26 June 2017 // Thoughts

The Arts Mean Business: Breaking Down the Arts and Economic Prosperity V Report

The numbers are in, and they are staggering.

  • In 2015, the arts and culture sector brought in $166.3 billion in economic activity.
  • $63.8 billion of that activity was direct spending by the arts and cultural organizations.
  • $102.4 billion was spending generated by audiences, both directly on event admissions, and indirectly on items such as food, beverage, retail, parking, and babysitting.
  • When expanded to include the commercial, for-profit, and educational arts institutions, as well as individual artists, the arts and culture industry contributed $730 billion (4.2%) to the nation’s 2015 GDP – more than transportation, tourism, agriculture, and construction. 

All images courtesy Americans for the Arts

These impressive findings are a result of the recently released Arts and Economic Prosperity (AEP5) study, published by Americans for the Arts, a nonprofit organization that “serves, advances, and leads the network of organizations and individuals who cultivate, promote, sustain, and support the arts in America.” For this fifth version of the study, Americans for the Arts included findings from 341 study regions, 14,439 organizations, and 212,591 audience spending surveys.

AEP5 analyzes spending both by arts and cultural institutions directly (on labor and materials) and by the audiences who attend arts events (not just on admissions, but on dining, retail, babysitting, local transportation, and overnight accommodations). It measures three main economic factors impacted by these spending activities: full time equivalent (FTE) jobs, household resident income, and total government revenue.

The level of economic activity generated by the arts and culture sector has risen $29 billion since the previous AEP study, conducted in 2010. In fact, all three of the economic factors in the study have increased, both on the organizational and audience spending sides. These increases appear to indicate that the nonprofit arts and culture industry has largely emerged from the Great Recession and that disposable incomes have rebounded to a level in which patrons are again willing to spend their time and money on arts and cultural events.

Jobs, Household Income, and Government Revenue

  • The arts support 4.6 million jobs, compared with just over 4.1 million in 2010The number of FTE jobs generated by organizations and audiences is roughly equivalent.
  • Arts and cultural institutions support .83% of the US workforce – a greater percentage than that of the legal or public safety sectors.
  • Cultural organizations and arts patrons support a combined $96.07 billion in resident household income, up nearly $10 million from 2010.
  • As a result of the above, the industry generates a combined total of $27.5 billion in government revenue (a more than 5:1 ROI versus the government funds they are allocated on an annual basis).

“Arts and cultural organizations provide rewarding employment for more than just artists, curators and musicians,” said the study. “They also directly support builders, plumbers, accountants, printers and an array of occupations spanning many industries.”

 Audience Spending and Tourism

Arts and cultural institutions are not only a draw for locals, but also a valuable tourism draw. According to the study, local arts patrons (comprising 66% of all arts patrons surveyed) spend $31.47 per person per event, beyond the cost of admission, on such items as child care, ground transportation, and meals, a figure up $7 from 2010. The other 34% surveyed, comprising nonlocal attendees, spend more than twice as much per person, understandable when adding transportation and overnight accommodations to the mix. Of those out-of-town audience members, 2/3rds responded that an arts event was the primary purpose of their visit. On the flip side, 41% of resident artsgoers said that if a particular arts event weren’t happening in their community, they would travel to another community to attend.

Research from the US Department Commerce and other agencies show that arts and cultural travelers spend more, stay longer, are more likely to purchase accommodations, and are more likely to spend $1,000 or more during their stay than other travelers. Bottom line? If cities don’t have arts amenities, not only do they miss out on tourist revenue, but they also lose local dollars, as residents spend their tourism money elsewhere.

Making the Argument

As we’ve reported previously, museums and other nonprofit organizations are often loquacious in describing their “soft value” – contributions to education, entertainment, community building, and the like. Where they often fall short is communicating their economic value with hard numbers – an increasingly important metric as funding sources become more scarce and audiences demand more bang for their discretionary buck.

Nonprofit arts organizations provide places for entertainment and enrichment, but they also hire local workers, purchase locally made goods, and attract tourists to local restaurants, hotels, and dining establishments. All of these economic activities generate revenue for their hometowns. The numbers in the Arts and Economic Prosperity V study support the notion that museums and culture institutions aren’t just memory makers for families, but money makers for the local, state and national economy. Facts in hand, it’s time to spread the message.