An evolving art: Calculating museums' economic impact

Museums are ubiquitous among modern human civilizations. They represent some of the most long-standing, recognizable institutions to showcase objects, places, peoples and creatures of cultural and historical significance.

A prevailing opinion of museums' value is how well they perform traditional core responsibilities, such as their programming, preservation activities and public-education events, said Jeff Pettus, artists and communities senior program director at the North Carolina Arts Council in Raleigh.

"We're lucky that North Carolina has so many institutions that do those things well," Pettus said.

But museums' economic value to the regions they serve, and society at large, continues to evolve.

Some entities track those types of data and some don't. Economic development officials often lump museums under a general tourism heading when analyzing their impact.

Arts and culture organizations typically don't make museums a discrete category when examining their economic productivity.

More and more individual museums or entities that represent a certain kind of museum have done their own economic impact studies.

The American Alliance of Museums, a nonprofit advocacy organization in Washington, D.C., offers museums an online template to create individualized economic impact statements.

"Now more than ever, legislators and funders need to know just how your museum impacts your community," the form's introduction states. Filling in data points will help museum executives "make the case about the value of your museum in your community."

Laura Lott, the alliance's incoming president and CEO, who starts June 1, said the types of travelers who visit museums — including institutions such as historic houses, science centers, zoos and the like — spend 63 percent more than other leisure travelers.

"We estimate that museums directly contribute about $21 billion annually to the U.S. economy," Lott said.

Museums also have, in recent years, undertaken a responsibility that the public sector traditionally had overseen: education.

"Museums contribute about $2 billion to education," she said. "They're doing core-education programs and spending on students who are coming in do that work. School superintendents have told me that museums have taken on some of the education spending burden that used to be handled by the government. Museums are now making those investments."

Linda St. Thomas, chief spokeswoman for the Smithsonian Institution in Washington, D.C., added, "Many museums are destinations for families, school groups and adults. Sometimes, they will be staying at nearby hotels or motels and certainly they will be eating in restaurants. All of this adds to the region's economic health."

Any money people spend beyond their museum visit would be defined as "indirect" economic impacts.

Nationally, museums "probably add billions more in indirect impacts by what they're doing when they travel to destinations," Lott said.

St. Thomas identified more examples, such as using public transportation, taxis or Uber, a transportation company based in San Francisco.

Susan Kluttz, the state Department of Cultural Resources secretary, agreed with Lott's point on museums being an educational focal point.

"They are the cornerstone of informal education in the North Carolina — and it takes both classroom and informal education to build 21st century skills," she said.

But Kluttz also spoke to a role museums play that people often overlook.

They "are one of the primary institutions that preserve those stories that help provide both local communities and the entire state with their shared identities, images, and what in the business world is known as 'brand identity' — the foundation of economic prosperity," she said.

Officials at the state Department of Cultural Resources "have not performed an inventory in some time" that shows how many museums exist in North Carolina and their locations, said Cary Cox, a department spokeswoman.

But a search for the keyword "museum" yields 8,948 hits on the North Carolina Exploring Cultural Heritage Online website.

Data collected by Economic Modeling Specialists International, an Idaho-based labor-market statistical analysis company, and the Denver-based Western States Arts Federation, a nonprofit dedicated to advancing and preserving the arts, show a slice of the significance of museums to Buncombe and Haywood counties.

A total of 99 museums in those counties employed 1,597 people in 2013. The museums collected revenues of about $133 million.

Economic Modeling Specialists International is a subsidiary of the Chicago-based CareerBuilder, a job-search company, which the Virginia-based Gannett Co. owns.

Gannett owns the Asheville Citizen-Times.

Though it did not break out museums separately, a 2014 study commissioned by the Blue Ridge National Heritage Area Partnership found that "heritage tourism" annually contributed $2.39 billion to the Western North Carolina economy, supported more than 30,000 jobs and generated $176.5 million in state and local revenue.

Congress and President George W. Bush created the nonprofit partnership in 2003. Its mission, in part, is to preserve and develop the natural, historical, and cultural resources of the Blue Ridge Mountains and foothills in Western North Carolina.

Heidi Reiber, director of research for the Asheville Area Chamber of Commerce, said Buncombe County is "very specialized" in the industry of museums and historical sites.

"We estimate nearly 1,100 jobs in the industry and have 8.5 times the concentration of jobs compared to the national average," Reiber said. "If you removed this industry from our economy, the ripple effect could have an impact of removing another nearly 700 jobs and $57 million labor income annually."

Economic impact by the numbers

Museums are economic engines on a national scale, officials from the American Alliance of Museums, a nonprofit museum-advocacy organization in Washington, D.C., say.

•Museums employ more than 400,000 Americans.

•Museums directly contribute $21 billion to the U.S. economy each year. They generate billions more through indirect spending by their visitors.

•78 percent of all U.S. leisure travelers participate in cultural or heritage activities. These travelers—including visitors to museums — spend 63 percent more on average than other leisure travelers.

•The U.S. Bureau of Economic Analysis has found that arts and cultural production constitute 3.2 percent of the nation's entire economy, a $504 billion industry.

•The nonprofit arts and culture industry annually generates over $135 billion in economic activity, supports more than 4.1 million full-time jobs and returns over $22 billion in local, state and federal tax revenues.

•Governments that support the arts see an average return on investment of over $7 in taxes for every $1 that the government appropriates.

Source: American Alliance of Museums, Washington, D.C.

According to Asheville Art Museum officials:

•Direct expenditures by Asheville Art Museum average over $1 million annually, create and support the equivalent of 39 full-time jobs in the area and generate $40,703 in local government revenue and $47,790 in state government revenue.

•The museum in 2013-14 welcomed over 70,000 on-site visitors, excluding pre-K-12 students, averaging $34.49 in event-related spending per person, for a total of $2.5 million. That money supports the equivalent of an additional 59 area jobs.

•A 2007 study commissioned by the museum showed that the museum generated $2.7 million in local spending in 2006.

•In the last year, museum activities and visitors generated $3.5 million in direct and indirect economic impacts on the region. That total includes almost $166,000 in local revenue and $191,000 in state revenue. Those activities also supported the equivalent of 98 area full-time jobs.

•The 1992 opening of Pack Place, which includes the Asheville Art Museum, has contributed to surrounding average property values to skyrocket. Property values on 18 surrounding parcels in 1986 ranged from $3,200 to $4,462,600. In 2014, those property values ranged from $198,300 to $10,761,000.