The Need for Support
Most people are unaware of the funding challenges that must be met to keep America’s arts organizations in operation. You need to help your community understand that, as nonprofit organizations or public entities, your public purpose is to make your cultural product accessible to the community—affordability is a factor of access. To simply raise ticket prices to meet core production costs would put the cost of admission out of reach of many Americans. This is an issue of equity and democracy.
Support for the nonprofit arts in the U.S. is a mosaic of funding sources—an ever-changing mix of earned revenue, government support, and private sector contributions. Nonprofit arts organizations are generally able to earn only half of the money it takes to sustain their operation. The other half must be raised through contributions and grants. Even small fluctuations in contributed revenue can mean deficits for many organizations.
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Why the high costs? One reason is that most arts organizations are very labor intensive businesses. The symphony requires every musician is required to play each night. The good news story is that (1) these are local jobs and (2) this is an industry that can’t be off-shored.
Support the data with a story about how a popular exhibit or production only was able to cover a portion of production costs through ticket sales.
Economic Impact of the Arts
- Arts organizations are responsible businesses, employers, and consumers. Spending by nonprofit arts and culture organizations (museums, theater and dance companies, performing arts centers, orchestras, arts councils and others) was an estimated $63.1 billion in fiscal 2005, and leveraged an additional $103.1 billion in event related spending by arts audiences. This $166.2 billion in total economic activity supports 5.7 million full-time-equivalent jobs and generates $29.6 billion in government revenue annually.
- From large urban cities to small rural towns, this research shows that the nonprofit arts are an economically sound investment. They attract audiences, spur business development, support jobs, and generate government revenue. Locally as well as nationally, the arts mean business.
Free Tools: Visit our
economic impact web pages
to find free copies of the reports, a downloadable PowerPoint presentation, sample Op-Eds and Letters to the Editor, and more-or how to conduct an economic impact study on your own community.
The arts are a growth industry. In five years, the economic activity of nonprofit arts organizations and their audiences grew nearly 24 percent from $134 billion in 2000 to $162.2 billion (11 percent when adjusted for inflation).
- The nonprofit arts industry generates $29.6 billion in federal, state, and local tax revenues annually. By comparison, federal, state, and local governments combined spend less than $4 billion on support for the arts each year. The financial return on government’s investment in the nonprofit arts is, therefore, more than seven times the investment—annually.
Economic Impact Calculator
The Arts & Economic Prosperity Calculator is a free and simple tool that makes it possible for you to estimate the economic impact of your nonprofit arts and culture organization—or even your entire nonprofit arts community—on your local economy.
National Arts & Economic Prosperity Partner Organizations
The following national organizations partner with Americans for the Arts to help public- and private-sector leaders understand the economic and social benefits that the arts bring to their communities, states, and the nation.
Creative Industries: Business and Employment in the Arts
A NEW research approach . . . Our Creative Industries study provides an entirely new approach to quantifying the impact of the arts on the nation’s economy. We are using data from Dun & Bradstreet—widely acknowledged as the most comprehensive and trusted source for business information in the U.S.—to provide very specific and reliable data about employment and the number of arts-centric businesses in both the nonprofit and for-profit arts.
Creative Industries in Seattle
Formidable industry . . . The creative industries are a formidable industry in the U.S.—2.98 million people working for 612,095 arts-centric businesses (2.2 percent and 4.3 percent, respectively, of U.S. employment and businesses). These findings are larger than most people expected.
Arts education . . . With nearly three-million people working for arts businesses—arts education is a critical tool in fueling the creative industries with arts-trained workers as well as new arts consumers. Alan Greenspan, U.S. Federal Reserve Chairman, notes, “The arts develop skills and habits of mind that are important for workers in the new economy of ideas.”
Mapping the broad reach of the arts . . . Mapping the nation’s geographic and political regions demonstrates the creative industries are broadly distributed and thriving throughout our communities and political jurisdictions.
Policy development and evaluation . . . Because our Creative Industries study will be conducted annually, it becomes a tool for policy makers, funders, and elected leaders, enabling them to track the efficacy of arts policies and initiatives at the local, state, and federal levels.
Economic development . . . The creative industries play a major role in building and sustaining economically vibrant communities. Arts organizations provide jobs and generate government revenue and are the cornerstone of tourism and downtown revitalization.
Export industry . . . The creative industries are an important international export industry for the U.S.—estimated at $30 billion annually.
A conservative research approach . . . We have taken a conservative approach to defining the creative industries by focusing solely on businesses involved in the production or distribution of the arts. Not included, for example, is computer programming and scientific research—both creative, but not focused on the arts. Our analyses demonstrate an under-representation of nonprofit arts organizations in the Dun & Bradstreet database, and consequently, in our data. Additionally, many individual artists are not included, as not all are employed by a business.
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