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L’Économie des arts en temps de crise

December 15, 200915 December 2009

Impacts of the Recession on the Cultural Sector

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Based on a survey of 259 publicly-funded non-profit organizations in June 2009, this study examines the impacts of the recession on Quebec-based cultural organizations. The margin of error of the data is +/- 5%, 19 times out of 20.

Expected impacts and organizations’ knowledge of the situation were provided as of June 2009. Although already well into the recessionary period, this timeframe was still too early for the organizations to provide definitive results. The final impacts of the recession cannot be tabulated until well after the recession is over and more data is available.

The main findings of the study include: the expectation of a significant decrease in private-sector revenues; differing results by discipline regarding earned revenues; and larger impacts being felt by larger cultural organizations. In addition, the study notes that the effects of the recession on Quebec’s cultural sector seem to be less pronounced than in other locations, due to the lesser overall impact of the recession in the province and the higher levels of government support (a funding source that is expected to remain more stable).

Surprisingly, a substantial proportion of organizations expect an increase in their self-generated revenues during their current fiscal year (compared with last year): 36% of responding organizations expect an increase in self-generated revenues, while 27% expect a decrease. The other 29% expect no change in self-generated revenues, which include earned and private-sector sources. Performing arts companies, larger organizations and Montreal-based groups are the most pessimistic with regards to their ability to obtain at least as much self-generated revenue this fiscal year as they did last year.

Private-sector revenue sources are most at risk, with many organizations pessimistic about the future of their foundation or endowment revenues and their cash sponsorships. The results regarding earned revenues differ by sector, with performing arts organizations predicting a slight decrease in earned revenues and visual arts organizations predicting a slight increase.

The primary short-term response to deal with a revenue shortfall is reducing expenses (61% of organizations plan to do so), followed by requesting increased financial support from regular funders (35% of organizations). Large organizations have stronger expectations of increased support from funders. Smaller organizations are more likely to implement hiring freezes. In the longer term, the main organizational strategy is to increase audiences.

The report calls for further research into the factors affecting cultural organizations’ health, including the key risk factors for revenues and expenses. Although not mentioned in the report, research into the situation in other provinces and among organizations that are not publicly funded would also be informative.

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