From What Sources Do Nonprofit Arts and Cultural Organizations Receive Financial Support?

General Revenue Sources for Arts and Cultural Organizations

Financial support for nonprofit arts and cultural organizations can be divided into four sources of revenue -- earned income, public contributions, private contributions, and investment income. Earned income includes all revenues from admissions, fundraising, and other sales of product or services; in fiscal year 1998, nonprofit arts and cultural organizations received the largest portion of their organizational revenue from this source (54%). The second highest portion of revenue came from private contributions (25%), which include donations from foundations, corporations, and individuals. Interest and endowment income represented 12% of revenues, followed by public contributions from government, which represented 9% of total organizational revenue.

Detailed Breakdown of Revenue Sources

Earned Income

Earned income, which represented 54% of total revenues for arts and cultural organizations in fiscal year 1998, can be broken down into five constituent categories -- admissions, ancillary sales and rentals, fundraising, fees for service, and other earned income. By far, the largest portion of earned income came from admissions (27% of total revenues), which includes box office receipts, season ticket sales, subscriptions, and membership sales. The second highest portion of earned income was from ancillary sales and rentals (12%). Fundraising, fees for service, and other earned income each represented 5% of total fiscal year 1998 revenue.

Private Contributions

Private contributions, accounting for 25% of total revenues for arts and cultural organizations in fiscal year 1998, consist of donations from individuals, foundations, corporations, and other private contributors. Contributions from individuals and corporations to nonprofit arts and cultural organizations each represented 9% of total revenues in fiscal year 1998, more than twice the amount donated by corporations (4%) and other private contributors (3%).

Public Contributions

Public contributions to nonprofit arts and cultural organizations can be divided into federal, state, local, and multi-governmental sources. In fiscal year 1998, contributions from state and local sources each accounted for 3.1% of total revenues for nonprofit arts and cultural organizations. Federal government contributions represented 1.5% of total revenues in fiscal year 1998, followed by multi-governmental sources at 1.2%.

Revenue Sources by Type of Organization

Performing Arts Organizations

In fiscal year 1998, performing arts organizations received the majority of their financial support from earned income (59%). This is almost twice the level received from private contributions (29%), and more than six times the amount received from public contributions (9%). Performing arts organizations received just 3% of their revenues from interest and endowment income.

Visual Arts Organizations and Museums

Like other arts and cultural organizations, museums and visual arts organizations received the highest proportion of their fiscal year 1998 revenue from earned income (49%). Almost a quarter (24%) of total revenue came from private contributions and 9% from public contributions. Unlike other arts and cultural organizations, however, visual arts organizations and museums received a much higher proportion of their fiscal 1998 revenue from interest and endowments -- 18%, compared to 3% for performing arts organizations and 7% for multipurpose organizations.

Multipurpose Organizations

Multipurpose organizations received 60% of their fiscal year 1998 revenue from earned income. Almost a quarter (24%) of total revenue came from private contributions, 9% from public contributions, and 7% from interest and endowment income.

Comparing Revenue Sources

A comparison of fiscal year 1998 revenue sources for performing arts organizations, museums and visual arts organizations, and multipurpose organizations reveals that all three types of organizations received 9% of their total revenue from public sources, according to data from the 2001 National and Local Profiles of Cultural Support study. In addition, all three received the largest proportion of their total revenues from earned income (49% to 60%) and the second highest amount from private contributions (24% to 29%). Museums & visual arts organizations received the largest proportion of revenues from interest and endowment income (18%), more than twice the amount received by multipurpose organizations (7%), and six times the percentage received by performing arts organizations (3%).