How cultural organizations are believed to be funded influences how they are perceived and experienced.
There are many ways to spend a precious weekend or a day off of work or school. People may go to the park with their families, see a movie, have a long brunch with friends, or simply sit on the couch reading Harry Potter or crying at the season finale of The Good Place. There are a lot of things vying for people’s precious time.
The decision to spend that time at a cultural organization – from a historic site to a theater performance to an art museum – is a multifaceted one. My job is to dive into data and explore those facets. What are the barriers to visiting? What makes for the best onsite experience? How big of a competitor is the couch and what does that mean for cultural institutions? These are the kinds of questions I explore almost daily. It’s my job to keep tabs on perceptions and behavioral trends concerning cultural organizations. Today’s article provides a data update on findings I’ve previously written about, and – as far as full-scale US public perceptions over time go – it’s a rather dramatic change.
In 2017, we shared data showing that an organization’s perceived tax status – whether the visitor believes the institution they’re visiting is for-profit, nonprofit, or government or university-funded – influences how it’s experienced. We uncovered that it doesn’t matter what the organization’s actual tax status is; what’s important here is what the visitor thinks an organization’s tax status is. If somebody doesn’t know that an entity is a private nonprofit and believes it’s government-funded, for instance, then they experience it as if it is government-funded.
Why am I making this distinction? Because people are often incorrect about the factual tax status of cultural institutions. People do not reliably identify nonprofit cultural organizations as nonprofit entities. The data below contemplates whether or not visitors and non-visitors to 82 cultural organizations in the US accurately identify them as nonprofit organizations.
All 82 are nonprofit organizations, but not even half of actual visitors to these organizations accurately identify them as such.
If they are not identified as private nonprofits, then they are generally believed to be private for-profit entities, government-run, or university-run. (Interestingly, university-run is its own category even if the university may be a private nonprofit or government-funded. As it turns out, most people don’t sit around thinking about the funding structure of cultural entities just for funsies. They simply identify the entity as run by a university and leave it at that.)
Is it bad news if a nonprofit isn’t accurately identified as a nonprofit? It depends. In some cases, it may actually be better to be perceived as a private for-profit entity, as you’ll see in the data below. On the other hand, nonprofits often require some percentage of donated contributions to stay afloat. If people don’t know that these contributions help the entity survive, they may understandably be less likely to donate… and that’s a problem.
Interestingly, the perception of how an entity is funded – whether correct or not – may influence how the entity is perceived far beyond understanding the organization’s desire for contributed revenue.
Overall satisfaction by funding perception
The data below shows the overall satisfaction values of people who recently visited a cultural organization, cut for how they perceived the entity to be funded. The data for this chart – and the others below – comes from the National Awareness, Attitudes, and Usage Study which currently includes over 140,000 respondents and is believed to be the largest in-market survey of perceptions and behaviors concerning cultural entities in the United States. The chart is shown in scalar variables, which quantify a level of agreement with the statement on a scale of 1-100. In these charts, a difference of even one point is statistically significant, and a difference of two points is noteworthy. A difference greater than that is a big deal.
Visitor satisfaction is a powerful metric that correlates with intentions to revisit, endorse, and how much value people find in a visit. People who believed they had visited a private for-profit (even if they were wrong) had significantly better experiences than those who believed they were visiting cultural entities funded by the government or universities or were private nonprofits.
The overall satisfaction of people in the US who visited (supposed) government-funded organizations has taken a meaningful dip since 2017. At that time, satisfaction scores for government-run institutions were at 71 – even better than nonprofits and university-funded entities, then both at 70.
“But maybe it’s just the time of the data collection. Take the pulse next week and report back.” That’s not how this kind of large-scale, representative data works. It takes time to move the national needle on overall perceptions of cultural entities. This is not like monitoring the approval ratings of individual presidential hopefuls (though I cannot blame you if that type of data analysis is most top-of-mind at the moment)! This sample size is large and representative of the people’s broad perceptions of a massive industry. We’ve been following these metrics closely over a lengthy period of time, and there is a trend.
It’s not like tracking candidate ratings, but what’s happening here may still have something to do with politics – or the government, at least. While cultural organizations are viewed as very trusted entities, the US federal government is… well, not, on the whole. This may create a conflicting trustworthiness predicament for government-funded cultural entities. Trust in the federal government is at only 53.5 in scalar variable. (In that data set, agreement with the statement that an entity is trusted starts at 64, meaning federal agencies are actively distrusted. State agencies are at 61.6 – also not a boon for trustworthiness.) Similarly, people actively disagree that federal agencies are “a highly credible source of information.” In this metric, federal agencies have a scalar variable of 51.4. State agencies are at 61.3. Yikes!
