Assessing Organizational Financial Health of Nonprofit Arts Organizations

This study is the second in a series that analyzes, both independently and in the aggregate, the empirical inter-relationships of financial levels of government support, marketing/development investment and financial health of nonprofit performing arts organizations. Currently in the design stage, this study will build on the previous research to examine those and additional factors—levels of earned/contributed revenue, and artistic and administrative/finance expenses—assessing their correlational and causal inter-relationships with organizational financial health. It also is designed to analyze differences between pre-2008 (pre-recession) data and post-2008 (recession and post-recession) data to assess implications of significant changes in the macro-economic environment for nonprofit arts organizations. This preliminary study examines those factors using data from GuideStar, a database which contains financial reports of nonprofit organizations. The final study will evaluate existing data from the League of American Orchestras robust annual survey of member orchestras.