Last year, I visited a regional theatre whose work – both on stage and off – I greatly admire. I had a conversation with the artistic director about the theatre’s determination to increase access and make it a place that serves everyone. Then I went into the theatre and opened the programme. There were pages of adverts for private schools.

If you’re someone who thinks that theatre is only for posh people, but are persuaded into the auditorium to see a show, surely those adverts signal that your initial instincts about the arts were right and it’s not for you after all? The arts, you might conclude, are indeed for that wealthiest, best educated and least ethnically diverse 8% of the population that is, as the Warwick commission discovered, the arts’ most culturally active segment.

Producer Sonia Friedman says the relationship between the commercial and subsidised sectors has become increasingly complex. Photograph: Jason Alden

I’m not a complete fool; I appreciate that theatres are operating in testing financial times. Increasing earned income has become the mantra, and some venues have easier ways of doing it than others. Soho theatre has cannily transformed its fortunes through taking control of its bar. The theatre’s central London location – and the fact it has a producing model tied to creating a sort of year-long Edinburgh fringe – allows it to make the greatest financial and artistic capital.

The National and the Royal Shakespeare Company, as War Horse and Matilda prove, have the kind of funding that allows them to spend money on R&D and develop shows which have lengthy runs. As Sonia Friedman suggested in interviews following her top ranking in the Stage’s annual Power 100 list – which measures industry influence – the relationship between the commercial and subsidised sectors has become increasingly entwined and complex. That’s not necessarily a bad thing. Commercial is not a dirty word, as long as the subsidised sector doesn’t see the possibility of West End and Broadway transfers as more alluring than serving the local community and prioritising an education department, and realises that, while there are financial returns to be made, there are also substantial risks.

The omens do not look rosy for public funding of the arts, and we may never see a return to the kind of levels we saw from the 1960s through to the 2007/8 crash. Maybe we are at the end of an era? Funding is tight at the Arts Council England, lottery receipts are down and has a direct impact on Grants for the Arts, which is already under severe strain. Crucially for those outside London, local authority funding has fallen by up to 50% in the years leading up to 2014/15. In what could be a sign of things to come elsewhere, shortly before Christmas the Birmingham council announced slashes to arts funding that will leave Birmingham Rep £325,000 the poorer from 1 April. The cuts also mean the council’s MAC is losing £280,000 from its current grant of £400,000, constituting a 70% cut.

If replicated elsewhere by local authorities, such sweeping cuts raise questions about the longer term viability of some theatres. The Arts Council has always been clear that funding for national portfolio organisations is dependent on the financial viability of the organisation, although larger organisations and theatres have often been recipients of emergency funding to bail them out when the going gets tough. Well, the going is getting tough.

Earned income – Birmingham Rep has done so by 54% since 2010 – is increasingly the most widely touted way forward, but as the recent Theatre Report demonstrated, when it comes to philanthropy and sponsorship, large organisations with 50 or more permanent staff generate 78% of all unearned income, while those with fewer than 10 staff members generate a mere 1% of all unearned income. Arts organisations also have to aware of where exactly sponsorship and philanthropic funding came from – unless you are one of those who believe that, wherever the money comes from, it becomes good money when it goes into the arts, and is justified because it might help develop access or be used for education projects.

As the arts faces an increasingly uncertain funding future, the subsidised sector needs to ask itself some big questions. What is it that makes it different from the commercial sector? What is an arts organisation’s mission and purpose? Why does it exist beyond ensuring its own continued survival? How can theatres and arts organisations make themselves truly valued and be considered essential by becoming fully embedded in the local community, working with local authorities, universities, charities and other agencies in a mutually supportive and altruistic way, and slowly and painstakingly building deep-rooted relationships? I suspect that a long-term approach may ensure a theatre’s survival far better than turning that quick buck.