Vol. 4 The Arts Funding Crisis: Math, Metaphor and Money
The Building Blocks Column | Volume 4
An exploration of the role of arts, culture and heritage in economic and community development; past, present and future
“Donald in Mathmagic Land.” Photo credit: Allison L. Venezio-Preston
“As any poet knows, good and bad metaphors shape reality for better or for ill.” - Meghan O’Rourke, The Invisible Kingdom (2022)
I’ve been thinking about Meghan O’Rourke’s simple yet profound statement that “metaphors shape reality.” O’Rourke is a poet who wrote a memoir / critique of the American medical system’s inability to treat people living with ambiguous chronic illnesses. One of the book’s core themes is that metaphors shape our thinking and our thinking, in turn, shapes our action. O’Rourke identifies multiple levels on which metaphorical thought shapes the care that the medical system provides. For instance:
“When it comes to chronic illness, both Western and alternative medicine read the body of the patient metaphorically. Western medicine is based on one kind of metaphor - the body is a car, and its parts need upkeep, piece by piece. It is not a metaphor that works well for chronically ill patients, whose parts cannot be “fixed.” Alternative medicine offers a more appealing metaphor: the body is an ecosystem and caring for it as a whole… is crucial.” (Page 84).
O’Rourke examines how longstanding medical metaphors impact care across the medical system: shaping what kinds of questions it asks, what problems it addresses, what interventions and treatments it offers, how those treatments are delivered, and what costs it is willing to bear.
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The arts and culture sector is facing an acute funding crisis created by the volatility, uncertainty and cruelty of the Trump administration's dismantling of the federal government. The entire American economy is grappling with how to respond to this acute crisis. We have never experienced anything like it in our lifetimes.
The current acute arts funding crisis comes directly on the heels of another acute crisis created by the Covid-19 shutdown. That crisis was also unprecedented in our lifetimes. The arts sector did a remarkable job of pivoting its production and financial models to respond to the shutdown, but we were only just beginning to figure out how to adjust to its long-term impacts when this new existential crisis hit.
These two acute crises exist on top of a progressive crisis: the longstanding financial models that sustained non-profit arts organizations for decades are failing. I wrote about the slow but inevitable collapse of the season subscription model in my Welcome to Wrexham post. But the season subscription isn’t the only failing organ, the entire non-profit model is ill-equipped to meet both current and future challenges. As a sector, we won’t be able to return to a place of thriving unless we address both the acute and progressive components.
So, with that in mind, I want to think about the metaphors we use to talk about arts funding. Perhaps, as O’Rourke suggests, if we change our metaphors we can change how we think. Once we change our thinking, we will hopefully find that new interventions and solutions present themselves that could enable us to respond more effectively to both our acute and progressive crises.
Subtraction
When we talk to funders about the importance of arts funding, the response we get is typically framed in metaphorical terms of subtraction. The conversation goes something like this:
Arts Sector: “We need the arts.”
Funding Community: “Yes, the arts are unquestionably important, but funding the arts would take away from more urgent needs like…” (insert any number of critical societal challenges).
For far too long, the arts sector responded to this widely held belief as if it were true. We felt the need to justify the importance of art. (Has anyone seen the recent episode of The Studio where the Seth Rogen character makes a complete ass of himself justifying his work as a movie executive to a bunch of pediatric oncologists? I cringed for our entire sector.) As long as we continue to justify the importance of art on its own merits, the entire conversation about arts funding will continue to be framed by this metaphor of subtraction.
Addition
In recent years, the arts sector has done a much better job of framing the conversation through a mathematical metaphor of addition. Rather than responding directly to the “funding the arts would take away from more urgent needs like…” argument directly, we started to demonstrate how the arts add to efforts to address these needs. Arts education has been leading the way on this for decades. While still woefully underfunded and underappreciated, arts educators have successfully framed the funding conversation by demonstrating the full societal impact of an arts education. Arts education adds value (oooh, everyone in a market economy likes that term!) at both an individual and a societal level.
Arts institutions have been leveraging arts education’s fundraising potential for decades. And no wonder, arts education’s mathematical metaphor of addition has been much more effective at bringing in contributed revenue than the mathematical metaphor of subtraction that continued to frame conversations about the art itself. Despite this easily quantified difference, we continued to try to convince funders of the inherent value of the arts.
