It’s not just the warm fuzzy feelings anymore: Research shows the cultural arts contribute to the economic fabric of the community.
“I think the arts have a very clear impact on the economy and quality of life,” says Judith Hayner, executive director of the Muskegon Museum of Art. “There’s just no question.”
Nationally, nonprofit arts groups are responsible for more than $135 billion in economic activity and more than 4 million jobs, says Americans for the Arts. The group also concludes that every $1 of government investment in the arts yields a $7 dollar return — a figure Michigan’s cultural arts sector tops. According to ArtServe, a statewide advocacy group, for every dollar Michigan spends on the arts “$51 is pumped back into the state’s economy.”
Statistics like these have gone a long way to turn arts support from a fringe advocacy issue to part of the mainstream conversation. Actor and arts advocate Tim Daly recently suggested that the arts should also be part of the political discussion.
“It was so encouraging to hear someone talking about this on the national stage,” says Hayner.
Do the math
On the down side, when economic analysis is condensed into sound bites and infographics, it can be hard to verify the accuracy of the numbers and the people crunching them.
After 11 years at Anderson Economic Group, a consultancy headquartered in Lansing, Scott Watkins has worked on market and economic research projects for clients all over the world — and as close to home as ArtPrize Grand Rapids Inc.
“At AEG, we have a niche analyzing events, development and legislation and helping the community — and helping our clients — understand what they mean in terms of economic impacts,” says Watkins.
Last year’s ArtPrize event apparently had quite the impact, according to the firm’s recent report: The event resulted in $10.1 million in new spending by attendees and $1.9 million in event operations spending.
Though the National Endowment for the Arts has been studying economic impact since the late 1970s, this type of analysis has only fairly recently exploded in the arts sector at-large — an upsurge in popularity that Watkins credits to the economic downturn.
“I think the prominence of economic impact studies in the arts community … stems from a need in recent years to justify expenditure and programming budgets,” Watkins explains. “Everybody has to justify that their program or activity is worthwhile in terms of the return on the investment it can create.”
But not all economic impact studies are created equal.
“What we see too often with economic impact studies is that they sum up all the spending associated with an event,” Watkins says. “They simply present what the economic impact is believed to be — not what went into it.”
According to Watkins, researchers need to be able to show “one plus one equals two.” That’s why Anderson Economic Group is so transparent with regards to its methods and definitions, he said. In the ArtPrize report, for example, AEG devoted nearly an entire section to clarifying exactly what the term “economic impact” meant in the context of the study.
“If you can’t look at it and figure out how the number was arrived at, it’s not a number you should rely on,” Watkins cautions.
In addition to general methodological concerns, studying economic impact in the arts sector presents its own unique challenges.
First, unlike their counterparts in fields like education or health care, for instance, arts professionals are not necessarily trained in data collection and analysis, much less a specific branch like economic impact assessment. In addition to this potentially steep learning curve, Watkins also observes that impact assessments are often cost- and time-prohibitive for arts organizations, which tend to be cash-strapped and understaffed.
“Doing a well-documented economic impact study is costly and time-intensive,” Watkins says. “And these organizations have a core mission of promoting the arts. I can’t begrudge them spending money on programming. It’s probably in their best interest.”
Groups who can pony up the money and time can maximize both if they focus on a specific event, with a distinct beginning and end, says Watkins.
“You have to have a very clear idea of what you’re studying,” he says. “Clearly define what it is you’re trying to measure and then think about how you will measure it while you’re planning the event.”
If Judith Hayner were planning to study the economic impact of the Muskegon Museum of Art, her measurables would likely include the money the organization puts back into the local economy.
“I have a budget of $1.2 million, and I’m not putting that in the bank — I’m spending it,” Hayner says. “I spend it on my staff, I support local vendors (like) printing businesses and caterers. There are a lot of vendors that benefit. I know our money multiplies.”
The museum is embarking on an ambitious centennial year capital campaign to raise $7.5 million, which Haynor says is the largest in Muskegon’s history. The campaign aims to ensure the sustainability of the organization as it spins off on its own in 2014 after being under the governance of Muskegon Public Schools.
The art museum’s story begins in the late 1880s, she tells MiBiz, when Charles H. Hackley took it upon himself to develop Muskegon’s cultural infrastructure. With members of the Board of Education, the lumber baron turned philanthropist helped form the Muskegon library. He also intended to establish an art museum, understanding that, much like a library, a museum’s value lies in its collection and its mandate to preserve, steward and exhibit that collection.
But when Hackley passed away in 1905, the museum had yet to become a reality. In death, however, he endowed the Board of Education of Muskegon Public Schools with an expendable trust of $150,000 to “buy pictures of the best kind.” This quaint turn of legal phrase happens to be the title of museum’s yearlong centennial celebration, exhibition and limited edition commemorative coffee table book.
Hackley laid the groundwork for the next 100 years of “remarkable stewardship” by museum donors and board members, Hayner continues.
“Muskegon has a cultural infrastructure like nothing else up and down the lakeshore. We have all the culture bones that you need (and) the museum is the touchstone of arts and culture in this community.”
But there’s more to Hackley’s legacy, which could be seen as a message from the 19th century Hackley to present-day Michigan, a state still on a bumpy road to economic recovery.
“He left a fund in the middle of the toughest times in Muskegon County’s history,” says Hayner. “The trees were gone, the lumber barons were gone — tough, tough economic times — and he left money to buy art.”
Interestingly, Hackley’s impetus was probably not too far off from the things that motivate Hayner in her role at the Muskegon Museum of Art.
“Our job as a nationally accredited art museum is to collect and preserve,” says Hayner. “We exist to preserve that material culture … because it inspires people and (offers) a way to think differently.”
But if calculating the economic reach of a single cultural event or organization is tough, pinpointing the ripple effects from quality of life indicators like inspiration and thinking differently is even tougher.
Yet that’s exactly what Lou Glazer of Michigan Future Inc. tries to do. The think tank studies how other states attract knowledge workers, foster innovation and become prosperous. As it turns out, this chain of interrelated factors starts with the cultural arts sector.
“Those amenities attract talent,” says Glazer. “And talent concentration is a key factor in economic vitality.”
Attaching a numeric ROI to any quality of life indicator may be iffy, sources say. But evidence does suggest that the arts can be economic multipliers because they help retain talent, spur innovation and creativity and reinforce an area’s brand.
Then again, maybe we’re all just too preoccupied about quantifying what the arts deliver.
“Arts and culture should be enjoyed for what they are, not just for their economic impact,” says Watkins, the senior researcher at AEG.
Ruth Terry is a freelance writer and consultant who curates content for magazines and corporate clients. Find her at www.ruthwrites.org.