Relying heavily on contractors can cut attendance by 27% for museums, theaters and other arts nonprofits—new research

Many nonprofits face increasing pressure from their donors and other funders to do more with less, as their costs rise and their budgets fail to keep up. One way these organizations respond is to try to save money on their staff by hiring contractors, consultants, and temporary staff instead of full-time employees.

But these flexible working arrangements can have drawbacks.

We are two specialists in non-profit management. We analyzed data collected from 2008 to 2018 from 7,838 museums, theaters, community arts centers, and other nonprofit arts and cultural organizations across the country. As explained in studies published in two peer-reviewed journals around the same time, we identified a gap between the promise of flexible work arrangements and their actual outcomes for arts and culture nonprofits.

First, we assessed the operational performance of nonprofits using in-person attendance at theater performances, museum exhibits, and other live events as an indicator of how well these nonprofits provided services and reached their target audiences.

In one of the studies, published in July 2025 in the journal Public Management Review, we found that attendance in groups that relied entirely on flexible working was about 27% lower than in those that relied instead on permanent, full-time employees. The attendance problem was more pronounced when nonprofits used contractors and other similar arrangements for their core activities, including program delivery.

Operational performance was less affected when nonprofits used contractors only for administrative tasks, such as IT or fundraising. In these cases, attendance was about the same as when nonprofits employed permanent staff for these jobs.

The situation was not much better in terms of financial performance of nonprofit organizations.

Our other study, published in June 2025 in Nonprofit Management & Leadership, reveals that while flexible working may temporarily ease cash flow, it does not improve long-term financial health.

In other words, while it may provide short-term relief, using flexible work arrangements does not provide lasting financial benefits. It’s more of a bandage than a cure.

We suspect that many nonprofits need employees with long-term commitment to their causes, communities, and partners to succeed.

Why it matters

Flexible working models are common in the private sector, where efficiency and cost reduction are key performance indicators. Nonprofits, on the other hand, generate value through trust, continuity, and deep community relationships.

It takes time to build the necessary institutional knowledge and commitment from strong nonprofit staff members.

Temporary staff members may not stay long enough to build relationships or understand, much less share, a nonprofit’s mission. When the person who runs a youth program or manages community outreach is here today and gone tomorrow, the quality of that program will likely suffer.

Trust between a nonprofit and the people who benefit from it is built through positive, repeated interactions. Because this trust can erode quickly, relying on a flexible workforce may be less useful for nonprofits than for for-profit employers.

For most nonprofits, personnel costs typically make up the largest portion of a nonprofit’s budget, making them tempting to cut. But replacing permanent employees with contractors to save money risks cutting the organization’s muscle, not just the fat.

What we still don’t know

We focused on nonprofit arts and culture organizations, which make up the majority of all arts groups. Nearly 9 out of 10 museums and visual arts institutions, 3 out of 4 dance companies, and about 6 out of 10 theaters are nonprofit.

The pros and cons of using flexible work arrangements may differ for other types of nonprofit organizations, such as those engaged in health care or providing social services.

There could be other variables. Contractors who freely choose not to be a permanent full-time employee and who already know the work and mission of the organization can do their jobs much better than people with little relevant experience.

And due to data limitations, we grouped all flexible workers into one category. Hiring independent contractors, on-call workers, and temporary staff through contracting companies can have different effects on an organization’s performance.

This article is republished from The Conversation under a Creative Commons license. Read the original article.