2013 National Arts Index
Americans for the Arts 2013 Index report delivers a 2011 score of the health and vitality of the arts in the U.S. The arts have effectively leveled off in 2011 as the economy slowly and unevenly recovers from the Great Recession.
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).
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.
Changes in Audience Engagement
How the public participates in and consumes the arts is ever-expanding. Tens of millions of people attend concerts, plays, operas, and museum exhibitions every year—and those that go frequently attend more than once and enjoy multiple art forms (sometimes called the “cultural omnivore”). The digital age affords consumers the tools for more personally-curated engagement in their arts experiences. Technology lets consumers select between in-person participation and experiences as well as remote experience through media. The evolving delivery model is digital, so arts producers whose business model relies on in-person engagement by the audience have to compete in different ways. The public is certainly not walking away from the arts, but they are walking away from some traditional models of delivery. Here are some interesting shifts in how audiences consume and participate in the arts:
- Technology changing audience engagement and the arts delivery models: The effects of technology have been undeniably swift, but it depends where one sits on the arts production-to-consumption food chain as to who the winners and losers are. Since 2003, nearly half of the nation’s CD and record stores have disappeared. Digital downloads, however, now comprise $2.9 billion of recording industry revenue out of a total $7.1 billion. Annual data about downloads wasn’t even collected until 2004, yet in 2011 it accounted for 50 percent of total music industry sales. “Access models” from providers like Pandora and Spotify represent an additional 15 percent of recording revenues. Movie theater attendance is decreasing, due in large part to legal (and pirated) digital formats. Similarly, bookseller revenues are down even through books in print are up, thanks to more self-publishing, print on demand, eBooks, and downward pressure on prices. Savvy nonprofit arts organizations are using technology to broaden their audience base and enrich the audience experience, like the successful Metropolitan Opera simulcasts (1,700 theaters in 54 countries and 3 million tickets sold annually). As ever, technology is a two-edged factor: There is concern, for example, that simulcasts of the arts are cannibalizing live arts attendance rather than bridging non-attendees to live attendees. Technology has even altered the business model for the artists. Musicians can now deal directly with consumers via websites—selling songs to fans and even allowing them vote on touring venues—thus bypassing traditional record labels and ticket services. However, digitization of movie projection systems and the wide adoption of digital photography threaten the use of film as an artistic medium.
- Arts and music preparation by college-bound seniors is slipping, following years of growth: Decreases in K-12 arts education can now be seen by college admissions offices. Between 1998 and 2009, the percentage of college-bound seniors with four years of arts or music grew from 15 percent to over 20 percent. Since 2009, however, the share of SAT test takers bringing this credential to their college application process slid precipitously to 17.6 percent, suggesting that pervasive arts education cuts in the 2000s are now having the downstream effect that was long a concern. Ironically, the College Board reports that students still able to take four years of arts or music average about 100 points better on the verbal and math portions of the SAT.
- More college arts degrees are conferred annually: Even with downward trends in the number of arts and music classes taken by college-bound seniors, college-level demand in this area continues to increase. The number of college arts degrees rose steadily from 75,000 to 133,000 between 1997 and 2011. Reasons for this include an increase in design degrees along with the appeal to college students of double-majors combining arts with humanities, social sciences, and physical sciences. This is promising news for business leaders looking for an educated and creative workforce.
- Consumer arts spending flat at $153 billion: Since 2002, discretionary consumer spending on the arts (e.g., admissions, musical instrument purchases) has remained in the $150 billion range. Because total consumer spending increased over time, however, the arts’ share slipped from 1.88 percent in 2002 to 1.43 percent in 2011. As noted in the key findings, one of the economic factors most strongly correlated with the health of the arts is total employment in the economy. As economic revitalization in coming years builds employment, consumer buying power, and the charitable instinct, the arts are poised to compete better.
- Arts organizations foster creativity and innovation through new work: Year after year, entrepreneurial arts organizations nurture new ideas, innovative leaders, and creative energy. One Index indicator tracks premiere performances and films. Between 2005 and 2011, audiences were treated to more than 9,000 new works—over 100 new operas, 342 orchestral works, 2,531 plays, and more than 5,000 movies. Even in a down economy, America’s arts industries continued to produce new and exciting work for their audiences.
Continuing Trends and Challenges
- U.S. cultural destinations help grow the U.S. economy by attracting foreign visitor spending. Cultural tourism by foreign visitors is, effectively, a form of export by domestic arts and culture industries. The U.S. Department of Commerce reports that the percentage of international travelers including “art gallery and museum visits” on their trip has grown since 2003 (17 to 24 percent), while the share attending “concerts, plays, and musicals” increased from 13 to 17 percent since 2003.
- The U.S. keeps strengthening its international trade surplus. U.S. exports of arts goods (e.g., movies, paintings, jewelry) increased from $64 to $72 billion between 2010 and 2011, up 11 percent. With U.S. imports at just $25 billion, the arts achieved a $47 billion trade surplus in 2011.
