Financial Implications of Engagement Between Higher Education Institutions and Professional Nonprofit Theatres in New England

Abstract

The purpose of this study is to test whether nonprofit theatres in New England that are engaged with higher education institutions (HEIs) have increased revenues over those that are not. Besides revenue, the study also tests two additional measures of financial well-being: expense-to-revenue ratios, and employee-cost-to-total-expenses ratios. The results showed that theatres that had discernable HEI engagement have greater total revenue and lower expense-to-revenue ratios over theatres that did not. Notably, regardless of the size of the theatre, those with discernible HEI engagement operated, on average, with a surplus. Conversely, theatres with no discernible HEI engagement operated, on average, with a deficit. The study found no difference in employee-cost-to-total-expense ratios. Resource Dependence Theory is used to explore why engagement with HEI’s may improve the financial status of nonprofit theatres. The implication of these results through a resource dependency lens is that HEI engagement creates paths to increase total revenue and reduce expense-to-revenue ratios of nonprofit theatres.