Looking at the RFO Benchmark data for 2011

Of course by now you’re more than familiar with the Arts Council England published report on the 2011 data set. So rather than simply replicate that work we thought we’d focus in on a slice of the data that looks at smaller organisations (defined here as <£1m turnover per annum) in particular. As we are looking at this smaller slice we will look at all sectors and all regions. If we filtered down to only one sector or region the data would not be robust enough to be useful. For further context here you may wish to read our earlier post on The difference between a survey & a benchmark.

You can run this filter on the data yourself if you like … just pick the system scenario ‘Total Revenue <£1m’ in the results set up page. If you run this yourself you’ll see that not only is there an average but also a weighted average, max, min and top quartile. We’re not going to go through all of that here … it would be too long a post!

Just to give you an idea of the size of the data set we’re reporting on there are approximately 30 organisations with a turnover of less than £1m per annum who’ve contributed data to the RFO Benchmark for 2011. That number is still growing month by month as more organisations start to actively benchmark their activities.

Instead we’ll just pick out a few of the things that strike us about the data and compare them to the overall RFO report that Arts Council England has produced to see how similar or different the small organisations are to the overall dataset.

In the 2010 report Arts Council reported on three sizes of organisation .. small (<£250k turnover), medium (£250k-£1m turnover) and large (<£1m turnover). They have not repeated this work in 2011 but if you would like to do this for yourselves on the RFO Benchmark results we’ve provided you with three scenarios for you called the ‘RFO turnover’ set where you can look at the benchmark results for each of these ranges in turn.

Headlines:

Small and medium sized regularly funded organisations continue to obtain a greater proportion of their total income from the Arts Council than the larger organisations – on average 61% of total income. This is consistent with our other work on the differences between the business models of small & medium and large arts organisations. Small and medium sized RFO’s are however just as successful at obtaining funding from Local Authorities as their large organisation counterparts. As less than three organisations in our sample group have achieved sponsorship income we have insufficient data on this to report on it … which we think is telling in itself. The maximum level of donations was 1% of total income against an average for all our 2011 data of 2.3% or the 2010 full data set figure 3.2%. This suggests that small and medium sized organisations are not yet achieving substantial revenues from either sponsorship or donations.

Small and medium sized RFO’s spend a greater proportion of their revenue on staff costs but given the average number of permanent staff per million of turnover is only 4 we suggest that this is to be expected as all staff are likely to have a delivery role in addition to any management role.

Small and mediums sized RFO’s have retained a greater surplus than the average reported by Arts Council England (7% from our RFO Benchmark sample vs. 1% as the national figure). We think there are a number of reasons for this which we’ve articulated in some detail below.

Small and medium sized RFO’s deliver attendance levels at education and learning events that are on a par with the national average which shows that size of organisation (and related marketing budgets!) is no hindrance to engagement. Given the scale of budgets this may also mean that they offer greater value for money but it would take more analysis to prove or disprove this theory.

As this is the first time we’ve compared the Arts Council published national figures to the contents of the RFO benchmark we would really like to pursue discussions with individual arts organisations and sector bodies as to what they see in the data we report. After all we’re simply cogitating upon what we find interesting, useful and surprising in the data and you might have a different perspective! We’re in the process of setting up a series of benchmarking workshops (dates and locations to be announced soon but provisionally June) so this will provide one forum for such discussions but we’re open to others!

We’ve structured the results below into three main sections .. financial, staffing & governance and activities. These mirror the way the data is collected and the way that Arts Council reports on it.

Financial:

  • The total Arts Council England subsidy represents some 61% of total revenue income. On average regular funding was worth 50% of turnover, non-Lottery ACE funding 5% and Lottery project grants 6% of income. We have insufficient data on other Lottery fund income to report on it for this sample. By way of comparison the lowest level of RFO funding as a percentage of income is 32% (the minimum when looking online at the data).
    Earned income was worth an average of 18% of total income. The detail on this is that earned income for core activity sits at an average of 13%, for educational activity 4% and for supplementary activity 3%. The top quartile achieved percentages of 22%, 6% and 6% for these three areas respectively and the best in class (the max) achieved 41%, 8% and 10% respectively. In our view these are useful indicators for growth of earned income and the setting of appropriate targets going forward. These figures are significantly different to the Arts Council national figures where earned income is the largest source of income for the RFO’s. This difference is consistent with our previous analysis on this topic and is something we’ve looked at in considerable detail both in other blog posts and in Size Matters. We think it is very important for the targets set for small and medium sized organisations in particular to be calibrated against their peer group not against a national average or a Arts Council’s headline goals…. the oft mythical 1/3, 1/3, 1/3 is still quoted by some funders and organisations and in our view is simply not appropriate for small and medium sized organisations.
  • As fewer than 3 respondents received sponsorship income we cannot report data on the percentage of income this represents though of course that is telling in itself!
  • Income from Trusts is worth an average of 17% of total income
  • Donations are worth an average of 1% of total income. It is worth noting that the max is also 1%. Whilst a great deal of emphasis is being placed on private giving we would still question whether this is a substantial opportunity for small and medium sized organisations.
  • Public subsidy is worth an average of 12% of total income. In detail this means that Local Authority grants are worth an average of 9% of total income and other public subsidy is worth an average of 6% of total income. The level of Local Authority grants as a percentage of income is on a par with the national figure reported by Arts Council of 8%. The national figure for other public subsidy as reported by the Arts Council is 4%. On this basis we suggest that small and medium sized organisations are equally successful in obtaining LA and other public funds as their large organisation counter parts.
  • Total staff costs consume an average of 47% of total income. Staffing costs split out as follows:

