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Corporate Giving


When the Metropolitan Museum of Art needed a new president, in 1999, they did not ask an art historian, or even an arts manager; instead, they asked David McKinney, former president of IBM Europe. In the heady days of the 1990s, when corporate funding for the arts reached unprecedented levels, it made sense to appoint a businessman as helmsman for one of the world's richest museums.

Now, with corporate profits down sharply and a new Wall Street scandal each week, the marriage between corporations and culture seems uncertain. Thus it was with palpable anxiety that cultural fundraisers gathered on June 20 to hear Citigroup Foundation president, Charles V. Raymond, American Express Foundation president, Mary Beth Salerno, and senior vice president for corporate social responsibility at JPMorgan Chase, Michael Feller, discuss their companies' commitments to the arts.

The trio's message was upbeat: in their corporations, at least, philanthropy doesn't follow profitability. When the market is down, giving doesn't drop off, just as in really good times -- e.g., the late 1990s -- it doesn't go up as dramatically as profits. By keeping some charitable funds in reserve, these corporations are able to be reliable partners to arts groups over time. And yet, overall, corporate funding did go up 30 percent from 1995 to 1999, and it is likely to decline some in the next few years.

In addition to the considerable tax benefits, corporations will continue to fund the arts because it is relatively cheap, and it makes good public relations sense. This summer's River to River Festival, an ambitious line-up of outdoor concerts and walking tours in Lower Manhattan, is sponsored by, among others, the Port Authority, World Financial Center, New York Stock Exchange, and, most prominently, American Express. The festival is part feel-good, family-friendly urban party and part advertisement for the solidarity and strength of the Lower Manhattan business community. This kind of corporate sponsorship taps in to the post-9/11, post-Enron sentiments that there is more to life than numbers--and more to corporations than greed and the bottom line. Citigroup's "Live Richly" ads remind us to "Live within your means; sing beyond your range" and that "You don't need a lot of money to toot your own horn; you need a horn." Both ads tout Citigroup's funding of a concert series.

Advice to Fundraisers

If these days corporations need to blanket themselves in culture, many cultural groups are in desperate need of partners. To strengthen their financial positions, many say, arts institutions both large and small should follow the corporate example: "Form partnerships," advises JPMorgan's Michael Feller. Just as companies merge to reduce costs and maximize profits, artistic partnerships can pool basic resources -- like office space and equipment, or marketing budgets -- to reduce overhead, increase visibility, and maximize bargaining power. (Many groups are already doing this)

Judith A. Jedlicka, president of the Business Committee for the Arts, says that arts groups should focus on making partnerships at the small, local level. Companies with budgets of under $1 million a year, including many printers and small manufacturers, comprise the overwhelming majority of all corporations, and yet they are often ignored by fundraisers, who tend to gravitate toward high-profile corporations. In a national survey, the Business Committee for the Arts found that many smaller companies did not give money to arts groups simply because they had never been asked, or because they felt no connections to the arts in their communities. Arts groups have to do a better job in forging meaningful connections with local businesses (in other words, don't just send a yearly letter asking for money).

The Bottom Line

In early June, the Americans for the Arts research and advocacy group released a two-year study of the economic impact of nonprofit arts. Across the nation, the study found, the arts generate $134 billion in economic activity annually and result in $24.4 billion in federal, state, and local tax revenues. These are just the latest numbers in a spate of recent studies that emphasizes the economic value of the arts. Armed with such figures, cultural groups should feel confident in knocking on corporate doors, even during the current economic climate.

Martha Hostetter writes for American Theatre magazine. 

Collaborations


At a conference about the future of theater in New York held last November, Jed Bernstein, president of the League of American Theatres and Producers, said that, if Broadway's actors, directors, producers, designers, and stage hands behaved the way they had since 9/11 all the time, then "there wouldn't be a need for this conference." Broadway, he said, had succeeded in overcoming breathtaking drops in ticket sales through a "rapid, collaborative" response.

