New report: U.S. nonprofit arts drive $135.2 billion in economic activity

Summary Report of "Arts & Economic Prosperity IV", Americans for the Arts website

Our fourth study of the nonprofit arts and culture industry's impact on the economy, the most comprehensive study of its kind ever conducted, features customized findings on 182 study regions representing all 50 states and the District of Columbia as well as estimates of economic impact nationally. Despite the economic headwinds that our country faced in 2010, the results are impressive.

  • Nationally, the industry generated $135.2 billion of economic activity -- [including] $61.1 billion by the nation's nonprofit arts and culture organizations.
  • This economic activity supports 4.1 million full-time jobs.
  • Attendance at arts events generates $74.1 billion in expenditures by audiences for local businesses -- restaurants, parking garages, hotels, retail stores. An average arts attendee spends $24.60 per event in addition to the cost of admission. In addition, data shows nonlocal attendees spend twice as much as local attendees ($39.96 vs. $17.42), demonstrating that when a community attracts cultural tourists, it harnesses significant economic rewards.
  • Our industry also generates $22.3 billion in revenue to local, state, and federal governments every year -- a yield well beyond their collective $4 billion in arts allocations.

Arts and culture organizations are resilient and entrepreneurial businesses. They employ people locally, purchase goods and services from within the community, and market and promote their regions. Arts organizations are rooted locally; these are jobs that cannot be shipped overseas. Like most industries, the Great Recession left a measurable financial impact on the arts -- erasing the gains made during the pre-recession years and leaving 2010 expenditures 3% behind 2005 levels. The biggest effect of the recession was on attendance and audience spending. Inevitably, as people lost jobs and worried about losing their homes, arts attendance -- like attendance to sports events and leisure travel -- waned as well. Yet, even in a down economy, some communities saw an increase in their arts spending and employment. As the economy rebounds, the arts are well poised for growth. This study puts to rest a common misconception that communities support arts and culture at the expense of local economic development. In fact, communities are investing in an industry that supports jobs, generates government revenue, and is the cornerstone of tourism. This report shows conclusively that, locally as well as nationally, the arts mean business.


Why measure only the nonprofit arts and culture?

From the FAQ section of the AEP IV website

(1) The findings dispel the myth that the nonprofit arts and culture sector is an economic "black hole" and provide proof that when people, corporations, foundations, and governments support the nonprofit arts, they are also supporting economic and community development;

(2) Because nonprofit arts associations are often the recipient of public funding, the availability of valid and accurate economic impact data about the sector is critical; and

(3) The information necessary to complete an economic impact study is more easily obtained from the nonprofit sector than from the for-profit sector since nonprofit sector data is treated as public information and available through IRS Form 990 filings.


FROM TC: AFTA's extensive website for AEP IV also includes:

Arts study released as Portland City Council ponders tax to fund arts education

Jim Redden, The Portland [Oregon] Tribune, 6/11/12

A new study on the economic impact of non-profit arts organizations was released as the City Council prepared to consider placing a measure on the November ballot to impose to $35-per-person tax on Portlanders to fund arts education and programs. The study found the regional nonprofit arts and culture industry generates $253 million in annual economic activity. It also revealed that it supports 8,529 regional jobs and returns $21 million in revenue to state, regional and local governments. Officials estimate the measure will raise $12 million a year. It would also fund grants to such organizations as the Oregon Symphony, Portland Center Stage and the Portland Opera. The Regional Arts & Culture Council would distribute additional grants to groups to improve access to the arts for youths and members of underserved communities. "Arts organizations add tremendous value to our community, but it's not always something we can quantify," said Eloise Damrosch, executive director of RACC. "We know that the arts have the power to inspire us and provoke us, delight and engage us. They foster creativity in the classroom and stimulate innovation in our workplaces. But now we see exactly how much arts and culture organizations contribute to the local economy -- and it's significant."


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Commentary: Can the value of the arts be measured in monetary terms?

Claire Donovan, "Priceless?" blog, UK's Department for Culture, Media & Sport website, 5/17/12

[Can] the value of culture be measured by government in monetary (or other) terms, or [is it] 'priceless' and beyond measurement? Why ask this question in the first place? We live in a financial climate where all areas of public services face scrutiny. Supporters of economic valuation of the cultural sector believe that monetised evidence is the surest way to demonstrate past successes and to secure future funds. The language of economics is the logic of government: if the cultural sector does not speak in these terms it will suffer. Economic or other quantifiable measures of cultural value may be crude, but over time will become more sophisticated, including measures of the impact of the arts or heritage on happiness and wellbeing, for example. Opponents argue that the cultural sector is different from other areas of public spending, and that the language of business and markets does not fit. There is a different rulebook -- if there is a rulebook at all -- and the value of culture transcends blunt economic measures. Indeed, for this very reason, public investment in the cultural sector should be without strings. But can we realistically maintain that public funds be asked for and spent without accountability? Why should funds be given to a museum or a library rather than to a hospital or a school? Is to want evidence of cultural value the height of philistinism, or a wider concern that, for example, government spending will bring high quality arts experiences to those who would otherwise be excluded? Do only economic measures make sense? Are you pragmatic, and speak whatever funding language you need to? Are there novel ways of demonstrating cultural value that other areas of government could learn from? 

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