Americans for the Arts: Arts & Economic Prosperity IV
On June 8th Americans for the Arts released the findings from Arts & Economic Prosperity IV, the largest and most comprehensive study of its kind ever conducted. Like the past three iterations, it documents the key role played by the nonprofit arts and culture industry in strengthening our nation’s economy. But this time around, the results of this study are a bit more extraordinary.
For the first time in its history, Arts & Economic Prosperity IV documents how the arts industry fared during a recession. And not just any economic slowdown. This study shows how the arts sector fared during The Great Recession, the most shattering economic downfall our nation, and the world, has experienced in generations. And there is encouraging news to share.
Despite the economic headwinds that our country faced in 2010 when the study was conducted, the arts and culture industry continued to serve as an economic engine, generating $135.2 billion dollars of economic activity-$61.1 billion in spending by nonprofit arts and culture organizations, plus an additional $74.1 billion in spending by their audiences. This economic activity had a significant impact on the nation’s economy, supporting 4.2 million full-time jobs, and generating $23 billion in revenue to local, state, and federal governments every year-a yield well beyond their collective $4 billion in arts allocations.
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 three percent behind their 2005 levels at an estimated $61.1 billion, demonstrating the industry’s resilience even if in the face of an extremely challenging fiscal environment. In addition, the 94,478 audience intercept surveys collected for the 2005 study showed an average event-related expenditure of $27.79, per person per event, beyond the cost of admission. The 151,802 audience surveys conducted for the 2010 report show an 11 percent decrease in that amount, to $24.60.
These findings are remarkable given the economic climate that was present when the study was conducted. Unemployment was at 9.7 percent in 2010-more than double the rate from when Arts & Economic Prosperity III was conducted in 2005. The Consumer Confidence Index-the degree of optimism that consumers are expressing through their spending and saving as measured by the Conference Board-plummeted to 54 (nearly half its 2005 level), and the number home foreclosures tripled to 2.9 million from the number in 2005.
Throughout the recession, the arts industry continued to produce new and exciting work-performances and exhibitions and festivals that entertain, inspire, and draw audiences. So as the economy rebounds in the coming years, the arts are well poised for growth.
Arts & Economic Prosperity IV demonstrates that America’s nonprofit arts industry is not only resilient in times of economic uncertainty, but is also a key component to the nation’s economic recovery and future prosperity. This study shows that the nonprofit arts and culture industry is an economic driver in communities-an industry that supports jobs, generates government revenue, and is the cornerstone of tourism. The arts mean business!
Arts & Economic Prosperity IV is our fourth study of the nonprofit arts and culture industry’s impact on the economy. The most comprehensive study of its kind ever conducted, it gives us a quantifiable economic impact of nonprofit arts and culture organizations and their audiences. Using findings from 182 regions representing all 50 states and the District of Columbia, an input-output economic model is able to deliver national estimates.
Nationally, the industry generated $135.2 billion of economic activity—$61.1 billion by the nation’s nonprofit arts and culture organizations in addition to $74.1 billion in event-related expenditures by their audiences. This economic activity supports 4.13 million full-time jobs and generates $86.68 billion in resident household income. 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. Despite the economic headwinds that our country faced in 2010, the results are impressive.
In 2010, nonprofit arts and culture organizations pumped an estimated $61.1 billion into the economy. Nonprofit arts and culture organizations are employers, producers, consumers, and key promoters of their cities and regions. Most of all the are valuable contributors to the business community.
Dinner and a show go hand-in-hand. Attendance at arts events generates income for local businesses—restaurants, parking garages, hotels, retail stores. An average arts attendee spends $24.60 per event, not including the cost of admission. On the national level, these audiences provided $74.1 billion of valuable revenue for local merchants and their communities.
In addition, to spending data, researchers asked each of the 151,802 survey respondents to provide his/her home ZIP code. Analysis of this data enabled a comparison of even-related spending by local and nonlocal attendees. While the ration of local to nonlocal attendees is different in every community, the national sample revealed that 31.8 percent of attendees traveled from outside of the county in which the event took place and 68.2 percent of attendees were local (resided inside the county).
Previous economic and tourism research has shown that nonlocal attendees spend more than their local counterparts and this study reflects those findings. Data shows that nonlocal attendees spent twice as much as local attendees ($39.96 vs. $17.42), demonstrating that when a community attracts cultural tourists, it harnesses significant economic rewards.
Arts & Economic Prosperity IV demonstrates that America’s arts industry is not only resilient in times of economic uncertainty, but is also a key component to our nation’s economic recovery and future prosperity. Business and elected leaders need not feel that a choice must be made between arts funding and economic prosperity. This study proves that they can choose both. Nationally as well as locally, the arts mean business!
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