During FY2015, the arts and culture industry in Missouri generated $1.039 billion in total statewide economic activity. The $602.9 million spent by organizations employed people locally, bought goods and services from local businesses, and attracted tourists. The $436.1 million in additional spending by audiences pumped revenue into restaurants, hotels, retail stores, parking garages, and other local businesses. The combined spending by organizations and audiences supported 31,925 full-time equivalent jobs that created $805.6 million in household income for local residents, and delivered $89.6 million in revenue to local and state governments.
Nonprofit arts and culture organizations are active contributors to their business community. They are employers, producers, and consumers. They are members of their local Chamber of Commerce and are key partners in the marketing and promotion of their cities, regions, and states.
The $602.9 million directly spent by Missouri nonprofit arts and culture organizations during FY2015 reached deeply into their communities and far beyond. Organizations paid employees, purchased supplies, contracted for services, and acquired assets within their community. These actions, in turn, supported jobs, created household income, and generated revenue to the local and state governments.
For instance, when a symphony paid its harpist or an art museum paid its accountant, each person’s salary, the associated government taxes, and the full-time equivalent status represented the direct economic impact.
Arts and culture, unlike most other industries, also leverage a significant amount of event-related spending by audiences. For example, when patrons attend an arts event, they may park their car in garage, buy dinner at a restaurant, eat dessert after the show, and pay a babysitter. This spending generates related commerce for local businesses such as restaurants, parking garages, hotels, and retail stores.
Direct and Indirect Impacts
Direct economic impacts create indirect impacts as ripples of spending spread through the local economy. Consider the path of a purchase of a five-gallon bucket of paint.
A theater company buys paint from the local hardware store for $100. This is the direct economic impact of the expenditure.
The hardware store then uses some of the $100 to pay the salary of the sales clerk, who spends some of his salary at a grocery store, which uses some of the money to pay its cashier, who then spends some of the money to pay her rent—and so on.
The hardware store also uses some of the $100 to buy services such as electricity and then to buy a new bucket of paint from the factory to restock. The utility company and the paint factory use the money to buy goods and services from other local business—and so on.
The total economic impact is the combination of the direct economic impact and the indirect economic impact.