Thursday, June 28, 2012

Benchmarking A Destination’s Non-Profit Arts & Culture Sector!

Unlike commercial varieties which tend to make communities more alike, non-profit arts and culture sectors have the potential, when properly cultivated and aggressively promoted, to contribute significantly to a community’s distinctive sense of place and appeal.

That’s why I hope the community-destination marketing organization execs (DMOs) representing 139 participating cities, towns and counties and another 10 representing states are devouring input-output economic impact reports prepared through the Americans for the Arts (AFTA) to measure the non-profit arts and culture sectors in their destinations.

Even if DMOs haven’t already been using input-output to measure the overall impact of visitors on their communities as the Durham Convention & Visitors Bureau (DCVB), where I worked until retiring a few years ago, has since the 1990s or lobbied their community’s early involvement in the AFTA initiative as DCVB did, the reports and the deeper data behind them are invaluable, straight-forward and insightful and well worth perusal.

Through much more comprehensive analysis than is done in similarly-sized communities, DCVB had long ago documented that 60% to 70% of overall audiences for sports and entertainment events in Durham are visitor related, comprised of non-residents traveling here on overnight stays and day trips for purposes other than work.

So it wasn’t surprising when the AFTA analysis for Durham confirmed that visitors also generate 55% of the attendees and 76% of direct event-related expenditures at non-profit arts and cultural events. What was surprising and valuable as benchmarks, I’m sure, is that the Durham average for visitor-related attendees is significantly higher than:Non-profit Arts & Culture - Durham NC

  • the national average of 31.8%
  • 85% higher than the average for the eight out of North Carolina’s nine largest counties participating
  • 96% higher than the average for nearby counties and towns

Clearly, communities may vary, even when proximate, in the visitor-worthiness of their respective non-profit arts and culture sectors, the prominence with which the sector’s offerings are interwoven into destination marketing as part of the community’s distinctive appeal and character and the degree to which the sector must compete for audience and resources with mainstream commercial venues and events.

While studies show that nearly all visitors are drawn first to the appeal of the overall destination, when curated as part of the telling of its story, the fact is that, if Durham had not had these non-profit arts and culture events available as part of its community appeal, 59.2% of the visitor-related attendees at events here may have traveled somewhere else instead.

Visitors are motivated much more by distinctive and place-based arts and cultural events in a destination than by events that can be viewed anywhere and everywhere at anytime.

While a consistent link was not statistically apparent between existence of local universities and visitor-related attendance at non-profit arts and culture events, it was intriguing to note that Durham’s visitors are 32% more likely to have Doctoral degrees than the average for the largest counties in North Carolina and five percentage points higher than the average for surrounding counties and towns.

More 6 out of every 10 visitor-related attendees at a Durham non-profit arts and cultural event had attained a Master’s degree or higher in education.

Of equal, if not more, significance, though not truly economic value-added is what’s called “retained tourism” meaning that 37.4% of the Durham residents who make up 45% of the audiences at non-profit arts and cultural events would have traveled elsewhere had they not been available here.

The AFTA input-output computations are conservative and properly net out the dollars spent outside the local economy for goods and services or wages paid to non-resident employees, known as “leakage,” and provide the reader both the impact from local audiences which is a recirculation of dollars that would have likely been spent locally for some other purpose and the true “value added” to the economy by visitors.

No one deserves more credit for Durham’s involvement in the AFTA initiative than the Durham Arts Council along with the 56 out of 83 eligible non-profits that participate in the initiative, giving Durham a 57% participation rate compared to the national average of 43.2%.

DCVB also deserves credit for its unparalleled partnership with Durham’s non-profit arts and cultural sector in other ways beyond helping to inform this analysis including publicity via the Durham New Service, maintaining the community’s comprehensive inventory of cultural organizations and facilities, and compiling and promoting the community’s official event calendar, as well as generating volunteers through its more than 2000+ Durham Wayfinders.

DCVB has also become skilled over the years on how to deduct “leakage” from economic estimates it performs on behalf of specific events, thereby providing data that is relied upon by local government during the budget process.

The quality and vibrancy of Durham’s non-profit arts and culture sector is critical to the community’s economic vitality, but it is also extremely reliant on underwriting from Durham-based businesses, corporations and universities.

The data in the report is documentation of the return on investment for those contributions which are all too often diluted by the incessant foraging here by organizations and events located elsewhere including many in surrounding cities and counties.

The report is also inspiration to local governments, illustrating the return on investment in local tax revenue from contributions to the non-profit arts and culture sector even though these contributions are made using revenue from visitors, not local taxpayers.

There are nearly 120,000 non-profit arts and cultural organizations nationwide playing a pivotal role in the unique personality of their communities and as an economic engine for America.

The audience impact alone of non-profit arts and cultural events nationwide is $74 billion, $24 million of which is generated by overnight and day trip tourism.  I count as one of my final rewards before retiring as CEO of the DCVB, a role in forging a partnership between Destination Marketing Association International (DMAI) and AFTA.

This partnership is now clearly symbolized by recognition of DMAI on the back of AFTA’s report for Durham.

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