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 Post-Voodoo Economics Panelists: Stephen Sheppard, Cora Cahan, and Neil Barclay Moderated by Joseph C. Thompson The following white paper is drawn from the remarks of the panelists and moderator for this session, along with the questions and responses from members of the audience. This document is intended to reflect the variety of viewpoints offered during the discussion, and to frame broadly the issues discussed; it should not be taken as a formal statement of opinion by the panelists. Arts institutions are increasingly employed as agents for generating change in the communities they serve, and they have proved to be powerful levers for economic growth and municipal revitalization. But when support of the arts is expressly coupled with an expected (financial) return, the means of measuring economic and social effects can influence the development and continued support of those arts organizations. The Multiplier Effect By working with policy makers to explain the strengths and value of the arts, many organizations have been able to provide economic impact studies that support the case for investment in the arts. These studies can include both traditional economic indicators—such as unemployment statistics or anticipated tourism—as well as a more encompassing view of the societal benefit that the arts provide. In fact, there is a kind of multiplier effect, measuring economic growth directly tied to an arts institution: (1) the social capital related to arts institutions contributes to a richer quality of life for all residents, (2) the presence of the arts provides a common experience and catalyzes community interaction, and (3) the positive changes brought about by arts institutions make communities more attractive to current and potential residents and businesses. The value of this approach is evident from its success. A number of small towns and communities facing economic slumps have made a convincing case for substantive government and other investment in the arts, with positive results. Here, the multiplier effect comes readily into play. While reduced unemployment and higher business occupancy rates are sometimes the fastest indicators of a changing economy, along with evident increases in local tourism, over the long-term, communities have seen the transformative effects of arts investments: on neighborhoods; property values and housing turn-over rates; new business launches, and subsequent sustainability; and even the re-use and renovation of previously-abandoned buildings. These changes can, in turn, facilitate—and even galvanize—related efforts to combat illegal drugs, address homeless problems, or make other long-term social and environmental improvements. The Softer Side Using the arts for economic revitalization may also highlight problems that communities were not aware existed—and then help to address them. Many arts projects change the pedestrian flow around their institutions while attracting people into them; this can have a positive effect on the basic ways in which people interact and reveal the valuable diversity within a community. For example, one study analyzed the pedestrian patterns within a very homogenous, white community before and after the launch of a major arts initiative. Before the new institution opened, white residents had a four percent chance of seeing a non-white person on the street on a day-to-day basis; that increased to a twelve to fifteen percent chance after the arts organization opened, and grew to a twenty-five to thirty percent chance within the institution itself. This diversity benefit also extends to so-called "first-voice" institutions, which promote the inclusion of minority voices from the community. By reclaiming the story of American culture through the presentation of the arts from more diverse perspectives, these organizations can cultivate meaningful—and economically valuable—engagement with minority communities. However, because of the non-traditional economic imperatives involved in developing and sustaining such organizations, they may also require new measurements to assess economic impact. Planning for the Long-Term Despite past successes, concerns remain about finding new ways to sustain the dividends of arts organizations, and much attention must be paid to alternative models for the future. For some arts initiatives with broader economic development programs, there may be a tripartite set of core revenue sources: charitable contributions, earned income, and rent. Likewise, other successful initiatives—such as sporting events, rock concerts, or conventions—may be able to help subsidize less independent arts programs, through a city-imposed surcharge or tax on venues or hotel occupancy. The incremental value of tax revenue may look small to a community overall, yet provide significant support for the arts. Another approach seeks to connect arts organizations with the broader developments within their communities, e.g., by working to create zoned areas that can bring together different arts communities while helping the stronger organizations nurture their smaller neighbors. Similarly, helping institutions to own their spaces may also support their long-term stability, and thus ensure the rootedness of their economic and social impact in the community. Looking for Metrics of the Future Whatever metrics exist, more could be used. The arts cannot and should not be the sole set of economic investments or community initiatives - even where current evidence suggests that a community's future is dependent on arts organizations. Likewise, rural communities have different problems, and needs, than urban environments. But to emphasize this point, new studies must be done, in partnership with the arts organizations themselves, that can more effectively tie together the details of their economic impact across a broader range of factors and environments. Underpinning all these issues and questions is a clear bottom line: community improvement is, fundamentally, the raison d'être for arts organizations. All the available data, derived from non-traditional indicators of community impact, support the notion that arts institutions stimulate cultural diversity and provide exposure to a wide range of people and experiences. Though not as easily quantifiable as tax revenue or income related to tourism, these indicators give evidence of the more fundamental and lasting impact of arts institutions in communities. For citation, please reference: http://www.berkshireconference.org/content/2005-postvoodoo.cfm
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