Report from SMU's National Center for Arts Research Shows Payment to Artistic and Production Personnel to be the Single Largest Expense for Arts Organizations
New report shows arts organizations spent 42% of all operating revenue on program-related personnel
SMU’s National Center for Arts Research (NCAR) today released the Expenses Report, the latest iteration in a series of reports on the health of arts organizations in the U.S. This edition, which focuses on expenses related directly to the cost of programming, shows that two-thirds of total program-related expenses, or 42% of all operating revenue, goes to payment of program-related personnel. This includes both contract and permanent staff such as artists, curators, artistic program coordinators, arts educators, and collections and production staff.
Designed to help those inside and outside the field better understand how the industry currently operates, the report examines how arts and cultural organizations invest, looking at trends by sector, geography, and organizational size. Overall, arts organizations of all sizes and in all sectors across the country saw steady increases in program expenses, with costs rising steadily since 2013 and peaking at a 4-year high in 2015. This growth in expenses developed at a higher rate than operating revenue, which only grew by 17.6% from 2012 to 2015, as compared to growth in program expenses, which increased by 21.5%.
The report also shows that while symphony orchestras and opera companies are the most labor-intensive art forms, with over 60% of their total revenue going to payment of artists and program-related personnel, every sector saw growth in average total compensation to artists and other program personnel.
“Despite widespread concern that arts organizations are not spending enough on artist compensation, this report shows that arts organizations are in fact spending increasingly more on paying their artistic personnel, with growth of these expenses outpacing revenue,” said Dr. Zannie Voss, director of NCAR and chair and professor of arts management and arts entrepreneurship in SMU’s Meadows School of the Arts and Cox School of Business. “We hope that findings in this report can provide clarity on what is happening in the field.”
With its reports, white papers, and planning tools such as the KIPI Dashboard, NCAR works to help arts organizations gain a deeper understanding of the cultural landscape they operate in by tracking industry trends and providing benchmarking data. Arts organizations around the country are using NCAR data to help inform their strategic planning. “NCAR’s research and work has recently presented to us other very interesting ways for us to track our metrics,” said John S. Stanley, chief operating officer of The Whitney Museum of American Art. “The Whitney has always been an advocate for tracking KPI’s across all areas of the museum. As a result, NCAR has helped to broaden our analytical horizon.”
For more findings from the Expenses Report, please see the full report on the NCAR website.