How Much Do the Arts Contribute to Providence’s Economy? A Lot More Than You Think.

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Community MusicWorks photo: Sake Chan

“The Creative Capital” isn’t just a catchphrase to describe Providence. Home to world-class arts institutions that draw artists from far and wide, its many neighborhoods thrum with diverse and vibrant arts and cultural scenes.

What’s sometimes missed behind this colorful portraiture is the supersized role the arts and culture play in driving Providence’s economy, including tourism. Want proof?  Check out the most recent edition of Arts and Economic Prosperity 6 (AEP6)–an economic and social impact study of the country’s nonprofit arts and culture industry commissioned periodically by Americans for the Arts, a national arts advocacy organization.

Created in 1994, the national study differs from others by looking at both nonprofit arts/culture organizations in a particular community, as well as their audiences, whose spending often includes dining out, transportation/parking, child care, and lodging.

Big Nazo                                                  photo: courtesy of Providence Department of Art, Culture + Tourism

This year, AEP expanded its focus beyond the sector’s financial, economic, and tourism contributions to include its social impact—such as livable communities, residents’ well-being, increased trust and empathy, and neighborhood pride. The report also now benchmarks arts and culture organizations that primarily serve communities of color, the audiences that attend their events, and those having a chief executive who identifies as BIPOC (Black, Indigenous, People of Color) or ALAANA  (African, Latinx, Arab, Asian, or Native American).

Overall, the study sends a message—not only with words but hard numbers—to  government and the private sector, that investments in arts and culture are investments in an industry that not only strengthens economies, but also builds more livable communities.

And those numbers pack a punch.

According to the latest AEP6 study, in 2022, the U.S. arts and culture sector generated $151.7 billion of economic activity. Of this, $73.3 billion represented spending by arts and culture organizations and $78.4 billion came from event-related expenditures by their audiences. The impact of that spending: 2.6 million jobs, $101 billion in personal income to residents, and $29.1 billion in tax revenue to local, state, and federal governments.

The AEP data for Providence, collected in partnership with the City of Providence Department of Art, Culture, and Tourism (ACT), is equally compelling. During 2022, the 37 organizations participating in this study generated $207.5 million in economic activity—$89.5 million in spending by those organizations and an additional $118 million in event-related expenditures by their audiences. That economic activity supported 2,774 jobs, provided $118.1 million in personal income to residents, and generated $36.3 million in tax revenue to local, state, and federal governments.

These findings complement state-level data collected by the National Endowment for the Arts and the U.S. Bureau of Economic Analysis showing that in Rhode Island, the value-added of the arts as a share of the state’s economy in 2021 was $2.2 billion or 3.2%. It also employed 16,876 workers, who received $1.8 billion in compensation.

Arts and Economic Prosperity 6: The economic and social impact study of nonprofit arts and culture organizations and their audiences in the City of Providence.       Americans for the Arts. 2023.

Other key takeaways:

  • The arts and culture sector drove significant commerce to local businesses in Providence, as well as tax revenue. Overall, arts and cultural event attendees spent $35.05 per person per event beyond the cost of admission for food, lodging, parking, etc. Spending by nonprofit arts and culture audiences also generated a total of $21.4 million in tax revenues.
MJ Robinson’s Visual Note-Taking                          courtesy: Providence Department of Art, Culture + Tourism
  • Arts and cultural events strengthened tourism in Providence. In 2022, 34.2% of attendees were nonlocal visitors to the city who spent an average of $51.37. Additionally, 81.5% of nonlocal attendees said the primary purpose of their visit was attending the performance, event, exhibit, venue, or facility where they were surveyed.
  • The city’s dynamic arts and culture scene keeps local residents and their discretionary dollars in the community. Asked what they would have done if the event where they were surveyed had not been available, 58.8% of attendees who live in Providence County said they would have “traveled to a different community to attend a similar arts or cultural activity.”
  • Arts and culture organizations boost community pride. Arts and culture attendees agreed that the activity or venue where they were surveyed “inspires a sense of pride in this neighborhood (90.5%); that they “would feel a great sense of loss if this activity or venue were no longer available (86.4%); and that the venue where they were surveyed is “an important pillar” for them in their community (79%).”
  • Volunteers provide economic value beyond dollars. During 2022, 2,024 volunteers donated a total of 59,177 hours to the organizations participating in the survey—a donation of time with an estimated aggregate dollar value of $1.9 million.
  • Arts and culture organizations are addressing pay equity issues. When asked if they had addressed pay equity issues that surfaced during the COVID-19 pandemic, 84.6% of the responding organizations responded “Yes.”

