A survey was recently conducted by Canada’s Performing Arts Alliance – made up of the Canadian Dance Assembly, Opera.ca, Orchestras Canada, and the Professional Association of Canadian Theatres – to evaluate the impact of the economic downturn on performing arts organizations. The first of four fiscal snapshots, the survey covered the period from September 1 to December 31, 2008 and included 89 respondents, all member organizations. Though far from conclusive, the results are definitely telling.

The results are in

Approximately half the organizations surveyed said they’d break even or post a small surplus this fiscal year. For that to happen, however, 52% will be reducing or freezing salaries. Considering the sector is already known to be underpaid and understaffed, that statistic will have an incredibly negative impact on human need, says Lucy White, executive director of the Professional Association of Canadian Theatres. What’s more, 37% of respondents said they’d be reducing travel and 27% would be cutting back on planning and programs.

The results weren’t exactly surprising. The Alliance began as a way to address some of the cross-disciplinary issues the performing arts community has in common. Collaborative by nature, members look for ways to leverage their impact, with advocacy a common pursuit. Upon hearing the economy was contributing to sectoral challenges, the survey was devised to assess the damage. Of particular concern, White explains, was the “rumour” that corporate support for the performing arts was softening. In fact, approximately three of four organizations surveyed expect corporate contribution to be lower than budgeted and six in ten expect foundation contributions to be lower as well.

The impact

The potential impact could put great pressure on organizations to reduce overhead or generate more revenue. Already lean-running machines, further cuts could seriously impede the pursuit of their missions. The good news? Ticket sales are still strong and all three levels of government continue to provide high levels of support. In fact, with the exception of BC, every provincial government is holding or increasing their contributions. And, federally, the Canada Council for the Arts received a much-welcomed increase last year. “The economic downturn hasn’t been as dire as it would have been if we lost that support,” concludes White. For now, with three more snapshot surveys to go (the second results expected in November), the Alliance is keeping a watchful eye on the government and the alleged economic rebound, hopeful it will translate into the return of strong corporate support.

And what of the rest of the arts sector? According to Rita Davies, executive director of culture for the City of Toronto, though many nonprofits haven’t yet reached their year-end, it nevertheless seems the city’s sector hasn’t been hit as hard as other sectors. Attendance and subscriptions appear to be on the rise, she offers. “And we’re seeing some reduction in corporate dollars and private fundraising, but it has not happened to the extent that created problems for the sector,” she adds. “If it continued longer, we would start to see problems.”

As for Nuit Blanche, a free all-night art event held every October, the only concern Davies expressed in our interview the day before was inclement weather. “The economy hasn’t had much of an impact on us,” she says, explaining they are comfortably sitting in year three of a four-year deal with title sponsor, Scotiabank, and other sponsor numbers have gone up. What’s more, she adds, “the city funding remains constant and we raised over $1.2 million in cash and media sponsorship.” It’s not hard to see why. As corporations become more strategic, a product like Nuit Blanche – attracting over a million attendees, 100,00 tourists, generating $13.7 million in local economic impact, $18.3 million in direct spending and 244 jobs – is undeniably attractive for a free event that lasts only 12 hours.

Flexibility is key

Concerning the rest of the sector, with economists predicting a recovery, Davies is hopeful organizations will soon return to levels of fundraising and sponsorship they previously enjoyed. Some factors contributing to her positive outlook include the federal government’s renewal of all its cultural programs, other than the ones they cut before election. “Canada Council received a big increase injecting a little bit of buoyancy into the sector as a result.” And then there’s the flexibility of the arts sector. “They are used to working on very fine bottom lines,” she says. “People can tighten their belts just a little bit more.”

Take Vancouver’s Arts Umbrella, providing arts education to kids for 30 years. It is perhaps a testament to their longevity and reputation that their website can proclaim “October is Arts Umbrella Month in the City of Vancouver.” Being around for that long has given the organization a strong group of supporters who believe in the mission of inspiring kids for life through art, giving them the ability to solve problems creatively. “It’s really an investment in our future,” states president and CEO, Lucille Pacey.

Diversify!

Thirty years has also taught administrators about sustainability and the art of diversification. Tuition fees account for approximately 45% of the Arts Umbrella operating budget, government funding – typically project-based – sits at less than 5% – and the remainder is raised through high-profile events as well as sponsors and donors, thanks to annual and individual giving campaigns. Though the organization has felt some recessionary effects on the tuition side, overall, parents seem ever-passionate about an arts education and any long-term effects are yet to be seen. They did take a hit on a recent event, with a sponsor unable to meet their commitments. Booked in at half a million dollars, the fallout was rough and they successfully scrambled to make up for the loss in their operating budget. On the philanthropy side, beams Pacey, “we met and exceeded our targets for the year.” It wasn’t the big dollars that got them there, though. “A lot of people were supporting us at $3,000 level and even if we get a $500 cheque, staff does a happy dance in the hallways,” she says. “Every dollar makes a difference.”

Their diversified funding base has been integral to overcoming adversity. As Pacey explains, “Some days we feel ignored by government because we’re not getting more support from them, but that means you have to become really independent and figure out how to operate.” So, although government funding took a dive this year, at 5% the loss is hardly a catastrophe. Sure, they’ve had to adjust their scope, hold back on some projects, learn to work with less, and staff hasn’t received any increases. But they still have jobs. Committed first and foremost to the kids, quality programming continues to be the priority.

Having faced a tough year, the Atlantic Film Festival took some creative and independent steps of their own. Devoted to promoting and building a strong film industry in Atlantic Canada, aside from their highly celebrated 10-day film festival, the agency organizes Strategic Partners, an international co-production conference, alFresco filmFesto, an outdoor summer film series, and ViewFinders, an international film festival for youth. This year the festival saw their support from corporate partners – making up close to two-fifths of their revenue, including non-cash contributions – fall by 30%, representing more than $200,000. While government support – a third of their overall revenue – is up, the funding is specifically tied to economic development in the arts sector events.

Despite obstacles, this year’s film festival was a great show, though modifications were necessary. With the program guide’s ad revenue down by 60%, they cut back on its size, its print run and, for the first time in the festival’s 29 years, charged a fee. At five dollars a pop, it can’t compare to the Toronto International Film Festival‘s $40 program guide, and the cost recovery was most appreciated. In any case, says executive director, Gregor Ash, “I hate to produce something just for the sake of producing it.”

Foundational sustenance

Further in line with their need to adopt creative long-term solutions, the festival is looking to start a foundation. Though the idea had been floating around for a while, the year’s challenges have put it front and centre. With a budget of over $3 million, 18 full-time staff, a government potentially fickle about their support for the arts, and a tenuous economy, the pursuit of sustainable revenue has become imperative. Besides, projects like ViewFinders take a lot of work and resources, forcing Ash to pursue regular fundraising initiatives.

An additional impetus is the organization’s 30th anniversary next year. “We want to make sure the organization continues for another 30,” says Ash, adding that the foundation would give them greater control over a situation marked by an ever-changing media landscape, audience and revenue patterns. “It will help us protect the integrity of the program.”

Elisa Birnbaum is a freelance journalist, producer and communications consultant living in Toronto. She is also president of Elle Communications and can be reached at: info@ellecommunications.ca.

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