What’s to Become of Philly’s Many Struggling Arts Groups? The Penn Foundation Has Some Ideas

The William Penn Foundation is the biggest funder in Philadelphia, so when it hints at a change in strategy, everybody in the industry turns an ear to listen. Penn has been a huge funder of arts organizations, art education, and creative public spaces, but it can’t seem to ignore some glaringly obvious trends in the region’s arts industry.

Penn recently conducted a study titled, "Capitalization, Scale, and Investment: Does Growth Equal Gain?" which points out how crowded, yet fragile, the city’s arts market really is these days. The report examined over 160 arts groups and found that at least 70 percent of them were struggling financially.

Accordingly, Penn is shifting its arts funding strategy a bit, and we wouldn’t be surprised to see other regional funders begin to follow suit. These are few of the things that may help Philadelphia arts organizations catch Penn’s attention and hold on to it for at least a few years.

Consider Mergers or Shut Down When Interest Isn’t There

In the art industry, trends and favorites comes and go, so it doesn't benefit anyone to cling to a dying organization that fails to draw interest time and time again. Arts nonprofits should be willing to consider mergers with similar-minded organizations, to do a complete overhaul or restructuring, or just call it quits if the outlook is especially dim.

"That could mean looking for a new model for the organization; that could mean right-sizing the organization; that could mean recognizing the organization has come to its natural end and finding ways to support those organizations to wind down in a responsible way," explained Penn Executive Director Laura Sparks.

Sparks went on to explain that the foundation hopes that over time, more organizations will look at mergers as a responsible way to wind down operations, rather than viewing them as a personal or professional failure.

It's All about the Millenials

Millenials this, millenials that—you may be tired of hearing about this elusive demographic and its potential, but they’re going to be around for a long time and they're today’s most important marketing demographic. Penn’s study acknowledges the potential purchasing power of this group, but also notes that arts groups might not be doing all they can to draw them in and keep them committed.

“Our interviewees sketched for us the dynamic that is playing out: a generational shift taking place among major donors in Philadelphia,” the report reads, courtesy of the Boston-based research company TDC. “Stalwart community leaders who drove individual giving are retiring. While wealth continues to exist in the region, arts organizations have not yet cultivated close relationships with the next generation. The question remainswho is on the other end of the arts community's $1.4 billion call on philanthropic capital, and how will they be engaged?"

Entice Repeat Attendees

Now that the economy is slowly bouncing back, more people are attending art events and performances. However, many of them are curious one-time attendees rather than committed art lovers who continuously frequent shows and exhibitions. Arts organizations need to find a way to secure long-term engagementa sort of “loyalty club” mentality, if you will.

The Take Away

Despite these challenges and concerns, the Penn Foundation's arts funding will keep chugging along, and in fact will increase this year. So the fear here is not that this central funder is going to turn off the spigot. 

But for Penn right now, it’s all about the audiencewhat brings it in, what keeps it engaged, and what keeps it paying the bills. The foundation is also looking outside the city limits to engage potential donors in other areas to invest in Philadelphia projects.

It seems that Penn has some doubts about whether audience growth is even possible to sustain the city's projects. This means that arts organizations really need to scale back or that outside interest will need to reach an all-time high. Either way, the arts scene in Philadelphia is one of the most intriguing in the country right now, and whether traditional philanthropy can continue to support it is yet to be seen.