Pooling Resources to Fund the Arts

Pooling Resources to Fund the Arts

Leigh Nanney Hersey (University of Louisiana – Monroe, USA)
Copyright: © 2018 |Pages: 26
DOI: 10.4018/978-1-5225-2581-3.ch006
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The viability of today's arts and cultural nonprofit organizations depends much on the ability to generate financial resources. Leaders of these organizations must balance government funding, private giving, and earned income to meet their budget needs. Using regression analysis, this research focuses on the relationship between government funding and private giving to nonprofit arts and culture organizations. Results suggest that government funding of the arts, including arts education programs, encourages private giving. Therefore, organizations need to continue to fight for funding from programs like the U.S. Department of Education's Arts in Education which will in turn encourage private giving. It is the pooling of different revenue streams that can keep the arts vibrant in our communities.
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Nonprofit organizations are funded through three main sources – private giving, government grants and contracts, and earned income. Referred to by some as a “mixed economy” (Anheier, 2005), this variety of funding sources is one characteristic of nonprofit organizations that makes the sector different from both government agencies, which mainly rely on taxes and fees, and from for-profit organizations, which depend mostly on consumer payments and sometimes government contracts such as defense contracts (Grønbjerg, 1991). While having a variety of funding sources can prevent a nonprofit organization from depending too much on one source, it also can give nonprofit organizations less ability to control their revenue streams than government or for-profit organizations can (Grønbjerg, 1991). Arts organizations as a whole depend heavily on private giving (41 percent of revenue) and earned income (31 percent of revenue) (Wing, Pollak, and Blackwood, 2008).

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