Restarting Pittsburgh’s Arts Economy

In late summer of 1606, one of the liveliest theatre seasons London, England, had known was abruptly shut down by the sudden onset of bubonic plague. When public entertainments were allowed to resume almost two years later in April 1608, several drama companies that had flourished pre-plague were nowhere to be found.

William Shakespeare’s company, the King’s Men, had survived the massive artistic attrition by virtue of their patronage from King James I. During the plague hiatus, the royal connection allowed the troupe to perform outside the infected capital, while affording Shakespeare leisure to finish “The Tempest,” “Antony and Cleopatra,” “Coriolanus” and a few other works in progress.

Today, even in relatively “normal” times, the story is much the same—some arts groups thrive, others don’t. Strong donor backing is a big advantage. And having a Shakespeare-level creative on your team can’t hurt, either.

But when current COVID-19 restrictions finally end, America’s cultural landscape will have witnessed a near-extinction event impacting hundreds of thousands of artists, presenters, businesses and service organizations across the country.

Aside from temporary palliatives of personal donations, emergency grants and loans, gift cards and other token purchases, what can be done now to enable our arts industry sector to rebound?

In Pittsburgh, a large network of foundations and corporate patrons already provide extensive support to local arts, from millions of dollars in program grants and event sponsorships to special initiatives, such as the Advancing Black Arts effort partnering the Pittsburgh Foundation and the Heinz Endowments, the Allegheny Regional Asset District’s county sales tax re-grants and the Forbes Funds’ ongoing work in building organizational stability within the nonprofit community.

Certainly, our philanthropic leaders are evaluating a multitude of actions to hasten and secure a strong arts recovery.

They’re likely starting with how to most efficiently restore some level of funding for the basic elements artists and arts organizations need to operate a planned schedule of revenue-producing programs—concerts, tours, exhibitions, workshops (or the clients required by arts service businesses like recording studios, art supply retailers, music stores, graphic designers, hair and makeup artists, equipment rental, etc.).

That means replacing a year’s worth of funds budgeted for marketing, fundraising, rent, staff salaries, guest artists, technical services, travel, supplies, et al. that make up the normal “supply chain” of arts programming.

So far, the measures announced to re-fund/re-stock small businesses are short-term and sporadic—a smattering of stimulus checks and business loans, increased donations from the many thousands of local arts board members who already give significant time and money.

All useful, but re-booting the Pittsburgh arts sector will need a longer-term strategy.

Consider the standard homeowner insurance policy and its replacement cost option that reimburses to the fullest extent possible the costs of repairing or replacing damaged dwellings or property. Compared to actual cash value coverage, replacement cost coverage does not deduct for depreciation or fluctuating market value but covers the cost of what it takes to fully replace the insured item.

With the COVID shutdown, the damage to the artist or organization isn’t to a dwelling or property; what’s damaged is the ability of artist and organization to execute revenue-generating programming.

Could the Pittsburgh-area philanthropic network collaborate on establishing a central funding pool that allocated grants to address essential “replacement cost” needs of qualifying artists and organizations?

Each grant would be based on a formula that assessed the applicant’s budgeted supply-chain production costs—what it needs to create programs to stay afloat over the next year. The formula would take into account the applicant’s federal income tax form recording its past-year expenses and income; the final grant amount might be a percentage of the applicant’s anticipated replacement costs, depending upon the backup resources the applicant might have and how much funding is in the overall central pool.

This type of coverage is similar to what’s found in a typical business interruption policy—a policy surprisingly few businesses and organization (and even fewer individuals) possess.

The reality is that, without a concerted Arts Restart Grant program, Pittsburgh’s cultural community could well become a dead zone. Why does this matter?

Because it’s a large enough occupational sector whose well-being has a palpable influence on the health of our overall economy.

The latest report from Greater Pittsburgh Arts Council estimates the arts deliver a $2.4 billion annual total economic impact to the Pittsburgh metro region, drawing nearly 25 million people to cultural events and venues a year. Americans for the Arts calculates Allegheny County’s culture industry (comprising nearly 3,000 businesses) provides 35,000 full-time jobs accounting for $641 million in resident household income and generating $48 million in local government revenue and $68 million in state taxes.

As the many stakeholders in Pittsburgh’s arts ecosystem grapple with unprecedented economic disruption, two questions present themselves for discussion:

1. What do we envision the future of Pittsburgh arts to be over the next decade?
2. To achieve that vision, what resources need to be deployed now for short-term survival and long-term stability?

In the plague years of 1600s London, Shakespeare’s drama business had the good fortune to receive support from paying audiences and from the most influential culture benefactors of the day.

In Pittsburgh’s time of pandemic challenge, will a similarly enlightened private-public synergy revive our many flickering muses of fire “that would ascend the brightest heaven of invention”?*

*Chorus, Henry V-Prologue, by William Shakespeare