Leadership structures, budgeting and financial performance remain largely unexplored in nonprofit organizations. This research explores the question How is the leadership structure of a performing arts organization related to its budget process and financial performance? Literature pertaining to these concepts is minimal, so to address this gap a mixed methodology was chosen to build then test new theory.

Three papers explore qualitative and quantitative relationships between these three variables using interview and survey data. Dual Leadership and Budgeting in the Performing Arts: A Tale of Two Organizations investigates the budget process and leadership structures through in-depth interviews. These conversations revealed that budgeting practices vary between organizations. Furthermore, results suggested that the question of who participates in budgeting affects the results and that participation is governed by those in the organization's leadership positions.

“Financial performance in arts organizations—an empirical look at its relationship to leadership structure” examines the relationship between dual leadership and financial performance—as measured by net income—using logistic and rank regression. Dual leadership is found to have a significant relationship to financial performance in well-performing organizations but is not related to the likelihood of an organizational surplus, nor does it contribute to a deficit.

Financial performance was also the dependent variable for the third paper, “Revenue structure in nonprofit arts organizations—do dual leadership or budgeting matter?” Here financial performance is measured as a ratio of either contributed or program revenue to total revenue. Impacts of budget factors on financial performance were also examined. Dual structure is positively associated with a higher program-to-total-revenue ratio but is not related to the level of contributed-to-total-revenue. Budget sequence also is associated with revenue structure with a ‘revenue first’ approach signaling an emphasis on program rather than contributed revenues. No association between other budget factors and revenue was found. The amount of explained variance in revenue structure is relatively modest, implying the importance of additional factors not included, such as product quality and level of resources devoted to marketing or fundraising.