This report examines financial trends from 2019 to 2023 across small and mid-sized organizations and brings much-needed visibility to micro-organizations—those with budgets under $60,000—that are often left out of traditional sector analysis. The findings highlight growing financial strain, persistent recovery gaps, and the resilience of organizations striving to serve their communities under pressure.

Key Findings

• Performing arts organizations face revenue challenges amid rising costs and a shifting funding landscape. Theaters saw the gap between expenses and revenue widen between 2022 and 2023. And while one of the most obvious contributors to the rise in expenses is inflation, it’s worth noting that values-aligned expenses—like a desire to provide living wages and offer pay equity—have major cost implications.

• The experiences of dance and theater groups are different. Dance organizations were better able to manage expense growth, reporting an 8% surplus in 2019, which allowed them to weather closures and pauses on programming. They were more successful at covering more of their expenses with earned income. By contrast, theater expenses outpaced revenue to a greater degree compared to other genres, creating heightened financial challenges.

• In person attendance rates and program offerings are increasing, but earned revenue is still in a recovery state. Expanded education offerings and free community programs were a primary driver for increased attendance.

• Replacing the unprecedented pandemic federal funding remains a challenge. Foundation support is the only revenue stream keeping up with inflation, while corporate and trustee support is at a five-year low. Individual support has grown in numbers but is not matching inflation. If inflation declines, strong individual support will remain vital for sustaining nonprofits.

• Micro-organizations are nimble and demonstrate resilience by investing in their communities and artists. Despite facing significant financial challenges, including being largely left out of the federal pandemic relief funding, micro-organizations demonstrated resilience. They increased programs and attendance, maintained or grew their workforce and prioritized community engagement and mission-focused recovery, even as expenses outpaced revenue growth.

This report surfaces urgent questions about how to support long-term sustainability in the arts—particularly for the organizations that operate closest to community needs. With reserves dwindling and costs rising, the need for equitable, strategic investment has never been clearer.

Read more about why the Kenneth Rainin Foundation chose to use data to understand where their support could be most useful:

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