Artistic programme or other main activity              31%
Marketing                                                                         4%
Education programme                                                   7%
Overheads                                                                         7%
Cost of generating funds                                               4%
Governance                                                                      2%
Other staff costs                                                              2%

  • The non-staff costs of the organisation consume 47% of total income and split out as follows

Artistic programme or other main activity              23%
Marketing                                                                         4%
Education programme                                                   8%
Overheads                                                                       13%
Cost of generating funds                                               2%
Governance                                                                      1%
Other costs                                                                       3%

You will note that Arts Council aggregate these staff and non-staff costs in their data set with the exception of stating that staff costs account for 41% of expenditure and non-staff costs for 59%. Please note that the Culture Benchmark is reporting in percentage of income and Arts Council switches to reporting in percentage of expenditure so these figures cannot be compared directly. This makes comparison of these un-aggregated figures tricky as the averages cannot simply be added up (see here for a stats explanation of why not … in layman’s terms of course!). Arts Council report that the artistic programme consumes 58% of turnover nationally and overheads 17%. However it is clear, based on this data and other work, that small and medium sized organisations spend a greater proportion of their total on staff than larger organisations. We think there’s a good reason for this. With an average of only 4 permanent staff/£m of turnover of course this means that in many cases all staff are do-ers in addition to any management role. Clearly in larger organisations it is not expected that senior management staff are part of delivery teams at the coal face. Indeed as an organisation grows in scale the overhead base and administrative staff costs become a smaller percentage of overall costs.

  • This gives an average total expenditure of 93% of total income and a 7% operating surplus (the maximum retained surplus by the way was 19%). This is in contrast to the Arts Council national figure reported on page 32 where the surplus nationally is only 1% of turnover. The question then is why are the small and medium sized organisations consistently creating a greater operating surplus than the national average? We would offer a couple of suggestions … many of the smaller organisations considered the possibility that they would not make the cut for inclusion into the National Portfolio a serious risk to their future sustainability and therefore chose to reduce their expenditure in the 2010-11 year so that they would have a greater financial cushion which could be used to buy time whilst they changed their business model should their fail to achieve NPO status. Furthermore with a greater dependence on Arts Council funding (i.e. it represents a greater percentage of total income) than the larger organisations not only was it likely that changes to business models should they fail to achieve NPO status would be more far reaching than in larger organisations but they have fewer alternative sources of income, they are worth a smaller percentage of total income and they do not typically have funds that they can invest in the development of new income streams. All of these issues make current business models both more fragile and less malleable and thus retention of surplus is one of the few routes open to them when working out how to fund change in the short to medium term.
  • For those who have legacies they are worth an average of 15% of the total income of the organisation
  • 50% of responding organisations do have a Balance Sheet that sets out their Assets & Liabilities, 50% declined to answer this question

Staff:

When we look at the staffing information we usually report the results in terms of the number of staff per £m of revenue turnover. This might seem redundant when all the organisations we are looking at have a turnover of less than £1m but we’ll stick with it to balance out the variations that will still exist between organisations at the top and bottom ends of the turnover range.

