Arts and Culture Contributes Close to $7 Billion to the U.S. Economy

One of the biggest challenges facing arts organizations, fundraisers and grant writers is effectively communicating the value of the arts. It's a topic that's near and dear to our hearts and one that's only becoming more important, thanks to two trends.

The first is the emergence of "effective altruism." It's the idea that no two dollars are equal. As such, donors should give to causes that generate the greatest impact. Why give money to a museum when you can provide vaccines to children in Africa? The second trend is what we call "measurement mania." Whether it's the Cultural Data Project, metrics-loving tech donors, or foundations like Bloomberg Philanthropies, which carefully measure impact at recipient organizations, the new reality is of one of systematic measurement of how the arts benefits consumers and, to a degree, society as a whole.

The good news is that we've seen a noticeable uptick in groups attempting to measure this impact. As we've previously noted, an Americans for the Arts study found that arts students—specifically those with years of study in art and music—outperformed non-arts students on their SATs. And an Education Week study found that exposure to the arts also influences levels of tolerance and empathy, boosts critical thinking, and improves one's ability to observe the world.

Now comes research demonstrating arts attendance impact on the U.S. GDP, courtesy of a partnership between the National Endowment of the Arts' Office of Research and Analysis and the U.S. Bureau of Economic Analysis. The study provides a comprehensive and detailed measure of arts and culture's impact on the U.S. economy from 1998 to 2012. "Impact" constitutes things like:

  • The production of arts and cultural goods and services.
  • Employment and compensation by arts and cultural industries.
  • Supply and consumption of arts and cultural goods and services, including imports and exports.

It's worth noting that the survey looked at certain segments of the arts and culture sector that one may not normally associate with nonprofit arts philanthropy. We're talking about segments like broadcasting—which, at over $120 billion, represented the largest contributor to the GDP—and motion picture and video industries (which contributed close to $96 billion). That said, the study provides a more granular analysis of certain sub-segments, such as the "core arts and cultural production" industry, which includes museums and arts education.

But what's of most interest is the study's conceptual framework, which aims to capture the economic value of the creation of a cultural product (for example, composing a symphony) to its production (the performance being recorded in a studio), then the distribution (by various modes), and finally, the consumption (by the listener). In short, the key "value added" metric, much like a return on investment, represents the difference between an "industry’s output and the cost of its intermediate inputs."

As such, the study found that in 2012:

  • Value added for arts and cultural production was $698.7 billion, accounting for 4.3 percent of GDP.
  • The share of GDP accounted for by arts and cultural production was larger than the share of industries such as mining (2.5 percent), utilities (1.6 percent), and banking (2.9 percent).  
  • Core arts and cultural production contributed $129 billion to GDP in 2012, and supporting arts and cultural production contributed an additional $547 billion.
  • 4.7 million individuals were employed in some way by the arts and cultural sector in 2012.

At the end of the day, one magical metric won't emerge to thoroughly convince donors that the arts is a viable philanthropic path. But the slow and steady accumulation of supporting metrics, whether speaking to the arts' ability to boost test scores, develop more empathetic kids, or its positive impact on the economy, can cumulatively create a compelling body of work to assist arts organizations and fundraisers in their efforts to make the pitch.