The Arts’ Big Economic Influence

The Arts’ Big Economic Influence

Creative Minnesota report shows the size and strength of resilient sector.

You may have already heard arguments on behalf of arts and cultural nonprofits based on their economic impact, not their intrinsic value, and you’re about to hear more. While music, or theater, or poetry may speak to your soul and spirit, both private and public supporters rally most fervently around the economic benefit of the arts. That’s because economic studies have repeatedly shown that arts organizations not only generate considerable dollars through their own spending, but also generate quite a bit more money than they spend. Arts audiences often stop for a pre-theater meal, or pay a baby-sitter for a night out, for example. Americans for the Arts, a national arts research and advocacy organization, calculated the economic impact of the arts in the U.S. at $135 billion in its most recent (2013) study. Of that, $61 billion came from direct spending by arts institutions, while $74 billion came from related audience spending.

So it’s perhaps no surprise that leading members of Minnesota’s cultural funding community came together last year to document the economic impact of Minnesota’s arts sector. Now they’ve released a new report about it. Their intent is to be as comprehensive as possible and establish a credible benchmark against which they can assess future changes. Data geeks and skeptics will be pleased to learn that the new report is based on the best-ever aggregation of data, thanks in part to our state’s new participation in the national Cultural Data Project (CDP), an effort to enroll cultural organizations nationally in shared common and comprehensive financial, programming and audience data gathering. The new Minnesota study is our first peek at what CDP will offer up to curious researchers locally. Beyond CDP data, the report also is based on financial and program information collected from grant applications to state and regional arts agencies, and the Minnesota Historical Society’s grant programs.

Creative Minnesota: The Health and Impact of the Nonprofit Culture Sector is the result. Here are some details:

  • The report documents the total economic impact of the nonprofit arts and cultural sector in Minnesota as $1.2 billion, including direct expenditures by cultural nonprofits of $696 million, and audience spending of $501 million.
  • Data from some 1,269 cultural nonprofits in Minnesota is incorporated, including science and history museums, zoos, public media organizations and arts organizations. The seven-country metro area is home to about half of these organizations. The others are spread across every corner of the state.
  • The sector is driven by hundreds of small organizations: 67 percent had budgets under $100,000; only 1.1 percent had budgets over $10 million.
  • Organizations in the study support 33,381 full-time jobs.
  • Overall, organizations earned about $219 million through ticket sales, admissions and other earned income (about a third of revenue). About 16 percent of revenue came from state government, approximately the same percentage as was raised from individual donors.
  • Audience visits totaling 19 million are documented, showing that average arts attendance is relatively high per capita in Minnesota (we have about 5.4 million total residents). Eighty percent of attendees are in-state and the rest are visitors. Average spending of local attendees is $17.83 per person beyond the price of admission, while each visitor spends an average of $32.15 beyond admission.
  • Arts experiences were delivered to 2.6 million Minnesota students, showing that many students are being served multiple times in a given school year (there are about 923,000 school-age youth in Minnesota).

Other than documenting that the arts and cultural sector is large, what does this new report tell us about how we’re doing? Not as much as one could hope, because there is not much offered for comparison. However, future reports will be able to show gain and loss against the initial benchmarks that Creative Minnesota establishes. Creative Minnesota does include some comparative data from a 2006 study called The Arts: A Driving Force in Minnesota’s Economy; however, both the census of organizations and the quality of data available were far less complete than what’s available today. (Organizations had to opt in to the 2006 study, so it’s likely that many are not included.) There was significant sector growth between the 2006 and Creative Minnesota reports across numbers of organizations, numbers of full-time jobs, attendance and statewide economic impact; however, it is not possible to say much more than “the sector grew despite the recession,” based on a comparison of the two reports.

Another place to look for an assessment of the Minnesota cultural economy’s vital signs could be comparisons to other states or economic sectors. Massachusetts, Michigan, Arizona and Maryland all have published economic impact studies of the arts in the recent years, informed in part by CDP data. Creative State Michigan, released in January 2014, showed that state had $564 million in direct expenditures by its cultural sector, $100 million less than Minnesota, despite having 4 million more residents. Maryland’s total arts employment was 12,700 jobs (2012 data), only one-third as many as Minnesota, despite having a population only a little larger than ours. The cultural sector in aggregate is a major employer in Minnesota, at more than 33,000; the State Department of Employment and Economic Development reports that Target Corp. has 30,500 full-time employees, Cargill has 6,555 and the City of Minneapolis has 3,088, by comparison.

As a next step, it would be great to see deeper analysis of the economic health and financial capacity of organizations themselves, demographic information about who is and isn’t being served by arts organizations, and ways public policy and funding choices influence the strength of our cultural sector in comparison to other states. For updates, visit

Sarah Lutman is a St. Paul-based independent consultant and writer for clients in the cultural, media and philanthropic sectors.