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Report: Arts/cultural nonprofits drive $1.2 billion in state expenditures Infographic by Rachel Harper

Report: Arts/cultural nonprofits drive $1.2 billion in state expenditures

BY Sunday, April 29, 2018 03:42pm

An annual report on Michigan’s nonprofit sector reinforces the industry’s role and place in growing the state economy. 

The 2018 Creative State Michigan Nonprofit Report released in April found arts and cultural nonprofit organizations contributed more than $1.2 billion in annual direct expenditures in the state when considering data from the 2015 fiscal year.

The report, the seventh in an annual series from Detroit-based Creative Many, details a number of the economic and social impacts of Michigan’s nonprofit arts and cultural industry via a survey of 410 organizations. 

Creative Many President and CEO Jennifer Goulet said the report affirms the creative economy as a significant financial contributor and strategic opportunity for Michigan’s economic development. 

“There is absolutely excitement and great hope for the creative sector and for the state to be increasingly building momentum and to be a leader,” she said. “It’s research like this that helps us to be part of that case.”

The report highlights the contributions of the creative nonprofit sector at a time when President Trump, for the second consecutive year, proposed eliminating federal funding for arts programs and public media and broadcasting as part of his budget proposal. 

Federal lawmakers expressed their disagreement with the President by increasing funding for arts programs.

The National Endowment for the Arts (NEA), the National Endowment for the Humanities (NEH) and the Corporation for Public Broadcasting (CPB) all received full funding in the final version of the federal spending plan. The NEA and NEH each received $152.8 million, a $3 million boost compared to each organization’s prior year budget.

The Congressional spending plan allocated $445 million for the CPB. 

“What we have really been excited about is that we have strong bipartisan support in Congress for arts and culture, which are essential assets,” Goulet said. “In the last month, we’ve seen that Congress does not agree with those proposed funding cuts.”

A major part of Creative Many’s role is ensuring that lawmakers at every level of government understand the positive impact that arts and cultural organizations make in the lives of Michigan’s residents and tourists who come into the state. They do this through advocacy, public policy, research, professional practice development, funding and storytelling. 

While a great deal of financial support for nonprofit arts and cultural organizations comes from individuals and foundations, having a seal of approval from the state in the form of grant money from the Michigan Council for Arts and Cultural Affairs remains an important feature, said Executive Director John Bracey. 

MCACA functions under the Michigan Economic Development Corp.

“There are plenty of opportunities for folks below Grayling that aren’t Traverse City to find other funding, but we are the only real funder of arts and culture in the state,” Bracey said. “This past fiscal year, we funded 78 of the 83 counties in Michigan, and that meant we were in all but two Congressional and State Senate districts. That doesn’t happen without a great deal of support from the administration and the legislature.”

While Bracey said the results of the study are encouraging, he’s starting to see arts and cultural funding hit a plateau.

“That’s a little troubling to me because funding for state arts agencies in general and the NEA are not keeping up with inflation,” Bracey said. “Funding is static. Over the last three years, we had about the same amount of money. This current fiscal year, we got an extra $1 million in funding.

“That puts us at $10.7 million to grant and that’s meeting just under half of what the actual need is in the state.”

In part, the funding shortfall has sprung from the growth of organizations in new and emerging sectors such as small community theater companies that MCACA hasn’t heard from in a while, Bracey said, noting the agency had more than $19 million in requests this year.

Along with an increase in new and emerging sectors, some creative industries have been struggling, Goulet said, citing literary, publishing and printing as having experienced the most significant decline during the reporting period from 2011 to 2014. 

“The film, audiovisual and broadcasting industries experienced fluctuations for total employment and wages, reflecting the volatility of this industry,” Goulet said. “The visual arts and crafts sector experienced declines in establishments, employment and wages but increases for nonemployer establishments, reflecting the potential for such creative practitioners to function as sole-proprietors.”

Despite these changes, national leaders have an increasing interest in being able to position creative industries for growth, Goulet said.

“Through the MEDC, we are seeing more opportunities for the creative industries to be recognized as an important driver of the economy and this is also bearing out at federal level,” she said.

When combined with the for-profit creative industries, the contributions of the cultural arts are even broader. A previous Creative Many report found that about 89,000 people worked in creative industries in 2014, earning $5 billion in wages at more than 10,000 businesses, according to Goulet.

Unlike for-profit organizations, nonprofit arts organizations make a choice to position their business for public benefit, Bracey said.

“One of the things we have certainly seen is that this is truly a time when all elements of communities, whether it’s health care, infrastructure, or the environment, we all have a stake in the future of the arts,” Goulet said. “Our nation’s arts and culture and creative industries are a very powerful tool.” 

MiBiz coverage of Michigan’s nonprofit sector is made possible through a generous sponsorship by the Grand Rapids Community Foundation, a leader in funding, initiating and leading programs that benefit the Grand Rapids area in the arts, community development, education, environment, health, and human services. For more information, visit grfoundation.org.

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