Nonprofit arts adaptation
The modern arts nonprofit evolved in an ecology of growth. It's time to evolve again.
“Evolution favors what is good at replicating itself, rather than what is good. This fundamental distinction is essential to understanding any evolving system.”
—John Kay, The Truth About Markets (2003)
By most accounts, the modern nonprofit arts organization emerged in the late 1950s and found its feet through the 1960s, ’70s, and ’80s (although a recent article by Ximena Varela suggests we may be off by a few centuries). According to John Kreidler’s classic, “Leverage Lost: The Nonprofit Arts in the Post-Ford Era” (1996), the extraordinary 20th-century growth in the number and distribution of this fruitful species was fueled by rising flows of money and people:
Flows of Money
Modern Tax Code - The Revenue Act of 1954 established new rules and structures for tax-exempt charitable organizations, including subsection 501(c)3 (Arnsberger et al 2008), making nonprofit status a cleaner and clearer option for arts initiatives.
National Funders – Major national funders such as the Ford Foundation started significant giving to the arts in the 1950s, signaling the social and civic value of such giving nationwide. From 1957 to 1976, the Ford Foundation invested more than $400 million in arts organizations and nonprofit arts infrastructure (Kreidler 1996). Many other national and regional funders followed suit.
Matching Grants – The Ford Foundation also established a “matching grant” strategy, requiring their money to be matched by local individuals and institutions – priming the pump for new flows of arts funding for the next many decades. Most of these new funders (like the Ford Foundation) required tax-exempt status for their grantees, making the 501(c)3 nonprofit arts organization a dominant choice for arts ventures.
Government Funding – The establishment of the National Endowment for the Arts and National Endowment for the Humanities in 1965 not only created a new national flow of funding to artistic ventures, but also incentivized/inspired state-level and local arts councils and agencies, many of whom employed matching grants.
Flows of People
Passion-Driven and Discounted Labor - The post-war baby boom (1946 to 1964) was entering the workforce amidst a robust economy and rising educational opportunities. Many were willing and able to accept lower compensation and longer hours in pursuit of their passion.
More Women in the Workforce - The rising percentage of women in the general workforce also fueled arts professions. A 1982 National Endowment for the Arts study found women entering artist occupations at twice the rate of men during the 1970s (NEA 1982).
Kennedy-Era Idealism and Cold-War Nationalism – The “camelot” aspirations of national politics manifested in the John F. Kennedy White House, welcoming renowned artists as celebrated guests – increasing the prestige of board service and philanthropy in the arts. That same idealism inspired many to join the arts workforce. As the Cold War advanced, the “high arts” and artistic excellence became a boasting point for capitalism and therefore a rallying cry for government and private funding.
Leisure Time – The size and geographic distribution of arts audiences also boomed during these formative decades – animating both earned and contributed income. In part, that related to rising economic capacity and educational attainment. But leisure time was another crucial variable. Kreidler notes that “leisure for the average working American reached an apogee in 1971. In some measure, this additional leisure probably contributed to the ability of people to engage in artistic endeavors and to become arts consumers” (Kreidler 1996).
To ride these rising tides, arts enthusiasts built more boats (aka, nonprofit arts organizations). As Joanne Scheff and Philip Kotler noted in 1996:
From the mid-1960s to the mid-1980s, contributions from foundations and corporations grew from $ 15 million to nearly $700 million, the number of professional orchestras swelled from 58 to more than 1,000, and the number of professional resident theater companies increased from 12 to more than 400 (Scheff and Kotler 1996).
This newfound affluence in money, labor, and audience inspired not only more organizations but also ever-larger ones. Arts organizations (and arts managers) were celebrated and rewarded for growing year over year – their audiences, events, exhibitions, buildings, contributed revenues, endowments, and professional staff.
And yet, these formative dynamics of the modern nonprofit arts industry were already shifting by the 1990s. As Kreidler tells it:
Just as abundant cheap labor and institutional funding were the defining elements of the Ford era, reversals in these two resources are now defining the Post-Ford Era. Despite the Ford era's remarkable successes in preserving and advancing American high art under the nonprofit banner, it was not an era that could be sustained.
As for money, by 1990, the pyramid-scheme dynamics of matching grants were running out of new funders to incentivize. Government funding for the arts became a flashpoint for conservatives in the 1980s and early 1990s (by the end of Reagan’s presidency, the National Endowment for the Arts’ funding had dropped by 50%, accounting for inflation). The fall of the USSR in 1991 removed much of the nationalist energy behind exceptional artistic achievement.
As for people, by 1990, most Baby Boomers were in their 30s and 40s, in a stumbling economy, and were (justifiably) less willing to work more hours for less pay. The rising percentage of women in the workforce had plateaued. Subsequent generations saw the established arts as a profession that demanded and deserved (slightly more) fair compensation. And technology brought many new distribution channels and distractions for audiences seeking creative experiences.
There have been rises and falls in these variables since the 1990s (for example, a cultural building boom in the late ‘90s and early ‘00s) . But the fundamental growth dynamics of the formative modern nonprofit arts era never fully returned. Today, there are ever more challenges to the flows of money and people to produce, present, preserve, and enjoy the traditionally nonprofit arts.
What does this changed ecology suggest for a next-generation of thriving arts organizations? Some compelling ideas from Vu Le, Doug McLennan, and Thaddeus Squire offer shifts in focus, structure, infrastructure, governance, and size. But only time and tides will reveal which forms are good at replicating themselves (which won’t necessarily make them good).
From the ArtsManaged Field Guide
Function of the Week: Finance
Finance involves designing, maintaining, and sustaining systems of money and stuff.
Framework of the Week: Convention
Sociologist Howard Becker defines convention as the shared understandings, practices, and norms that members of an arts ecology adhere to in order to produce and appreciate art. These conventions encompass everything from technical methods and artistic styles to business practices and social behaviors, enabling coordinated and coherent collaboration among diverse participants in the art world.
Photo by Cup of Couple via Pexels
Sources
Arnsberger, Paul, Melissa Ludlum, Margaret Riley, and Mark Stanton. 2008. “A History of the Tax-Exempt Sector: An SOI Perspective” (PDF). Statistics of Income Bulletin, Internal Revenue Service.
“Artist Employment and Unemployment 1971-1980” (PDF). 1982. 16. NEA Research Report. Washington, DC: National Endowment for the Arts.
Kreidler, John. 1996. “Leverage Lost: The Nonprofit Arts in the Post-Ford Era.” Grantmakers in the Arts Reader.
Le, Vu. 2025. Reimagining Nonprofits and Philanthropy: Unlocking the Full Potential of a Vital and Complex Sector. 1st ed. John Wiley & Sons, Incorporated.
Scheff, Joanne, and Philip Kotler. 1996. “How the Arts Can Prosper Through Strategic Collaborations.” Harvard Business Review 74 (1): 52–62.
Varela, Ximena. 2026. “The York Cycle of Mystery Plays, or How the Black Death Created Arts Managers.” Journal of Management History, ahead of print, January 23.