Report Reveals Increases in Non-Profit Theaters’ Income

Two-third of the nation’s non-profit theaters ended last year with a surplus — the first time in a decade that a majority of theaters were operating in the black, according to a new study.

ALSO SEE:

Non-Profit Theaters: a Statistical Profile

Total income for the theaters came to $565-million in 1997, said a new report by the Theatre Communications Group, an organization that represents non-profit theaters. Nearly $350-million of that amount came in the form of earned income, such as ticket sales, and $213-million was contributed by private donors and government agencies. Expenses totaled $527-million, resulting in a net surplus of $38-million.

Those figures, however, cannot be compared with those reported in last year’s survey. That is because the report changed its methodology in response to changes in accounting rules introduced by the Financial Accounting Standards Board, a private organization that sets rules that govern how most non-profit groups keep their books.

The rules, which theaters have been adopting over the past few years, encourage theaters to count as assets all of their unrestricted funds — not just the money in their operating funds, as many previously had.

The survey found that the theaters’ good financial health may be in part the result of an increase in attendance.

Theaters in 1997 staged 5,500 more performances than in 1996 and attracted 160,000 more patrons. Those figures’ significance is heightened by the fact that 197 theaters participated in the survey this year, 31 fewer than in last year’s survey.

Other notable findings:

* Earned income accounted for 62 per cent of revenue in 1997, while contributions accounted for 38 per cent — nearly the same proportions as in 1996.

* Ticket sales were responsible for three-fourths of earned income.

* Gifts from individuals accounted for 27 per cent of all contributed incomes. Donations from trustees were especially important to the theaters: They made average gifts of $4,974, compared with $173 for all other donors. Foundation grants accounted for 21.7 per cent of all contributions.

* The National Endowment for the Arts directly provided only 1.5 per cent of total contributed income received by theaters, but state arts agencies, which are supported by the N.E.A., accounted for 5.8 per cent.

* The National Endowment for the Humanities did not support any theaters in the report.

Among 81 theaters that responded to the survey for three years in a row, royalties grew 11 per cent from 1994 to 1997, after adjusting for inflation.

* Those same 81 theaters employed 3.5 per cent more artists in 1997 than in 1996, and 2.1 per cent more than they did three years ago.

* About 47 per cent of theaters reported that they did not have endowments.

* More than half of the theaters’ expenses went to payroll. Marketing accounted for 12 per cent of expenses and development 3 per cent.

“Theatre Facts 1997″ appears in the November 1998 edition of American Theatre, a magazine published by the Theatre Communications Group.

Copies of the report are available from the Customer Service Department, Theatre Communications Group, 355 Lexington Avenue, New York 10017; (212) 697-5230; e-mail custserv@tcg.org. The cost is $4.95, plus $3 shipping.