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Our Fiscal Performance

December 15, 200915 December 2009

Impacts of the Recession on the Cultural Sector

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This report, based on a survey of 89 performing arts organizations in the spring of 2009, examines the financial implications of the recession on theatres, orchestras, operas and dance companies in Canada. Unfortunately, the report does not provide an estimate of the margin of error, given the number of survey respondents. This is a major limitation on any interpretation of the results. The report does indicate that “results by subgroups are only suggestive, and any difference in this report is not statistically significant”.

One main finding of the report is that the recession has had an impact: almost half of the organizations surveyed (47%) noted that their current budget forecast is worse than their original plan. Of these organizations, about one-third indicated that this deterioration was “entirely” due to the economic downturn. The remaining organizations, except one, indicated that the deterioration in their budgetary forecast was “somewhat” related to the recession.

In terms of results in late 2008, about sixty percent of the organizations reported that “year-end fundraising is somewhat (38%) or substantially (19%) lower than budgeted”. Ticket sales were also lower than expected, with one-half of the respondents reporting lower non-holiday single ticket sales and 39% reporting lower subscription sales. Holiday-related single ticket sales and classes or tuition income were less affected.

Regarding anticipated changes during the organizations’ current fiscal year, about 90% of the organizations indicated that at least one key revenue source is expected to be lower than expected. This includes the one-half of the organizations that expect that at least one key revenue source will be “substantially” lower than anticipated. Corporate and foundation contributions are the two revenue sources that are the most likely to be lower than anticipated, with 73% and 61% of respondents, respectively, expecting these revenue sources to be lower. About one-half of organizations expect that ticket sales (53%) or individual contributions (49%) will be lower than anticipated. Relatively few organizations (17%) expect government contributions to be lower than anticipated.

As of the spring of 2009, almost 80% of the organizations had taken action to address their financial challenges. The most common response was a reduction or freeze of salaries (52% of organizations), followed by a reduction in travel budgets (37%), a reduction in the number of productions or programs offered (27%) and discounting of new tickets (26%).

The report concludes that, “at this point, it is difficult to know the longer-term impacts of the economic downturn, and how performing arts’ contributors, clients, and audiences will behave if the downturn persists, or even when the economy begins to recover”.

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