Arts shutdown cost $58 million

THE SHUTTERING OF the arts in Massachusetts due to COVID-19 has affected an estimated 8,000 jobs so far and cost arts-related nonprofits $55.7 million and individual artists $2.8 million, according to the results of a survey distributed by the Massachusetts Cultural Council.

The data are sparking calls by arts advocates for more help from the state and federal governments.

“I’m sincerely concerned that without direct focus and relief, we are not going to have the kind of creative sector that we’ve really relied on to make the Commonwealth a stronger and more vibrant place to live and be,” said Emily Ruddock, executive director of MASSCreative, an arts advocacy group.

CommonWealth previously reported that as gatherings are banned and performance spaces are shut, the arts are being particularly hard hit in Massachusetts. Many arts organizations operate with little financial cushion, and many artists are gig workers, paid for each job they accept. After a slowdown in the winter, the spring and summer is typically when many artists earn large portions of their revenue.

The Massachusetts Cultural Council survey was the first attempt to quantify the economic impact of the pandemic.

Two surveys – one of individual artists and one of cultural organizations – were posted online between March 16 and 22.

There were 566 organizations that responded to the survey, and they collectively reported a revenue loss of $55.7 million, an average of $133,000 per organization. The organizations reported nearly 15,000 cancellations. More than half (58 percent) said they planned to lay off, furlough, or reduce hours for staff. The staff cuts will affect 8,200 jobs, of which 70 percent are artists and the rest are organization staff or independent contractors.

There were 595 individuals who responded, and they reported a collective loss of $2.8 million in income, or an average of $5,000 a person, representing more than 5,000 cancelled jobs or gigs. While many artists earn money in other ways, slightly more than half said they typically get at least 75 percent of their income from the arts.

“The data is devastating,” said Anita Walker, executive director of the Massachusetts Cultural Council. “There’s no question our field is suffering greatly financially.”

What’s more, Walker noted that the survey was conducted only a few weeks into the crisis, and no one knows how long it will last. She said when it comes to the response to coronavirus, “Our organizations are literally at the threshold of the emergency room. They are suffering.”

Walker said most cultural organizations do not have large reserves, and money has dried up from all corners — ticket sales, endowment investments, school classes and touring shows.

Arts advocates are using the data to illustrate the need for arts-focused stimulus funding.

Ruddock said the arts sector has needs that are often different than that of the average small business or the average furloughed worker.

For example, Ruddock said arts organizations may not be financially able to take on debt through a small business loan fund. She would like to see more grant programs providing money that does not need to be repaid.

Many artists are also not eligible for standard unemployment benefits because they are independent contractors.

This could be addressed through the creation of an unemployment benefits program for independent contractors, which can be done at a state level once a federal “major disaster declaration” has been made.

Many arts organizations take advantage of a benefit provided to nonprofits, which lets them self-insure and avoid paying unemployment insurance premiums, but then requires the organization to pay the full cost of workers’ unemployment benefits. Jim Klocke, CEO of the Massachusetts Nonprofit Network, said this arrangement is appropriate in normal times. But it is not set up for a situation where all the workers are let go at once, and then become quickly eligible for unemployment benefits, which could result in huge costs for organizations.

“This is such a unique, catastrophic, calamitous event through no fault of the nonprofits,” Klocke said.

A federal stimulus bill still under consideration would direct states to reimburse part of the costs that self-insured nonprofits owe.

Some arts groups say what they need is immediate cash.

Craig Coogan, executive director of the Boston Gay Men’s Chorus, said the group will lose $350,000 by cancelling two of its annual three concert cycles. It will use reserve funds to continue to pay staff. “Right now, government is best suited to be able to make directed block grants so that artists and arts professionals who earn their living can continue to be paid,” Coogan said. “That needs to be happening today, not six months from now, because people have lost their income now.”

Brian Boyles, executive director of Mass Humanities, the state affiliate of the National Endowment for the Humanities, said the impact on its grantees, which include everything from major museums and libraries to small historic societies, “ranges anywhere from an existential crisis for some organizations to a total reinvention of the way they’re going do their work for the time being.” Boyles said with organizations forced to cancel all their fundraising events, it is important that a fund be established to help cultural nonprofits cover operating costs, potentially through federal stimulus money.

“Sooner or later, we’re going to emerge from our homes, and when we come out, we’re going to need artists and cultural organizations to process what we’ve been through and what we’re going to do,” Boyles said. “If we let them die off during the crisis, as Massachusetts residents, where are we going to go when it’s time to rebuild?”