Good Measure Productions

Presents:

AN INTERVIEW:

THE IMPACT OF THE ARTS ON REGIONAL ECONOMIC DEVELOPMENT:

WITH RANDY COHEN, RESEARCH DIRECTOR OF AMERICANS FOR THE ARTS

Interview conducted by Russ BARNES, Executive Director, Good Measure Productions

ABOUT RANDY COHEN:  Randy COHEN is vice president of Policy and Research at Americans for the Arts-the national organization advancing the arts in America - where he has directed research and arts policy information initiatives since 1991.

ABOUT THE ARTS STUDY.  Randy COHEN authored the research study: Arts & Economic Prosperity III: The Economic Impact of Nonprofit Arts and Culture Organizations and Their Audiences documents the key role played by the nonprofit arts and culture industry in strengthening the nation's economy.  Nationally, the nonprofit arts and culture industry generates $166.2 billion in economic activity every year-$63.1 billion in spending by organizations and an additional $103.1 billion in event-related spending by their audiences.

The study is the most comprehensive study of the nonprofit arts and culture industry ever conducted. It documents the economic impact of the nonprofit arts and culture industry in 156 communities and regions (116 cities and counties, 35 multicounty regions, and five states), and represents all 50 states and the District of Columbia.  Some of the study results (more information starting at http://www.americansforthearts.org/information_services/research/services/economic_impact/default.asp)

* 5.7 million full-time equivalent jobs

* $104.2 billion in household income

* $7.9 billion in local government tax revenues

* $9.1 billion in state government tax revenues

* $12.6 billion in federal income tax revenues

ABOUT AMERICANS FOR THE ARTS: Americans for the Arts is the nation's leading nonprofit organization for advancing the arts in America. With 45 years of service, the association has been dedicated to representing and serving local communities and creating opportunities for every American to participate in and appreciate all forms of the arts.

ABOUT GOOD MEASURE PRODUCTIONS: Good Measure organizes original theater performances, with an emphasis on spiritual values, for the benefit of non-profit presenters.  It acts as a broker/producer between player companies and theater presenters.

THE INTERVIEW

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RUSS BARNES:  What got you so energetic, personally, about researching the impact of the arts on the economy of the United States and individual communities?

RANDY COHEN:  I've been here at Americans for the Arts now for over sixteen years.  And my job here is to provide the information tools for people who need to make the case for the arts, to strengthen the arts in their communities, to put more arts in the schools, to increase the public's appetite for the arts, to allow for a more favorable arts policy.  

BARNES:  How about personally, not just corporately?

COHEN:  I'm here because of a real passion for advancing the arts in America.  I'm extremely lucky to have a job where my position is to give people the information tools they need to increase arts funding, to make more favorable arts policy.  We work with a lot of groups here in Washington DC where there is an association for everything: mayors, cities, county managers, governors.  And if you look at their surveys, you find out what elected leaders are looking for or worrying about.  Well, the list doesn't change too much.  It's jobs, the economy, youth, education, health.  

BARNES: Naturally.  So where do the arts fit in?

COHEN: When it's time to sit down and figure out, well, what are compelling cases to be made for the arts that will produce results, you go to things like jobs and the economy.  And in fact, the is linkage is there.  So the first study we did was back in 1994; the most recent one is Arts and Prosperity III. . .

BARNES:  The latest study is your third one?

COHEN: Yes, and it provides the numbers everyone can use at the local level about “Here's what the arts mean in our community economically speaking.”  Over the decades people are finding the story makes sense.  Intuitively everyone gets, well yeah, the arts are, in fact, a business.  Qualitative data gets you in the door, but quantitative data keeps you at the table.

BARNES: (laughs) That's true.

COHEN: At some point, you need the numbers.

BARNES: Your study's numbers make a compelling case.  It has an interesting methodology and the samples you use are quite large.

COHEN:  You need those numbers to say, “Here is the size of the industry. And here's its impact on the community.” [See quantitative summary in the introduction above.] I'm not an economist, but I work with a team of economists.  And a team of statisticians.  And we work with our colleagues like the U.S. Conference of Mayors and the National Association of Counties.  You'll find their logos on our reports.  Getting back to the Randy piece here.  The reason I love my job is . . .

BARNES: Yes, how did that come about?

