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Arts, Culture Nonprofits Are Economic Drivers, Study Says

By Rebecca Goldfine

October 31, 2011

New England’s nonprofit arts sector is a job-generating, financially robust piece of the economy, despite stereotypes to the contrary, according to a new report released by the New England Foundation for the Arts.

“Nonprofit arts and cultural organizations are not viewed as part of the business community,” says Linda Varrell. “There’s a cloud of misconceptions around nonprofits.” Varrell, president of Broadreach Public Relations in Portland, Maine, is a spokeswoman for the Maine Center for Creativity, which authored the NEFA report along with economists Chuck Lawton of Planning Decisions Inc. and Charles Colgan of the University of Southern Maine.

Varrell says people tend to believe that nonprofit arts groups are elitist and supported by the wealthy, or are subsidized by government hand-outs — and that they’re run sloppily, with a lot of waste.

To help dispel these “myths,” as Varrell calls them, she and Jean Maginnis, the executive director of the Maine Center for Creativity, hold up the new report as evidence that nonprofit arts and cultural organizations are making jobs and contributing to local economies — and doing it despite the worst recession since the Great Depression. The report is part of a regular assessment of the regional arts-and-culture economy by NEFA, which hires economists to analyze the financial data from thousands of nonprofits in Maine, Massachusetts, New Hampshire, Vermont, Connecticut and Rhode Island every few years. The last report was released in 2006.

According to this year’s report, New England’s 18,026 arts and culture nonprofits spent nearly $3.7 billion in 2009 and provided jobs for over 53,000 people. “By comparison, that spending total is fully $1 billion greater than the gross product of the region’s entire paper manufacturing industry and nearly as large as the gross product of the region’s information and data processing industry,” the report says.

Lawton and Colgan’s calculations show that the $3.7 billion in direct spending generates $8.4 billion in revenue to businesses across New England, and that the 53,270 arts and culture jobs support nearly 30,000 extra jobs for related vendors and consumer businesses, for a total of 83,000.

The report tallied 332 nonprofit arts and cultural organizations in Hartford, which in total employed more than 650 people, spent more than $137 million in 2009 and held assets of over $440 million. Throughout Connecticut, the state’s 3,326 arts and cultural organizations spent nearly $625 million and employed nearly 10,000 people in 2009. The total economic impact — after the ripple effects of that spending is calculated — is over $1.3 billion and supported nearly 14,000 jobs.

Connecticut’s arts and culture sector ranks 34th among 46 major state sectors in terms of gross product totals, just behind transit and ground passenger transportation and ahead of truck transportation. In terms of employment, the sector’s ranked 41st among the U.S. Bureau of Labor’s 65 major sectors, just behind electrical equipment manufacturing and just ahead of publishing.

The report’s numbers also indicate that between 2002 and 2009, through a sallow economy, nonprofit arts and culture organizations in New England grew. They jumped in number by 14 percent, their spending increased 24 percent and their employment rose by 28 percent. More specifically, between 2007 and 2009, when New England’s total personal income fell 0.5 percent and the number of employers fell 0.6 percent, the number of nonprofit arts and cultural organizations increased 1.1 percent and their spending rose 11.5 percent, even while their assets dipped nearly 7 percent. (The report acknowledges a higher number of organizations included in its analysis.)

Maginnis says that arts organizations are less vulnerable to the ups and downs of economic cycles than some other industries. Lawton also suggests that cultural organizations’ endowments give them a degree of stability over private businesses. Plus, he adds, “My own interpretation is that these organizations view themselves as long term. Even though their revenues are down they’re not going to cut down performances. They may try to economize or try to be more efficient, but they’re going to maintain their offerings.”

Maginnis says the report can be used to advocate for more financing initiatives and greater support from policy makers. She makes the point that nonprofit arts organizations could possibly be funded in the same way that other startups, particularly in the tech sector, are boosted with subsidized seed grants and other investments.

By the numbers: Connecticut’s nonprofit arts and cultural organizations in 2009 3,326 — Number of organizations. $625 million — Amount spent. 10,000 — Employees. $1.3 billion — Total economic impact. 34th— Gross product ranking in the state, among 46 major sectors. 41st — Employment ranking in the state, among 65 major sectors. Hartford’s nonprofit arts and cultural organizations in 2009 332 — Number of organizations: $137 million — Amount spent. 650 — Employees. $400 million — Total assets. Source: New England Foundation for the Arts

Reprinted with permission of the Hartford Business Journal. To view other stories on this topic, search the Hartford Business Journal Archives at http://www.hartfordbusiness.com/archives.php.
| Last update: September 25, 2012 |
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