Burying the Lede: When Arts Recovery Headlines Reinforce Inertia
You've seen the headlines. And, like me, your first reaction was probably "wow, this is great!" Mine was too—until I dug deeper.
The arts sector grew at twice the rate of the total economy!
We contributed $1.2 trillion to the GDP in 2023!
Our industry represents 4.2% of the total GDP!
At first glance, these look like incredible wins. But there's more beneath the surface.
Here's what's actually happening—and why clearing away the statistical fog is essential for arts organizations to build sustainable futures.
When "Explosive Growth" Means Nothing
In April, the NEA announced that the growth rate for the arts and culture sector between 2022 and 2023 was more than double that of the U.S. economy during that same time.
The truth? When an entire sector essentially shuts down, any recovery looks like explosive growth in percentage terms.
If your organization's revenue dropped from $100,000 to $5,000 during pandemic closures, then recovered to $50,000, you could legitimately claim "900% growth!" while still operating at half your original capacity.
This is exactly what's happening with the "twice the rate of growth" statistic. According to the NEA, performing arts organizations grew 31.6% between 2022 and 2023. The catch? Despite this growth they remained 12.3% below 2019 levels. Museums, too.
That rapid growth is just rebound from shutdown—not a real win. It’s simple math: when you crash 90% and then double, you're still down 80% from where you started.
Behind the $1.2 Trillion Figure
Another statistic that’s been making the rounds is that arts & culture contributed $1.2 trillion to the GDP in 2023.
What’s not highlighted is that this number is misleadingly broad, with multiple categories that have little in common with traditional arts organizations. In fact, it’s padded with 25+ industries that are NOT what arts leaders mean when we say arts & culture.
The list will surprise you, I guarantee it.
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Performing Arts
Performing Arts Companies
Promoters of performing arts and similar events
Agents/Managers For Artists
Independent Artists, Writers, And Performers
Museums
Design services
Advertising
Architectural Services
Landscape Architectural Services
Interior Design Services
Industrial Design Services
Graphic Design Services
Computer Systems Design
Photography and Photofinishing Services
All Other Design Services
Fine Arts Education
Education Services
Art support services
Rental and Leasing
Grant-Making And Giving Services
Unions
Government
Other Support Services
Information services
Publishing
Motion Pictures
Sound Recording
Broadcasting
Other Information Services
Manufacturing
Jewelry and Silverware Manufacturing
Printed Goods Manufacturing
Musical Instruments Manufacturing
Custom Architectural Woodwork and Metalwork Manufacturing
Other Goods Manufacturing
Construction
Wholesale and Transportation Industries
Retail Industries
All Other Industries
The top five industries contributing to this $1.2T figure?
Web publishing and streaming
Broadcasting
Government
Publishing
Motion picture and video industries
In other words, this data lumps Netflix and Spotify in with your local symphony orchestra and opera company, with their growth overshadowing the real challenges facing traditional arts organizations.
It's like claiming the restaurant industry is healthy by pointing to McDonald's profits while local bistros close their doors. The aggregate success tells you nothing about what's happening to the organizations people actually care about.
To put this in perspective: web publishing and streaming contributed $181.5 billion to the economy in 2023, while performing arts organizations—symphony orchestras, opera companies, and theaters—contributed just $14.2 billion. That's a 13-to-1 ratio.
The Attendance vs. Revenue Disconnect
Despite these aggregate growth statistics, the organizations most people think of as "the arts" are facing a financial crisis that contradicts the sector's supposed recovery.
According to SMU DataArts' recent analysis of over 6,500 nonprofit arts and cultural organizations, total revenue for the sector in 2024 fell below pre-Covid levels. When accounting for inflation, revenue dropped 36% since 2019—hardly the picture of a thriving industry.
The financial stress is widespread. Nearly half of arts organizations (44%) ran deficits in 2024, compared to 36% in 2019. Working capital decreased for the third consecutive year, with four in ten organizations maintaining just three months of operating expenses or less—a precarious position that leaves little room for unexpected challenges or strategic investments.
Organizations have responded by making deep cuts. Staff counts declined to their lowest point in six years, with personnel expenses falling 23%. Yet despite these drastic measures, organizations are still struggling financially.
Here's where the story gets more complex: SMU DataArts shows that paid attendance actually grew 13% from 2023 to 2024, while free attendance increased 22%. It’s tempting to celebrate this growth, but a 13% increase in paid attendance simply cannot offset a 36% decline in inflation-adjusted revenue.
IMPACTS Experience projections suggest this attendance recovery will continue, with performing arts organizations expected to reach 90.6% of 2019 attendance levels by the end of 2025.
But, as IMPACTS Experience points out, the pandemic merely exposed existing problems. Performing arts organizations were already losing ground as their traditional audiences aged out without sufficient replacement—a crisis that predates COVID-19 and explains the sector's ongoing struggles.
Will performing arts organizations ever return to pre-pandemic attendance levels? “It’s possible that they never will,” says IMPACTS Experience, “without a significant industry change.”
Why This Matters: Beyond the Numbers
These broad-brush growth statistics create unintended consequences. When funders, boards, and policymakers believe recovery is underway, they're less likely to support the fundamental changes needed for long-term sustainability.
The change our sector needs:
Instead, the false optimism encourages:
Continued reliance on (squeezing more from) shrinking audiences
Chasing the wrong audiences based on product affinity rather than actual need
Addressing these fundamental issues requires organizations to rethink their approach to audiences, business models, and value creation.
Business as usual is a dead end.
Honest Assessment, Strategic Innovation
Real recovery requires abandoning comfortable metrics and facing uncomfortable truths. Organizations that acknowledge their market realities can begin building models designed for today's consumer.
It's time to clear away the statistical fog and start building arts organizations designed for the world as it actually is—not as we wish it were.
Copyright © Ruth Hartt. September 22, 2025.
