Working Capital

We studied the average trends of working capital for organizations by sector, budget size, geographic market, and BIPOC/Non-BIPOC from 2016-2019.

Ensemble Espanol, Chicago, IL. Photo credit: Jorge Perez

Organizations Maintained Stable Levels of Working Capital from 2016 to 2019

  • Months of working capital increased after 2016 to roughly five months and has remained fairly stable through 2019.
  • The high annual averages belie the variety of working capital levels experienced by organizations in different sectors and of different sizes. See the findings by Arts Sector and Size for more detail.
  • (Note: Median Working Capital was 1.5 months in both 2016 and 2019 with little change in interim years, showing that the averages are skewed by large organizations.)
  • Expenses generally increased for the average organization, meaning that more working capital was required to maintain the same relative level of liquidity.
  • Average working capital was 17% higher in 2019 compared with what it was in 2016.


See the Full Trend Tables

Art Museum and Music Sectors Maintained Higher Levels of Working Capital

2016-2019 Trends, By Sector

  • The overall four-year trend of tighter working capital was the experience for the average organization in every sector except Music and Art Museums.
  • Most sectors managed to avoid negative average working capital during the four years.
  • Art Museums and Music sectors consistently maintained higher levels of working capital than other sectors.
  • The Art Museum sector’s working capital levels fluctuated considerably over the four years, whereas that of other sectors was more consistent.
  • For all sectors except Opera, the negative index trends were due to average working capital levels being lower in 2019 than in 2016 while expense levels were higher.

Growth in Working Capital and a Decrease in Spending for Medium and Large Organizations 

2016-2019 Trends, By Size

  • Average months of working capital for Small organizations rose in 2017 before a drop in 2018 and a recovery to 2016 levels in 2019. These organizations’ average working capital and expenses decreased, with the net effect unchanged in months of working capital.
  • Medium and Large organizations saw the opposite overarching trend as Small organizations: working capital growth coupled with a decrease in spending.

Most Markets Experienced Tight Liquidity Over Time

2016-2019 Trends, By Geography

  • The average organization in most markets experienced tighter liquidity over time. The exceptions were the New York and Chicago areas, and Very Small Markets, all of which saw a rise in months of working capital.
  • The Los Angeles averages in 2016 and 2019 were driven by an outlier. Eliminating it from these analyses would leave a working capital for this market at 1.6 months in 2016, slowly declining to one month by 2019.
  • After a steady rise, working capital dipped in 2019 for New York organizations. Despite this, 2019 working capital remains higher than it was in 2016. Chicago organizations, on the other hand, saw a decline in months of working capital in 2018, then a steep rise in 2019.
  • Very Small Markets consistently demonstrated the highest levels of months of working capital throughout all four years, with liquidity steadily rising from 2016 to 2019.
  • All markets managed expense growth in the same manner, outpacing inflation by less than 15%.

  • Chicago demonstrated the greatest upswing in average working capital – a surge of 155%.  These organizations had comparably more ground to cover since their average working capital was the lowest of all regional market clusters in 2016.

  • San Francisco organizations saw relatively little change in months of working capital after a dip in 2017; similarly, expense growth in San Francisco remained steady, rising only slightly between 2016 and 2019.

BIPOC Organizations Reached a Four-Year High in 2019

2016-2019 Trends, BIPOC Organizations

  • While working capital increased for non-BIPOC organizations, BIPOC organizations had a slight downward trend in 2017 and 2018 that recovered to a four-year high in 2019.
  • While non-BIPOC organizations followed the overall sector trend, BIPOC organizations experienced lower average levels of working capital.
    • However, it is worth noting that BIPOC organizations improved their working capital over time.
  • When we look at the median, or midpoint in the range, rather than the mean, we see a different story. A majority of BIPOC organizations were more liquid than most non-BIPOC groups each year: 2.3 months for BIPOC organizations in both 2016 and 2019, and a steady 1.2 months for non-BIPOC over time.

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