220
Technical 7,164
Total Paid Personnel 24,977
CHANGES IN INCOME
AND EXPENSES
56 Sample Theatres
5 Yrs.
In percents 87-88 88-89 89-90 90-91 87-91
Expenses 7.6 10.2 9.0 4.8 35.5
Earned Income 6.3 12.2 9.0 1.9 32.5
Contributed Income 7.6 12.3 8.1 5.8 38.1
Total Income 6.8 12.2 8.6 3.4 34.6