COHEN:  The quick history here.  I used to work in the theater, managed a small theater company in San Diego.  After several years, I came to Washington as an arts administration fellow back in 1990 which was a great program that unfortunately is no longer in existence.  Then after a year and a half I came over here with Americans for the Arts.  In doing some of the studies like Arts and Public Housing, Arts and Healthcare, Art in Youth-at-Risk, I really get to work with the nation's best thinkers and scholars in these areas.

BARNES: What's the size of Americans for the Arts?

COHEN:  We've got about 80 people.

BARNES: DC and New York, right?

COHEN:  Yes, and a few in other places.

BARNES: What's the budget of the organization per year?

COHEN: It's about $17 million.

BARNES:  One of the things that fascinates me about the study is that it calls “arts and culture” an industry.  I mean the word “industry” is right smack in the title.  That language itself sends a very powerful  -- and kind of an unusual -- message about the nature of the arts in our society.

COHEN: Well, the study is a real myth-buster in a way.  We all appreciate the arts for what they do for our quality of life.

RB.  Yes, all the platitudes about what great art and culture does for everybody -- its civilizing influence.

COHEN:  Of course, the arts inspire us.  They challenge us.  But the fact is arts organizations are businesses.  They employ people, they purchase goods and services in the marketplace.  They are a cornerstone of tourism in our communities.  Ask people why they travel.  They want to see the art, the culture, the heritage of the place.  You look at the travel industry.  People are looking for authentic cultural experiences when they travel.  So a vibrant arts community is a real economic asset to the community as well.  So you are looking at an industry that not only adds cultural benefits, but  also economic benefits.  That's not entirely intuitive.  You need to do the numbers.  You need to run those numbers by people and say, ”Look, this is a huge industry.”  But the most important part of this study -- its value in thinking strategically about economic development -- is identifying the amount the audience spends at the arts event and around the arts event.

BARNES:  And your study differentiates between the people who are in the location where the arts business is located and those who come to see or experience the arts event from the outside the locale in which is takes place.

COHEN:  Yes, exactly.  So we did a total of 94,478 intercept surveys . . .

BARNES: Wow!

COHEN:  I know.  A ridiculous sample by any measure.  We went into a 156 study regions across the United States, every state, small town and middle-sized town.  We did quick hit interviews.  We asked, “How much did you spend?”  When a typical person goes to an arts event, you go into the theater, you pay for parking, you have dinner, see the show, maybe then you go out for deserts and drinks to discuss what you saw.  Then you go home -- if you're like me, you go home, and double the cost of the evening by paying for baby-sitting.  That may be the real racket in all this.  And so there's all this event-related spending.  The national attendee pays, you've seen the numbers, about $27.79 per person per event, not including the cost of admission.  And then we asked each of those individuals for their zip code.

BARNES:  So you correlate behavioral, demographic, and geographic data?

COHEN:  Yes.  Because we want to find out whether they live in the county in which the event took place?  Or whether they live outside the county?  So did people travel to see this event?  Nationally, 39 percent of the attendees came from outside the community in which it was performed.  And what's interesting here is, if you compare the locals versus the non-locals, the non-locals spend twice as much as their local counterparts.

BARNES: Yes, I saw that in the report.

COHEN: So now we show arts as an industry.  But consider this.  Arts and culture are together a product.  And together they are a product that attracts people to the community.  And those people spend money on local businesses and what turns out good for the arts community turns out good for local business.

BARNES:  That kind of answers another question -- or raises it.  Is the arts community, their events, an export industry?  Economists talk about the fact that, if you're not exporting, you're not creating a vibrant economy.

COHEN:  Right. Oh, you can look at that in a couple of different ways. Nationally, the arts are a huge export industry if you look at the recording industry, film, and Hollywood and all that kind of stuff.  But if you look at the “non-profit” arts organizations in a small to medium-sized community, what these really do is they import.  They import people from outside the town and those people come to spend money.  And another way to look at that is, if you've got a vibrant arts community, you are preventing leakage -- of your own people to other communities.  

BARNES:  That's a really interesting point.

COHEN:  So you're keeping your people in the community so they don't have to go to the next town over to see the arts and spend money at those restaurants.  I was speaking at a public event once, and the mayor there got up and said, “I'm just so proud of the arts and when the wife and I want to go see some arts, we just head to New York City.  We love the arts.”  I thought, “Oh, that's not the message.”  The message is, “We need something right here in town that makes people stay here and brings other people into our town.”  

