COVID-19 threatens health of arts organizations; some face bankruptcy
By Guest Columnist LARA SMITH, managing director of Dad’s Garage Theatre
I work as the managing director of Dad’s Garage Theatre (we specialize in improv and scripted comedy), and even with our very robust financial protections we are still facing financial challenges in this crisis.
Over the past three years, we have built up a $100,000 cash reserve, diversified income streams, and a line of credit; we can weather a shut down through June without other cash infusions, but we will lose up to $300,000 in this endeavor.
Unfortunately, many smaller and newer arts organizations may not have the cash on hand or financial fortitude to make it. I know theater directors who are having to ask for rent forgiveness from landlords, and still are worried coronavirus will bankrupt their nonprofit organization.
This is why any economic relief packages put forth on the local, state, and federal level should take into considerations arts organizations and artists as deserving of funds. Arts organizations are set to receive roughly $300 million – a small fraction of the $2 trillion sum—from the Coronavirus Aid, Relief, and Economic Security Act. Already, pundits and politicos have started crowing about how this is a waste of taxpayer money.
But investing in arts and culture helps our communities thrive. Consider this: have you watched a Netflix show during quarantine? Has your kid drawn along with Mo Willems on his Instagram lunch doodle sessions? Have you turned off the news so you could enjoy listening to music, just for a moment? Well, you have enjoyed the arts. In times like this, we turn to arts and culture as a reprieve from the stressful world. Arts make life vibrant and enjoyable. They make life worth living.
Cutting arts organizations and artists out of economic relief packages would be a mistake, especially since our sector is central to building a strong economy. Arts and culture organizations (theaters, music venues, museums) have a symbiotic relationship with many other industries, such as tourism, hotels/hospitality, travel, restaurants, and nightlife. “Dinner and a show” is a real thing – people want to go out and have a great night on the town, they want to see a show and have a delicious dinner. Music venues and museums draw in tourists, which helps our hotel and airline industries. When looking for new corporate headquarters, companies often consider the density of arts organizations – they know their employees want to live in a vibrant, fun, enjoyable town.
The advocacy organization Americans for the Arts recently published the ”Arts and Economic Prosperity V” report, and partnered with Atlanta Regional Commission to measure fiscal impact of the arts in metro Atlanta. This study found that, “The nonprofit arts and culture sector is a $719.8 million industry in metro Atlanta – one that supports 23,514 full-time equivalent jobs and generates $64.5 million in local and state government revenue.” As a medium-sized arts organization with a budget of around $1.8 million that employs 45 FTE individuals, Dad’s Garage contributes to this vital sector of our local economy.
Arts organizations, like any business, contribute to their economy through spending locally. My organization, like most theaters, builds several sets a year for our plays. When we spend $100 on a drum of paint, part of that $100 goes to pay the sales clerk who ran the transaction. That sales clerk spends that money on groceries at her neighborhood store. The grocery store takes that money and pays their employees, who then pay rent. All along the way, taxes are being taken out to fund local infrastructure and government.
According to AEP-V, “Spending by nonprofit arts and cultural organizations totaled $434.8 million in metro Atlanta during fiscal year 2015.” This money moves through our local economy and supports a variety of businesses and government initiatives.
When people come to see a show at Dad’s Garage, they often make a night of it. They have pre-show dinner down the street at one of our local restaurants like Bell Street Burrito or Ammazza Pizzeria, and after they leave the theater they go to a neighborhood bar such as Sister Louisa’s Church for a drink. In this way, the economic impact of seeing a live theater show is amplified and pumps more money into our local economy. “Event-related spending by these attendees totaled $285 million in Metro Atlanta during fiscal year 2015, excluding the cost of event admission,” reports AEP-V.
For these reasons, the arts industry deserves robust financial relief in this time of crisis. We are part of the economic engine of our community, and our existence drives money to other complimentary industries as well.
Note to readers: Before joining Dad’s Garage Theatre as Managing Director in 2012, Lara Smith served as Managing Director of Actor’s Express from 2010-2012.