2013 National Arts Index

Roland J. Kushner, Randy Cohen | Americans for the arts

The 2013 National Arts Index by Americans for the Arts delivers a 2011 score of the health and vitality of the arts in the U.S. This year’s report provides the fullest picture yet of the impact of the Great Recession on the arts—before, during, and after.

  • The National Arts Index score effectively leveled-off in 2011 at 97.0, down just a fraction from a revised 2010 score of 97.2.
  • The impact of the Great Recession of 2008-09 on the arts were swift and measurable: the two-year drop from 2007-09 far exceeded the five-year gains made between 2002 and 2007 (-5.4 percent vs. +3.6 percent, respectively).

Key Findings:

1. The arts industries are lagging as the economy recovers: The arts are an economic force in the United States: 95,000 nonprofit arts organizations and 800,000 more arts businesses, 2.1 million artists active in the workforce, plus $153 billion in consumer spending. Figure A shows growth during the middle part of the past decade when the economy was growing, followed by a decline of the Index during the two most recent economic downturns, and a leveling off in parallel with economic strengthening. It appears that the economic recovery which started in 2009 did not positively affect the arts sectors until 2011.

2. Fewer nonprofit arts organizations are active: The population of registered 501(c)(3) nonprofit arts organizations grew to 113,000 in 2010. In 2011, however, there was a dramatic change, with the number dropping to 95,000—a loss of 18,000. Two reasons explain this drop. First is the recession, which affected numerous arts nonprofits—slowing the rate of new organizations being created, while accelerating the closing rate of those already struggling. Second, and most significantly, the IRS revoked the 501(C)(3) status of 275,000 nonprofits of all kinds that had failed to file annual returns for at least three years. While a small number of these may have been slow to file, the vast majority of those revocations affected nonprofits that had already ceased operations at some unknown point in the past. Despite this, the arts remain an entrepreneurial sector, especially when compared to other nonprofit sectors. Between 2000 and 2010, the number of new nonprofit arts organizations grew 49 percent (76,000 to 113,000), faster than all nonprofit organizations, which grew 32 percent (1.2 million to 1.6 million). Or to look at it another way, from 2003-10, a new nonprofit arts organization was created every three hours in the U.S.

3. Arts nonprofits continue to be challenged financially: The percentage of nonprofit arts organizations with an operating deficit (requiring them to amass debt or use cash reserves) showed improvement by decreasing in 2010, but then increased again slightly in 2011 (43.3 percent and 44.2 percent, respectively). This percentage of organizations with an operating deficit has ranged from 36 percent in 2007 (during a strong economy) to 45 percent in 2009 (the deepest part of the recession). For the small portion of organizations drawing interest from an endowment, this is a sound business practice. For most organizations in this category, however, it raises concerns about long-term sustainability. Larger-budget organizations were more likely to run a deficit than smaller ones; there was no predictable pattern based on specific arts discipline.

4. Arts attendance remains fluid: In 2011, 33 percent of the adult population attended a live performing arts event, up from 32 percent in 2010—notable as this is only the second increase since 2003 (when 40 percent attended a live performing arts event). Art museums attendance held steady with 13 percent of the population attending at least once (down from 15.5 percent in 2003). Overall, attendance at symphony and theatre increased in 2011 over 2010, while audiences for live opera and movies are getting smaller. Almost certainly related is the decreasing share of households making contributions to the arts—a figure that has dropped annually since 2007, from 9.3 percent to 8.6 percent.

5. Total charitable giving and overall employment help explain the health of the arts sector. For the ten year period between 2002 and 2011, two economic forces were strongly correlated to the overall National Arts Index—total private giving to all charities, and the overall number of workers in all occupations—a combination of factors that explained 67 percent of the change in the Index value from 1999-2011. The significance of this finding is that it points to two bellwethers for the arts over the long term. People who are working, especially within the confidence of a growing job market, have more discretionary income to engage in the arts both personally and as a consumer as well as make charitable contributions. At the same time, an environment where charitable giving rises is also healthy for the arts. Thus, the increases in employment and in overall levels of charitable giving in 2012 and 2013 are promising signs for the arts.

PDF   National arts index 2013 : an annual measure of the vitality of arts and culture in the United States 2000-2011

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