Curtain Call or Financial Fall?

In the performing arts sector, many organisations rely on government subsidies to provide the necessary financial support to sustain operations. However, these subsidies might be subject to fluctuations, due to political or economic changes, which could negatively influence the organisational sustainability of performing arts organisations. This quantitative research investigates the impact of subsidy volatility on the organisational sustainability of performing arts organisations in the Netherlands, addressing a gap in cultural economics and policy analysis. This study first analyses how volatile government subsidies for the performing arts are, by examining secondary data of Fonds Podiumkunsten (FPK) and Basisinfrastructuur (BIS) subsidy distributions from 2009 to 2024. Additionally, online research was done to find the operational outcomes of organisations after subsidy cessation, thereby finding how subsidy volatility impacts the organisational sustainability of these performing art organisations. The findings reveal considerable volatility in subsidies for the performing arts, with FPK subsidies being more volatile than those of BIS. The findings also show that when subsidies are withdrawn, this had profound effects on the organisational sustainability of these performing arts organisations. They exhibited a range of responses to subsidy changes, with the most common response being ceasing of operations (30.14%), followed by continuing operations with alternative funding (28.77%) and then downsizing their operations (19.18%). Only a few organisations (15.07%) were able to continue their operations independently without additional financial support. The analysis also demonstrates significant differences in subsidy allocation and volatility between different genres. With opera organisations and symphony orchestras experiencing less volatility and more consistent funding, whereas other genres, such as theatre, musical theatre and dance faced greater volatility in government funding. These findings suggest a potential misalignment in subsidy allocation policies that may not adequately support the diversity of the cultural ecosystem. The study concludes that policymakers and stakeholders in the cultural sector are encouraged to provide more consistent and fair support for the performing arts. This is crucial to improve the organisational sustainability of performing organisations.