BARNES: That says something for what is going on with our Newtowne Players' project coming out of Lexington Park, Maryland. We call it “Newtowne on Tour.”  Now Lexington Park is around the big Naval Air Station down there on the Patuxent River, and so a lot of high tech companies have grown up around the base to serve the air station.  And those little companies are trying to bring in employees from the west coast, Texas, and so forth.  And the theater group there got started because those people coming in want and need that quality level of live cultural entertainment.

COHEN:  Yes.

BARNES: And so that really makes your point.  It's employee attraction for a community -- and retention as you are talking about.

COHEN:  And that's a huge piece of it if you look at the new economy -- the information economy -- the knowledge economy.  And, you know, I think it's just the new economy that has just simply developed.  The new workers, the best and brightest young workers, are developing their careers differently than I did, and I'm guessing, you did.  Early on in our careers, we looked at where we could get the job and, boom, that's where we went.

BARNES: (laughs)  That's for sure.

COHEN:  Sure happy to get that job.  I'll go to wherever.  In the new economy, the new workers are finding a community they want to live in, going there knowing, “Hey, I'll be able to find work when I get there.”  We work with the Conference Board, and their research shows that workers are looking for culturally vibrant communities in which to work.  If you've got this vibrant cultural community, then that's what attracts the kind of workers you want.  It's not as if the new businesses today have got these 20 million bricks they've got to move.  You simply need to plug into your satellite dish and you're good to go.  And so the businesses are going to gravitate to where the workforce is rather than the other way around.  So it becomes a real economic development strategy to have this vibrant cultural community.  You want the new businesses to settle in your city, not in somebody else's city.  Boosting the arts becomes a competitive tactic.  

BARNES:  Does your data lend credence to that point of view?

COHEN:  No, we go with other organizations' research in that area. But the data is compelling and we support and publish it in many ways.

BARNES:  Well, let me give you a real life example to stimulate our dialogue.  In my hometown in Pennsylvania, there is a guy who is a billionaire lumberman.  He bought a resort in the Allegheny Mountains/Laurel Highlands which attracts people from all over the northeast -- it has its own airstrip.  You get a guest there at the resort and he has this wonderful place with all sorts of amenities, but outside the resort, there are only a few other places for them to go.  And so what he did was fund, or help fund, the renovation of the old downtown movie theater, an opulent place built in the 1920's.

COHEN: Oh yeah!

BARNES:  Renovated the whole place, began bringing in big time acts, stage plays, and musicals. So resort guests could get in their cars or the resort limo and go down to town where this entrepreneur also set up a restaurant across the street from the theater.  Then they would have dinner down there, go to the show, and go back to the resort in the mountains.  Any comment on that kind of economic development strategy?

COHEN: It's a great example.  Number one, I love it when people renovate those old, historic theaters because they're just -- talk about, “they don't make 'em like they used to.”  They really are majestic.  What this guy has done is create a cultural opportunity.  What we've found in our data is it's not only in Chicago where you're getting a great economic bang for your arts dollar.  It's in small communities as well.  We have Homer, Alaska in our study -- 3400 people.  They're talking about “Here's the arts.” They have made it a business there.  So it's an astute business development plan.  That's probably how this guy got to be a billionaire in the first place.  See, he's got this cultural product which is the theater and which is this fabulous magnet.  So they see the show.  They need to park the car.  They go someplace to eat.

BARNES:  And it becomes part of the entire travel package, doesn't it?

COHEN: Yes.  And travelers these days, they are traveling to find authentic cultural experiences.  They want to go to small towns as well as large cities. They want to see the way it was.  Hey, you can see a movie at any multiplex theater.

BARNES:  Or a live stage play in an old one that showcases the cultural heritage of the town or region.

COHEN: The other thing is, if you look at the numbers, you find there is an elitism about the arts.

BARNES:  On one hand good, and on they other maybe not so good?  That's one of the perceptions I'd like to have you address.  Many people in the arts think of themselves as elite.  And many people in the public are turned off by that perception.  Any thoughts about that?

COHEN: There's a feeling that only affluent, educated people are going to theaters and museums in this country.  And that's not necessarily the case.  The fact is all kinds of people like all different kinds of art.  One of the main factors is not education or money.  It is discretionary time that more often than not creates the barrier to accessing the arts.  Affordability is also an issue.

