Arts Spell $281 Million for Economy

Underscoring the growing influence of the arts in Orange County, a new study found that the nonprofit arts sector employs thousands of workers and pumps $281.6 million a year into the local economy.

Ticket sales have declined slightly in recent years, but the loss in revenue has been offset by an increase in private and government grants and corporate and individual donations, according to the study, which was conducted by Chapman University for the Orange County Business Committee for the Arts.

In 1997, Chapman found, the number of jobs provided by the county’s nonprofit arts organizations rose to 4,725, up 10.1% from 4,290 in 1993, the year the previous study of the arts’ economic impact was done.

The impact of those institutions--including wages paid to workers and audience spending--increased 11.6% to $281.6 million from $252.3 million four years earlier.

“There’s no question when you look at these numbers that this is significant,” said Chapman President James L. Doti, who presented the results Thursday at the Orange County Performing Arts Center. “You’re talking about large organizations that are having a profound impact not only on our culture but also in dollar terms and in creating jobs and opportunities for people.”

Fifty arts organizations participated in the study from May to July 1997, including museums, dance companies, musical venues, theaters and other arts and cultural centers. If those groups were combined into a corporation, it would be the eighth-largest employer in the county, with more workers than the Ralphs Grocery chain or Pacific Telesis, Chapman researchers said.

“It’s important that our business leaders see that dollars given to the arts are important because the arts themselves fuel the economy,” said Betty Moss, executive director of the county Business Committee for the Arts, a nonprofit group that seeks business support for art institutions.

But the study also raised a red flag. Paid admissions fell in 1997 to 1.62 million from 1.68 million four years earlier.

Revenues from ticket sales dropped to $30.4 million from $31 million, despite a 1.6% increase to $18.76 in the average ticket price.

A 24% jump in grants and donations to arts organizations to $35.1 million last year from $28.3 million in 1993 more than compensated for the decline in ticket sales. As a result, their combined total income grew nearly 16% to $81 million from $69.9 million in 1993.

Jerry Mandel, president of the Performing Arts Center, said that although the center’s ticket sales have continued to increase, many smaller, younger organizations have probably had less stable sales.

“When you’re young, you’re worried about getting that art exhibit up” and spend less resources on promotions, he said.

“We have to become more sophisticated in marketing. It’s a very simple equation. If you market well, you draw audiences.”

Orange County’s changing demographics might also factor into the decline in ticket sales, Mandel said. Many younger residents are busy building careers and families and have yet to become regularly involved in arts events--something he believes will change over time.

Barbara Pieper, director of the California Arts Council, said the lower ticket sales might also reflect the growing struggle between traditional arts and newer entertainment venues, from the Internet to cable television.

“There are all kinds of things that compete now for your mind and what’s in your wallet,” she said.

Of greater concern, Mandel said, is that Orange County’s nonprofit arts organizations are far more dependent on ticket sales and private donations, whereas organizations in other areas receive a greater level of public funding.

“That’s a real weakness for Orange County,” he said. “There’s no government support.”

The $73.3-million Performing Arts Center, for example, was built in 1986 entirely with private money and continues to operate without any government funds. Several county groups, however, get support from the National Endowment for the Arts, the California Arts Council and other public sources.

In a recent Times Orange County poll, 61% of county voters said they’d vote yes on a bond measure for a new art museum, compared to 37% who would favor paying for a football stadium.

The County of Orange, however, historically has given little or no money to arts groups. Some cities do, but that figure is on the decline. Local government spending on the arts in Orange County fell 6.1% to $3.41 million last year from $3.63 million in 1993, Chapman officials said.

County Supervisor William G. Steiner said he’s well aware that the arts are “a very powerful contributor to the economic well-being of Orange County.”

But he didn’t anticipate any movement by the Board of Supervisors to increase public support for the arts.

“There’s a tremendous emphasis on private philanthropy that’s served Orange County well,” he said. “I think much more could be done in that area [of private support] versus a bond issue.”

Indeed, Doti said donations to Orange County’s arts groups have outpaced the national average. From 1993 to 1997, private giving to the arts in the county climbed 23.6% to $29.2 million. At the same time, donations nationally rose only 10.6%, to $10.6 billion.

Given the falloff in ticket sales locally, though, Doti said many arts groups probably should consider pursuing other sources of revenue more aggressively, such as selling more food and gift items.

“I think these organizations will have to be more creative in the way they think about income generation,” he said.

The study also found the county’s arts institutions expect contributions to show a slight decline this year, though income from ticket and product sales is expected to rise.

Overall economic impact is anticipated to increase by 7.4% this year, to $302.3 million.

Pieper sees ample reason for optimism about the continued growth of Orange County’s arts community, particularly in light of the strong economy.

“There are a lot of resources that exist in Orange County,” she said. “That’s what I find amazing--this growth from an agricultural community to a very busy, active part of the state.”

The economic impact survey has been conducted every four years since 1989. Since that first study, designed to provide a snapshot of the arts impact on the economy at the time it’s conducted, the money the nonprofit arts have put into the county’s economy has risen 50.6% from $186.9 million.

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Arts and the Economy

The economic impact of Orange County’s arts community increased from 1993 to 1997 despite some softening in ticket sales and attendance:

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TOTAL SPENDING 1997 Amount % Change from 1993 Direct spending $77,973,224 15.6% Indirect spending $147,369,392 15.6% Indirect audience spending $56,211,121 -1.8% Total spending $281,553,737 11.6%

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TICKET REVENUE/PRICES 1997 Amount Change from 1993 Admission revenue $30,384,390 -1.8% Paid admissions $1,619,234 -3.4% Avg. ticket price $18.76 1.6%

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EMPLOYMENT 1997 Amount % Change from 1993 Full-time positions 479 4.6% Part-time positions 2,404 39.4% Contract positions 1,842 -12.6% Total paid positions 4,725 10.1%

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INCOME 1997 Amount % Change from 1993 Contributions $35,051,090 24.0% Earned income 45,798,732 10.1% Total Income 80,849,822 15.7%

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Sources: Orange County Business Committee for the Arts Inc., Chapman University