Greater Philadelphia Cultural Sector Experiences Dramatic Growth

The region's nonprofit cultural organizations grew at almost twice the rate of inflation over the last decade. And cultural growth in the suburbs was even faster, at three times the rate of inflation. These figures are some of the findings that were released today as part of the 2008 Portfolio, a report released today by the Greater Philadelphia Cultural Alliance.
 
The 2008 Portfolio offers an in-depth look at the scope of the local non-profit cultural sector. Based on confidential and detailed information from 281 local arts and cultural organizations, the report gives a compelling look at a sector that draws 15 million visitors annually and is driven by a workforce of 43,000 staff and volunteers. This report is also, for the first time, able to look at long-term trends in the sector, based on a ten-year analysis of 108 cultural organizations, from 1995 to 2005. The report interprets a wide range of data including revenue, employment, attendance, fundraising and expenses.

“The Greater Philadelphia region has enjoyed a remarkable economic and social resurgence. Arts and culture has been at the forefront of that renaissance,” said Peggy Amsterdam, President, Greater Philadelphia Cultural Alliance. “With the release of this report, we're finally able to quantify the sector's strong growth and vibrancy over the last decade.”

Several key themes emerged from the study:

Nonprofit cultural organizations have grown dramatically. From 1995 to 2005 individual nonprofit cultural organizations expanded activities at almost twice the rate of inflation. Growth in the suburbs was even more dramatic, with individual nonprofit cultural organizations expanding activities at almost three times the rate of inflation* and increasing employment at twice the rate of regional job growth.
 
Arts and culture is a significant and highly valued assets for the region. There were over 43,000 paid and volunteer workers supporting the 281 organizations in the report and those groups attract 15 million visitors annually.

Despite clear successes, nonprofit cultural organizations remain at risk. In the most recent years examined in the report, two in five nonprofit cultural organizations operated with a deficit. This was compounded by a dramatic decline in federal support and a 273% increase in utility expenses. Despite these challenges, the sector continues to make the arts accessible, with 43% of all visits free of charge.

“The findings in this report highlight both the incredible value of the arts and compelling evidence of why we need to invest in our regional cultural resources- not just to continue to keep the arts accessible, but as part of a successful plan for long term regional growth,” stated J. William Mills III, regional president of Philadelphia and Southern New Jersey for PNC, the key sponsor of the report.

Other highlights of the report include: 

• To take in all the cultural activities of the 281 organizations in the 2008 Portfolio you would have to attend 3 performances every hour, 13 tours a day, and attend 777 different events a week.
• All but the smallest organizations (all but those with budgets under $250,000) cover over 80% of health care costs for their employees, on par with the national average of 84%.
• The arts are a bargain. Nonprofit cultural organizations charge, on average, $14 for ticketed events. Those events cost $46 per attendee to produce.
• Those free and affordable tickets are supported by contributed income. Forty five percent of overall income is generated from contributions, and for every $1 invested by nonprofit cultural organizations on fundraising, organizations generated $9 in additional income.
• Despite some growth in state support, federal support has declined and all corporate, federal, state and local support  combined was less than 10% of overall income for cultural organizations.
• In 1995 nonprofit cultural organizations received support equally from Federal and State sources. By 2005, state support was nine times greater than federal support. In addition utility expenses over the same period soared 273%. 
• Operating margins remain thin at cultural nonprofits, at only 5% across the board in 2005. 
• Theater employs the most people, providing almost 1 in 5 positions in the sector: 3467 Full time, part time, and contract employees. Service groups are the smallest sector, employing only 3%.
• Science and Nature organizations have the most attendance, with 3.8 million visits. 
• Seventy Six percent of nonprofit cultural organizations are located in the City of Philadelphia.
• Very Large (>$10M) organizations generate significant investment income, 28% of their total revenue. Small organization's (<$250k) highest source of revenue (25%) is foundation support.
• The most numerous events are public classes, with 24,000 different courses offered.

The 2008 Portfolio is based on detailed financial and organizational information reported by 281 cultural organizations to the Pennsylvania Cultural Data Project (PACDP), a statewide data collection effort. The figures presented in this report are for the most recent fiscal year available for each organization, in most cases FY06 or FY07.

In addition, the ten-year trend analysis used additional data collected from the Economy League's 1998 report Greater Philadelphia's Competitive Edge, and tracked changes over time for a subset of 108 organizations in this report. The complete list of organizations in the report is available at www.philaculture.org/research/reports/2008-portfolio.

The PACDP is a collaborative project of the Greater Philadelphia Cultural Alliance, the Greater Pittsburgh Arts Council, The Heinz Endowments, Pennsylvania Council on the Arts, The Pew Charitable Trusts, the Pennsylvania Historical and Museum Commission, The Pittsburgh Foundation, and William Penn Foundation. Operated by The Pew Charitable Trusts, PACDP was created to provide access to reliable data about the cultural sector in order to enhance both individual organizational capacity as well as the overall effectiveness of the nonprofit cultural community. Additional information on PACDP is available at www.pacdp.org.

The Greater Philadelphia Cultural Alliance is a leadership organization of over 375 nonprofit arts and cultural institutions located primarily in the five counties of southeastern Pennsylvania.  Its mission is to lead the effort to increase awareness of, participation in and support for arts and culture in the Greater Philadelphia region.

The 2008 Portfolio was made possible by PNC and the William Penn Foundation.

The publication is available online at www.philaculture.org and printed copies are available upon request.

*Inflation from 1995 to 2005 was 28% (Bureau of Labor Statistics). Organizations grew over that same period by 49%, with suburban organizations growing 76% (2008 Portfolio).

Homepage photo credit: Kimmel Center for Performing Arts by B. Krist for GPTMC.