The Boston Foundation report charts strengths, vulnerabilities of cultural sector

More organizations compete for fewer resources as audiences shrink

December 19, 2007

Boston – A new report issued by the Boston Foundation titled Vital Signs: Metro Boston’s Arts and Cultural Nonprofits, 1999 and 2004 offers fresh research into the status of the arts and cultural sector in Greater Boston. This report, the fourth in a series issued by the Boston Foundation over the past four years, draws upon original research by the nonprofit consulting firm TDC to examine the needs and wellbeing of the cultural sector.

The current report identifies specific concerns about the health of the sector. Some of the concerns are being driven by larger trends that have affected the entire region, including a static or declining population, and the economic slowdown that began in 2001 with recession. Some trends within the sector have also undermined its wellbeing. For example, the sector as a whole has seen declines in attendance and a drop in revenue—average revenue for arts and cultural organizations dropped 18 percent between 1999 and 2004.

As population overall has become stagnant, the region’s immigrant and minority communities have grown. That represents both a challenge and an opportunity for these organizations, which must learn how to connect with the needs and interests of a new potential audience.

At the same time, the number of organizations in the sector has increased, from 534 nonprofits in 1999 to 624 in 2004. Inevitably, this means more groups chasing fewer dollars—and smaller audiences. Meanwhile, payrolls for arts and cultural organizations have increased. In particular, the need to compete for limited resources in an ever more crowded field has led to competition for talent in marketing and development, and increases in salaries paid for these roles. While pay in the arts and cultural sector continues to lag far behind pay in the for profit sector, salaries for marketing and development employees has increased sharply, contributing to increases in costs that further stress organizations whose revenues have, on average, declined.

“Greater Boston is well served by stellar arts and cultural organizations with national—even global—reputations,” said Paul S. Grogan, President and CEO of the Boston Foundation. “These organizations help define our region and contribute to its economic vibrancy, as well. This report celebrates that richness and our ability to seed new ideas, and warns of the need to step up the support we can provide to strengthen the sector.”

The report includes brief profiles of arts organizations that exemplify resilience and a talent for innovation. These include the Actors Shakespeare Project, drawn from the ranks of unemployed actors, which proved there was a fresh market for the Bard’s work, with bare-bones productions that bring the values of the classic dramas to new audiences.

The Peabody Essex Museum in Salem is another institution highlighted. An institution with a history of fruitful consolidation, PEM brings together institutions that tell a story about the economic history of the country. A consolidated mission for the Essex Institute and the Peabody Museum created a foundation. A new building by Moshe Safdie celebrated both the collections and the missions of the older institutions while forming a dramatic cultural centerpiece for the city of Salem and a catalyst for renewal for the city as a whole.

But while some organizations have emerged transformed in recent years, many more struggle to find the dependable income and the steady audiences that sustain arts and cultural organizations. For these, the report offers strategies for self-examination. The report suggests that everyone concerned with the health and vitality of the sector would do well to consider the following issues:

    • The need for a clear and unique vision: Successful organizations have a compelling mission to attract audiences and supporters in a highly competitive marketplace.

    • An understanding of the audience: At a time when the region’s population is stagnant, and growing more diverse, effective organizations will know the profile, interests and needs of their potential audience.

    • The right scale for their organization: Successful smaller organizations confront the realities of the marketplace by being creative with staffing or partnerships that can relieve the stresses caused by declining audiences and corporate support. For some, growth is needed to achieve a scale that can sustain the creative vision, and that suggests a need to re-evaluate resources, including management and board members.

Among the more challenging suggestions included in the report is the call for organizations to consider that leaving the marketplace may be an appropriate strategy. A healthy nonprofit sector must allow new nonprofits to enter the marketplace. With flat growth, that suggests nonprofits no longer serving a compelling vision or a robust audience must exit.

“I know that some of the content of this report will seem harsh,” said Ann McQueen, co-author of the report. “But the takeaway message should be that Greater Boston is well served by vibrant, effective, well-managed arts and cultural organizations that enrich the lives of those lucky enough to live here. There are powerful examples of institutions that have changed to meet the needs and demands of a new age,” said McQueen. This report was designed to share best practices, effective strategies.”

The report is based on the organization-level analysis of 990 data—that is, data derived from required IRS reports—for 1999 and 2004. All data used is available at\culture. In addition, a PDF version of the final report is available on the Boston Foundation website at


The Boston Foundation, Greater Boston’s community foundation, is one of the oldest and largest community foundations in the nation, with assets of almost $900 million. In 2007, the Foundation and its donors made more than $92 million in grants to nonprofit organizations and received gifts of $90 million. The Foundation is made up of some 900 separate charitable funds established by donors either for the general benefit of the community or for special purposes. The Boston Foundation also serves as a major civic leader, provider of information, convener, and sponsor of special initiatives designed to address the community’s and region’s most pressing challenges. For more information about the Boston Foundation, visit or call 617-338-1700.