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Friday, July 10, 2009

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Did You Know?

The Global Financial Crisis and the Arts

International arts and culture agencies expect the global financial downturn to affect the arts, but many are unsure of the extent, nature and timing of the impacts, according to the results of a recent survey by IFACCA, the International Federation of Arts Councils and Culture Agencies.

Many of the responses summarized in Global Financial Crisis and Recession: Impact on the Arts were wide-ranging about the recessionas degree of severity:

Maintaining arts revenue in the current and upcoming economic climate is an area of concern. Economic forecasters estimate that many national economies are entering severe recessions, with recovery predicted to be slow. Because the downturn was triggered by a financial crisis across markets worldwide, its effects will be felt in ever-widening circles by various sectors. For example, asset adjustments in the funding sector will later affect organizational and consumer behavior, which could result in rising unemployment, all of which are likely to affect revenues. The revenue sources respondents cited most frequently as affecting the arts sector were corporate sponsorships, endowment income, foundation/trust philanthropy, and local or municipal funding.

The nations IFACCA surveyed all have very different government structures. Some lack the three tiers present in the United States (local, state and federal), and contrasts among the systems used to support the arts make international comparisons difficult. Taking these differences into account, most countries polled expect the least disruption in federal funding for culture, whereas the recession is expected to have a greater impact on arts funding from other levels of government.

Anticipated Effects of the Economic Crisis
Staff layoffs 79%
Fewer commissions of new work 79%
Less adventurous programming 64%
Consolidation of operating units 36%
Figures reflect the percentage of national cultural agencies expecting these factors to emerge among arts organizations as asignificanta consequences of the economic crisis.

The survey also asked cultural agencies to rate the non-financial effects of the economic crisis on arts organizations. Top concerns included staff layoffs and reductions in the commissioning of new works. The recession is expected to have a greater impact on performing and visual organizations than on literary or community groups.

The report includes the questionnaire, to which representatives from 12 countries responded; a digest of all responses; and a listing of research, best practices guides, expert commentary and news items that arts agencies and cultural organizations can use to manage operations in a down economy.

IFACCA DaArt Report No. 37, Global Financial Crisis and Recession: Impact on the Arts, Sydney: International Federation of Arts Councils and Culture Agencies, June 2009, www.ifacca.org.