Measuring the Financial Success of NYC Non-Profit Theaters in the Face of COVID-19 Julia Mollin Senior Honors Project May 10, 2021 Introduction ● COVID-19 poses an existential threat to performing arts organizations across the country. ● New York City has been hit particularly hard. ● One prediction from Americans for the Arts states that “1 in 10 nonprofit arts organizations doubt their ability to survive the pandemic” (Cohen 2020). ● Many organizations rely heavily on earned revenue and COVID-19 restrictions seriously threaten that crucial source of income. ● There is also increased uncertainty about donations and grants. Introduction Cont. ● Many small and mid-sized arts organizations have had to layoff or furlough staff (CUF 2020). ● Many artists have participated in mutual aid networks to make ends meet while waiting on emergency government assistance. ● Organizations and venues have worked quickly to transition valuable educational and public programs from in-person to online, but are still dealing with challenges such as using new technology and limited interest in virtual performances. ● There is a need for urgent action to provide support to these organizations as well as direct relief to artists and workers to ensure that the arts survive this crisis. Project Tool Overview ● This project sets out to create a tool that allows nonprofit arts organizations to analyze their financial data, compare it to their competitors and use the information to advocate for increased support and funding. ● It was designed using Tableau with data from the IRS’ Form 990. ● The tool is currently in Beta and only includes a limited amount of data from select nonprofit Off-Broadway theaters. ● Once the 2020 and 2021 Form 990 data is available, this tool can be used to study the impact of COVID-19 on nonprofit theaters. ● This study analyzes data from the 2018-2019 tax year which is the most up to date Form 990 currently available. Similar Research & Tools 1. Broadway Brands’ Broadway Business provides “tools and resources for theater producers, general managers, advertisers, press representatives, theater owners, ticketing services, attorneys, investors, and anyone else involved in or interested in the business of Broadway” (Run the Show). ● The data displayed in Broadway Business is focused on measuring profit. 2. Americans for the Arts studied the impact of COVID-19 on the arts and cultural sector of the United States by surveying arts organizations and arts agencies of all types, genres, sizes, and tax statuses. ● It is a very generalized tool. Methods: Theaters ● Off-Broadway Theater Alliance’s list of nonprofit Off-Broadway theaters was used to determine which theaters to include as a way of focusing the search. ● For the purposes of this study, the tool only includes theaters that had the most recent Form 990 which is from the 2018-2019 tax year publicly available at the time of initial research. ● Theaters that were part of a larger arts organization that offered other programming outside of the theater were not included. ● Some of the theaters file under different names than what they are commonly known as. Final 14 Theaters Included 1. 47th Street Theater / Puerto Rican Traveling Theatre 2. Atlantic Theatre Company 3. Baryshnikov Arts Center 4. HERE Arts Center 5. Irish Repertory Theatre 6. Manhattan Theatre Club 7. New York Theatre Workshop 8. Playwrights Horizons 9. Signature Theatre Company 10. Public Theater 11. Rattlestick Playwrights Theater 12. Roundabout Theatre Company 13. WP Theater 14. York Theatre. Methods: Form 990 ● Every organization that has been recognized as tax exempt by the IRS has to file Form 990 every year, unless they make less than $200,000 in revenue and have less than $500,000 in assets, in which case they have to file Form 990-EZ (Schwencke 2021). ● There is an abundance of data available. ● Form 990 data is difficult to extract and analyze because it is only available in PDF and XML form for more recent years. ● To easily analyze the data, it needs to be transformed into a relational database. ● “Accessing IRS Form 990 Data with Excel” by Humberto Barreto and Michele T. Villinski, provides Form990.xlsm which was used to extract the data and transform it to be machine-readable. ○ Form990.xlsm provides specific instructions to guide users through the process. Methods: Tableau Prep 1. Data was extracted and combined. 2. Duplicate rows were deleted. 3. Relevant data fields for one theater were selected in Tableau. 4. A union between the first two organizations was created and all mismatched values were removed. 5. Additional theaters were continually added to the union and mismatched values were removed until the data set was complete. 6. Once the maximum (10) was reached an additional union was created connecting the original union to another theater input. 7. To make comprehension fast and easy the variable names were edited. Any extra characters that weren’t necessary were erased. 