Return on Investment: Arts and Culture Sector Makes a $3.3 Billion Impact on Regional Economy
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A recent report from the Greater Philadelphia Cultural Alliance shows that the region’s arts and culture organizations have a $3.3 billion impact on the local economy. Often, that money starts out as an investment from other businesses.
In fact, most of the money invested in the city’s arts and culture group probably stems — at some point — from business, according Gary Steuer, the City of Philadelphia’s Chief Cultural Officer. Donations come from three places: (1) individual giving (in which case the person either earned the money in business or inherited it from someone who did); (2) foundations; and (3) corporate philanthropy, either through pure philanthropy or sponsorships, he explained.
It’s easy to guess why an individual may choose to donate to a specific cause, said Betsy Anderson, communications director at the Philadelphia Foundation. The arts contribute enormously to our quality of life, she said. They entertain and inspire; they can help heal people facing obstacles; and they give a voice to people who might not be heard or represented in their community, Anderson explained.
But why are businesses — especially those completely unrelated to arts and culture — investing in this sector?
Why Arts and Culture?
Bank of America, which sponsored the report, says it considers itself a “corporate citizen” of Philadelphia, according to Tom Woodward, the company’s market president for Pennsylvania. As such, it wants to invest in its community in ways that improve the local economy.
And while Bank of America has a number of corporate social responsibility priorities, the arts and culture agenda is one that the company views “as something very important to the economic landscape.”
The report, Arts, Culture and Economic Prosperity, supports this view. It found that Southeastern Pennsylvania’s cultural organizations and their audiences:
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have a combined impact of $3.3 billion on the region’s economy;
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support 44,000 full-time equivalent jobs in the region;
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return $1.04 billion in household income to area residents; and
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add almost $230 million in direct spending into the local economy.
Arts and culture also help to attract and retain businesses in the region, encourage urban renewal, increase tourism, and promote innovation, said Woodward. “It enriches civil life, in our view,” he added, and it is “one of our priorities to support that.”
“I think the report says it all,” said Woodward. “The return is very [obvious]; even the less-tangible and harder-to-measure return is there.”
Steuer agreed. “Businesses don’t thrive unless the local economy is doing well,” he said. “The cultural fabric of the city is critical to a successful business environment.”
“It’s also about the attraction and retention of workers,” Steuer said. A strong arts and culture sector makes it a place where graphic designers, software developers, and other cultural professionals want to live, he said. Businesses benefit when they recognize that art is important to their employees and their communities, he added.
Furthermore, it’s important to view the nonprofit arts and culture sector as part of a bigger economic ecosystem, Steuer said. Nonprofits may receive the bulk of donations, but for-profit entities benefit from these gifts, too. According to Steuer, recording studios, art galleries, and film production companies often share the same workforce as nonprofits, and their health and future depend on a community that fosters the arts.
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