Milwaukee’s Arts Organizations Are Dangerously Dependent On Philanthropy, Finds Study

Milwaukee has always prided itself on having a full complement of major arts groups: a symphony orchestra, repertory theater, ballet, opera company and art museum. But a recent study by the Wisconsin Policy Forum (WPF) shows that the major performing arts groups, along with smaller companies in Milwaukee, are in big trouble, with the percent of their budget coming from earned income — mostly paid admissions — plummeting over the past decade.

But as bad as those numbers look, they are even worse if you compare to the mid-1990s, when I wrote a feature story for Milwaukee Magazine on the economics of arts groups. Take the Florentine Opera Company: the percent of its budget coming from earned income has dropped from about 19% in 2012 to an anemic 6% in 2022, the WPF report found. But in the 1990s its earned income was at 33%. Those are jaw-dropping numbers.

The decline for other Milwaukee performing arts groups in the 10-year period from 2012 to 2022 is also alarming: The Milwaukee Rep plummeted from 59% earned income to 31%; First Stage from 54% to 16%; the Skylight Music Theatre from 35% to 26%; and the Milwaukee Symphony Orchestra from 21% to 17%.

While the MSO declined the least, back in the 1990s it was earning 32% of its budget from earned income, which was then a bit higher than peer orchestras nationally. Moreover, the symphony’s move to its own hall was supposed to increase revenue. In fact, it did, and by quite a lot: the report notes that during the 2021-22 season – the first after the opening of the MSO’s $90 million Bradley Symphony Center – ticket sale revenue grew to $4.5 million, compared to $2.9 million in the last season before the pandemic hit. But operating expenses for the new symphony center “have grown, increasing the MSO’s annual operating budget by $4 million,” the WPF found. The net result is a decline in the percent of its total budget from ticket revenue.

The main bright spot in the report is the Milwaukee Ballet. Its earned income was 41% in the mid-1990s and that actually grew to about 48% in 2012 and then 51% in 2017, only to fall to 40% in 2022, the WPF found. Still, that shows the company earns about as much of its budget as it did 30 years ago, which is remarkable. Nationally ticket sales for dance companies declined by a whopping 33% from 2019 to 2022. The ballet is helped by revenue from its dance school, the report notes.

Among the smaller performing arts groups there were two doing relatively well. From 2012 to 2022 the percent of budget coming from earned income rose from 26% to 32% for the Bel Canto Chorus. And Danceworks was above 50% earned income in 2012 and 2017, though that dropped to 32% in 2022. Still, compared to most groups in town that’s pretty good, and probably also reflects dance school revenue.

But all the other smaller performing arts groups tracked by the report saw flat or declining earned income over that decade. As of 2022 Present Music was at 16%, as were both the Next Act Theatre and Milwaukee Chamber Theatere, while Renaissance Theaterworks and the Milwaukee Youth Symphony Orchestra were both at 13%.

“Overall, this analysis suggests a troubling story,” the WPF warns. “Program service revenue — including ticket sales — has declined as a percentage of their total revenue while dependence on revenue from unrestricted donor contributions has increased.”

Among the six major groups, all but the Skylight “received sizable increases in unrestricted contributed income from donors” since 2017, the report notes, ranging “from 12% for the Ballet to more than 70% for the Florentine Opera and the Rep.”

Historically, Milwaukee’s arts scene has always been challenged because it got such a late start compared to other big cities in America. The Florentine did not become an opera company until 1950, the symphony, Rep and Skylight were founded in the 1950s and the ballet in 1970.

As though to make up for lost time, Milwaukee’s arts group grew tremendously from the mid-1970s to mid-1990s. By 1995, Milwaukee ranked as the 27th largest metro area, but boasted the nation’s ninth-largest ballet company, 20th largest opera (the Florentine), 19th largest symphony, the 29th largest theater and in addition the 32nd largest opera company in the Skylight, though it has always mixed operas and Broadway shows.

Since then Milwaukee has been passed by many metro areas and now ranks 40th in the nation. Some in Milwaukee have questioned whether it’s “punching above its weight” in the number of arts group it supports, the WPF noted. To test this theory it looked at three mid-sized metro areas and found two of them had more performing arts employment. But all three rank higher than Milwaukee in size with metro Pittsburgh ranked 27th, Cincinnati 30th and Kansas City 31st. They have anywhere from 500,000 to 800,000 more people in their metro area. (To be fair, for various reasons there aren’t any perfectly comparable cities to Milwaukee.)

The late start of Milwaukee’s arts groups has meant they tend to be endowment poor. Thus the MSO now claims a $26 million endowment compared to the much older Cleveland Orchestra (founded in 1918) or St. Louis Orchestra (1880), which both report endowments of more than $200 million. The San Francisco Opera (founded in 1923) has an endowment of $270 million and the Florentine’s is tiny: its most recent financial statement shows about $4.6 million in invested assets.

The lack of endowment income spinning off every year has meant annual giving must fill the gap. During its big years of growth, from the mid-1980s to mid-1990s the United Performing Arts Fund grew by 180% while United Way grew by just 37%, showing just how committed this community was to the arts.

Another longstanding problem is the abysmally low level of state arts support. In 2023 Wisconsin ranked dead last in the per capita funding for the arts, the WPF found. Going back decades the state has never ranked above 46th place. A key reason for this is the biggest arts groups are all located in Milwaukee and many legislators see this is having no benefit for the rest of the state.

A final funding issue is the decline in arts giving by the huge Bradley Foundation, which has reduced the percent of its giving to Milwaukee and Wisconsin, from about 50% of all giving in the late 1980s to just 27% today, as Urban Milwaukee has reported. In real, un-inflated dollars this has meant a loss of many millions in funding for the arts over the past 30 years.

All of that said, the real problem for Milwaukee’s performing arts groups as a whole is not a lack of contributed income, but of earned income. Across the board they are struggling for audiences.

However, that problem is one afflicting the entire country, as performing arts groups have not yet recovered from the COVID-19 pandemic. In Chicago, its 143 arts organizations saw a 60% drop in attendance from 2019 to 2022.

But even before the pandemic attendance was down nationally. The Survey of Public Participation in the Arts, which sampled 40,718 U.S. adults, “found nearly universal declines in fine arts attendance from 2017 to 2022,” the Washington Post reported. “The adults who reported seeing a musical theater production fell from about 17 percent to 10 percent; the number for nonmusical plays dropped from about 9 percent to 5 percent. Attendance for ballet, opera and classical music performances saw similarly dramatic decreases.”

These are the same years during which much of the decline in earned income for Milwaukee groups occurred. In short, they are battling a national problem, but with less state support and endowment dollars than many cities. In calling this a “troubling” situation, the WPF is arguably understating the case.