It appears that the stress of the coming recession was affecting not-for-profit theatres before anyone used the "R" word.
Theatre Communications Group (TCG) released its latest survey of member NFP professional theatres. The survey covered fiscal years ending between November 2007 and September 2008. Theatre Facts 2008 in pdf format can be viewed here. Sarah Hart, writing about the report in the November 2009 edition of TCG's magazine American Theatre, noted that "not-for-profit theatres can often be like canaries in the coal mine, the first to show the effects of a poisonous environment."
The 2008 survey showed more than half of surveyed theatres ended the year with a budget deficit. In the five years before the opposite was true, most theatres ended the year with a surplus. Cash reserves were the lowest in the past five years when adjusted for inflation. Earned income dropped 7.2% between 2007 and 2008. Expenses rose; payroll for example went up 12.5% over inflation. With expenses rising, the percent of budget covered by earned income fell to 56.5% from 65.2% the previous year. And average endowment income was down.
The managing director of People's Light & Theatre Company in Malvern, Pa, said "I don't think we've ever seen anything like this. This year feels worse than 1990. I'm hopeful, but we may still have hard years ahead." In their 2008 IRS filing People's Light & Theatre reported revenues of $5.6 million and expenses of $4.6 million. Only 30% of income was earned income. It held assets worth about $6.5 million, a little over one year's budget. This is not a theatre in crisis, but it is worrisome that so much of its budget is covered by donations and grants.