8. The flow was run, and the finalized data was saved as a .csv file for later use in Tableau Desktop. Tableau Prep: Unions & Output Variables Methods: Missing Variables ● All missing/null variables were addressed in the saved Excel file. ● The corresponding Form 990 PDFs were used for reference. ● Many of the missing values were Prior Year (PY) variables where the corresponding Current Year (CY) was zero. ● Based on this, all the missing values were made equal to zero. Methods: Additional Variables ● Two additional fields needed to be added because using location in Tableau requires longitudinal and latitudinal data. ● Geocod.io has a batch geocode feature for U.S. and Canadian addresses in spreadsheet form. ○ It quickly interprets the data and outputs an updated spreadsheet available to download. Methods: Tableau Desktop 1. The data in the .csv file was imported into Tableau Desktop. 2. Several worksheets with graphs and charts were created. 3. Everything was made more cohesive by playing around with creative and design. 4. The worksheets were then combined to create dashboards. 5. The dashboards were uploaded to Tableau Public for easy, convenient access by relevant parties. Results: Gross Receipts ● The IRS defines "gross receipts" as "the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses" (IRS 2021). ● The New York Shakespeare Festival (also known as the Public Theatre), Roundabout Theatre Company and Manhattan Theatre Club were the largest organizations by gross receipts included in the study. ● York Theatre Company, Pregones Puerto Rican Traveling Theater and Rattlestick Playwrights Theater were the smallest. Results: Revenue & Expenses ● The following stacked bar graphs show how much each form of revenue contributes to the total. ● The majority of revenue comes from contributions and grants, and program revenue. ● Most theaters spend the most money on salaries and other expenses. ○ The high percentage of spending on employees demonstrates the importance of these institutions in supporting artists and other industry professionals. ● For most theaters total revenue and expenses is about equal. ○ This indicates that most of the revenue coming in is being spent with limited profit intake for the organization. Total Revenue Total Expenses Results: Profit ● Some theaters saw a profit increase from the 2017-2018 tax year to the 2018-2019 tax year while others had a decrease. ● There is no obvious pattern; however, future research could be conducted to study why this may be occurring. ● Profits for several theaters were negative or very close to breaking even prior to the COVID-19 pandemic. Results: Assets & Liabilities ● For the most part, net assets remained equal from the beginning to the end of the year with some increases or decreases depending on the theater. ● Total assets & liabilities varied from theater to theater. Results: Organization Information ● The Location graph details the coordinates of each of the theaters on a map. ● The Formation Year graph is in the format of a timeline and shows when each theater was formed. ● The Governing Body graph shows the total number of voting members which roughly corresponds to the size of the organization and runs between about 10 to 50 individuals. ● The Employees and Volunteers shows the total number of people working at the theater. ● The Gantt Bar graph shows the tax period for each theater. Results: Tableau Public Dashboard The final dashboards, Financial Data and Demographics, are available on Tableau Public for anyone to view in better detail and interact with at a unique web link. The project is titled 2018-2019 Form 990 Off-Broadway Theater Data. Discussion ● Due to time constraints the data for the 2020 tax year was unavailable to be used in this study. ● This study shows how the data can be analyzed and provides possible next steps to improve the tool, so it is optimized to study COVID-19 data in the most effective way. ● It provides an important baseline analysis which will be a valuable tool when studying data from the COVID-19 era. ● After a year of social distancing and isolation, the arts can help heal the nation. ● This tool is another stepping stone to recovery for New York City’s theaters. References “Art in the Time of Coronavirus: NYC's Small Arts Organizations Fighting for Survival.” Center for an Urban Future (CUF), 2020, nycfuture.org/research/art-in-the-time-of-coronavirus. Barreto, and Villinski. “Accessing IRS Form 990 Data with Excel.” Philanthropy & Education, vol. 2, no. 2, 2019, p. 95., doi:10.2979/phileduc.2.2.05. Cohen, Randy. “By Every Measure, COVID-19 Continues Its Devastation of the Arts.” ARTS Blog, 17 Dec. 2020, blog.americansforthearts.org/2020/12/01/by-every-measure-covid-19-continues-its-devastation-of-the-arts. “Financial Accounting for Local and State School Systems.” National Center for Education Statistics (NCES), nces.ed.gov/pubs2009/fin_acct/chapter5_3.asp.