Key Takeaways

Working Capital

We studied the averages of working capital for organizations by sector, budget size, geographic market, and BIPOC/Non-BIPOC for the year 2019

Every Sector Averaged Positive Working Capital

2019 Key Takeaways, By Sector

  • By examining results by arts sector, we see that the overall average of five months of working capital is driven by Art Museums and Music organizations. All other sectors’ working capital index averaged less than four months.
  • Art Museums recorded the highest levels of working capital and also the highest levels of average expenses.
  • General Performing Arts organizations, as well as Dance and Opera companies, had the lowest average months of working capital.
  • (Note that for Performing Arts Centers and Other Museums, three outliers were removed from calculations for both categories. If including outliers, Performing Arts Centers would have 4.9 months of working capital, and Other Museums would have 11.2 months.)


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Working Capital for Organizations of Different Sizes

See Budget Ranges by Sector

To appreciate working capital levels for organizations of different sizes, it helps to understand what’s going on with working capital's component parts (not shown in the chart).

The Starting Point: Unrestricted Assets

Small (those that reported detail on assets by restriction) organizations’ level of unrestricted current assets was 61% of total expenses, whereas that of Medium and Large organizations was roughly 41%. 

Layer in Unrestricted Current Liabilities

As organizations increased in size, their unrestricted current liabilities increased in proportion to their unrestricted current assets. Large organizations’ relative level of unrestricted current liabilities limited their working capital.

A Balance Sheet Side Note

On average, only Large organizations had access to readily available cash and investments that exceeded the amount captured as unrestricted current assets. This measure includes unrestricted and temporarily restricted cash, cash equivalents, investments, and line of credit limit. Large organizations that have a long planning horizon or plan multi-year projects depend on the release of previously raised, multi-year money sitting as temporarily restricted cash. We know from the SMU DataArts Fundraising Report that as organizations grow in budget size, the release of restricted net assets into the current year – a clear sign of multi-year planning – becomes an increasingly important part of the year’s contributed revenue.  Galvanizing donors behind a big idea that will occur in the future appears to be a hallmark of growth.


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New York had Substantially Higher Levels of Working Capital

2019 Key Takeaways, By Geography

  • Among individual markets, New York had a substantially higher number of months of working capital, with San Francisco having the fewest months.
  • Organizations in Chicago averaged a similar number of months of working capital when compared to Large markets. Very small markets tended to have more months of working capital than any other market size, driven by lower relative average expenses and more working capital.


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BIPOC Arts Organizations Average Lower Levels of Working Capital Overall

2019 Key Takeaways, BIPOC-Serving Organizations*

  • Overall, organizations that serve general audiences had higher average working capital than BIPOC organizations. However, averages are again skewed high by a few large organizations that possess a lot of liquid capital and that do not self-identify as BIPOC-serving.
  • When we look at the median, or midpoint in the range, rather than the mean, we see a different story. A majority of BIPOC organizations were more liquid than most non-BIPOC groups: 2.1 months for BIPOC organizations and 1.2 months for non-BIPOC.
  • The median small organization in both cohorts had 3 months of working capital. Median WC decreased for both cohorts with size. However, the majority of medium and large BIPOC organizations had more liquidity than their non-BIPOC peers, with the gap increasing with organization size. See our white paper, Buffering Against Uncertainty, for more details.
  • (Note: This analysis includes 322 BIPOC organizations and 702 non-BIPOC organizations.)


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*We identified organizations as BIPOC-serving for this study based on their response to the following questions in SMU DataArts’ Cultural Data Profile (CDP): Does your organization primarily serve a particular racial/ethnic group? If yes, primary racial/ethnic group served? We have chosen to use the terminology “BIPOC-serving organizations” and “BIPOC organizations” for brevity, with recognition that any attempt to speak of a variety of heritages and cultures as a group is fraught with imperfection. These terms refer to organizations that self-select as primarily serving Black or Indigenous communities or people of Asian, Hispanic/Latinx, Arab, or multiracial descent.

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