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Lessons in Cultural Participation and Financial Sustainability

Ted Russell

Ted Russell, Former Senior Program Officer

In our recent posts, the Irvine Arts team has been exploring the ways nonprofits can expand arts engagement — to create meaningful experiences that bring forward the full public benefit of arts, and to also increase organizational sustainability for the future.

One area that we have been particularly interested in has been finding ways to increase cultural participation and improve financial stability among arts organizations serving areas outside of major California arts centers. In 2009 we launched the second phase of the Arts Regional Initiative, a five-year partnership with 36 arts organizations in Southern California, the Central Valley, and the Central Coast. During that time, we provided $13.4 million in grants and technical assistance to support these goals.

What did we learn from this work?

We commissioned an evaluation from Harder+Company Community Research to help us answer this question. The report, Investing in Cultural Participation and Financial Sustainability, which we’re releasing today, generated a host of insights that arts organizations and funders alike may find valuable. Most notably, we learned:

  • It’s possible to increase cultural participation. Many grantees were particularly successful in deepening cultural participation with existing audiences.
  • Combining three key approaches maximizes participation. Those that realized the greatest success employed a combination of strategies, including, in order of effectiveness, direct outreach to members of target audiences, market research, and new programmatic activities.
  • Organizations can achieve new capacities. Most developed new capacity for continuing to improve their cultural participation and financial sustainability.
  • Increased capacity cannot ensure financial sustainability. Results here were mixed for Initiative participants, who endured the Great Recession that was felt intensely in their regions. Despite an immediate focus on simply keeping the doors open during this time, several improved their unrestricted net asset position.
  • Partnerships and executive leadership matter. Collaboration with community groups and continuity of executive leadership were important factors contributing to an organization’s success.
  • Commitment level correlates with benefit. Organizations highly committed to the work and strategies of the Initiative saw the most benefit.

Our peer funders may be interested to know that the Initiative’s transformative impact was greatest with small- to mid-size organizations ($500,000 to $2M in annual revenues); and that most grantees were eager to improve governance practices when offered materials and trainings.

In addition, arts nonprofits may be interested in learning more about ways grantees evolved to become more strategic, data-driven organizations better able to respond to environmental change; and about challenges some participants encountered in selecting and implementing new software systems.

Finally, I’d like to thank Harder+Company and our primary technical assistance provider, TCC Group, for their excellent work. They were terrific partners for more than six years as we developed, implemented, and completed the Initiative.

View the full report

We expect that lessons from this report will continue to have application. Despite having survived the Great Recession, arts organizations everywhere continue to confront the challenge of changing times, characterized by new demographics, new technologies, and new expectations for participation. The Arts Regional Initiative provides ideas and potential pathways for those seeking to adapt and grow through change — insights we are grateful to have and share to advance the arts sector in California and beyond.