Information regarding the Arts and Economic Stimulus

National Endowment for the Arts,
29 January 2009, USA

There has been much public conversation recently regarding the role of the arts and culture industry in economic stimulus. Following is information that seeks to clarify this issue through two key points: that the arts and culture industry is a sector of the economy just like any other with workers who pay taxes, mortgages, rent and contribute in other ways to the economy; and that the National Endowment for the Arts is uniquely positioned to assist in job stimulation for that industry.

A statement on January 22 from then NEA Chairman Dana Gioia noted, "Arts organizations have been hit enormously hard by the current recession. They've seen their support drop from corporations, foundations, and municipalities. This infusion of funds will help sustain them, their staffs, and the artists they employ. We are hopeful that Congress and the new administration will support this important investment."

The arts and culture sector
A recent study released by the National Governors Association titled Arts & the Economy: Using Arts and Culture to Stimulate State Economic Development states, "Arts and culture are important to state economies.  Arts and culture-related industries, also known as 'creative industries,' provide direct economic benefits to states and communities:  They create jobs, attract investments, generate tax revenues, and stimulate local economies through tourism and consumer purchases."

As noted in the NEA study Artists in the Workforce (June 2008), there are two million trained, entrepreneurial working artists across the country who are assets to their communities. Representing 1.4 percent of the U.S. labor force, artists constitute a sizeable class of workers -- only slightly smaller than the total number of active-duty and reserve personnel in the U.S. military (2.2 million).

In addition to artists, there are many more arts administrators who manage arts institutions including office staff such as accountants and booking agents, production staff such as stage managers, and artistic staff such as ballet masters and artist managers.

According to research by Americans for the Arts, nonprofit arts organizations and their audiences generate $166.2 billion in economic activity every year, support 5.7 million jobs, and return nearly $30 billion in government revenue every year. Every $1 billion in spending by nonprofit arts and culture organizations and their audiences results in almost 70,000 full time jobs.

The National Endowment for the Arts
The NEA has in place processes to distribute federal funds quickly and effectively to organizations large and small in every Congressional district. The NEA's grant-making process of applications, panels, and grants distributes money to arts and culture organizations in six to nine months both through state governments and directly to the organizations themselves.

A review of NEA grants for FY 2008 revealed that for every $10,000 of grant money, 162 artists benefited. This number does not include the arts administrators involved in these projects as mentioned above.

Of the 884 grants approved in the NEA's October 2008 National Council on the Arts meeting, project costs totaled $403.8 million of which 22 percent was designated for salaries. Of the $53 million requested in those 884 grants, the NEA was able to fund more than $20 million or 38 percent.

The NEA has strong relationships with grantees and other institutions in the nonprofit arts field that can facilitate funds distribution. And finally, the projects the NEA supports aren't subject to hearings or studies at the front end that might delay the start of a project and don't put entitlements in place after a project is completed.

Examples from the arts and culture sector
Nonprofit arts organizations have been struck particularly hard in this economic downturn due to their reliance on both private and public, earned and donated monies to support their activities. Some examples of the impact of the economic crisis on arts organizations follow.

The Los Angeles Opera said today that it had laid off 17 employees, or approximately 17% of its staff. It has also mandated a pay cut for all employees, averaging 6% but with higher-paid staffers taking an 8% cut. (source: Los Angeles Times, 1/27/09)
The Milwaukee Shakespeare Theater Company, a high profile regional nonprofit theater closed down operations in October. (source: report from the field)
The Seattle Art Museum has cut back five percent of its staff and is facing a $3.8 million annual shortfall if it can't find a new tenant for the space Washington Mutual had been leasing from it. (source: Seattle Post-Intelligencer, 1/25/09)