The Government Shutdown And The Arts

The Arts Multiplier Effect
Theo Wargo / WireImage
– The Arts Multiplier Effect
The Arts Multiplier Effect: Actor, composer Lin-Manuel Miranda (right), credits arts funding programs with his own success. Pictured here with Leslie Odom, Jr. performing a scene from “Hamilton” during the 58th Grammy Awards at Richard Rodgers Theater on Feb. 15, 2016, in New York.

This week, Americans across the United States breathed a sigh of relief as the longest government shutdown in U.S. history came to an end – at least temporarily.  Thirty-five days earlier, President Trump had stopped funding for the U.S. government as part of a quid pro quo strategy to fund a southern border wall he had once vowed Mexico would pay for.

Regardless of one’s support for or against the president’s policy, the shutdown brought to light a number of functions the government provides that most Americans find indispensable. This includes food safety inspection, airport security and national park oversight, all widely reported on; less reported, was the impact the government shutdown had on arts funding, which in turn has a much larger ripple effect on the U.S. economy. 
“It is affecting us!” a grant writer from a symphony orchestra in the Pacific Northwest told Pollstar.  “Several of our awarded grants, both at the federal and state level, are contingent upon federal appropriations to NEA (National Endowment for the Arts). We are unlikely to receive payments on those commitments until the federal government is reopened. In our case, we’re waiting on over $50,000 in pledged funds.” 
Her exasperation was echoed across the country by other arts administrators as the government shutdown came just as 2019 NEA grantees were to be announced. These grants, it turns out, impact virtually every American within reach of an arts venue, which is all of us.
“Arts funding is in every congressional district,” explained Robert L. Lynch, president and CEO of Americans For the Arts, a nonprofit organization whose primary focus is advancing the arts and arts education in the United States. Lynch had just come from meeting with the U.S. Conference of Mayors, who he said cross party lines to support federal arts funding.
Looking at last year’s NEA recipients – including a dulcimer festival in Guntersville, Ala., a Jazz & Classics Festival in Juneau, Alaska, and an International Music Festival in Brunswick, Maine – the NEA funded close to 1,200 projects ranging from $10,000 to $100,000 grants (which include music performances of every stripe) hitting some 4,500 communities large and small throughout the United States.   All told, some $50 million in grants were put on hold while the government remained shuttered.

While that may not sound like a great sum of money relative to the larger U.S. economy, as Lynch explained, federal funding of the arts has a multiplier effect. This because state and local government are mandated to match or exceed federal funding as are arts organizations themselves, which they pay for with ticket sales, donations (often tax deductible), fundraising and more. 

Every dollar spent by the NEA, which is some $155 million a year (a minuscule 0.0004 percent of federal spending), is matched to the tune of nine to one, according to Lynch, putting the total amount at nearly $1.4 billion.  There’s also other federal granting agencies beyond the NEA, including the National Endowment for the Humanities, Institute of Museum and Library Services and the Corporation for Public Broadcasting which also contribute to arts funding.

The economic impact of the arts and performance sector includes a myriad of businesses surrounding and dependent on event and performance spaces such as parking, retail shopping, cafes and restaurants, lodging and more. Also, these culture centers not only help drive local economies, but they help attract tourists, who spend in greater amounts. And grant recipients are also employers themselves with a majority in rural and/or low-income areas and at the same time they are also consumers of goods and services.
According to Americans For the Arts’ 2016 Arts and Economic Prosperity Study, nonprofit arts and culture industry generated “$166.3 billion – $63.8 billion in spending by arts and cultural organizations and an additional $102.5 billion in event-related expenditures by their audiences. This activity supported 4.6 million jobs and generated $27.5 billion in revenue to local, state, and federal governments (a yield well beyond their collective $5 billion in arts allocations).” The AFTA also noted that 673,656 businesses are involved in the creation or distribution of the arts employing nearly 3.5 million.  

Creative Industries: Business & Employment in the Arts. (2017). National Summary Report. Washington, DC: Americans for the Arts.

Though some believe arts funding to be a partisan issue favored by one side of the political aisle or the other, in fact funding of the arts is an issue that crosses the political divide. This, precisely because funds are disbursed democratically across the country and its economic multiplier effect. 
In fact, while the Trump administration in previous budgets tried to completely de-fund the NEA and the NEH, budgets were actually increased slightly under the stewardship of Ken Calvert, the Republican Chairman of the House Appropriations Subcommittee on Interior, Environment, and Related Agencies. 
Another broader economic stimulus of publicly funded arts is the content itself, which acts as an incubator for theater, music, dance and other formats that upstream into the larger commercial, for-profit entertainment industry. This “great feeder system,” as Lynch called it, includes massive Broadway productions (“Hamilton,” “Spring Awakening,” “August: Osage County” for example) and many musicians (from Milt Hinton to Philip Glass, Chuck Brown to Duncan Sheik, The Kronos Quartet to Bill Monroe) who have been beneficiaries of NEA largesse. 
And that greater U.S. media and entertainment industry, according to the latest Entertainment & Media Outlook by PriceWaterhouseCoopers, stands at $735 billion and represents a third of the global M&E industry. 
“Without humanities and arts programs, I wouldn’t be standing here today,” actor/writer Lin-Manuel Miranda said in 2017 at an event on Capitol Hill noting that the NEA and NEH fund programs in all 50 states.  “The fact is that in places like Appalachia and California’s Central Valley and Native American reservations and the Mississippi Delta and vast swaths of the Great Plains, the private resources simply do not exist to provide kids with the kinds of programs that I was just lucky enough to grow up with.” 
The Pulitzer- and Tony Award-winning creator of “Hamilton: An American Musical” also told “CBS Sunday Morning” that “When we talk about the NEA, we’re talking about a very small amount of money that gets an enormous return on its investment.”