“Some cultural organizations, staggered by the financial upheaval caused by the coronavirus pandemic, are dipping heavily into their endowments. Others are thinking about it,” write Graham Bowley and Julia Jacobs in Tuesday’s (6/2) New York Times. “Endowments have long been viewed as the bedrock upon which the long-term financial health of arts organizations are built—money that was painstakingly accumulated and protected over decades to finance the future.” The standard draw from an endowment is 5 percent, and many states regulate endowment draws by nonprofits. “But the coronavirus pandemic has challenged that orthodoxy because so many … museums, orchestras and ballet troupes are facing unmatched financial problems…. The Los Angeles Philharmonic is drawing down $37 million from its endowment, more than twice what it would normally take, to offset crippling losses of revenue from performances, including its season at the Hollywood Bowl…. The endowment issue is confronting universities, think tanks, hospitals, social service organizations, all kinds of nonprofits that have been damaged by the pandemic. The conversation has grown intense among arts organizations, especially smaller ones that are staring at particularly bleak futures…. Still, many arts organizations, despite the economic stresses they face, say they simply will not touch their endowments.”
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