BARNES: Yes, as we move on, let's get back to the issue of affordability.

COHEN:  The key to our work at Americans for the Arts is how you make all these thousands of opportunities for the arts accessible to the largest number of people -- make them geographically accessible, financially accessible.  It costs a theater a lot of money to put on a play.  The typical arts organization in this country derives only about 50 percent of its revenue from tickets and sponsorships and that kind of thing.  And so the other half has to be contributed.  And that's how you keep prices affordable. We've all gone to New York and it's $100, $150 a seat there.  That's what it takes to pay the theater bills.  In most communities it's hard to do it at that scale.

BARNES:  Is there any evidence that any of the local arts organization or theaters are experimenting with, or innovating alternate merchandising approaches, to reduce cost at the retail level -- that is, to the theater-going public?

COHEN: Well, some have done very well with gift stores.  Some have opened restaurants.  There's the Proctor Theater up in Schenectady, New York.  They own an electric utility and that provides earned income.  In Columbia, South Carolina, they are working with a theater to provide the attendees with access to backstage communication.  You'll see why I call this NASCAR for the arts.  

BARNES: [laughs]

COHEN:  You can here the pit crew conversations.  Everyone is intrigued with what's going on behind the scenes.  And the arts are no exception.

BARNES:  It's kind of like being on an airplane and listening to the pilot talking to the tower about landing at Dulles Airport.

COHEN:  Exactly.  It's kind of like United Airlines, Channel 7.  The organizations that are going to thrive are the ones that are going to evolve and innovate.  Evolve with the community.  Society is changing.  More diverse, older.

BARNES:  Just an amplifying comment.  I read somewhere that there has always been a “popcorn factor” in movie theaters -- going way back.  I understand that the movie theaters would not have been able to survive soley on box office revenues.  The movie theaters would not have made it without popcorn, and so the entire movie industry, which depended in the early days on local movie theaters as the retail outlet for films, would never have flourished and our culture and entertainment would have become impoverished.  And so popcorn promoted the movies and the movies promoted the sale of popcorn.

COHEN:  This gets back to the gentleman in your home town who renovated the fabulous theater.  People want to spend money around that exciting experience.  Businesses have to innovate in order to prosper.  And arts organizations, again, are businesses.  You've got to make the experience relevant to the community you're in.  There's nothing that says you've got to do it the same way it's always been done just because it's a theater or a museum.  And so you are always looking for the new “popcorn factor.”

BARNES:  Allow me to change gears a little bit here and ask you to contrast profit making organizations in the arts and non-profit organizations in the arts.  Profit making organizations have the capacity to sell stock to raise capital.  In a non-profit, like arts organizations, churches, all sorts of associations such as your own, you don't have the capacity to sell stock.  The point of your study is that the value of the non-profit is that it develops cash flow within the community and in the region.  In other words, dollars changing hands.  In a profit organization, dollars change hands too, but they also consider the assets they are building as part of the accounting system.  I wonder whether any of the non-profit arts organizations are taking a look at their unique assets, and does Americans for the Arts study that aspect at all?

COHEN: The data for this study do not go in that particular direction.  What the data does show is that money that goes into the arts doesn't just go down a black hole.  It gives back to the community.  Non-profits have a public purpose, that's why they are non-profit.  It's their purpose to make your cultural product available to the community.  They are different in that way.  Thirty or forty years ago you had to go to a big city: New York Chicago, Los Angeles.  These days, most cities, small to mid-sized cities, and towns even, have orchestras, have theaters; so the arts are more accessible geographically.  And people are absolutely attending.  These days, you can buy the CD, the DVD, order out Chinese food, and see great works of art at home.  But people are finding there's nothing like the cultural experience of seeing things live.  That's what we are trying to arrange, to make that experience available to people.

BARNES:  Getting back to the economic question.  I was talking to the head of a theater a while back, and he lamented that there is a kind of scarcity mentality among theater people, that the pie is only so big, and that there is much competition for slices of that pie.  They feel what they are doing is so important, but no one understands how important it is, and so they don't get the support they need.  Is it possible to enlarge the pie for the arts rather than competing for finite slices already in place?

COHEN:  I don't quite understand.

