​In 2020 Wallace and SMU DataArts released The Alchemy of High-Performing Arts Organizations, a report that examined the question: How do high- performing arts organizations achieve financial health? In Part II of this report, researchers focused on arts organizations of color to examine how 21 arts leaders viewed the reasons for their success, along with the distinct challenges they face.

The study was based on interviews with 11 arts organizations of color in dance, music, theater and multi-disciplinary performing arts, and 10 community-based arts organizations. The organizations—located in 13 cities around the country—were diverse in budget size (from $146,000 to $15 million) and self-identified as serving predominantly Black, Indigenous, Hispanic/Latinx, Arab American or Asian American communities. Despite their differences, the report finds that leaders from all 21 organizations saw deep community engagement and high-quality programming as critical to financial health.

Research was conducted in August and September 2020 and takes into account the challenges that accompanied the COVID crisis, providing additional insights that may help other organizations consider potential strategies for recovery. Even as the challenges and economic hardships persist, notably more than 80 percent of the arts leaders interviewed indicated that their organizations are financially stable.

Interviewees in this study also identified a number of challenges that arts organizations of color face, specifically: racism, gentrification, lack of equitable access to funding. In addition, interviewees emphasized limitations in organizational capacity due to the constraints of low compensation levels and staff resources, which can lead to difficulty in recruiting high caliber talent and staff burnout.

The study also identifies in a graphic depiction the “mental map” leaders used to think about the stages of organizational development that lead to financial health—including internal and external factors that can enable or hamper success.​