Off-Broadway theaters and other arts groups mounted their own collective responses, including the "Downtown NYC" cultural coalition and the New York Arts Recovery Fund. Anecdotally, such collaborations have become more common since 9/11, but the notion of collaboration as a way to achieve shared goals is not new. Indeed, at a February conference on arts funding, one audience member complained that he'd been hearing about the need for united action for more than 20 years. "Instead of just talking about it," he asked the room, "what are we going to do?"

Such calls for collaborative action take place at a time when there are a greater number of arts groups competing for limited funding and audiences than at any other time in the city's history. Other than attending conferences and exchanging free tickets among arts professionals, what does collaboration among highly competitive arts professionals really add up to? And, now that arts groups are asking to be taken seriously as partners in the economic and spiritual rebuilding of Lower Manhattan, what models of collaboration between arts groups and other organizations seem to work?

SHARED RESOURCES

The greatest problem facing all arts groups is the lack of affordable space. To answer this need, the Alliance of Resident Theatres/New York opened South Oxford Space, a shared office complex in Fort Greene that houses 20 small theater companies at below-market rents. A.R.T./New York is launching an even more ambitious project in the heart of the theater district, at 520 Eighth Avenue, where they will lease 32,000-square-feet of raw space, to be divided and sublet to 25 nonprofit arts groups. Some of these groups require as few as a hundred feet of administrative space--too little to interest realtors. Using their collective bargaining power, A.R.T./New York will be able to offer rents for 20 percent below market rates. Customized spaces will be built for tenants, who will also share rehearsal space, props, and office equipment.

STRANGE BEDFELLOWS

Some of the more interesting collaborations of late have taken place between arts and non-arts groups. Begun in 2001, Creative Communities is the first-ever federal partnership between the Department of Housing and Urban Development and the National Endowment for the Arts. The two federal agencies together contributed $3.5 million to provide arts instruction to children and teens in public housing communities. The project was born when someone at the National Guild of Community Schools of the Arts observed that a public housing project in Charlotte, North Carolina, had created a successful in-house orchestra. It gained crucial support through the efforts of Gloria Cousar, the Department of Housing and Urban Development's former assistant secretary for public and Indian housing. According to Shawn Dove, the project director, "she grew up in public housing and credits arts education as the key to helping her develop into a successful adult."

The project is being implemented locally in Harlem. The Manhattanville Community Center, a public housing structure, and the Children's Art Carnival, a community school, are seven blocks apart from each other, but it has taken this federal partnership to bring them together. Through federal funding and matching grants, 60 Manhattanville residents, ages 8 to 18, receive instruction in book-making, drama and movement, painting and drawing, and other art projects from Children's Art Carnival professionals in after-school and weekend programs. Now seven months into the program, the program coordinator for the Children's Art Carnival, Vashti DuBois, calls the partnership a powerful tool for community-building. "At first we had to prove ourselves to Manhattanville," she says. "They didn't know us, we had to deliver the art, exercise good faith." She has found the process to be mutually beneficial: "Instead of us bringing the art to the housing project, it has been a process of making art together."

"Young people in public housing are experiencing powerful art-making experiences," Shawn Dove says of Creative Communities, "but resident councils are organizing, being educated, and contributing to the process too." Delores Stuart, the Project Coordinator at Manhattanville, who works for the Department of Housing and Urban Development, helps to arrange room for the art projects and involve adult residents in the activities. Stuart credits much of the success of the program to the time and money provided for training sessions, where housing and arts representative exchange ideas and build friendships and trust.

A COMMUNITY-WIDE COLLABORATION

Patricia Cruz, the director of the Aaron Davis Hall performing arts center in Harlem, used to gaze longingly across the street from her office to the enormous--and empty--Gatehouse Building, at 135th Street and Convent Avenue. Once part of the city's water delivery system, the Gatehouse was condemned by the Department of Environmental Protection and filled-in 10 years ago. Cruz imagined that the historic Romanesque building could house some of the artists that use Aaron Davis Hall, which provides a home for the Emerson String Quartet, Dance Theatre of Harlem, Bill T. Jones/Arnie Zane Dance Company, Opera Ebony, and Boys Choir of Harlem, among many other groups.