- Arts and culture is losing its market share of philanthropy. The share of all philanthropy going to the arts dropped from 4.9 percent to 4.4 percent between 2001 and 2011, while education, health, and environmental organizations saw growth in their share of the charitable giving pie. If the arts sector merely maintained its 4.9 percent share from 2001, it would have received $14.3 billion in contributions in 2011, instead of $13.1 billion—a $1.2 billion difference. It is noteworthy that this trend began well before the current economic downturn. As noted in the key findings, overall philanthropy correlates strongly with the health of the arts. Philanthropy has grown stronger since 2011, a hopeful sign that the arts are poised to compete better.
- Arts employment remained strong: A variety of labor market indicators show relatively steady levels of employment, especially when compared to labor market difficulties facing all sectors of the economy.
- There was an increase of eight percent in the number of working artists from 1996 to 2011 (1.99 to 2.15 million). Artists have remained a steady 1.5 percent of the total civilian workforce.
- The self-employed “artist-entrepreneur”—active as poet, painter, musician, dancer, actor, and in many other artistic disciplines—is alive and well, with total numbers growing 10 out of the 11 years between 2000 and 2011 (509,000 to 730,000 ).
- Arts workers have diverse occupations and skills, ranging from designers and crafts artists to performance professionals and artistic technicians. Across the range of arts occupations, earnings kept pace with inflation, increasing in current dollars to about $52,000.
- Government arts funding struggled in 2011. Funding of the National Endowment for the Arts decreased to $155 million in 2011, the first cut in a decade. Funding of the whole suite of federal arts-related agencies stayed very close to historic highs of previous years at about $1.8 billion. As a share of the federal domestic discretionary (non-military) budget, however, total arts funding dropped from 0.40 percent to 0.28 percent, between 2002 and 2011. Not included in these totals are arts programs embedded in the budgets of other federal departments and agencies such as Health and Human Services, GSA, Transportation, and Defense (which boasts vigorous music programs throughout the armed services). State and local arts funding dropped to historic lows in 2011 in dollars, in share of total expenditures, and per capita.
- Millions of Americans volunteer in the arts. Two Index measures show the range of volunteer engagement in the arts. Volunteering at an arts organization was the choice of service for over 2 million people in 2011, up 11 percent from 1.8 million in 2010. This amounts to 21 volunteers for every nonprofit arts organization in the country! But, this is only part of the story. In another federal study of volunteerism, 6.2 million Americans say that arts activities (such as playing music) are their main activities while volunteering, regardless of type of organization they volunteered for (a school or church, for example). Taken together, these show the depth and range of what volunteers contribute to the arts.
Changes in National Arts Index Indicators in 2013
This report features two new indicators, and the “retirement” of seven others. The two new data sources added to this year’s report help to paint a clearer picture of how the arts are supported by individuals and households.
- Arts work in volunteering (Indicator # 37)
- Share of households contributing to arts and culture organizations (Indicator # 54)
Seven data series that were in past National Arts Index reports are not available for 2011 and beyond. In keeping with our Index inclusion criteria, the seven have been “retired.” Their prior year values are still available; see Appendix F for details.
- Corporate dollars (Conference Board) In its place, a joint report by the Conference Board and Committee Encouraging Corporate Philanthropy was added last year
- Citations of arts and culture in bibliographic databases
- Museum visits
- Personal arts creativity experiences
- Arts and culture share of corporate funding (Conference Board)
- Population share engaged in personal creativity activities
- Arts, culture, and humanities in the Philanthropic Giving Index
While bruised and a little battered by the Great Recession, the arts industries showed resilience having survived, evolved, and maintained societal relevance during the worst economic downturn in generations. The National Arts Index tracks a continuing change in how audiences seek to consume the arts, with growing reliance on technology and major institutions struggling to maintain attendance numbers. The Index highlights changes in demand and supply, how audiences are engaging with (and spending money on) the arts and the constant tension between what artists and arts organizations produce and what the public wants to consume.
The arts in the U.S. are active venues of creativity and innovation in their artistic products. To ensure continued relevancy, arts organizations need to evolve as their communities evolve, which is key to growing audiences and reversing the downward trend in households contributing to nonprofit arts organizations.
About the National Arts Index: The Index is composed of 78 national-level indicators—the latest annual data produced by the federal government and private research organizations—and covers the 12-year span of 2000-11. The Index is set to a base score of 100 in 2003; every point difference is a one percent change from that year. There is no uppermost Index score, though higher is better. A score of 125 would convey that arts are more highly integrated as a fundamental component of society than during the past decade—characterized by strong financial health, ample capacity, innovation, vigorous participation, and a vital competitive position in American society.
Fast Facts from the Arts Index
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International arts exports increase: U.S. exports of arts goods increased from $56 to $64 billion between 2009 and 2010 (+12%). With U.S. imports at just $23 billion, the arts achieved a $41 billion trade surplus in 2010. The percentage of international travelers that include the arts on their visits to the U.S. has increased annually since 2003.