Nonprofits, including cultural organizations, are increasingly relying upon fees for service as part of their operating budgets. Arts organizations have taken an increasingly prominent role in arts education starting with federal budget cuts in the 1960s and 1970s. There is a lack of data on the effects of partnering with schools on nonprofit arts organizations as well as the effects of government contracting on nonprofits.This study consists of an email/internet survey to determine how contracting with schools to provide arts activities affects nonprofit arts agency independence, vendorism, bureaucratization, costs, and artistic quality. The survey was pilot tested with 22 leaders of arts organizations. The survey was emailed to a random sample of 680 leaders of American nonprofit arts organizations identified as art museums; ballet; dance; music; music groups, bands and ensembles; opera; singing choral; symphony orchestras; theaters; and visual arts organizations. Responses were gathered from 280 respondents for a 41% response rate. The researcher analyzed the data using frequencies, cross tabulations, logistic regression, and linear regression.This study reveals limited negative effects on arts organizations of partnering with schools. The major findings of this study support Lester Salamon's (1995) theory that bureaucratization is among the most likely effects of government contracting on nonprofits, and a study of nonprofits by Patricia Hughes and William Luksetich (2004) indicating that greater reliance on private funding does not divert funding fiom program service delivery. Organizations that partner with schools have greater odds of being affected by rules and regulations compared to those that do not partner with schools, but these rules seem to fall within acceptable limits for arts organizations of the types studied.Earning higher levels of income from school partnerships does not make arts organizations less likely to advocate for arts education, change artistic direction or offer significantly different programs, or impose unreimbursed costs.This study does not support Bruno Frey's (2003) Crowding Theory of the effect of external rewards on creativity. More collaborative types of school activity had no effect on organizational creativity in this study. However, enhanced artistic growth appears to be an important positive effect of school partnerships.