Thursday, May 31, 2007

Profiting from Nonprofits

If you are unable to read Arts & Economic Prosperity III, which Americans for the Arts released while I was busy getting ready to whoop it up in Chicago (see below), you should read this nifty recap of the main points of the report in the Chicago Reader. Very smart of Bob Lynch, who is terrific guy and an excellent interview, to go with the title "The Arts Mean Business."

Among other things, I would like the community -- in particular the nonprofit Off-Off-Broadway community -- to spend some time absorbing the ramifications of some of the things contained in this report. For example:

By every measure, the results are impressive! Nationally, the nonprofit arts and culture industry generates $166.2 billion in economic activity annually—a 24 percent increase in just the past five years. That amount is greater than the Gross Domestic Product of most countries. This spending supports 5.7 million full-time jobs right here in the United States — an increase of 850,000 jobs since
our 2002 study. What’s more, because arts and culture organizations are strongly rooted in their communities, these are jobs that necessarily remain local and cannot
be shipped overseas.

Our industry also generates nearly $30 billion in revenue to local, state, and federal governments every year. By comparison, the three levels of government collectively spend less than $4 billion annually to support arts and culture — a spectacular 7:1 return on investment that would even thrill Wall Street veterans.

Arts & Economic Prosperity III has more good news for business leaders. Arts and culture organizations — businesses in their own right — leverage additional event-related spending by their audiences that pump vital revenue into restaurants, hotels, retail stores, and other local businesses. When patrons attend a performing arts event, for example, they may park their car in a toll garage, purchase dinner at a restaurant, and eat dessert after the show. Valuable commerce is generated for local merchants. This study shows that the typical attendee spends $27.79 per person, per event, in addition to the cost of admission. When a community attracts cultural tourists, it harnesses even greater economic rewards. Nonlocal audiences spend twice as much as their local counterparts ($40.19 vs. $19.53). Arts and culture
are magnets for tourists, and tourism research repeatedly shows that cultural travelers stay longer and spend more.

Whether serving the local community or out-of-town visitors, a vibrant arts and culture industry helps local businesses thrive.

In the post below about tourism and Broadway fiscal health (artistic health is a whole other matter), I said something about the post-9/11 view on things, how it was no sure thing that things would approach any kind of normalcy again in the American commercial theatre. That remains true; what I find interesting, however, is how the arts advocacy community, which I reported on extensively from late 2001 until late 2005 for Back Stage, has finally begun to speak loudly and coherently about the dollar-for-dollar impact of the arts on the rest of the economy. It's not that this argument-slash-discussion is particularly new; it wasn't new in 2001. It's that you can sense some critical mass -- it is clearly why the House of Representatives, for example, is considering boosting NEA funding by $35 million. It's not that that $35 million will necessarily give everyone a chance to mount their kooky Kabuki Hamlet; it's that every dollar of public funding generates economic activity by, as noted, a factor of seven.

If you want to have a voice in this, I suggest calling the office of Representative Norm Dicks, Democrat of Washington, who chairs the House Interior Subcommittee, which provides the NEA funding.

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