Monday, April 9, 2012

2012 National Arts Index

Good morning.
"And the beat goes on....................."

This from Randy Cohen at Americans for the Arts re: the 2012 National Arts Index:

"5 Key Findings From the National Arts Index
1.       The arts industries continue to follow the nation’s business cycle:   The arts are an economic force of 113,000 nonprofit arts organizations and nearly 800,000 more arts businesses, 2.2 million artists in the workforce, plus $150 billion in consumer spending. The Index is strong when Consumer Confidence and GDP growth are strong.  Figure A shows growth during the middle part of the past decade and in the late 1990s when the economy was growing, both followed by a decline of the Index during the two most recent economic downturns, and a leveling off in parallel with recent and current signs of economic strength.

2.       Significant growth in the number of nonprofit arts organizations:  The number of nonprofit arts organizations continued to grow, reaching 113,000 in 2010.  In the past decade, the number of nonprofit arts organizations grew 49 percent (76,000 to 113,000), a greater rate than all nonprofit organizations, which grew 32 percent (1.2 million to 1.6 million). Or to look at it another way, between 2003 and 2010, a new nonprofit arts organization was created every three hours in the U.S.

3.       Arts nonprofits show improvement, but continue to be challenged financially:  The percentage of nonprofit arts organizations with an operating deficit (requiring them to amass debt or dip into cash reserves) declined for the first time since 2007.  In 2010, 43 percent of nonprofit arts organizations had an operating deficit, down after steady increases during the Great Recession—36 percent in 2007, 41 percent in 2008, and 45 percent in 2009. While a troubling finding, this is about the same share as nonprofits in other areas besides the arts.  Larger-budget organizations were more likely to run a deficit; there was no predictable pattern based on specific arts discipline.

4.       America’s arts industries have a growing international audience:  U.S. exports of arts goods (e.g., movies, paintings, jewelry) increased from $56 to $64 billion between 2009 and 2010, up 12 percent.  With U.S. imports at just $23 billion, the arts achieved a $41 billion trade surplus in 2010.

5.       Arts organizations foster creativity and entrepreneurship through new work:  Arts organizations are homes to new ideas and innovative leaders.  One measure of the Index is the number of premiere performances and films.  Between 2005 and 2010, there was a 14 percent increase in the number of new opera, theater, film, and symphony works—audiences were treated to an impressive 1,025 premieres in 2010 alone.


Trends in Audience Engagement:
How the public participates in and consumes the arts is ever-expanding.  Tens of millions of people attend concerts, plays, operas, and museum exhibitions every year—and those that go usually attend more than once (dubbed the “cultural omnivore”).  The data underscore the observations of many that consumers are seeking a more personal engagement in their arts experiences, embracing the delivery of arts and music through technology, and seeking more diverse cultural experiences.  Thus, the public is not walking away from the arts, but they are walking away from some traditional models of delivery.