BARNES:  Does Americans for the Arts promote expansion of distribution channels for the arts, to shake up the current set-up by means of competitive innovation?

COHEN:  There is on-going growth of arts institutions in this county.  According to the Urban Institute there are close to 100,000 arts organizations in the U.S.  Those numbers have gone up steadily.   It's going to be competitive for a long time.  I think this person is probably talking about contributive support.  What our research has shown, if you look at private sector giving -- foundations, corporations, individuals --, is that the arts have kind of lost market share.  The philanthropic high has grown to close toward $300 billion. But the arts portion of that has actually gotten a bit smaller.  You're seeing a larger portion going toward education, healthcare, social services, international development . . .

BARNES:  How do you account for that shift?

COHEN:  Well, philanthropy has changed too.  You hear about Bill Gates and the fabulous work his foundations do.   But they have no arts giving policy.  And then Warren Buffet says, “Hey, I love what you're doing here.  I'll give away my money too.”  So now you've got more no-arts-giving policy.  Foundations have changed.  The venerable ones like Rockefeller, Philip Morris -- they pulled away from the arts.  The question is, “Have the arts made the compelling case as to why they are central to a community or region and their development?”  The data are certainly there the support an arts policy in philanthropy.  Here's just one example, if you look at students who participate in the arts, they perform better academically.  Now that's education.  They have better grade point averages, lower drop-out rates, higher standardized test scores.  There's very solid research that demonstrates that. You look at Youth at Risk.  We did a big study with the U.S. Department of Justice that found that young people involved in the arts demonstrate more pro-social behavior.  So when you strip the arts out in the name of budget saving to re-direct money elsewhere, it may be illogical policy.

BARNES:  It's kind of like dollars defeating their own dollars in a way, isn't it?

COHEN:  Exactly.  Look at No Child Left Behind.  There's the case of a fabulous disconnect between actuality and policy.  Here you've got legislation designed to improve the academic performance of children and bring everybody up to a certain standard.  What it's resulted in is increased hours on math and reading, and a decrease in arts programming. If you look at Title 1 schools and low-income schools, you find an even larger percentage of arts programs being cut out.  You put that up against research done by James Catterall at UCLA, and you see that kids involved in the arts and those not involved in the arts, you find the kids involved in the arts exhibit higher grade point averages and other indices across the board, and even better attitudes toward community service.  But then you get the expected question, “Aren't these kids from better educated, more affluent families?  So Catterall went back to his base of 25,000 students at 100 different schools.  And he looked at the lowest economic quartile, and he found that there was an even GREATER disparity between the arts-involved and the non-arts-involved.  That suggest that the arts may help level the playing field.  So here's the arts providing this catch-up opportunity.  What we've got in the arts community is a job of getting the message out, not complaining about it, but educating the public and policy makers about the facts.

BARNES:  If you can read Shakespeare, you can easily read a contract.

COHEN: Yes, right.  And it's interesting that, if you look at the business community, they are confronted with this huge portion of the workforce that is slowly getting ready to retire.  And they are wondering, where are those new workers going to come from to replace this workforce?  So the Conference Board and some of these other national organizations who survey business leaders find that business is saying, “We need creative workers.  We need people who can identify and articulate problems.  We need workers who are comfortable with multiple solutions to the same questions.  All these things that the arts teach.  We need knowledge, but we also need creativity.”  They put it this way: “Knowledge plus creativity equals competitive advantage.”

BARNES:  The United States is going to need that in the global economy, isn't it?

COHEN:  MIT recognizes this necessity for its graduates.  It takes more than just being an engineer to create competitive productivity and social improvement.

BARNES:  We're lucky to have Americans for the Arts around pointing out the facts about the arts and its contribution to the many dimensions of the public welfare.  Thank you for taking time to explain to the our Good Measure Production audience what Americans for the Arts is trying to accomplish.

COHEN:  We wish you, and organizations like yours, the best luck and effectiveness in your advocacy of the arts for the sake of all our communities.

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© 2008. Rockville Maryland. Good Measure Productions.  All rights reserved.  For permissions, contact russ@bonmeasure.org.  To learn more about Americans for the Arts, visit http://www.americansforthearts.org/about_us/.  To see an on-line flyer for the latest Good Measure production, go to: http://bonmeasure.org/InviteRDDlex.htm.