Mass. Cultural Nonprofits Lost $425M Due to COVID-19 Crisis
Coronavirus-Dollar

July 17, 2020 — Since the COVID-19 pandemic took hold in Massachusetts in March, cultural nonprofits across the state lost $425 million in revenue to date due to cancellations and closures and will take an average of two years—up to five years in some cases—to recover, according to the Mass Cultural Council.

The losses, based on a survey of 392 nonprofits across the state with annual spending budgets ranging from $50,000 to $145 million, included $365.4 million lost in earned revenue and $59.5 million lost in contributed revenue.

Forty percent of survey respondents noted that they were unsure when to reopen, even if allowed by state reopening guidelines.

Since March, at least 98% of respondents said they had to cancel in-person programmatic activity and 79% had to cancel funding events/activities, the Mass Cultural Council (MCC) reported yesterday.

“While the necessary public health measures in place for the past 18 weeks, like social distancing and COVID-related closures, have resulted in beneficial public health outcomes, they have also wreaked havoc on the economics of the cultural sector,” said David T. Slatery, acting MCC executive director. “The continued unknowns about the future complicate the planning process for cultural organizations.”

He noted, “Cultural nonprofits are more at risk than other industries because of their operation and programming models.”

In testimony delivered to state senators on Wednesday, Troy Siebels of the Worcester-based Hanover Theatre for the Performing Arts said that the performing arts have been "decimated" by the pandemic and many businesses operating in the field will not survive, according to the State House News Service.

Joseph Thompson, director of the Massachusetts Museum of Contemporary Art in North Adams, reportedly told senators he is "quite nervous" about how it will get through the next six months

Reflecting the difficult fundraising environment, the Massachusetts Alliance of Portuguese Speakers in Cambridge, while not a cultural nonprofit, yesterday announced it has canceled its 50th Anniversary Gala, scheduled for September 19, due to concerns over the COVID-19 pandemic and the risk that big-scale events continue to pose to the health and safety of the community.

Ninety-three percent of survey respondents provide programming “mostly in person”; 88% of responding organizations provide programming “mostly indoors”; and almost one-third of survey respondents provide programming aligned with school activity or direct cultural programming in schools.

Cultural sector employees have been heavily impacted by COVID-19 as well. Sixty-eight percent of responding organizations indicated that they expect layoffs, furloughs, and reductions in pay and working hours for their employees, which will impact 17,020 employees and their jobs statewide.

Cultural nonprofit organizations estimate that it will take on average two years— up to five years in some cases—to recover programming and financial status back to pre-COVID levels. That will be driven, in part, by the public feeling confident in reengaging with cultural programming.

When identifying recovery strategies necessary to reopen, survey respondents prioritized changes to core programming, such as:

  • Reduced occupancy for programming

  • Shifting program delivery from in-person to virtual, or from indoor to outdoor

  • Making capital investments like HVAC adjustments for public health and safety

  • Making changes to, or eliminating, concessions and other sources of earned income

  • Implementing other changes like transitioning employees to work remotely, providing the equipment necessary to do so, increasing cleaning services, signage, and sanitizing or hand-washing stations for employees and audience members.

The cost of implementing recovery strategies, to reopen to the public, as identified by survey respondents is $117 million.

“We now know that one in four cultural sector jobs have been impacted by COVID,” said Slatery. “Public investment is necessary to restore these jobs and help the sector flourish across Massachusetts again.”