  • Arts attendance begins to rebound: In 2010, 32 percent of the adult population attended a performing arts event (up from 28 percent in 2009); 13 percent visited an art museum (up slightly from 12 percent).  These are the first increases since 2003. 
  • Consumer arts spending steady at $150 billion:   Since 2002, consumer spending on the arts, a discretionary expenditure, has remained in the $150 billion range (e.g., admissions, musical instruments).  Because the amount of consumer spending increases over time, however, the arts’ share has slipped from 1.88 percent in 2002 to 1.45 percent in 2010.  Inevitably, as people lost jobs and had their housing threatened, their expenditures on arts and culture went down, too.  As economic revitalization builds consumer buying power in coming years, the arts are poised to compete better
  • Americans seek personal engagement in their arts participation:  Personal arts creation and arts volunteerism remains strong, though responsive to the economy.  The percentage of Americans who personally participated in an artistic activity—making art, playing music—has remained steady in the 19 percent range over the past decade.  However, annual increases are noted in the pre-recession years, followed by annual decreases during the recession.  Following steady growth during the recession years, volunteerism at arts organizations declined slightly in 2010. 
  • Technology is having dramatic effects, which is both encouraging and concerning. Since 2003, nearly half of the nation’s CD and record stores have disappeared.  Online downloads of music singles, however, have grown 7-fold to more than one billion units annually. In 2009, digital formats comprised a record 41 percent of total music sales in the United States, up from 34 percent in 2008, and 25 percent in 2007.  Savvy nonprofit arts organizations are using technology to broaden their audience base and enrich the audience experience. For example, the Metropolitan Opera simulcasts its operas to 1,600 theaters in 54 countries—a program that sold 3 million tickets in 2011. Following one of its best years on record in 2009, motion picture attendance dropped off in 2010 with continued small but steady growth in the number of movie screens.
  • The rapid increase in number of culturally and ethnically diverse arts organizations: While growth in the numbers of these organizations kept pace in 2010 , this was the only year since we began measuring in 2003 that they did not grow at a markedly faster rate than all nonprofit arts organizations.
  • College-bound seniors taking more arts and music:  Despite the evidence of decreases in K-12 arts education, the percentage of college-bound seniors with four years of arts or music grew over the past decade—from 15 percent to 20 percent of all SAT test takers—a confounding finding to researchers given the evidence of K-12 decreases in arts education overall, and suggesting to researchers a significant educational equity gap.  The College Board also reports that students with four years of arts or music average about 100 points better on the verbal and math portions of the SAT. 
  • More college arts degrees conferred annually:  The number of college arts degrees has risen steadily from 75,000 to 129,000 over the past dozen years.  Reasons for this include an increase in design degrees and more double-majors, such as science and music.  This is promising news for business leaders looking for an educated and creative workforce.

Continuing Trends:

  • U.S. cultural destinations help grow the U.S. economy by attracting foreign visitor spending.  Effectively, cultural tourism by foreign visitors is another form of export by domestic arts and culture industries.  Additionally, the U.S. Department of Commerce reports that the percentage of international travelers including art gallery and museum visits on their trip has grown annually since 2003 (17 to 24 percent), while the share attending concerts, plays, and musicals increased five of the past seven years (13 to 17 percent since 2003). 
  •  Arts and culture is losing its market share of philanthropy to other charitable areas, such as human services and health.  It is noteworthy that this decline began well before the current economic downturn.  The share of all philanthropy going to the arts has dropped from 4.9 percent to 4.5 percent over the past decade.  If the arts sector merely maintained its 4.9 percent share from 2001, it would have received $14.3 billion in contributions in 2010, instead of $13.3 billion—a $1 billion difference.
  •  Arts employment remained strong:  A variety of labor market indicators show relatively steady levels of employment, especially when compared to labor market difficulties facing all sectors of the economy.  
  1. There was a 15 percent increase in the number of working artists from 1996 to 2010 (1.9 to 2.2 million). Artists remained a steady 1.5 percent of the total civilian workforce. 
  2. The self-employed “artist-entrepreneur”—active as poet, painter, musician, dancer, actor, and in many other artistic disciplines—is alive and well, with total numbers growing eight of the past nine years (from 509,000 in 2000 to 688,000 in 2009). 
  3.  Songwriter/composer royalties grew from 2003 to 2009, from $1.27 billion to $1.66 billion, a 30-percent increase over a six-year span, even after adjusting for inflation.
  4. Government arts funding is mixed.  Federal funding to the National Endowment for the Arts increased to $167.5 million in funding in 2010, which was just a portion of the $1.9 billion in total federal arts spending.  As a share of the federal domestic discretionary budget, however, total arts funding dropped from 0.42 percent to 0.30 percent, between 2002 and 2010.  Many arts programs are also immersed in the budgets of other federal agencies such as GSA, Transportation, and Defense (which boasts vigorous music programs throughout the armed services), but are not included in these totals.  In contrast to the federal government, aggregate state and local arts funding both had decreases in 2010.

