Number of Arts Organizations Continues to Increase Despite Poor Economic Climate

Monday, January 24, 2011

press releaseContact:
Catherine Brandt
202-712-2054
cbrandt@artsusa.org

WASHINGTON, D.C. — Americans for the Arts, the nation’s leading nonprofit organization for advancing the arts, today announced the first update to its National Arts Index, the annual measure of the health and vitality of the arts industries in the United States. The 2010 Index  offers the first comprehensive picture of how the arts fared during the Great Recession.

According to the Index, the vitality of America’s arts sector reached a 12-year low in 2009, dropping a record 3.6 points to 97.7.  What’s more, since the onset of the Great Recession, the Index has plummeted 6.2 points. In fact, the losses sustained from 2007-2009 were nearly double the gains made from 2003-2007 (3.9 percent).

Defying this fall was a continued growth in the quantity of arts organizations. From 2007-2009, the number of nonprofit arts institutions grew by 3,000. As a result, the arts sector is now composed of 109,000 nonprofit arts organizations and 550,000 for profit arts businesses, and 2.2 million artists in the U.S. workforce. However, an increasing number of organizations and individuals are struggling to make ends meet. In 2008, 41 percent of nonprofit arts organizations reporting to the IRS failed to achieve a balanced budget, up from 36 percent in 2007.  Further, analysis shows these organizations in deficit are likely to be larger in budget size , though no specific arts discipline is particularly more likely to run a deficit. 

Fueling the drop in the Index and the growing number of arts organizations’ inability to balance their budgets are declines in earned income and charitable giving. While the public’s personal spending on the arts has remained in the $150-$160 billion range, it has steadily slipped since 2002 in terms of share of all expenditures (from 1.88 percent to 1.57 percent). In addition, arts and culture continue to lose their market share of philanthropy to other charitable areas, such as human services and health. The portion of all philanthropic giving going to the arts dropped from 4.9 percent to 4.0 percent over the past decade. In other words, if the arts sector merely maintained its 4.9 percent share from 2001, it would have received $14.9 billion in contributions instead of $12.34 billion in 2009—a $2.5 billion difference.

“Nonprofit arts organizations are venues of artistic entrepreneurship—homes to new ideas and imaginative and innovative leaders,” said Robert L. Lynch, president and CEO of Americans for the Arts. “The growth of cultural opportunities and increased access to the arts is a positive direction for our country and its artists. However, the changes in philanthropy and the country’s slow emergence from the Great Recession put these gains at risk. Now more than ever the arts need to make the case that they are not only inherently valuable but are also part of the solution to the economic problems our nation’s communities are facing.”

"The arts are a fundamental component of true prosperity, and the National Arts Index provides an important starting point to discuss this element of our national well-being—to us as individuals, communities and a nation," said Arthur C. Brooks, president of the American Enterprise Institute and one of the Index's advisors. "The Index also highlights the growing imbalance between supply and demand. That 41 percent of arts nonprofits fail to break even suggests we need to focus not only on simply keeping them from going out of business, but also stimulating engagement among more members of the community and fostering entrepreneurship in the arts."

"The economic downturn that we're beginning to recover from has affected citizens and governments in a variety of ways and while Philadelphia's arts and culture sector has faced hardship, it continues to reflect a resilience that's critical to our economic vitality and sense of community," said Philadelphia Mayor Michael A. Nutter. "2009 was a tough year, but I'm confident the arts and culture sector will boost America's economic recovery on a local and national scale."

Demand for Arts in Education is Up

According to the Index, the percentage of college-bound seniors with four years of arts or music has grown over the past decade—from 15 percent to 20 percent of all SAT test takers—despite evidence of K-12 decreases in arts education overall. College arts degrees conferred annually have risen steadily from 75,000 to 127,000 in the past decade.

“It’s encouraging to see an increased demand for arts education,” said Chairperson, Chief Executive Officer and President of Sunoco Lynn Elsenhans. “Companies that support the arts know that a solid education in the arts teaches creative thinking skills and stimulates creativity and innovation—qualities all business need their workforce to have to succeed, thrive and grow.” 

"The benefits of arts education are well documented and far-reaching," said Lynch. “Students who study the arts perform better academically and develop much needed creative thinking, problem-solving and communications skills, all of which are essential to succeeding in today’s business climate.”

Other Key Findings:
• Increasing number of cultural and ethnically specific arts organizations. In the last decade, the number of cultural and ethnically diverse arts institutions has doubled from 4,806 to 9,609.
• More professional artists in the workforce. From 1996 to 2009, the number of working artists increased from 1.9 to 2.2 million—a 17 percent increase. In addition, arts worker wages were up, increasing from $45,825 in 2008 to $48,473 in 2009.
• Americans changing how they participate in the arts. While attendance numbers at artistic institutions has remained relatively flat over the past decade, personal arts creation and arts volunteerism is growing. The number of Americans who personally participated in an artistic activity—making art, playing music—jumped by 5 percent between 2005 and 2009. During the same period of time, the number of people volunteering for the arts has jumped 11.6 percent. 
• Technology is having an impact. In just the past five years nearly half of the nation’s CD and record stores have disappeared, while online downloads of music singles have grown seven-fold to more than one billion units annually. In 2009 digital formats comprised a record 41 percent of total music sales in the United States, up from 34 percent in 2008 and 25 percent in 2007. In addition, many nonprofit arts organizations are using technology to broaden their audience base. For example, the Metropolitan Opera is simulcasting 12 operas to 1,500 theaters in 46 countries—a program that sold an additional 2.4 million tickets last year alone. Also, the Washington National Opera’s annual simulcast at the Washington Nationals’ baseball stadium attracts 20,000 fans. 

“To thrive in today’s world, it is essential that arts organizations find innovative ways to engage audiences—using new technologies, alternative venues, and capitalizing on the public’s growing interest in personal arts experiences,” said Susan Coliton, vice president of the Paul G. Allen Family Foundation. “For our part, we as funders must continue our investment in arts organizations—even in challenging economic times.  It is this contributed support from the public and private sector alike that keeps the arts accessible to all members of our community and makes our cities and towns places we want to live.”

The Kresge Foundation and Ruth Lilly Trust provided support for the development of the Index. The National Arts Index was written by Dr. Roland J. Kushner, an economist and assistant professor of business at Muhlenberg College, and Randy Cohen, vice president of research at Americans for the Arts.

Americans for the Arts is the leading nonprofit organization for advancing the arts in America. With offices in Washington, D.C. and New York City, it has a record of more than 50 years of service. Americans for the Arts is dedicated to representing and serving local communities and creating opportunities for every American to participate in and appreciate all forms of the arts. Additional information is available at www.AmericansForTheArts.org.