Report: Philly’s arts sector contributes $3.3 billion to the local economy each year

The Barnes Foundation, newly reopened on the Benjamin Franklin Parkway.

Southeastern Pennsylvania’s arts and cultural sector has a $3.3 billion yearly impact on the local economy and is the number one region in the country for arts-related job creation, according to a report released today by the Greater Philadelphia Cultural Alliance.
The arts also generate $169
million in annual tax revenues – $94 million for the state government
and $74 million municipally.

“In many places, culture is viewed as an amenity,” president Tom Kaiden said in a statement. “Here in Philadelphia, it’s interwoven into the fabric of everything we do. Arts and culture is a vital regional asset that supports thousands of jobs, benefits business in every industry and helps grow our economy.”

The report, “The Arts, Culture and Economic Prosperity in Greater
Philadelphia,” breaks down the $3.3 billion in annual spending by local cultural organizations and audiences into direct expenditures, which total $1.4 billion, and indirect expenditures created as those dollars travel through the economy, generating another $1.9 billion.

The 345 local nonprofit arts and cultural organizations surveyed by the report contribute $875 million each year in direct expenditures, including:

  • $290.9 million on salaries
  • $266.8 million on physical locations, such as the purchase or rental of properties
  • $97.5 million on artistic and programmatic services, such as putting on productions and exhibits
  • $89.5 million on professional services
  • $68.5 million on employee benefits
  • $61.2 million on communications, such as marketing events and shows

Of the 2,039 patrons surveyed at 78 arts and cultural events, audience members directly contribute $521 million each year to the local economy, spending an average of $30 per person per event in addition to its ticket price. That includes:

  • $237.8 million on meals before or after an event
  • $84.3 million on overnight lodging
  • $65.7 million on ground transportation
  • $53.5 million on refreshments during the event
  • $46.3 million on souvenirs
  • $16.2 million on clothing and accessories
  • $4 million on event-related childcare
  • Another $13.4 million on undefined, “other” event-related expenses.

Though 29 percent of annual arts events attendees are tourists, they account for nearly 44 percent of total audience spending, spending on average $45 per person during each excursion – nearly twice as much as the typical resident.

Examples of the $1.9 billion in yearly indirect culture-related expenditures – $1.2 million made by organizations and $655 million made by audiences, include:

  • Expenses and services associated with businesses benefiting from cultural organizations and the events they stage, such as restaurants who hire contractors for repairs and pay them with the money they made from a recent concert.
  • Expenses and services associated with hotel room rentals, such as cleaners, housekeepers, linen services, product suppliers and delivery people.
  • Expenses and services associated with souvenir manufacture and sales, such as clerks, screenprinters, graphic designers, apparel distributors, paper suppliers and warehouse, factory and sales staff.
  • Expenses and services associated with restaurant patronage, such as waiters, cooks, food suppliers and purchasing agents.

Comparing Philadelphia to 181 other regions, the report finds that
its cultural sector supports nearly 44,000 full-time jobs each year
about 11 jobs per thousand residents, double the national average –
putting the city first in the nation for arts-related job creation.

While 7,600 of those jobs are in the cultural fields themselves, an
additional 36,100 are created in other industries but supported by arts
and culture spending, such as marketers, accountants, consultants,
contractors and hospitality workers. The industries that most benefit from this job creation are:

  • Finance, insurance and real estate, which benefit from $287.2 million in expenditures made by arts and cultural organizations and audiences each year
  • Accommodation and food services, which receive $282.5 million each year
  • Management and business support, which make $273.4 million annually
  • The product manufacturing industry, which makes $269.3 million per year
  • Entertainment and recreation, which generates $137.9 million annually
  • Educational and health services, which makes $136.9 million each year
  • The retail trade, which receives $102.6 million yearly

Of the yearly $1.04 billion in household income returned by the region’s cultural sector:

  • $490.3 million goes to Philadelphia residents, with the highest
    share of that – $53.4 million – going to residents of the near Northeast
    Philadelphia (closely followed by West Philadelphia, at $52.2 million)
    and the lowest arts-generated income made by residents of the
    Roxborough-Manayunk area, at $19.1 million
  • $349.5 million is divided between those living in the suburban counties
    of Chester, Bucks, Delaware and Montgomery, with Montgomery County
    coming in as the top arts-related earning spot with $119.9 million in
    household incomes, and Chester County clocking in at the lowest with
    $60.6 million.
  • $103.1 million goes to New Jersey residents.
  • $70.6 million goes to residents of other Pennsylvania counties.
  • $13.6 million goes to Delaware residents.
  • $12 million goes to residents of other areas.

Finally, the report breaks down economic impact by cultural discipline within the arts sector, finding:

  • Museums, visual arts, historic and scientific organizations combined have a $2.08 billion yearly economic impact
  • Performing arts – including dance, music and theater – have a combined $675.1 million yearly economic impact
  • Community arts and education have a combined $544.8 million economic impact each year
  • Councils and services have a combined $16.7 million annual economic impact

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