Emerging Bay Area Arts Organizations Face Unique Challenges

Re-granting, crowdfunding, cultural data, and funding transparency promise greater equity

 By Kelly Varian, Communications Specialist at Sustain Arts 

Six months ago Sustain Arts launched a series of free cultural data resources tailored to meet the needs of arts organizations in the Bay Area. The online platform provides data for everyday strategic decision-making. For example, users track funding connections between grantmakers and grantees, search for arts organizations by budget size, discipline, and county, and explore audience participation rates and demographics. Yet Sustain Arts does much more than supply data. 

At Sustain Arts, we endeavor to tell a story about the Bay Area arts sector that is grounded in facts and to facilitate community dialogue informed by a shared understanding of the health and sustainability of the local arts ecosystem. To this end, Sustain Arts published a Bay Area Key Learnings Report analyzing 17 highly relevant national and local data sets. The report highlights unique challenges and opportunities facing small arts organizations in the Bay Area. 

At first glance, Sustain Arts data suggests sector-wide prosperity. Compared to the rest of the nation, the Bay Area arts sector recovered rapidly from the 2008 recession. Revenue jumped 30% between 2009 and 2012 (compared to a 7% national average), attendance increased 4%, and both earned and contributed income went up for non-profit organizations. Most impressive of all, board giving spiked 222% in the same period. 

Yet despite sector-wide success, a deeper dive into the data reveals this narrative of resilience may not ring true for all. Financial gains for the Bay Area’s largest arts organizations inflate sector-wide averages and smaller, emerging organizations lag financially. Organizations with annual budgets under $10M show negative margins and have a .3% deficit on average, while organizations with budgets over $10M enjoy a 23% surplus. Finally, very small arts organizations are most likely to fail. Those with budgets under $100K have a 69% survival rate, and those with budgets of over $1M have a 90% survival rate.   


To many in the arts community, these statistics may not come as a surprise. Conversations about creating equity have become ubiquitous at Bay Area arts sector conferences and coalition meetings, and cultural leaders increasingly advocate for policy to protect the arts. Sustain Arts data provides insights into the specific factors destabilizing small organizations.


1. Bay Area arts and cultural funding patterns favor large organizations. Less than 15 percent of Bay Area arts nonprofits have budgets over $1 million, but they receive over three-quarters of foundation funding for the arts in the Bay Area.  


2. Smaller organizations have limited geographic reach. The larger a nonprofit arts and cultural organization, the further Bay Area residents will travel to visit it. Participants will travel over 15 miles on average to visit an organization with a budget of $8M, and only ten miles to visit an organization with a budget under $8M.  


While small organizations face many challenges, Sustain Arts data reveals a promising number of opportunities for increased sustainability, namely re-granting, crowdfunding, access to cultural data resources, and greater funding transparency.


1. Re-granting supports small organizations. More than half of dollars re-granted by intermediary organizations such as Sustain Arts partners Theatre Bay Area, Dancers’ Group, and Silicon Valley Creates, support arts and cultural organizations with annual revenues of less than $100,000.


2. Alternative giving vehicles provide a new revenue stream for small for-profit and nonprofit entities. More than $24.6 million was raised on the crowdfunding platform Kickstarter for arts and culture related projects in the Bay Area in 2013 alone. The vast majority of recipients were for-profits, while unincorporated entities, nonprofits, and individuals raised less. 


3. Sustain Arts levels the playing field in terms of access to cultural data. Arts and culture organizations in the Bay Area increasingly rely on data for critical fundraising, strategic planning, marketing, partnership development, and general operating activity; yet obtaining high-quality data can be prohibitively expensive, time-consuming and challenging, particularly for small to mid-sized organizations with limited resources. Sustain Arts seeks to create equal opportunity for all organizations by providing free and easy-to-use online cultural data resources to the public. 

4. Increased funding transparency promises a more equitable arts sector. The Sustain Arts/Bay Area platform enables users to examine the interrelationships among organizations and their funders, shifting demographics, and participation trends. By bringing these types of data together, we can begin to see how sector growth and development does or does not align with demographic changes or emerging cultural preferences. And we can begin to see whether capitalization flows favor large, established or small, emerging cultural organizations and how broadly (or narrowly) they serve the cultural needs of the community. 

Whether you are part of a small or large organization, nonprofit or for-profit, Sustain Arts would love to hear from you. Do our observations ring true to your experiences? Are you taking advantage of re-granting, crowdfunding, or Sustain Arts’ free cultural data resources? Would you like to incorporate Sustain Arts’ Key Learnings into a conference or event? Please email me at kellyvarian(at)gmail(dot)com or take this brief Sustain Arts survey.

Take a few more minutes to read the Bay Area Key Learnings Report 

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