Five Macro Trends That Arts Organizations Need to Watch

Five Macro Trends That Arts Organizations Need to Watch
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2016 is off and running, and guaranteed to be a dynamic presidential election year. Along with a new administration in Washington, five broad cultural and economic trends are sure to impact sectors across America--affecting our work in the arts in the coming years. Candidates at all levels of government will need to evolve positions on each of these trends so we can work more strategically to ensure that the arts continue to thrive and enrich the lives of every American.

1) Nonprofits Are Being Expected to Play by For-Profit Rules

Sixty percent of the revenue for nonprofit arts organizations comes from the sale of tickets, merchandise, and services. This means that they are operating more and more like small businesses. Current public and private funding trends are nudging arts nonprofits further toward more innovative ways of creating revenue while staying true to their mission, but too much focus on revenue generation can distract from the standing model of nonprofits as mission driven organizations for the benefit of society.

Competition for audiences and resources. There are more arts organizations in America than ever before, and competition is stiff for audiences and resources. Some cultural leaders have suggested thinning the herd, but is that option viable when you consider arts organizations have diverse levels of public, private, and earned revenues, and of course, different missions? Historical circumstances have influenced who is funded and who is not. However, decisions about which community treasures go or stay are not necessarily best left up to only the marketplace.

Public support is coming, but not enough. We are seeing an increase in city government funding plans for the arts, and increases in dedicated tax revenues such as hotel-motel taxes and sales taxes. In January, the U.S. Conference of Mayors declared the arts to be one of 18 key advancement planks that they will recommend to the next administration. But public funding still falls short given its role as an important leveraging tool for arts organizations to acquire funding from other sources. Elected leaders need to see that the arts are essential components of their community. But so do the people in the communities, the constituents, who vote on where the funding goes.

Private support for the arts is changing. Private funding for the arts today represents only about 30 percent of nonprofit arts revenue with two-thirds of that coming from individual giving. And the share of philanthropy that goes to the arts is decreasing as funders consolidate their issues. While the arts are valuable to society in and of themselves, it is also important to make the case that they are even better strategic, essential partners in solving many of the other areas of concern that private funders are targeting. This is especially critical as market volatility and economic uncertainty lead donors to be more strategic and conservative in their giving.

2)Target Markets Are Changing and Expanding
Audiences are using the power of the market and social media to challenge the status quo.

Attention to racial equity in the arts and arts organizations is growing nationwide. Arts organizations like The Sphinx Organization, The Association of American Cultures, and the National Association of Latino Arts and Cultures have been working toward more equitable practices in the field for decades now. Our own Arts and Business Council of New York has sponsored the Diversity in Arts Leadership Internship Program for 20 years with Con Edison. But even while the highly visible entities like the Oscars are drawing attention to issues of equity in the arts, nonprofit arts organizations of color are facing severe funding challenges, according to a recent DeVos Institute report, and addressed in a follow-up study at Southern Methodist University. In the meantime, our nation roars toward 50 percent population of color by 2050, with some regions already there.

Arts participation is evolving. Yes, studies show that there has been a declining share of the population attending an art museum or live performing arts event, but there is nothing traditional about the landscape of cultural consumption today. Downloads of classical music are at an all-time high. Art- and culture-themed shows fill the television airwaves. Fifty percent of the American public say they are makers of art in some way. More and more, the arts will be adapting to the new, broad landscape of multi-sector and multi-media opportunity.

Digitally savvy arts marketers are increasing audience share. At our annual National Arts Marketing Project Conference, it seemed to be "all digital, all the time." Social media platforms, and even email, have created a new world of connectivity, citizen critique, and marketing opportunity. Yet, while these platforms remain essential tools, nothing has replaced the value of building strong relationships with your own audiences and the power of word of mouth.

3)Environmental Crises Are More Common
Extreme weather events, natural catastrophes, and water crises are all near the top of the World Economic Forum's list of the top ten risks most likely occur in the next 10 years.

Arts organizations will have to invest in disaster preparation. Organizations like CERF+, South Arts, and Americans for the Arts have been talking about the need for preparedness for a long time, but these events are happening more frequently and unpredictably. Not having plans in place could challenge an organization's ability to weather the next storm, so to speak.

4)Tomorrow's Leaders Need Opportunities for Development and Growth

Arts education seeps back into schools. At the end of 2015, the Every Student Succeeds Act (ESSA) replaced the No Child Left Behind Act. Some former roadblocks like relentless testing have been relaxed, and local leadership can redirect funds to what they believe will benefit the children in their communities. Leaders say that the outlook is much brighter for arts programs everywhere. Positive and enduring results will still rely on local leadership and persistent advocacy so that the arts don't disappear the next time the economy hits a bump.

Slow pathway to leadership positions. Younger leaders among Gen X, Gen Y and Millennials will still see fewer current leaders in top positions moving on or retiring. Better health and continuing interest and passion on the part of Baby Boomers, along with challenged retirement portfolios, will keep more current leaders in place for now, suppressing opportunities to grow within established organizations. This in turn will continue the trend toward growing new startups and increasing the pool of nonprofit and for-profit arts organizations.

5)The Necessity of Collaboration
No sector can solve the complex challenges that our communities face on its own, and no sector can create a thriving community alone. Therefore, many sectors are seeking partnerships to combine resources and expertise.

Arts and community partnerships will be essential. Across the country, arts organizations are partnering with military and veterans organizations, urban equity programs, and businesses and helping to address homelessness, hunger, and other social issues. In San Jose the technology and science sectors partner with the arts. In Miami, design leaders, business leaders, tourism leaders, even the zoo management, collaborate through the Miami Dade County Department of Cultural Affairs.

These trends are why policy--and not just arts policy--matters. Candidates up for election and elected officials at all levels of government can change the course of these issues through economic, social, and environmental policies, and we have the power to influence them by voting and getting out the vote. Our greatest advantage is we are facing these issues at different times. There are those who have already confronted, or are currently confronting, some of these trends. We can learn from one another, evolve with one another, and work more strategically to ensure that the arts continue to thrive and enrich the lives of every American.

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