In the last several years, I’ve been buoyed by the emerging conversation about the ways that arts and culture create measurable impact across multiple complex societal challenges: public health, food justice, economic development, gun violence prevention, etc. etc. Small BIPOC arts organizations have led the way on this front. Many community groups that are not exclusively arts organizations are expanding arts and cultural programming as effective vehicles to advance their missions and deepen community relationships. And many funders are now making investments in arts and culture as tools to create measurable impact across many of their focus areas. It has been a joy for Bustling Spaces to help these artists and organizations tell their stories about how this work is creating tangible change for their communities.
This work subverts the “arts funding takes away from more urgent needs” argument. It renders the mathematical metaphor of subtraction irrelevant. By changing the metaphor, these artists were beginning to change the thinking about why funding for arts and culture makes an impact across multiple societal priorities. The actions of the Trump administration are undercutting the emergence of this powerful new metaphor for arts funding and its many potential impacts across society. In addition to directly targeting funding for these programs, Trump’s chaotic policies have renewed the pressure on both funders and arts organizations to justify arts funding when there are so many other urgent needs. Recently, in advocacy and funding conversations, I have repeatedly heard the “arts funding takes away from other urgent needs” argument as a basis for why arts funding will need to take a back seat during this crisis.
Multiplier
I propose that the arts sector addresses our current acute and progressive crises with a full-throatened embrace of the metaphor of the arts as an exponential multiplier. When we hear:
“Yes, the arts are important, but funding the arts would take away from more urgent needs like x, y and/or z.”
Let’s respond, “Yes, x, y and /or z are all urgent issues. Arts and culture, if properly funded, could have an exponential impact on our collective efforts to address x, y, and/or z.”
As humans we aren’t good at comprehending the impact of exponential growth. I recently heard a story about the power of the exponential growth curve. If I offered to give you a penny that would double in value every day for 30 days or $3 million dollars today, which would you choose?
The human brain has the ability to understand the impact of $3 million dollars. We even understand that we could invest that $3 million so that it grows significantly over time. But we really don’t have the capacity to mentally calculate the value of a penny that doubles every day for 30 days.
With exponential growth, benefits accrue slowly. The result may be imperceptible in the beginning. Over time, however, as the penny continues to double in value, the gains increase rapidly.
Figure 1: Exponential growth curve. Credit: Credit: JamesClear.com.
If you chose the penny, by the end of the month of exponential growth you would have $10,737,418.24.
Arts and culture’s ability to tell compelling stories, synthesize complex ideas, bridge divides, and gather like minded individuals make it a powerful tool for catalyzing exponential change across any number of urgent societal challenges. Most importantly art has the power to inspire. Think about, for example, the arc of theatrical inspiration that starts with underground playwrights like Charles Ludlum and Charles Busch to Larry Kramer to Harvey Fierstein, Lea DeLaria and The Five Lesbian Brothers to Tony Kushner and Scott McPherson to Will and Grace and Moonlight. This artistic line of inspiration changed our country: shaping our national response to the AIDS crisis, leading the way to gays serving openly in the military, opening the doors for the constitutional recognizition of gay marriage and so much more. That’s arts and culture’s powerful ability to galvanize exponential change.
The Trump administration’s chaotic policies have unleashed a many headed beast. There is so much damage being done on so many fronts. We face huge economic volatility, the loss of vital services and much of our social safety net, and the potential collapse of our democracy. It’s impossible to respond to it all. In addition to the many necessary triage actions that we need to take to minimize short-term damage, we need to invest in strategies with the potential to catalyze rapid change over time on an exponential growth curve. This is why funding for the arts is urgently needed and should not take a back seat during the current crisis.
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Arts as economic multiplier
For the rest of this post, I want to shift from the metaphorical to the literal level and look at the role that arts, culture, recreation and entertainment play as important economic multipliers at the hyperlocal and national levels.
The idea of the economic multiplier is central to both Keynesian economics and local economic development policy. Broadly, an economic multiplier is any economic factor that, when implemented, creates changes in many other related economic variables. Every business and economic sector has a series of linkages to other businesses and the overall economy. Backward linkages refer to the suppliers who provide the materials that the industry needs for production (and the suppliers who supply those suppliers, and the suppliers who supply them, etc). Forward linkages refer to the economic sectors where a business’ workers spend their money (and where those businesses and workers spend their money, etc). When an economic multiplier invests a dollar, the economic impact of that dollar is multiplied by the numerous transactions it triggers up and down the series of backward and forward linkages.