Taken together, the findings suggest that the city’s nonprofit arts and culture sector remains a formidable industry. Even more striking is that the data surfaced in the aftermath of the COVID-19 pandemic and resulting recession, indicating that even in the face of these challenges, the sector persevered.

That doesn’t mean the industry didn’t take a hit.  A Brookings study of COVID’s effects on arts organizations revealed that, in Providence from April to July 2020, the sector lost 14,128 jobs (31%) and $604M (10.2%)

Mayor Brett Smiley and Joe Wilson, director of Providence’s Department of Art, Culture, and Tourism (ACT), have been attempting to repair those cracks. In July 2023, the City announced new funding programs aimed at ensuring arts organizations can rebound and grow over the long-term. These and other initiatives are part of the rollout of Providence’s new cultural plan: PVDx2031: A Cultural Plan for Culture Shift 

PVDx2031:A Cultural Plan for Culture Shift      Courtesy: Department of Art, Culture + Tourism

The ten-year plan, which updates the City’s 2009 cultural plan (Creative Providence: A Cultural Plan for the Cultural Sector), is the result of a robust two-year community engagement process shepherded by practitioners who used a variety of facilitation approaches, including community conversations, virtual planning studios, focus groups, and surveys. The result, says former ACT Director Lizzie Araujo, in a preface to the plan, is a “living blueprint for public policy, private initiatives, and strategic investments in our City’s creative life…that is grounded in the concrete words and intentions of the many brilliant people who have helped make it real.”

Like AEP6, the plan emphasizes the need to view the arts and culture community and social impact as important to the “creative economy” as dollars spent, people served, and revenue generated. Kathleen Pletcher, artistic director and founder of FirstWorks, a multidisciplinary arts organization established in Providence 20 years ago, says that she’s happy to see that her organization’s “strategic initiatives are well-aligned with the cultural plan,” especially its emphasis on livable communities as part of the creative economy. “The employment of local creatives, attracting visitors as well as neighborhood businesses and audiences, all ground in the idea that the arts are essential to building a thriving, sustainable cultural sphere, and changing social narratives,” she notes.

Now, the challenge will be figuring out how to operationalize these kinds of variables so that this information can be used to show progress and be accountable to residents.

According to Ruth Mercado-Zizzo vice president of programs and equity at EdVestors, a Boston-based school improvement organization with deep experience in evaluation, advocacy, and funding, “the entire nonprofit arts and culture sector is still struggling to create and use better metrics that can assess the impact of the arts most holistically—not just economic or financial impact. We’re also still trying to find better ways to measure and disaggregate data across different communities and even to just better define what we’re trying to measure to begin with. All of this is made even more challenging because of the substantial changes the field continues to face because of COVID.”

Cassandra Thomas, the city’s Director of Economic Development is in agreement. “Although the AEP studies continue to provide concrete data showing that creative industries are important contributors to Providence’s economy…the city is also looking at using additional frameworks beyond this study in the future to better understand the industry’s impact more fully.”

Local artists agree. The information gleaned in AEP6, however, can still be (and is) used as a powerful advocacy tool and will be helpful in thinking about how to codify PVD2031x’s more complex goals in the coming years.

Sebastian Ruth, director of Community MusicWorks, is one of those who’s excited over the opportunities and possibilities the new cultural plan offers. “That the entire community came together to create this plan is amazing and worth celebrating,” he says. “It’s not a strategic plan—it’s aspirational, which is important to remember. But it reflects how the city and the world are changing, with the people who are most affected by challenges helping to develop ways to address them through the arts. Now, hopefully, all our communities can come together to make sure those aspirations are realized.”

Pletcher concurs:  “We are excited to work together with our many collaborators for an increasingly impactful role for the arts in Providence.”

 


How This Study Was Done

A detailed description of the study’s methodology, which AEP describes as “highly regarded, conservative, and rigorous,” is included in the full report. They caution, however, that smaller sample and lower response rates in any study may understate economic impact findings.

One notable tweak to this edition reflects AEP’s acknowledgment that its previous studies emphasized collecting data from large-budget organizations with existing relationships to the funding community and less on smaller organizations and those that serve communities of color. AEP6 data now includes audience surveys at events presented, produced, or hosted by BIPOC and ALAANA organizations, as well as other information that will help “initiate new or escalate existing funding conversations about BIPOC and ALAANA organizations receiving fair and proportional financial support” from grant award processes that “have frequently proven to be historically and systemically unbalanced.”


 

Cynthia Gibson, Ph.D. (www.cynthesisconsulting.com), is principal of Cynthesis Consulting, which provides strategic planning, program development, evaluation, and communications assistance to hundreds of US and international philanthropic institutions and nonprofits. She is also a writer whose many publications on philanthropy and the nonprofit sector, civic engagement, democracy, education, and other issues have influenced public discourse and policy change.