The Arts in Action: Tracking Atlanta's Return on Investment in the Cultural Economy

With the presidential election heating up, candidates from both parties like to remind us of the important role that small businesses play in the national economy. The same logic pervades "cultural economies" across the country. That is, for every New York Metropolitan Museum of Art—which, mind you, raised a hefty $283.1 million last year—there are dozens, if not hundreds, of small- to mid-sized organizations doing the heavy lifting for a region's arts economy. Arts stakeholders understand this, but the general public often does not. That is a problem.

And so we turn our attention to Atlanta for a compelling case study illustrating the role of small- and mid-sized organizations in shaping the city's cultural economy. (The metropolitan Atlanta area is vast, yet only four organizations within the city limits have operating budgets exceeding $2 million.)

Lois Reitzes of Atlanta's NPR station WABE recently sat down with Metropolitan Atlanta Arts Fund Director Lisa Cremin to talk about the role of the arts in the local economy and how everyone, from nonprofit executives to politicians, needs to do a better job at promoting its impact on the community. 

And make no mistake, the arts have a tangible impact. According to Cremin,  for every ticket that's sold for an arts event, it nets about 12 times the impact. So this means that if someone pays $30 for a theater ticket, that generates around $360 for the local economy. 

In describing this kind of financial domino effect, Cremin pointed to sports in an interesting analogy of how people view public investments. Most people can grasp the economic value of a sports team in their city. It provides jobs. Visitors pay for parking, eat $8 hot dogs, and buy $30 football jerseys. This is why voters approve public-funded stadiums. Yet the general public rarely views the arts through a similar lens—perhaps because voters don't have to weigh in on paying for a $500 million symphony hall. Or, as Cremin notes, "people experience it, but don't add it up."

Raising awareness is a huge priority for Cremins and her organization. What's more, Cremins argues that the message should transcend the economic benefits of the arts and instead present a donor's gift as a stable and valuable investment. She notes that a majority of the region's 300 to 400 small- to mid-sized arts organizations have been around for 20 years or more. They likely aren't going anywhere. So donors need to know that their gift isn't going to a fly-by-night operation. In this sense, therefore, the messaging onus falls on the fundraisers themselves.

Cremins also noted—and we'll venture to guess that her experience in Atlanta will resonate with nonprofits in other cities as well—that the region's arts nonprofits remain under-capitalized. This is due partly to the impact of the Great Recession, but in isolated cases it can also be attributed to an organizations' relative lack of financial and strategic planning acumen. That's why her foundation provides financial management training—so organizations can effectively accumulate capital for the long haul.

In related news, check out our take on a $6.6 million grant from the Lettie Pate Evans Foundation to support Atlanta's Woodruff Art Center's "Art From the Start," a new, three-year program designed to "better connect families and students with the arts center's art and arts education offerings."