  • The average number of permanent staff/£1m turnover is 4. There is a slight preference for having more part time artistic staff in that mix vs. full time artistic, full time managers and part time managers.
    The average number of contractual staff/£1m turnover is 10. In the main these are artistic staff … an average of 9 artistic staff/£1m turnover vs. 1 manager/£1m turnover and 2 other staff/£1m turnover. Remember that these sub-headings won’t add up to the total for reasons that we’ve explained here (ref other blog post on this)
    The average number of volunteers is 8/£1m of turnover and by the way other data in the Culture Benchmark indicates that they give an average of 11 days per annum per volunteer
    The Arts Council report does look at staffing levels and change in staffing levels but as these are presented as national figures the report does not give enough detail to enable comparison with the data we are reporting here.
    We report our figures in terms of staff/£m of turnover because we think this helps look at the productivity of your team and helps to inform discussions about how many staff you need in what areas of the business as you grow. It would be interesting to look at what the norms are for staff productivity levels in different sectors and different sizes of organisation but we don’t yet have sufficient detail to slice the data into these sub-groups.
  • Whilst we do have data on the staff and board ethnicity & disability we don’t really have as much as we’d like and as it is a often a particularly sensitive subject we’d better not report it this time around. That said looking at the Arts Council analysis on page 16 which states that 84% of CEO’s were white and that 84% of board members were also white this would seem to be roughly on a par with the data we hold on the small and medium sized organisations.
  • 50% of the responding organisations have a male CEO (or equivalent), 22% have a female CEO and 28% declined to answer. The Arts Council reports that for the full cohort of RFOs 55% of CEO’s are men and 45% are women.
  • 28% of responding organisations have a CPD plan, 44% do not
  • 61% of responding organisations offered CPD to all employees, 11% did not
    These levels look pretty good to us … what do you think?

Activities:

The Arts Council report on activities starts on page 39 in case you want to read that in parallel with our analysis.

  • The average attendance per day of production (incl schools) for performances in England is 309, for performances outside England this rises to 442. The average attendance per day of production for school performances is 53. We are excluding estimated audiences from these figures and just focusing on known audiences. It is also worth looking at how different this average is from the best in class (the max in the dataset) and the top 25% (the quartile in the data set) as this helps an organisation see how they might set new goals for the year ahead if they are already better than the average (if you’re not there yet, aim for the average!).
    The highest level of attendance per performance is 1179 for performances in England (incl. schools) and 1075 for performances outside England. The highest attendance for school performances is 168.
    The top quartile achieve figures of 456, 484 and 107 for these three types of activity.
    As you will see with nearly all the results reporting from MyCake we pick a relevant denominator e.g. per day of production so that we can more easily compare large and small organisations.
    We’d be interested to know what your rule of thumb is for whether a performance has been a success or not from a capacity perspective.
  • This is similar to the levels of attendance per screening which averages 388
  • The average attendance/exhibition is 19,311. Interestingly this is much higher than anecdotal evidence from conversations with key visual arts organisations would suggest.
    Anecdotal evidence suggests that the norm is more like 3,000 per exhibition in leading development venues whose turnover is in the region of £400-700k and whose staff base is in the region of 5-10 permanent employees.As the section on activities and attendances is presented as national totals by art form and by region we cannot give you a comparison to the national data set for our analysis above.
    We feel quite strongly that for the RFO data to be most useful to individual organisations we need to be able to present it at this micro level as this is the level at which many professionals are working … looking at attendances per event for their organisation rather than as a proportion of regional, sectoral or national activity overall. If you disagree with us and you’d like us to present our data in ways that more easily enable comparison to Arts Council England’s national picture please do let us know!
    When we look at the top quartile and the maximum figures we see just how different these are to the average. The top quartile for exhibitions is 131,125 and the max is 723,302. The top quartile for attendance/screening is 3,039 and the max is 13,149.
  • For digital activities the average time visitors spend on your website is 3 minutes and the average number of unique visitors to your site is 42,367 annually … the top quartile show figures of 175,169 and 4 minutes, the max is 442,578 and 7 minutes.
  • The average number of attendances per learning engagement and participation event is of course broken down into age group categories. Average attendances are as follows:

Aged 4-19    40
0-5 years     not enough data
5-16 yrs        52
17-19 yrs      22
Adult             11
Mixed           29

Total attendance/session of informal & participatory    19

Section 6.6 of the Arts Council report presents the headlines for education, learning and participation and states that 91% of RFO’s conduct an education programme and that the national totals are that these 758 organisations delivered 383,794 sessions with 10,159,027 attendances. This gives a national average attendance of 26 per session which is on a par with the attendance levels per session of the small & medium sized organisations we are reporting on above. That is to say that small organisations are just as good as the national average when it comes to attracting participants to education and learning activities.

  • The average percentage of a programme that has a BME focus is 20% and work with an international dimension comprises an average of 35% of the programme of these small & medium sized RFO’s.The nearest data point for comparison purposes from the Arts Council report is that 104 organisations reported that BME work represented more than 50% of their programme. The Arts Council definition of a BME programme is where more than 50% of their programme is BME focussed work. By this definition none of the small and medium sized organisations whose data is held in the RFO or Culture Benchmarks have a BME focussed programme.

 

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