Cruz began to convene meetings about the abandoned building, which many felt was not only an eyesore but a danger to students from the nearby school. Cruz talked to people at various city agencies and at City College, and it soon became clear that there was great interest not only in fixing up the Gatehouse building but in revitalizing the surrounding area. At nearby P.S. 161, it turned out, the playground looked more like a prison yard; at Annunciation Park, an abandoned field house also needed attention.

Last September, at a public "visioning" session, City College architecture students, P.S. 161 teachers and parents, Abyssinian Church members, community activists, artists, and others shared their ideas about how to make use of the Gatehouse building and create neighboring green spaces for children and residents. The final plan is still taking shape--and some promised city monies have not yet come through--but the collaborative effort of what has become known as the 135th Street Gatehouse Project is already yielding tangible results. This May, with funding provided in part by the "Take the Field" organization, P.S. 161 will get new playing fields. The renovated Gatehouse will expand available performance space for Harlem-based arts groups and provide a banquet hall and community center.

One art group's effort to expand their physical space has evolved into what promises to be neighborhood revitalization. "It's fair to say that we were a catalyst for this project," Cruz says. "We brought players together to the same table. . . . I'm very, very proud of our efforts."

BEYOND BROADWAY

Now that Broadway theaters are back on their feet--sooner than anyone expected--they are returning $1 million of emergency funds to the city, under an agreement that they would give back whatever remained of the original $2.5 million in aid once the theaters had returned to profitability. The money will be redistributed to nonprofit cultural groups, which continue to suffer. Three grant-making groups, A.R.T./New York, the New York Foundation for the Arts, and the American Music Center, as well as four arts education programs, Arts Connection, Center for Arts Education, Young Audiences, and Studios in the Schools, will share the funds.

A modest proposal: To follow the city's enlightened example, Broadway producers could channel $2 from each ticket sale into a non-profit arts fund--an acknowledgment that arts groups of all sizes and types are needed in New York's cultural economy (and that Broadway theaters depend on off-Broadway to create new shows and nurture talent). For the non-profits, the money could be put into cash reserves. The lack of any financial cushion has made many groups particularly vulnerable to the disruptions caused by 9/11; even modest cash reserves could go a long way toward ensuring their stability down the road.

 

The Employment Impact of the September 11 World Trade Center Attacks: Updated Estimates based on the Benchmarked Employment Data


Contact: James Parrott

FPI Deputy Director and Chief Economist
212-414-9001

Introduction and Overview

On November 5, 2001, the Fiscal Policy Institute released a report, "The Economic Impact of the September 11 World Trade Center Attacks," that estimated that New York City would lose a total of 105,200 jobs in the fourth quarter of 2001 as a result of the WTC attacks. Of this total job loss to the city, an estimated 79,700 of the lost jobs were likely to involve layoffs; the remainder (25,500) involved jobs that were relocated outside of the city.

The November 5 report was based on estimates made by FPI that were developed through numerous interviews with industry sources supplemented with economic analysis of the city economy and input-output analysis of the multiplier effects. At the time of that report, there were no government data for New York City yet available for the fourth quarter. On March 5, the New York Labor Department released its annual benchmark revision of the monthly payroll data for New York City. With this data, it is possible to determine more up-to-date estimates of the actual job losses occurring during the fourth quarter on a detailed industry basis.