When it comes to economic development strategy, localities spend tremendous effort in attracting and retaining anchor institutions to act as economic multipliers for their local economies. An anchor institution with significant chains of backwards and forward linkages not only generates economic activity but encourages the money generated by that activity to circulate within that local economy with each transaction up and down the chain of forward and backward linkages. For most of the 20th century, manufacturing plants served as the most significant economic multiplier for Chicago, its surrounding communities and most of the country. As the manufacturing sector in Chicago and its surrounding communities collapsed, Chicago pivoted to the service sector, and particularly financial services, to replace manufacturers as the primary economic multipliers growing and sustaining our economy (I wrote about this in my A Tale of Neighborhoods, Part 1: The Loop essay).
Businesses and economic sectors can act as an economic multiplier at multiple geographic levels: global, national, regional, local, hyperlocal. When we think about arts, culture and entertainment as an economic multiplier we can start at the regional/city scale. Think about the role that the film industry plays on the economy of Los Angeles, or that country music industry plays in Nashville. It is because of Broadway’s power as an economic multiplier that Rudy Giuliani said immediately after 9/11: "If you really want to help New York City, come to New York. Go to a play. Spend money in New York City."
Major cultural events act as powerful short-term economic multipliers for local economies. Think about Lollapalloza in Chicago, or Art Basel Miami, or SXSW in Austin. Individual arts institutions serve as anchor institutions for their local economies: think about how essential the Stratford Festival, Oregon Shakespeare Festival, and American Players Theater are to the local economies of Stratford Ontario, Ashland Oregon, and Spring Green Wisconsin.
But it is perhaps at the hyperlocal level - where Bustling Spaces works - that the role of arts, culture and entertainment has the greatest potential impact as an economic multiplier. Small arts organizations and creative businesses are, dollar for dollar, highly effective hyperlocal economic multipliers. Unfortunately, we rarely recognize this and so it even more rarely gets the investment it deserves.
As the economy has globalized, the economic impact of traditional anchor industries has become less localized. In the early twentieth century, workers at a local factory would have spent a large portion of their income at local businesses, who in turn would spend much of their revenue at other local businesses. So, a dollar that entered into a community would circulate through the local economy many times before leaving. That’s no longer the case. Today, across almost every industry, the majority of any business' backward and forward linkages are located across the world. Businesses continue to generate the same volume of economic activity across their backward and forward linkages, but the money that is brought into a local community escapes much more quickly than it did in the past. It no longer circulates within the local economy for as long as it once did.
Unfortunately, for communities across the country, the local economic benefits of traditional anchor institutions are much less than they were in the past. This is especially true for historically disinvested communities which experience significant retail leakage as residents are forced to leave their neighborhoods to access the shops they need. That is not the case with small arts organizations and creative businesses. Most of our backward and forward linkages remain local. A small arts organization producing a concert in their community will hire local musicians, employ local audio engineers and local ushers, rent equipment from local suppliers, purchase food from a local caterer and flowers from the local florist. The audiences who attend that concert will purchase dinner from local restaurants, shop at local stores, and have drinks at local bars. The artists and local suppliers will spend much of the money they earn in their communities. Sure, much of the earnings of the local artists will eventually escape to Amazon purchases and Netflix subscriptions. But much more of the overall economic activity will circulate within the hyperlocal economy for longer than nearly any other industry.
The amount of money generated by a small arts organization may be quite small compared to a multinational corporation. But on a dollar for dollar basis, arts organizations and creative businesses are highly effective economic multipliers for their hyperlocal community. The impact of small arts organizations and creative business as hyperlocal economic multipliers is magnified even further when a community is host to numerous arts organizations, creative businesses and community groups creating cultural programming. Formal and informal cultural districts create economic ecosystems that multiply the number of local backward and forward linkages, generating more economic activity and enabling it to circulate locally longer.
Here on Chicago’s Southside, the Obama Presidential Center (OPC) is scheduled to open in 2026. Whatever one may think of it, the OPC will be a powerful anchor institution and driver for tourism. As I wrote in A Tale of Two Neighborhoods, Part 2: Bronzeville, Southside neighborhoods near the OPC including South Shore, Woodlawn, Englewood, Bronzeville are experiencing an extraordinary blossoming of cultural enterprises. In Bronzeville alone, there are more than two dozen new, expanding or planned arts, culture and heritage venues and businesses. If implemented, this thriving local creative economy would amplify the OPC’s economic multiplier effect, ensuring that its economic benefits circulate longer through these communities and directly benefit existing community residents. This burgeoning “Second Chicago Renaissance” offers a once in a generation opportunity for equitable economic development. Chicago should go all in.
