It is becoming clear that the coronavirus global pandemic will affect every aspect of our lives. For the nation’s cultural institutions — museums, gardens, zoos, parks, galleries — the financial impact will be severe and from multiple fronts. Decreased or ceased visitation, donor financial uncertainty and investment losses will all contribute to a strain that may put your favorite cultural institutions in jeopardy. Public support and government legislation should not neglect to recognize the economic and social benefits these organizations offer our community.
Last Monday, virtually all the Tulsa cultural institutions jointly announced public closure of facilities. I was part of the group discussions that led to this unprecedented move by ahha Tulsa, Philbrook Museum, Tulsa Zoo, Gilcrease Museum, Discovery Zone and many others. The decision was wrenching, but as expected, our cultural institutions stepped up and placed the highest priority on public health and safety.
Cultural attractions like these operate with a balance of two funding sources: earned income, such as admission tickets and gift shop buys, and contributed income, such as donations and grants.
Closing the doors to visitors will affect earned income, whammy No. 1. The repercussion will be particularly severe because the closure time frame includes spring break, which is every Tulsa attraction’s highest visitation week, bringing in up to 20% of annual earned revenue. The actual effect in dollars for spring break closure will be anywhere from $50,000 for smaller organizations up to $1 million for the larger organizations.
The stock market roller coaster and decline in oil prices will deliver whammy No. 2. While some public money is available for cultural organizations through groups like the Oklahoma Arts Council and National Endowment for the Arts, most contributed revenue comes from private foundations, corporations and individuals. In Tulsa, the investment income that allows foundations and individuals to give to charitable causes is highly dependent on the oil and gas industry. When energy stocks are down, donations decrease. To further the blow, the pandemic crisis forced several cultural attractions to cancel fundraisers during this shutdown phase. These events contribute up to 50% of organization budgets, so canceling them has a swift and painful effect. Even if organizations reschedule fundraising events in short order, which is no small task, donor uncertainty due to the markets will undoubtedly reduce contributions.
Many cultural institutions have backstops to provide bridge funding during difficult financial times. Some have cash reserves to cover operations for three to six months. Most maintain board-designated endowment funds that include investments in, you guessed it, the stock market. Whammy No. 3 for cultural institutions is that just when they need to rely on their backup funding, they are experiencing losses like everyone else in the market. Their portfolio may not bridge a months-long gap in earned or contributed revenue.
The risk to our community should be clear at this point. Some cultural institutions we all hold dear may have difficulty weathering the storm if this crisis continues for months on end. While the government and the media are focused on how to save the economy, small business and the working class, nonprofit organizations, including cultural attractions, are often forgotten. The economic risk is immense as cultural organizations bring in over $225 million to the greater Tulsa region annually. Because the organizations hire artists, performers and other industry professionals, the rippling economic impact is quite significant.
The community risk is much higher because of the intrinsic value cultural institutions provide. These organizations provide safe spaces for disagreement, offer a conduit to share stories, deliver moments of wonder and delight and bring beauty and creativity alive.
You can be part of the solution. Advocate for nonprofit cultural institutions to be part of any economic stimulus at the state or federal level. Buy your annual membership now. Donate any amount online. Buy a fundraiser ticket or table today, even if it is postponed. Show some love to your favorite organization and help soften the blow of the triple whammy.
Holly Becker is executive director of ahha Tulsa and chairwoman of the Tulsa Arts Commission.