July 6, 2012

Arts in Mecklenburg generate $200 million a year, study finds

Mecklenburg County’s cultural groups and their audiences are the driving force behind more than $200 million a year of economic activity, a study by a national arts group says.

Mecklenburg County’s cultural groups and their audiences are the driving force behind more than $200 million a year of economic activity, a study by a national arts group says.

As the money spent by Mecklenburg’s arts organizations and their attendees moves through the community, it supports more than 6,200 jobs and contributes more than $18 million a year in tax revenue to local and state governments, Americans for the Arts says. Mecklenburg is one of 182 cities, counties and states the group examines in “Arts & Economic Prosperity,” a study it does every five years. It’s based on information from 2010 and 2011.

“A lot of us appreciate how arts organizations make the community a better place to live,” says Randy Cohen, a vice president of the group. “But a lot of people don’t think of them as businesses.” In the face of that, he says, the new study is “a mythbuster.”

“Arts organizations employ people in the community,” Cohen says. “They purchase goods and services locally. They’re good business citizens.”

For a glimpse of what happens, look at Children’s Theatre of Charlotte. Last year, the company spent $360,000 with vendors in Mecklenburg, said Linda Reynolds, managing director for development, marketing and sales. The largest single category consisted of lumber, paint, fabric and materials for sets and costumes. The total: $97,000 into Mecklenburg cash registers.

“It’s important for people to understand,” Reynolds said. “We’re shopping at the same places they are in some cases.”

Economic ripple effects

The study looks at nonprofit cultural groups and their audiences. It also includes cultural events related to educational or government entities – such as Ovens Auditorium and the Davidson College Friends of the Arts. Businesses, such as movie theaters, aren’t included. Neither are freelance artists.

In Mecklenburg, 73 of about 200 eligible cultural groups identified by the Arts & Science Council responded to the survey. The ASC made sure all the county’s largest organizations complied, ASC president Scott Provancher said. Smaller groups ranged from the James K. Polk Memorial to Charlotte Jazz Society to Asociación De Mujeres Latino.

The information about Mecklenburg audiences and their habits came from surveys of 740 people who attended performances and exhibitions. The surveys asked what they spent and did on that particular occasion, Americans for the Arts’ Cohen said, rather than having them generalize.

To gauge the ripple effects as the cultural groups’ and audiences’ dollars moved through the community, the analysts used an economic model of Mecklenburg created by economists at Georgia Tech. The Georgia economists used information from the U.S. Department of Commerce to create an economic map of each community in the study.

Some of the main findings:

• Spending by Mecklenburg’s cultural organizations drove $101,177,294 in economic activity. That compares with $61,939,651 in the study five years ago.
• Audiences’ spending on meals, drinks, souvenirs, parking and other things other than their admission to events generated $101,620,796. Five years earlier: $96,020,123.
• The groups’ and audiences’ spending supported 6,240 jobs generating $144,567,000 in income. The previous study: 4,771 jobs generating $92,949,000.
• The spending generated $8,367,000 in revenue to local governments and $9,766,000 to the state. The previous study: $6,881,000 to local government, $7,179,000 to the state.

To capture the way the arts’ economic impact works, the report uses this example:

“A theater company in Mecklenburg County purchases several gallons of paint from a local hardware store for $200. The hardware store then uses a portion of the $200 to pay the sales clerk; the sales clerk re-spends some of the money at a grocery store; the grocery store uses some to pay its cashier; the cashier spends some on rent; and so on.”

Even though some cultural groups didn’t respond to the survey, the analysts did not fill in for them by estimating what they do, Cohen said. The study used only the information from the groups that took part.

“If everyone responded,” Cohen said, “these numbers would be even bigger.”

Food on the table

By pointing out that the arts have an economic payoff, the study harmonizes with a report released in 2009 by the N.C. departments of Cultural Resources and Commerce.

That study, using information from 2008, had different parameters. It looked at the state as a whole and included businesses such as movie theaters and architectural firms. It didn’t look at audience spending.

It found the creative industry accounted for 164,325 jobs statewide – outpacing the financial industry’s 153,075 jobs – and generated $41 billion worth of goods and services.

Since that report came out, of course, the recession has shrunk the economy, cultural and otherwise. The new study, using information from 2010 and 2011, does help depict the post-downturn world.

“Even in a down economy, the arts are an industry that supports jobs and generates government revenue,” Cohen said.

Drawing in money

The study found about 40 percent of the people attending cultural events in Mecklenburg came from outside the county. Not counting what admission cost them, they spent $41.48 apiece – compared with the $23.54 spent by people inside Mecklenburg, who, of course, were closer to home.

“Arts and culture are a product that draws people to the community,” Cohen said. “And those people spend money.”

The economic action reaches beyond Mecklenburg, too.

The Children’s Theatre pays vendors in 37 states, Reynolds says. The Charlotte Symphony pays nearly $1 million a year to insurance companies based far outside Mecklenburg, executive director Jonathan Martin says.

But the orchestra spends most of its money at home. It pays 82 full-time musicians and staffers, plus additional part-timers. And for its annual Summer Pops season – which just ended – the orchestra spends $100,000 to $150,000 to rent and operate lights, sound equipment and other things it needs to perform in outdoor venues across the area.

“That’s all local,” Martin said. “You’ve got local stagehands. The sound guy is local. The lighting folks are local.

“It’s quite the little cottage industry.”

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