Bloomberg offers an interesting article on a rising fear of commitment by consumers, in many aspects of their lives. Social and economic indicators point to rising lease vs. buy rates for cars, rising rent vs. purchase rates for homes, declining birth rates, and declines in long-term contracts (such as on mobile phone service). People also seem to be holding onto their possessions longer (cars, furniture, and the like) before replacing them.
The article suggests that all of these are indicators of fear and uncertainty. Not knowing what’s in store for your future can make you less likely to commit past the horizon line (to a mortgage, to monthly car payments toward ownership).
For arts organizations, this increasing concern about commitment and fear of an uncertain future could have impact on cash flows, contributions, and bottom lines. If positive cash flow requires significant advance sales or subscriptions, it’s likely time to ensure you’ve got alternatives (line of credit, deferred payments, etc.). If you want to lure such advance purchase, it might also be time to review your returns/exchange policy to make it easier for your audiences to change plans (or at least for them to feel more comfortable that they COULD do that if they needed to).
I’ve heard from many organizations that donors are showing a similar unease. While their wealth is returning, many are still holding more cash and assets than they used to in case the world changes. Similarly, many financial trends suggest that businesses are hoarding more cash than they used to, inspired in part by an uncertain credit market.
Should arts groups get skittish about programming in response to this commitment-phobic audience? Or should they be bolder than ever to inspire hope and excitement among their audiences? If your board isn’t talking about this, it’s a rather good time to start that conversation.