Capital, Endowments, and Budgets

October 25, 2022

With the looming threat of a recession and rising inflation rates around the world, discussion around securing capitalization has increased amongst arts organizations who are keen to stabilize their financial sustainability. Our latest Arts Leader Survey asked arts leaders to benchmark themselves on the current state of their organizational budgets, endowments, and cash reserves so we can better understand the financial state of the union worldwide. Highlights from the survey include:

• A half of arts orgs are expecting an operating budget deficit this fiscal year; half of these organizations are relying on cash reserves to fund these deficits.

• Organizations agree that the ideal size of cash reserves relative to the current total operating budget should be at least 25%.

• One-third of arts orgs are increasing their funding for innovative/explorative programming this year compared to previous years.

• A majority will draw 4 to 5 percent of their endowment this year, a draw that will cover between 1 to 30 percent of operating budgets.