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December 31, 2007

Are economic impact studies good for the arts?

John Stoehr

Here's a version of a June report I wrote about the specious nature of "economic impact" studies for a daily newspaper in Georgia. I hope you find it edifying. I wrote it when I was beat reporter covering arts and culture -- everything from puff pieces to annual fiscal reports to the intersection between arts and medicine.

The article came after the Americans for the Arts released its survey, finding that Savannah saw an arts impact of nearly $50 million in 2005, a huge, and dubious, number for a metro area of over 300,000.

In this article, I put findings by American for the Arts side-by-side with a study by the RAND Corporation that found "noteworthy weaknesses" in studies like the one applied to Savannah (and for that matter, Charleston).

The RAND study makes a fairly convincing case that arts organizations stop emphasizing art's quantitative aspects -- i.e., that the arts are good for business -- and start stressing art's qualitative aspects -- i.e., that art is inherently good, that it is important to literate, civilized communities, and that it promotes quality of life.

What I found most intriguing about the RAND study was its creation of a dichotomy: supply-side thinking and demand-side thinking on the part of arts organizations.

In other words, instead of spending oodles of money creating free concerts, performances, etc. (what economists would call "supply"), why not spend that same money encouraging people to value the arts vis-a-vis arts education and outreach (that is, "demand")?

Such thinking would go a long way toward achieving long-range, not short-term, goals.

On a more philosophical note, this is the similar dilemma that early scientists faced when they sought evidence of God's divine providence in their studies of the earth, human anatomy and outer space. The more they looked to the material world, the more reason they found to doubt their faith. By Darwin's time, faith has become something you couldn't prove, because the evidence keeping pointing to the contrary.

At the same time, even though faith couldn't be proved, it also couldn't be disproved. For some (though perhaps not many), having faith in a power larger than oneself became something good for its own sake.

Same with art. It's good for us. We don't have to prove. We just have to make a successful case for it.

Or as one source for my article, the president of an arts organization and lawyer at a high-powered law firm, put it: "You can always back up requests for funding with statistics. The experience of the arts is very subjective. Sometimes you just have to say that this is the right thing to do." --J.S. |

A Washington-based advocacy group's survey reports that Savannah realized more than $46.6 million in arts- and culture-related spending in 2005.

Arts groups, according to the study, spent more than $21.8 million. Audiences here spent more than $24.7 million.

Americans for the Arts issued "Arts & Economic Prosperity III" Wednesday, the third in a series of detailed reports tracking the economic impact of nonprofit arts and culture organizations in communities across the nation.

The report includes data from arts groups in Savannah, such as theater companies, dance troupes, arts festivals and musical ensembles. It is the first attempt in over a decade to provide evidence of what city officials, residents, patrons and consumers materially gain from their investment in arts and cultural organizations.

Arts organizations, the study suggests, created more than 1,600 full-time jobs or their equivalent. More than $2.8 million in local tax revenue was generated.

Nationally, more than $166 billion in economic activity was recorded during the same period, including nearly $30 billion in federal, state and local tax revenue.

Researchers from the Georgia Institute of Technology examined data from 156 communities - 116 cities and counties, 35 multi-county regions and five states - to measure industry spending. The report asserts that the arts are a cornerstone of tourism.

"When a community attracts cultural tourists, it harnesses significant economic rewards," the report states.

All this sounds good to Savannah city officials who allocate money every year to various arts organizations, especially those in the "cultural tourism" category of public funding. For 2007, Savannah City Council provided more than $978,000 for arts groups, including $150,000 for the Savannah Music Festival and $50,000 for the Savannah Film Festival.

Reframing the debate
Although such studies are good for advocates and politicians, they don't facilitate good research, according to a 2005 report by the Rand Corporation called "Gifts of the Muse: Reframing the Debate about the Benefits of the Arts."

Among dozens of surveys reported in recent years that attempt to measure the economic impact of the arts, most of those surveys suffer from "noteworthy weaknesses" and "holes in the evidence" because of the data used, the Rand report states.

Such studies claim benefits that are inherently difficult to measure. They assume money generated by the arts is a net addition to the local economy, when it's more likely to be a replacement for other kinds of spending.

Moreover, by focusing on the economics of the arts, they do little to help the long-term goals of arts groups, namely, to create a public that values the arts.

The Rand report recommends that arts advocates stop emphasizing the quantitative aspects of the arts, such as economic rewards, and instead focus on individual experiences, including enlightenment, emotional reflection and personal well-being.

Rand researchers made the case for less supply-side thinking - putting on shows and exhibits, for example - and more demand-side thinking that would lead to renewed efforts in public school and community arts programs to cultivate new audiences.

What's the real impact?
To see evidence of the arts' economic impact, said Patricia Miller, president of the Tybee Island Fine Arts Commission, people need to simply open their eyes. Many cities have revitalized their downtown neighborhoods because of the arts.

"I'm definitely on the side of the arts being an economic engine," Miller said, citing Douglasville, Statesboro, Brunswick and Savannah as success stories.

Ken Carter, executive director of the Lucas Theatre and a Georgia Council for the Arts panelist, said economic impact studies do have an upside, but they also have a downside: replacing the inherent and traditional value of the arts with a notion that cultural activity is merely good for business.

"These studies reinforce the notion that the value of the arts is economic, when it should be seen as the ability to change lives and raise the level of community engagement," he said. "That is the primary attribute of the arts."

Shonah P. Jefferson, chairwoman of the Friends of African-American Arts, a group affiliated with the Telfair Museum of Art, said that as a lobbyist, she would use economic impact studies to make the case for arts funding. But ultimately, she said, the issue is qualitative, not quantitative.

"You can always back up requests for funding with statistics," Jefferson said. "The experience of the arts is very subjective. Sometimes you just have to say that this is the right thing to do."

The results of the study, as they apply to Savannah, are scheduled to be presented July 19 to the Savannah City Council by a representative of Americans for the Arts.

Cross-posted from Charleston City Paper's Unscripted.

Posted by John Stoehr at December 31, 2007 8:56 AM

COMMENTS

Arts groups tout the economic benefits because they have to; funders in many cases want to see/hear that, because it is measurable....creating harmonious communities and people by making art cannot be measured, even thought we know it to be so. Happy New Year.

Posted by: Moe at December 31, 2007 11:49 AM

All that is very nice- yes, the Arts are subjective and ultimately GOOD. The Arts are a NECESSARY part of a places cultural life.

However, when the funding in a town comes from a Community Development Block Grant, and your Arts organization is pitted against (and I do mean against) a homeless shelter or a group that takes battered kids off the street and teaches them (unbelievably enough) boxing, and it is very popular over decades, then you had better have some keen economic analysis in your presentation, or you look like a dope, and worse, people remember you as 'the artsy lady' and get very condescending when you go up the next year looking for 'their' money. Been there, done that. I've called it "The Arts Economy" here and it is beginning to get some traction, at least people will listen now.

Posted by: Katrina S. Axelrod at January 3, 2008 7:26 AM