Michigan Is Finding That the Arts Is a Growth Industry, Even During the Recession

Last summer, we reported that ArtsServe Michigan had releases statistics that suggest every $1 invested in the arts in the Great Lakes State yields $51 for the state’s economy. If that didn’t impress you then perhaps you will be surprised to hear that even during the recent recession the arts has been a growth industry in the state.

The new numbers which focus on Fiscal Year 2010 and uses the data of 346 of the state’s 2,000 culture nonprofits, includes a number of notable facts:

• In Fiscal Year 2010, the 346 organizations in the Michigan Cultural Data Project with review complete data spent $553,599,668 — yes, half a billion! — in salaries, services, and materials.
• The number of jobs at the 346 organizations in the Michigan CDP with review complete data equaled 22,335, including 3,068 full-time employees, 7,573 part-time employees, 11,694 independent contractors, and 1,396 interns/apprentices.
• 70% of the income from these 346 organizations is earned income (rental income, tuition, tickets and merchandise, membership fees and dues, and contracted services), rather than donations.
• In 2011, Michigan’s arts community generated more than $2 billion in tourism, which accounts for 19% of the state’s tourist revenue.

Other than the large ArtPrize nonprofit, which began in 2009 and has awarded millions of dollars in prizes since then, there doesn’t appear to be any other major organizational changes in the cultural landscape of the state. Why are the arts a growth industry?

Statistics by the Pew Charitable Trusts’ supported Cultural Data Project gives us a fuller picture of the arts in Michigan, though their numbers appear to differ somewhat from ArtServe’s Creative State Michigan report, notably because they used data from 418 organizations compared to ArtServe’s sampling of 346.

We reached out to Jennifer H. Goulet, President and CEO of ArtServe Michigan, who agreed that the report “again affirms the important contributions of Michigan’s arts and cultural organizations to the state and local economies in terms of expenditures and jobs.”

She believes that the state’s arts and cultural community are positioned to be “an essential force in the state’s economic reinvention strategies.” And the data, as you saw, is quite convincing.

She explains:

This year’s report also dispels the perception that arts and cultural groups depend on government funding. In fact, of every dollar raised by the organizations in the report, 70 cents was generated through earned income in ticket sales, registration fees, tuition, gift shop sales, etc. Arts and cultural organizations are focused on diversifying their revenue models and maximizing earned income — just as private sector companies have done in these economically challenging times.

But I was also curious as to why the creative sector has been growing even in the midst of a recession. Goulet shared her thoughts:

Might it be that people facing business closures or job losses turned creative interests and entrepreneurial skills into new opportunities in the creative sector? Might it be that arts and cultural organizations have been gained valuable experience in doing more with less from their historic cycles of growth and decline? Might it be that the sector is rich with innovative thinkers and doers that simply focus on creating opportunity over being limited by constrained resources? What’s important is that we take a deeper look into that growth sector opportunity to determine how we can tap this potential as part of state and regional economic development strategies.

ArtServe Michigan should be congratulated for publishing such clear data that helps people outside of the culture field see the real value of the arts beyond the abstractions of cultural understanding, intellectual enlightenment, or quality of life. These types of economic arguments are crucial in this day and age.