While bruised and a little battered by the Great Recession, the arts turned a corner in 2010 and are poised to see increases in 2011 and beyond.  The Index highlights the changing nature of how audiences are engaging with (and spending money on) the arts and the resulting imbalance between supply and demand.  There are both demand-side and supply-side solutions to be considered: how do we create more “want” for the arts by the American public using new technologies, alternative venues, and capitalize on the public’s growing interest in personal arts experiences?  And on the supply side, with large numbers of nonprofit arts organizations running deficits, should more be considering alternative business models beyond prevailing 501(c)(3) nonprofit, such as arts and business incubators, shared services and spaces, nonprofit/for-profit hybrids, more support for unincorporated entities, and better use of existing venues?  What other funding models for a new competitive world can help funders evolve their role in advancing the arts—even providing funding to help organizations close when it’s time (“die with dignity), or require validation by audiences?  Arts organizations have much in common—even those in different arts disciplines or whether they are for-profit and nonprofit.  It is important to see how they can exploit their shared circumstances in the form of collaborations, especially those that build demand.  There also may be social equity issues related to arts education that need to be addressed in further conversation—who is being left out?  

Randy tells me he now has significant data for every county in the country, and that much of the data digs deeper than previously (he intends to begin to roll out some of that data soon and over time).  This promises to be a potential treasure trove to explore a whole range of issues that we haven't previously been able to touch on.  For example, he has the data that can identify the funding (presumably from both public and private sources) within a given county that goes to the larger cultural institutions v. the smaller ones, the eurocentric ones v. the multicultural ones.  As Randy suggests, this kind of data and analysis that explains it ought to be invaluable in consideration of "balancing support for the majors along with creating an environment for the new and emerging...all that against a backdrop of flat or declining contributed support."  I hope to have that very discussion on this blog in the near future.

For more information go here:  www.ArtsIndexUSA.orgwww.ArtsIndexUSA.org

Have a great week.
Don't Quit.
Barry

4 comments:

  1. www.ArtsIndexUSA.org is a spammer site.

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  2. Larry Field left these two questions: Randy please respond.

    1. Does the figure of 113,000 arts organizations include all types -- amateur, children's et . or only professional?

    2. By "800,000 other arts businesses" does this mean commercial entities, for example a printing company, advertising agency. film studio etc.?

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  3. Hi Barry and Larry!

    Thanks for your question.

    1. The 113,000 nonprofit arts organizations in the U.S. (from the National Center for Charitable Statistics at the Urban Institute) is the “big umbrella” number. Thus, it includes visual, performing, and media arts organizations; festivals; arts education and arts service organizations; small volunteer to hundred-million-dollar budget organizations—and within all of that, the additional spectrum of amateur, community, and professional organizations. This link will take you to the Index report. Jump to page 133 for a list of the types of organizations included in this analysis.
    http://www.artsindexusa.org/wp-content/themes/AFTA%20for%20WP/doc/2012-NAI-Full-Report.pdf

    2. The “nearly 800,000 arts businesses” include both nonprofit AND for-profit establishments. So, in addition to the above, you also have for-profit film, architecture, design companies, and the like. Our data source on this is Dun & Bradstreet. They code the 21.4 million businesses in their database using one of about 18,500 Standard Industrial Classification (SIC) codes. We identified 644 from this list that are businesses involved in the creation or distribution of the arts. As of January 2012, there are 904,581 arts businesses in the U.S. that employ 3.34 million people (4.25 percent of all businesses and 2.15 percent of all employees, respectively). You can go to our website on this and see the list of codes. Not only that, you can actually download Creative Industry reports for your state, county, Congressional District, and state legislative districts.
    www.Artsusa.org/CreativeIndustries
    (Hint: user name: creative; password: industries)

    Randy

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