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Public demand for arts & culture strong, but funding threatened

These past few months have been a challenge for all cultural organizations, but public interest in and support for the arts remains strong.  According to TempCheck, a periodic survey released last week by the Greater Philadelphia Cultural Alliance, public demand for arts and culture is growing just as resources to provide it, like state funding, are drying up.  And cultural organizations are doing everything they can to survive in the face of this adversity.  "Since typical admission fees cover less than half the cost of production, cultural organizations are walking a tightrope between increasing interest and decreasing resources," said Peggy Amsterdam, President of the Greater Philadelphia Cultural Alliance. "They are doing everything possible to adapt to a new economic reality without sacrificing high-quality programs and services.”

How does this situation play out in reality?  It’s quite simple: as demand is going up, resources are going down, and this dynamic is putting many organizations in a very difficult position.  On the local government front, we've seen three attempts this year to expand taxes or increase rates for nonprofit organizations in Philadelphia, and Montgomery County reduced operating support for cultural organizations in this year’s budget. Peggy Amsterdam also testified on Friday, May 8 during the public testimony on the city budget (read her remarks here). In addition to the above issues, her testimony supported the Mayor's proposed funding for cultural organizations and programs, and updated Council members on how the cultural sector is faring in the current recession. 

State funding for cultural organizations has also been threatened in recent weeks. The PA Senate passed their version of the state budget, which would eliminate all arts and cultural funding through the Pennsylvania Council on the Arts and the Pennsylvania Historical and Museum Commission.  The PA House has also introduced a budget bill, which remains in committee.  The budget bill expected to be passed by the House differs from the Senate’s, which indicates that a conference committee will be formed to work out the differences.

Yet, despite dire prospects, cultural organizations appear well-managed and are preparing to weather the recession. Cultural managers have always operated under the framework of doing more with less, so while the recession presents a daunting challenge, it is not an entirely unfamiliar one.  Forty-two percent of organizations have prepared for the rainy day with cash reserves of 1-3 months' worth of expenses immediately available. Another quarter of organizations surveyed have access to 6 months or more cash if needed. One-third are expecting deficits in the current fiscal year, and 2 in 5 expect things to get worse over the next six months.

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