Local arts and cultural organizations facing financial fallout from COVID-19 closures

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Local arts and cultural organizations will face a major economic impact due to coronavirus, according a survey of those organizations conducted starting last week by the Southeastern Connecticut Cultural Coalition that has so far drawn about 40 responses.

If coronavirus restrictions keep arts and cultural organizations in southeastern Connecticut shuttered through April 30, here is what is expected to happen, based on those responses:

• Those 40 respondents would suffer a total of $2.8 million in estimated lost revenue during that time frame.

• Small- to medium-sized organizations and businesses will each face $25,000 to $100,000 in lost revenues.

• 90% of medium- to large-sized organizations and businesses will have to change staffing in some way, whether that might mean cutting hours or layoffs or furloughs.

• Individual working artists will each lose $1,000 to $5,000 in revenue or more.

As mentioned, this covers only the period from March 12 to April 30, which is the time span addressed in Gov. Ned Lamont's first executive order. If the closures drag on, of course, the negative financial effect will be much more severe.

And it's not just about the arts and cultural organizations themselves.

There is a huge ripple effect. That indirect economic impact on other businesses is going to be huge, says Wendy Bury, executive director of the Southeastern Connecticut Cultural Coalition. A study that the coalition did in 2015 showed that nonprofit arts and cultural organizations in New London county have a $168 million economic impact each year. Of that, $81 million was the result of the money that audience members spent on things like restaurants, lodging and travel. (That study didn't include individual artists or for-profit creative businesses.)

Bury says that the arts and culture industry is part of "a larger, broader umbrella of adjacent industries that are critical to our economy and our communities — arts, culture, restaurants, lodging, tourism and hospitality. While we are each distinct and unique in what we provide and how we operate, we are deeply intertwined and feed off each other. .... When we lose one customer/patron/visit, multiple adjacent industries are affected, and the combined lost dollars in the economy become exponential. Collectively, these industries create an experience for residents and visitors. We are all deeply impacted by COVID-19 and harder hit than some other industries right now. We are all suffering and will need a short and long-term response and recovery plan, and there is already discussion between these adjacent industries' leadership about a collaborative and united approach to providing that."

While arts and cultural organizations are, of course, losing ticket and admission fees as performances and events have had to be canceled, the venues still have operating monthly expenses, as other businesses do. That means costs for things like rent or mortgages and utilities.

All places need to maintain a certain temperature control, but museums with priceless art collections need to maintain temperature and humidity control in order to protect those artworks. Arts and cultural nonprofits run some of the largest public facilities out there, with performing arts centers with capacities ranging from 100 to 3,000 seats and consequently being expensive to heat. Historic collections and buildings require ongoing preservation.

Bury is in contact with local arts and cultural nonprofits, asking them how the coalition can be helpful and what questions and concerns they have.

The Southeastern Connecticut Cultural Coalition will continue to encourage local funders like foundations and grant-makers to allow any current grants that are restricted to programs and projects to instead be used for things like overhead and payroll.

As for the mood of the organizations, Bury says people tend to be concerned and overwhelmed, and the challenge right now is finding answers to the questions they have.

"I think they are trying to assess what's the impact for one month, what's two months, what's three months, and where is our breaking point. What are those breaking points going to be, what are our biggest challenges, how can we figure out how we're going to raise that money?" Bury says.

She notes that creative responses to the situation have already started to kick in, with some organizations and artists offering online performances, for instance.

When the COVID restrictions are done and places can reopen and the public can gather together, she says, "There will simply NOT be enough available days, venues, patrons, businesses or money to support the rescheduling of the hundreds of cancelled/postponed events, performances, galas and fundraisers ... Organizations must consider collaborating to share costs, revenue, audiences."

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