“Lies, Damned Lies, and Statistics” – Another Bad Research Project About the Arts Leads to Worse Conclusions

Benjamin Disraeli might have been referring to the latest irrelevant data on the economic power of the arts in 2021.

[Jeez Louise. Why do they make me have to write this?]

Let’s start with a basic question. What constitutes relevant data?

If you’re really hungry and you find yourself in an apple orchard, which one of these points is the most relevant to you?

1. The robust height of the trees
2. The deep-green gloss of the leaves
3. The thousands of apples sold to market
4. The hundreds of apple-pickers hired
5. A low-hanging apple that appears almost ripe

If you choose anything but 5, you’re probably impressed with the latest data from the National Endowment for the Arts and the Bureau of Economic Analysis. As reported in The Art Newspaper, the NEA/BEA reported that the art and cultural sectors had a larger impact on the US Gross Domestic Product (GDP) in 2021 than ever before, making up over $1 trillion of the US economy.

If you did choose 5, you understand why the study itself offers little in the way of bolstering the case for any single nonprofit arts organization in any single community. Frankly, it offers nothing of value at all, once you look at what was considered “the arts” in the survey. Here are the 10 highest-ranking “arts” activities listed:

Remember two things as you read this. First, the numbers are in the millions, so add 6 zeros to the end of each number. Second, the vast majority of these figures emanate from the profit-making industries of broadcasting, motion picture production, and the internet. Even the item called “Arts retail trade” mostly includes commercial signage that you see in office buildings, hotels, and other businesses. Even “independent artists, writers, and performers” weighs heavily toward vast sums of money given to movie stars for each picture in which they star.

So, of the $1 trillion of which they write so glowingly, $833.55 billion comes from these 10 sources. And of that, almost none goes to or comes from nonprofit arts organizations.

One has to ask, what is the significance of these figures? Was the United States planning to get out of the film, television, advertising, publishing, architecture, or web business, but gosh, now that we know it comprises 4% of the GDP, the US will continue to soldier on in these businesses? That’s the only rationale for putting out this particular report, co-written by a government entity that generally only provides support to nonprofits.

Meaningless data are worse than no data at all.

Why are the data meaningless? Don’t they provide some evidence that the arts are an economic plus for the country?

It’s not an unreasonable question. For at least half a century, the nonprofit arts has been using the phrase “positive economic impact” to describe their own budgets, secondary and tertiary expenditures that ticket-buyers make on the day of performance (restaurants, babysitters, parking, etc.), and the (completely wild and unsubstantiated) speculations of increased property values based on having an arts organization in the community.

Let’s grant all of that, even though it’s mostly guesswork and most often proof-free. The problem is, positive economic impact is not any nonprofit’s reason for being. Helping the underserved is the reason for being, at least for an arts organization (which has no exemption in the IRS code merely for producing art).

So, no, size of GDP don’t make sense in this case. Size of overhead doesn’t make sense. Size of budget doesn’t make sense (except in scope of charitable impact).

The dollars don’t make sense. It’s like a child who loudly argues loudly at the dinner table about winning an after-school kickball game—in response to a parent saying, “Eat your asparagus.” It’s nice that the kid got some exercise and social activity, but it has nothing to do with the fact that the mission at hand is to ingest a healthy vegetable.

The infuriating aspect of meaningless data comes from the fact that some nimrod somewhere is going to use this as some sort of support for their individual nonprofit arts organization. Again, there are almost no dollars emanating from the nonprofit version of any of these “arts.” But worse, the data will be used to bolster the claim that the nonprofit arts are good for business. It’s a misguided and irrefutably irrelevant claim.

It doesn’t matter if the arts are good for business. It matters that charities are, presumably, good safety nets. It matters that nonprofit arts organizations have the ability to use art to quantifiably solve or mitigate community problems.

It matters that the NEA thought it was worth the expense to engage in such research, even though its data are misleadingly irrelevant to today’s nonprofit arts companies, even the ones they support. It matters that some senator or congressperson decided to lean on the NEA to produce such data in order to justify some annual budget expenditure (or worse, to use it as a political football for something else).

Which other charitable sectors might one put together a survey, basing their reason for existence on percentage of GDP…and then misleading the public as to the results?

Schools? Potentially. Although educating people is listed in the IRS as an exempt activity, the truth is that a highly-educated populace is better for the economy than one that isn’t educated. If that’s good for the GDP as an indisputable measuring stick (somehow) then that could be true. But is the purpose of education to increase the GDP?

Social justice? The claim that “DEI is good for business” defeats the purpose of DEI. Eliminating discriminatory practices, pay inequity, and fulfilling our constitutional obligation as described in the final phrase of the First Amendment, “petition the Government for a redress of grievances” is simply the right thing to do, regardless of cost. Whether it’s a money-maker is mercenary, infantilizing, and perfunctorily needless.

Social service? Healthcare? The US, as one of the last countries on the planet to eschew universal healthcare of some sort, uses healthcare and social services as hostage situations, with the patients being the hostages of a system that forces them to choose health or rent on too many occasions. Social services and healthcare should happen whether they increase the GDP or not.

It’s all about intent. If and when the nonprofit arts ever decide to wholly embrace their charitable charters to help their communities, then they will be seen as community engines. Not from the money they make; not from the money they spend; rather, from the impact on the people of the community.

Based in Kirkland, Washington, Alan Harrison is a writer and speaker specializing in nonprofit organizations, strategy, the arts, and life politics. His columns appear regularly in major publications. Contact him directly at alan@501c3.guru.

If you’re feeling generous or inspired, just click on the coffee cup above. You don’t have to, of course, but if you can afford it and find some value here, please provide the desperate need for caffeine.

Alan is always looking for good opportunities to write and consult for nonprofits that need a hand. And, of course, that elusive Perfect Opportunity™.

BIG NEWS: Alan’s new book, “Scene Change: Why Today’s Nonprofit Arts Organizations Have to Stop Producing Art and Start Producing Impact” will be published in January. CLICK HERE TO PRE-ORDER IN THE UNITED STATES. If you live in the UK, CLICK HERE.

Alan will be speaking on May 19 at the Washington State Nonprofit Conference at the Marriott Hotel in downtown Tacoma, WA. The publisher has pre-printed a LIMITED NUMBER of books so that attendees can purchased a signed copy right there at the event.

A few more copies may be made available for those booking conferences, reading engagements, and speaking engagements. Recruit your local bookstore, conference panel, or boardroom to get a visit from Alan. Let Alan know if you want bulk copies for your board!