The attached table presents FPI’s updated estimates of the WTC-related job loss during the fourth quarter. FPI developed these estimates by seasonally adjusting the benchmarked data at a detailed industry level, and by applying adjustments for the effects of the recession and anticipated further revisions when the 2002 benchmarked data is released in March of 2003. FPI examined job changes on an industry basis for the first three quarters of 2001 to estimate the likely effects of the recession during the fourth quarter in the absence of the WTC attacks. Since the 2001 benchmark revisions were only based on more complete administrative records through the second quarter of 2001, the Labor Department will further revise employment data for 2001 when the 2002 benchmark. The 2002 benchmark will be based on the administrative records for the last half of 2001 and the first half of 2002.

FPI finds that the revised WTC job loss involving layoffs was approximately 73,900 during the fourth quarter, slightly lower than the 79,700 estimate from the November 5 report. Among the most significant changes were a 5,000 upward revision in job loss in the air transport industry, a 3,900 reduction in the number of hotel jobs estimated to have been lost, and a 3,000 reduction in the estimated restaurant industry job loss. In the case of both the hotel and restaurant industries, sharp job declines registered in the immediate aftermath of the attacks were partially offset by seasonally adjusted job gains in the months of November and December. For example, the restaurant industry reported an employment decline of 12,300 in October, but gains of 3,300 jobs in November and 1,300 in December.

Highlights of New York City’s Current Employment Picture

  • NYC lost 131,300 jobs in 2001, 3.5% of the total number of jobs that existed in December 2000. This was one of the largest 12-month employment declines on record and the largest employment decline in the city since 1991.
  • Every industry sector experienced job loss during the last 3 months of 2001, except for construction where there was a small gain of 400 jobs.
  • Nearly two-thirds, or 84,000, of the 131,300 job decline occurred during the fourth quarter, effectively the post-September 11 period. The post-September 11 decline during 2001 was almost two-thirds of the total for the year, and 5-and-one-half times the pace of decline occurring in the 9 months of the pre-September 11 period in 2001.
  • As the November 5 report pointed out, most the of the job displacement post-September 11 hit low-income workers in the restaurant, retail, wholesale and hotel industry.
  • The post-September 11 job decline picture looks very different from the pre-September 11 job decline. Before the WTC attacks, New York City job losses were concentrated in manufacturing (-13,900), business services (-27,400), and the FIRE sector (-4,100). Post-September 11, the FIRE sector led all industries in job declines (-26,600), although nearly half of this involved jobs being relocated outside of the city. Air transport (-9,900), restaurants (-7,700), other retail (-5,600), and hotels (-3,100) were hard hit. In most cases, these industries had felt only moderate job loss before September 11. (The figures cited here are before FPI adjustments.)

Almost All September 11 Displaced Workers are NYC Residents

  • 85% of the workers displaced by the WTC attack are NYC residents, according to the State Labor Department. The largest portion live in Brooklyn (26%), followed by Queens (24%) and Manhattan (20%).

Unemployment and Unemployment Insurance Claims

  • With 264,100 people officially unemployed, the unemployment rate in NYC was 7.5% in January, well above the national rate of 6.3% (not seasonally adjusted). For the 4 months since September 11 for which there are data, the city’s unemployment rate has averaged 7.2%. However, the bleak employment outlook in the city has led nearly 50,000 city residents to cease looking for work altogether. If these discouraged workers were factored into the unemployment rate calculation, the city’s unemployment rate would be 8.7%. Even though the national economy may be entering a recovery period, the unemployment rate is likely to rise further in NYC through the rest of 2002.
  • Over 260,000 NYC workers have filed initial unemployment claims in the 6 months since September 11. The volume of initial claims has tapered off somewhat since January, but the number filing from mid-November to mid-January was nearly as great (100,400) as the number applying for unemployment insurance in the first two months (114,400) after the attack (mid-September to mid-November). Those starting to receive unemployment benefits in the wake of the September 11 attacks will soon start exhausting the 26 weeks (6 months) of regular state unemployment insurance compensation.
  • Nearly six months after September 11, the number of workers filing for unemployment insurance is still 20% higher than a year ago, a period when the recession had already started to push up unemployment filings in NYC.


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