Glass Half-Full: Report Suggests That the America's Theater Fundamentals Are Strong

We are the first to admit we occassionally—very occassionally—fall victim to a term known in the philanthropy field as "big city bias" (BCB). For example, we recently looked at the state of small theater in the United States, but through the very narrow lens of companies in the three largest markets—Los Angeles, New York City, and Chicago. (In our defense, we were simply "following the story.")

Nonetheless, we'd like to make amends by turning to the state of small theater as it applies to both large and small markets. 

The impetus? A comprehensive survey of 1,770 U.S. nonprofit theaters conducted by the Theatre Communications Group. This survey acts as the basis for "Theatre Facts," an in-depth report documenting the country's nonprofit theater landscape. Needless to say, it's a robust piece of work, so for brevity's sake, we'd like to hit on a few key findings. (Spoiler alert: the prognosis is generally positive.) 

  • The 118 "trend theaters" that completed the survey every year since 2010 saw a 9.5% rise in total income from 2010 to 2014, driven by growth in contributed income, as well as increased earned income.
  • While theater exhibited "robust upward trends in individual giving and foundation support, government funding was down considerably over time, and there was lackluster growth in corporate giving." 
  • Single-ticket income grew between 2010 and 2014, and theaters added more performances; however, subscription income decreased, as did total attendance. 
  • Working capital, defined as "the unrestricted resources available to meet day-to-day obligations and cash needs" was negative in each of the five years, but improved over the past two years to finish 18.5% better since the low of 2010. 
  • In aggregate, total net assets rose 15.2 percent to reach a five-year peak of $1.72 billion, driven by investments, building and plant funds, undesignated cash, and net assets not in a reserve or endowment.
  • Contributed income increased 12.6 percent from 2010. Individuals were the largest source of these funds, followed by foundations. Buttressed by fundraising events, this support helped offset decreases in other income streams, including significant declines in federal, state, and city/county support.
  • A 7.3 percent growth in overall earned income was driven by multiple factors, including single-ticket income, educational/outreach programs, rental revenue, consessions, and investment income (all of which increased over the last five years).

So, what can we glean from this survey? First off, nonprofit theaters seem to have weathered the Great Recession somewhat well, on average. And while it's great news that they've been successful on the fundraising front—especially as government and corporate support has waned—subscription income and attendance figures didn't keep pace. On the surface, this isn't a particularly alarming trend. After all, theaters are at long last emerging from a prolonged recession and a bit of realism is required. Consumer confidence has remained stagnant—it actually dropped in October of 2015—so Americans remain reluctant to open their wallets, whether for a theater performance or a new dishwasher. If consumer confidence rebounds and attendance continues to lag, then concern will be warranted.

Paul R. Tetreault, director of Ford’s Theatre in Washington, D.C., sums up the industry's cautious optimism with the kind of macabre language that is perfectly fitting for a theater professional. Nonprofit theaters "already were being run without a lot of fat, so the recession really hurt when we had to tighten up on spending," he said. However, the tide has turned. "I think people feel a lot less uncomfortable than we did when the guillotine was hanging closer to our necks."

Now that's an image.