It is important to note that while arts organizations and creative businesses can have an outsized impact as hyperlocal economic multipliers, that does not necessarily mean that they can become economically sustainable on their own without ongoing contributed revenue from public and private funders. In fact, it is the very reason why arts organizations and cultural programs are so effective at ensuring that economic activity circulates longer in their hyperlocal economies that makes it so difficult to sustain them financially. It takes an extraordinary amount of local people and local suppliers to mount a theatrical production or a dance season or an annual street festival.
Earlier this month, the Hyde Park Herald reported that the Silverroom Block Party has accumulated over $600,000 in debts. Over two decades, this beloved annual summer festival generated millions of dollars in economic activity for local businesses along the 53rd Street Commercial Corridor. Its closure in 2023 represented a huge loss, both culturally and economically. Now, Silverroom’s owner, Eric Williams is trying to raise $200,000 from the community to ensure that the Silverroom remains open. When it comes to equitable economic development, funders and advocates need to focus on an arts organization or creative business’ outsized hyperlocal impact, not on its relative sustainability.
Silverroom Block Party. Photo credit: Silverroom.
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More data needed
Unfortunately, we don’t have much data to demonstrate the full impact of arts and culture as economic multipliers for their local communities. As a sector, we have a desperate need for better data. What we do have is incredibly compelling. As I’ve cited before, arts and culture generate $233 million of total annual economic impact for The Loop and create nearly 6,000 full time equivalent jobs (Loop Alliance, 2019). We need to harness the data we do have to make our case for the arts as an exponential multiplier, even as we work to gather more of it.
While working on this post, I found an 2019 Economic Policy Institute study on employment multipliers for the US economy that blew my mind. The study attempts to determine which industries would cause the largest impact on the overall US economy if they collapsed. The study uses two methodologies. The first methodology “estimates the ripple effects of a given number of jobs being lost directly in an industry.” The study takes an assumed direct loss of 100 jobs, and then calculates the total number of jobs that would be lost across that industry's backward and forward linkages. Using this methodology, 100 lost jobs in the arts, culture and entertainment industries would result in 378.5 total jobs lost - less than utilities, real estate, or manufacturing but more than construction, transportation, health care and social services, or food and accommodations.
Surprised? Wait til you see the results of the second methodology.
The second methodology “takes a given dollar value of final demand for an industry’s output and calculates how much of this final demand spills over into backward- and forward-linked industries. An example would be assessing the impact of a fall of $1 million in final demand for auto (that is, $1 million less being spent on cars by consumers). This fall in final demand would cost jobs directly in the auto production industry, but would also cause demand to fall in supplier industries and in forward-linked industries that rely on automobile workers (and on workers in the supplier industries) to purchase their output.” Here are the results:
Figure 3: The ripple effect of jobs lost per $1M in final demand, per sector. Source: Economic Policy Institute.
A $1M drop into final demand for arts, culture and entertainment would result in a greater level of total job losses than any other industry!
I had a little bit of trouble deciphering the total number of lost jobs - we calculate it by adding the Direct jobs and Total indirect jobs columns. So for arts, entertainment, and recreation the total job loss would be 29; the next highest is accommodation and food services at 25.7 and real estate and rental leasing at 24. For the arts sector, final demand for our output consists of both our earned revenue and our contributed revenue, so Chicago is looking square in the face of a drop of hundreds of millions of dollars in arts sector revenue.
As the study’s author writes, “one lost dollar of economic output or one lost job is not the same as another.” The current losses to the arts sector will have an outsized impact on a dollar by dollar basis. Providing economic relief to the arts sector makes good policy sense.
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In a time of extreme crisis like this, it can feel fruitless to focus on something as intangible as shifting the metaphors we use to argue for arts funding. Arts organizations are closing every week. In addition to the many necessary triage actions that we need to take to ensure that our institutions survive day-to-day, we also need to prioritize strategies that can return our sector to thriving.
Shifting the metaphors we use to argue for arts funding can produce benefits to our sector on an exponential growth curve. It may take time to gain traction, there may be little tangible impact at first, but changing our metaphors has the potential to catalyze a rapid, exponential increase in arts funding over time.
Do you have a topic at the intersection of culture and urban planning that you’d like to write about? We welcome you to reach out to us at info@bustlingspaces.com.
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