Nonprofit Arts Organizations: Do Funding Sources Influence Spending Patterns?

Concern over the funding of nonprofit organizations has raised issues concerning the amount of money available for the provision of services and the potential that changes in the nature of funding will compromise organizational goals. Because of increased competition and government cutbacks, nonprofits will be forced to place more reliance on commercial ventures. This has the potential to negatively affect the behavior of recipient organizations. The question addressed in this article is whether greater reliance on private funding and commercial ventures will ultimately cause nonprofit arts organizations to place less emphasis on program services and more emphasis on fundraising and management expenses. The analysis is focused on three categories of nonprofit arts organizations: museums, performing arts, and media and communications. Overall, the provision of program services appears to be the primary goal of organizations in these three sectors, and greater reliance on private funding does not divert funding from program service delivery.