One-Third of U.S. Arts Institutions May Close This Year; PPP Loans Lagged Behind the Billions in Losses

  • July 23, 2020 16:22

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Rodin's The Thinker, at the Legion of Honor, San Francisco.

A survey released by the American Alliance of Museums (AAM) this week relayed a bleak outlook for U.S. arts institutions during ongoing pandemic-produced shutdowns: one-third expect that they could close completely this year. 

From responses taken from 760 museum directors, 33 percent were "not confident" that they could survive without additional financial relief and 16 percent were at "significant risk of permanent closure."

With closures since mid-March affecting most U.S. arts institutions, revenue from ticket sales, memberships, events and gift shops have largely shriveled.

Among the surveyed, more than 40 percent of respondents were history museums, historic houses and historical societies, with art museums representing less than 25 percent, and botanical gardens and other cultural institutions rounding out the whole.

According to AAM, a total of 87 percent said they had only 12 months or less of financial operating reserves, with 56 percent having less than six months left to cover operations.

"Museums support 726,000 direct and indirect jobs and contribute $50 billion each year to the economy. Of the museums able to reopen, over 40% plan to do so with reduced staff and will need to spend additional funds to ensure their ability to reopen safely," AAM said in a statement.

While 75 percent of organizations have increased online resources, budget cuts are expected ahead by 64 percent of directors. Forty-four percent of respondents have furloughed or laid off some portion of their staff.

U.S. museums have been losing at least $33 million per day, according to an earlier AAM survey.

In a separate analysis from the organization Americans for the Arts, financial losses to nonprofit arts and cultural organizations was an estimated $9.1 billion as of July 13, 2020. Overall, 96 percent of organizations have cancelled events since the onset of the pandemic—many well in to 2021—resulting in a loss of 327 million admissions. 62% of artists have become unemployed.

From the analysis of 173,243 arts loans—from the $2.3 trillion CARES Act enacted by Congress—9,917 went to nonprofit arts organizations and 163,326 went to for-profit arts and creative economy businesses. Within the $13.7 billion in arts and creative economy loans, $11.9 billion were awarded to for-profit arts businesses and gig workers, and $1.8 billion were awarded to nonprofit arts organizations. View the data here.

Some museums that received PPP loans still laid off workers, and more lay-offs are expected in August, according to the Nonprofit Quarterly.

The next deadline to apply for a PPP loan is August 8, 2020.

A new relief package is expected next week. ArtsHero is one grass roots campaign comprised of arts and culture workers, unions, and institutions in the United States pushing the Senate to allocate proportionate relief funds to the arts and culture sector.

On Thursday, the U.S. led the world with coronavirus cases at 4.1 million.

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