Report: Arts, Culture Groups Help Drive N.E. Economy | Worcester's Hanover Theatre cited as revenue generator
New England’s nonprofit arts sector is a job-generating, financially robust sector of the economy, despite stereotypes to the contrary, according to a new report released by the New England Foundation for the Arts (NEFA).
“Nonprofit arts and cultural organizations are not viewed as part of the business community,” said Linda Varrell, president of Broadreach Public Relations in Portland, Maine. “There’s a cloud of misconceptions around nonprofits.” Varrell is a spokeswoman for the Maine Center for Creativity, which authored the NEFA report.
Varrell said nonprofit arts groups are sometimes seen as elitist and supported by the wealthy, or are subsidized by government handouts, and that they’re inefficiently run, with a lot of waste.
To help dispel these myths, Varrell and Jean Maginnis, the executive director of the Maine Center for Creativity, hold up the new report as evidence that nonprofit arts and cultural organizations are making jobs and contributing to local economies despite the worst recession since the Great Depression. The report is part of a regular assessment of the regional arts-and-culture economy. NEFA hires economists to analyze the financial data from thousands of nonprofits in the six New England states every few years. The last report was published in 2006.
According to the most recent report, New England’s 18,026 arts and culture nonprofits spent nearly $3.7 billion in 2009 and provided jobs for more than 53,000 people. “By comparison, that spending total is fully $1 billion greater than the gross product of the region’s entire paper manufacturing industry and nearly as large as the gross product of the region’s information and data processing industry,” the report states.
The calculations show the $3.7 billion in direct spending generates $8.4 billion in revenue to businesses across New England, and that the 53,270 arts and culture jobs support nearly 30,000 extra positions for related vendors and consumer businesses.
The Worcester Scene
The report tallied 162 nonprofit arts and cultural organizations in Worcester, which employed about 500 people, spent $40 million in 2009 and held assets of approximately $175 million. Throughout Massachusetts, the state's 8,125 arts and cultural organizations spent nearly $2.2 billion and employed more than 27,000 people, which created a nearly $4.8-billion economic impact and supported more than 42,000 jobs.
“The arts play a vital role in Greater Worcester,” Erin Williams, the city’s cultural development officer, said in an email. “The arts are an economic development force as well as a generator of social capital.”
The report specifically singled out the multi-million-dollar renovation of The Hanover Theatre as a revenue generator for other businesses in downtown Worcester, notably restaurants and hotels. “All of this provides significant revenue for local hotel owners, restaurants, and retail shops — the induced impact of the theatre’s operation,” the report said.
Statewide, the arts and cultural sector ranks 28th among 46 major sectors for gross product totals for Massachusetts, just behind the information and data processing services sector and ahead of the food manufacturing sector. In employment, the sector is ranked 32nd among the U.S. Bureau of Labor Statistics’ 65 major sectors.
The numbers also indicate that between 2002 and 2009, in spite of a sallow economy, nonprofit arts groups in New England grew. They jumped 14 percent, their spending increased 24 percent and their employment grew 28 percent. More specifically, between 2007 and 2009, when New England’s total personal income fell 0.5 percent and the number of employers fell 0.6 percent, the number of cultural organizations increased 1.1 percent and their spending rose 11.5 percent, even while their assets dipped nearly 7 percent. (The report offers the disclaimer that part of this growth could have to do with the higher number of organizations included in its analysis.)
Maginnis said arts organizations are less vulnerable to the ups and downs of economic cycles than some other industries. “It’s a basic human need for beauty, culture and storytelling,” she said. “The nonprofit sector is putting money into people and storytelling and that money comes back threefold.”
Maginnis said the report can be used to advocate for more financing initiatives and greater support from policy makers. “The nonprofit arts organizations are creating something from nothing,” Maginnis says. “Business people know that when they innovate and create a new product, that is when a business grows.”
Goldfine is a staff writer with Mainebiz. Worcester Business Journal Staff Writer Rick Saia contributed to this report.
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