It may be that these low – and falling – trust levels are rubbing off on entities that are perceived to be government-run. They may be influencing the real, onsite perceptions of visitors coming through the doors.
Value for admission by funding perception
People also generally report significantly less value for admission cost to entities perceived to be government or university-run compared to private nonprofits or for-profits.
Value for admission is a measure of essentially how much “bang for their buck” somebody believes to have received from their visit. This particular chart contemplates the perceptions of people who visited an entity with an adult admission price. (In other words, we excluded free admission organizations in this particular chart.)
Take a look.
The difference in value for admission cost between entities perceived to be private for-profit entities and government or university-funded is staggering. What’s more, private for-profits often have higher admission prices than government-run institutions!
People do not believe their money is as well spent when they visit (what they believe to be) government or university-run institutions. This number is also dramatically down since 2017, when (perceived) government and university-run institutions came in at 69 and 68, respectively.
It may be that people who pay admission to government or university-funded entities are confused. (“Aren’t my taxes, tuition, or another institution already paying for this?”) Or it may be increasing government distrust impacting perceptions, or something else. Regardless, the delta between value for admission for entities perceived to be private for-profits and government or university-funded has increased… and that’s not a good sign for these entities. Or rather, for entities that risk being perceived as government or university-funded, whether they actually are or not.
Intent to re-visit by funding perception
It gets even more interesting. This is a new data cut we have not shown in previous articles, but it’s particularly important as we consider how funding perceptions may influence attendance. Critically, “intent to visit” correlates with actual attendance numbers to cultural institutions. (Unlike “interest” metrics, which tend to be much higher than actual, observed attendance.)
People generally have lower intent to return to entities that are perceived to be university or government-funded than they do to those perceived to be private for-profits. At a scalar variable of 66, those perceived to be for-profit have by far the greatest intentions to re-visit compared to entities perceived to be funded by different methods. The difference is stark and notable. It’s also a bit alarming, as nonprofit, government, and university-run entities also often rely on the support of members – evangelists who are hopefully eager to return.
What’s going on here? It may be a host of things. It may be that university-funded entities are experienced as significantly more educational than entertaining, making motivating re-visitation difficult. (Reminder: “Entertainment” is not the opposite of “education.”) It may be that people think for-profit entities have more stability and thus those entities spend more money on quality experiences and have better ones. It may be that the distrust observed in federal and state governments is rubbing off in this metric as well. As is often the case with overall perceptions, they may be fed and fueled by a number of inputs.
Interestingly, the differences in the intentions to visit entities that are perceived as each type of organization are significant. There are dramatic differences between all of them.
So what?
Instead of suggesting an anti-government and university bias, could it be that university and government-funded entities perhaps offer a less satisfactory experience when compared to their privately operated brethren? Thus, perhaps it’s not the perception of funding but, rather, the reality of the experience driving these values?
That’s possible. But when we consider that over half of visitors identify private nonprofit cultural institutions as residing in an “incorrect” funding category, the logic gets fuzzy. Perhaps people assume that if the experience wasn’t great, it must not be a private for-profit entity because private for-profits may be believed to have better business acumen and thus provide a better experience. That’s possible, too.
…But none of this is great for entities that truly are government or university-funded.
And it’s not great for those that may be perceived as government or university-funded, either.
It’s tough enough to be a cultural entity trying to inspire visitation in a Netflix world, but these findings suggest that beliefs about how entities are funded may influence an organization’s reputation. In a world wherein corporate social responsibility is touted as required for the survival of for-profit entities, private nonprofits may not “own” social change. Tax status may not speak for itself in terms of an organization’s effectiveness in achieving its mission. Even for-profit entities have social missions today, and in some cases may be perceived as carrying them out better than nonprofits. “But we’re a nonprofit” doesn’t automatically prove impact.
All this isn’t to say that government and/or university-funded (and recognized as such) organizations do not provide valuable experiences. Far from it! Certainly, there are those that have high visitor satisfaction scores and high intentions to re-visit. But data suggests that these entities may be thriving despite their funding perceptions, rather than because of them.
Though it’s not great, that’s why I don’t think this is necessarily bad news.
I think it’s powerful news.
Understanding how funding perception may impact experience helps entities to think about how to better navigate their identities. It helps organizations see possible perceptual barriers visitors may encounter. And it empowers entities to devise appropriate messaging and strategies to overcome those barriers.
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