NPT Instant Fundraising Newsletter

Nonprofit Arts Worth $166.2 Billion To Economy

The nonprofit arts industry generates $166.2 billion in economic activity annually, putting almost $30 billion of tax revenue into government coffers, according to a new economic impact study.

Arts & Economic Prosperity III, released recently by Americans for the Arts, is the most comprehensive economic impact study of the U.S. nonprofit arts and culture industry. Since the first analysis by Americans for the Arts in 1992, the nonprofit arts and culture industry has grown faster than the rate of inflation.

Spending by organizations and their audiences grew 24 percent between the second study in 2000 and 2005. Total economic activity increased from $134 billion to $166.2 billion, with $63.1 billion in spending by organizations and another $103.1 billion by audiences in event-related spending.

Event-related spending by arts audiences reflects an average $27.79 per person spending for hotels, restaurants, parking, souvenirs, refreshments and other costs. Non-local attendees ($40.19) spent twice as much as local attendees ($19.53).

The total economic activity has a significant national impact, generating:

• 5.7 million full-time equivalent jobs
• $104.2 billion in resident household income
• $7.9 billion in local government tax revenues
• $9.1 billion in state government tax revenues
• $12.6 billion in federal government tax revenues

“Most Americans understand that the arts improve our quality of life,” said Robert Lynch, president and CEO of Americans for the Arts. “This study demonstrates that the arts are an industry that stimulates the economy in cities and towns across the country. A vibrant arts and culture industry helps local businesses thrive.”

The nonprofit arts industry supports more jobs than accountants, public safety officers, and lawyers, and just slightly fewer than elementary school teachers, according to the study. Spending by nonprofit arts and culture organizations provide employment for more than artists, curators, and musicians but also directly support builders, plumbers and printers.

The study, available at www.AmericansForTheArts.org/EconomicImpact, documents the economic impact in 156 communities and regions (116 cities and counties, 35 multi-county regions, and five states), representing all 50 states and Washington, D.C. Communities range in population (4,000 to 3 million) and type (rural to urban). Researchers collected expenditure and attendance data from 6,080 nonprofit arts and culture organizations and 94,478 of their attendees to measure total industry spending.

To derive national estimates, the 116 cities and counties were stratified into six population groups, and an economic impact average was calculated for each group. Second, the nation’s largest 12,662 cities were assigned to one of the six groups based on their population. Each city then was assigned the economic impact average for its population group.

The values of the cities were added together to determine the national economic impact findings. Results of the economic impact of the arts for each of the 116 cities and counties, as well as comparative data for the 25 communities from both the 2002 and current study will be released June 6.

New York and Los Angeles, each with more than $1 billion in organizational expenditures, were excluded from the study to avoid inflating the national estimates. Laguna Beach, Calif., and Teton County, Wyo., also were removed when calculating the national estimates due to their comparably high levels of economic activity in their population category.

The Arts & Economic Prosperity III study was conducted by Americans for the Arts and supported by the Paul G. Allen Family Foundation, the John D. and Catherine T. MacArthur Foundation, and The Ruth Lilly Fund of Americans for the Arts. Americans for the Arts’ local and statewide project partners contributed both time and financial support to the study.