Bottom Line

We studied the average trends of unrestricted surplus (before depreciation), operating surplus (before depreciation), and operating surplus (after depreciation) for organizations by sector, budget size, and geographic market from 2016 - 2019.

Overall Trends from 2016 - 2019

Generally speaking, bottom lines improved since 2016. The average organization‘s bottom line shifted from an operating deficit equivalent to -8% of budget to -5% in 2019, accounting for depreciation. When depreciation is left out of the calculation, bottom lines increased significantly from 2016 to 2017 before dipping down in 2018 and 2019.

Operating revenue growth outpaced inflation by 8% (not shown in the table), and its growth was greater than that of expenses. Operating deficits have shrunk over time but still remain.

Operating surplus (after depreciation) showed improvement in 2017. Since the only difference between the two operating surplus indices is depreciation, we can conclude that reported depreciation expenses were lower in the 3 years following 2016.

See the Full Trend Table 


Other Museums and Community Organizations Report Consistent Increases in Operating Bottom Line Indices

Trends 2016-2019, by Sector

  • When measuring bottom line by unrestricted surplus, roughly two-thirds of the sectors mirrored the overall upward trends to varying degrees. When measured by operating surplus before depreciation, all sectors except Music and Opera were able to increase their bottom line from 2016 to 2019. If depreciation is considered, a third of the sectors experienced a downward trend.
  • The Music sector saw a downward track in all three measurements of bottom line in 2019.


  • Other Museums and Community organizations displayed consistent increases in operating bottom line indices over time, regardless of whether depreciation is included. These sectors saw higher growth in revenues than in expenses (before depreciation).
  • Measuring bottom line using operating surplus before depreciation generated the least disparity between sectors; measurement using operating surplus after depreciation shows the greatest difference between the bottom line of different sectors, particularly in 2017 when many organizations had a big uptick in bottom line.
  • Most sectors experienced generally the same growth rate in expenses, outpacing inflation by around 5-10%. Notable exceptions are the Performing Art Centers, whose expenses after depreciation grew by more than 43%.

Large Organizations are More Likely to End the Year with an Operating Deficit

Trends 2016-2019, by Size

  • In all measures except unrestricted surplus, Large organizations have remained in deficit since 2016. The sharpest increase can be seen when measured by unrestricted surplus: large organizations experienced a 21% increase. Operating surplus after depreciation shows a slight increase in 2019 over 2016, indicating that large organizations reported slightly less depreciation recently.


  • Small organizations' operating surpluses have remained generally level over time. Small organizations reduced their expenses and increased their unrestricted revenue, with particularly robust growth in operating revenue. In both operating surplus indices, small organizations are not far below the operating bottom line level of Large organizations. Within 4 years, the span has increased to a bottom line at least 5% higher than their large counterparts.

  • Medium organizations experienced increases in unrestricted surplus and slight decreases in operating revenue.

Only Organizations in Los Angeles Ended the Four Years with a Surplus

Trends 2016-2019, by Geography

  • Regardless of how bottom line is measured, most markets displayed a rise in 2017 then a dip back down in 2019 – resulting in a generally positive trend. This is consistent with overall national trends and suggests that no individual market stood out against these overall trends.
  • When measuring bottom line using operating revenues and taking into account depreciation, only Los Angeles ended the four years with a surplus.
  • Most independent markets experienced a large decrease in net surplus (deficit), with some recording a drop of over 300%.
  • When measuring bottom line by unrestricted surplus, all market clusters averaged an increase in 2019 over 2016 – the exception being Washington, D.C. and Small markets.


  • The other two bottom line indices, calculated using operating revenues, present a more varied view in 2019; New York and Los Angeles were able to decrease their deficits from 2016 to 2019.
  • Washington, D.C. saw the largest average decrease in bottom line by any measurement. In 2016, organizations in this market averaged the highest bottom lines by any measure. By 2019, they displayed the largest unrestricted deficits and the most severe operating deficits relative to expenses.


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