Financing rules of the activity of cultural institutions in the context of economic efficiency

Abstract

Motivation: The authors are interested in the problem of financing of theatres as cultural institutions also because of the arising conflict between the objectives set by the organizers of the institutions, and those managers and artists consider the most important in the public cultural institutions. Aim: The aim of this article is the efficiency evaluation of statutory subsidies granted to cultural institutions in the context of subsidizing rules of these institutions. Results: The system of financing municipal cultural institutions is predominantly based on statutory subsidies from the organizer's budget. Therefore, statutory grants play an important role of creating income and of stabilizing finances of cultural institutions. Their share in the total amount of revenue of the examined cultural institutions persisted at a high level throughout subsequent years of the study period. Although statutory subsidies significantly improve the financial situation of cultural institutions. Those which are using subsidies to a lesser degree, and those whose important source of financing their activities were their own revenues, are characterized by higher efficiency. Unfortunately, the analysis of the data indicates that there is a very small group of institutions characterized by a high indicator of financing.

Productivity of Public Theatres in the Times of COVID-19: The Example of Polish Theatres

“…In an artistic institution whose budget before the pandemic was approx. 40 % (Gałecka and Smolny, 2017) based on the institution's resources, it is not currently possible to carry on activities of the existing scale and formula without receiving financial support from the State (Thorsby, 2010;Gałecka and Smolny, 2019). Especially in large theaters that offer performances incurring the high cost of presentation, the revenue generated by these institutions from ticket sales covers operating costs and finance the production of new artistic events and is often also a part of fixed costs.…”

The impact of the COVID-19 pandemic on local government cultural institutions – the productivity of theatres

“…In an artistic institution whose budget before the pandemic was approx. 40% (Gałecka and Smolny, 2017) based on the institution's resources, it was not possible to carry out activities of the existing scale and formula without receiving fi nancial support from the state (Thorsby, 2010;Gałecka and Smolny, 2019). Especially in large theatres that off er performances incurring high costs of presentation, the revenue generated by these institutions from ticket sales covers the operating costs and fi nances the production of new artistic events and often is also a part of fi xed costs.…”

Criteria for the optimal financing model of public theatres

“…Our previous research has concerned the regulations (Gałecka and Smolny, 2017a), sources of financing (Gałecka and Smolny, 2017) and stability of performing arts organisations (Gałecka and Smolny, 2017a). Now, we are focused on the investigation of the accessibility of cultural services based on the example of public dramatic theatres in Poland as cultural services in Europe.…”

“…Public theatres receive statutory subsidies calculated on the basis of the so-called historical budgets (appropriations in the previous year). The statutory subsidies, on average, accounts for 70% of the revenues of their annual budget (Gałecka and Smolny, 2017a). Other funds are sourced by the theatres themselves (ticket sales, renting out of space, subsidies).…”