Vitality of the Arts Industry Hits 12-Year Low

Monday, January 24, 2011

Americans for the Arts announced the first update to its National Arts Index, the annual measure of the health and vitality of the arts industries in the United States. The 2010 Index offers the first comprehensive picture of how the arts fared during the Great Recession.

According to the Index, the vitality of America's arts sector reached a 12-year low in 2009, dropping a record 3.6 points to 97.7. What'€™s more, since the onset of the Great Recession, the Index has plummeted 6.2 points. In fact, the losses sustained from 2007-2009 were nearly double the gains made from 2003-2007 (3.9 percent).

Defying this fall was a continued growth in the quantity of arts organizations. From 2007-2009, the number of nonprofit arts institutions grew by 3,000. As a result, the arts sector is now composed of 109,000 nonprofit arts organizations and 550,000 for profit arts businesses, and 2.2 million artists in the U.S. workforce. However, an increasing number of organizations and individuals are struggling to make ends meet. In 2008, 41 percent of nonprofit arts organizations reporting to the IRS failed to achieve a balanced budget, up from 36 percent in 2007. Further, analysis shows these organizations in deficit are likely to be larger in budget size , though no specific arts discipline is particularly more likely to run a deficit.

Fueling the drop in the Index and the growing number of arts organizations';€™ inability to balance their budgets are declines in earned income and charitable giving. While the public's personal spending on the arts has remained in the $150-$160 billion range, it has steadily slipped since 2002 in terms of share of all expenditures (from 1.88 percent to 1.57 percent). In addition, arts and culture continue to lose their market share of philanthropy to other charitable areas, such as human services and health. The portion of all philanthropic giving going to the arts dropped from 4.9 percent to 4.0 percent over the past decade. In other words, if the arts sector merely maintained its 4.9 percent share from 2001, it would have received $14.9 billion in contributions instead of $12.34 billion in 2009 - a $2.5 billion difference.

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