An input-output analysis model was customized for each of the 341 participating communities and regions to determine the local economic impact of their nonprofit and public sector arts and cultural organizations and their audiences. Americans for the Arts, which conducted the research, worked with a highly-regarded economist from the Georgia Institute of Technology to design and customize the input-output models used in this study.

Because of the variety of communities studied and the rigor with which the AEP5 study was conducted, nonprofit and public sector arts and cultural organizations located in communities that were not part of the study can estimate their local economic impact. Estimates can be derived by using the Arts & Economic Prosperity 5 Calculator.

Yes, the Arts & Economic Prosperity 5 study makes a strong argument to elected and appointed government leaders.

Any time money changes hands, there is a measurable economic impact. Social service organizations, libraries, and all entities that spend money have an economic impact. What makes the economic impact of arts and cultural organizations unique is that, unlike most other industries, they induce large amounts of event-related spending by their audiences. For example, when patrons attend a performing arts event, they may purchase dinner at a restaurant, eat dessert after the show, and return home and pay the babysitter. These expenditures have a positive and measurable impact on the economy.

Like all other industries, the nonprofit arts and culture experienced significant economic headwinds during 2010. Between 2005 and 2010, unemployment rose from 5.1 percent to 9.7 percent. The Consumer Confidence Index fell from 101 to 54. Home foreclosures tripled to 2.9 million. Nationally, nonprofit arts and culture organizations demonstrated resiliency throughout The Great Recession. Some major institutions were forced to close their doors, but many new organizations were founded.

No, grant dollars should not be double-counted in the analysis. The Organizational Expenditure Survey instructed the responding organizations to exclude any dollars that were awarded as grants or contracts to other nonprofit arts and culture organizations. Similarly, researchers removed from the economic impact analysis expenditures that were identified in Cultural Data Project profiles as grantmaking dollars.

When many people hear about an economic impact study, they expect the result to be quantified in what is often called an economic activity multiplier. The multiplier is an estimate of the number of times a dollar changes hands within the community (e.g., a theater pays its actor, the actor spends money at the grocery store, the grocery store pays the cashier, and so on). It is quantified as one number by which expenditures are multiplied. The convenience of the multiplier is that it is one simple number.

In 2015, Americans for the Arts published a call for communities interested in participating in the AEP5 study. Of the more than 300 organizations that expressed interest, 250 agreed to participate and complete the study’s four participation criteria. Some partners requested that multiple study regions be included in their study (for example, a county as well as a specific city within the county). As a result, the 250 study partners represent a total of 341 participating study regions.