an online resource for baby boomers

Time and Money Help the
Cultural Arts Thrive!

The world of arts and culture in the United States is extraordinarily complex and fertile. Citizens who enjoy the arts can choose from a wide array of drama, visual arts, dance, music, and literature available in local theatres, museums, libraries, universities, performance halls, and nightclubs, as well as on radio and television. In the past 20 years, the arts and culture sector has boomed and the revenues from sales and attendance have risen to all-time high levels.

The proliferation of U.S. arts institutions and revenues has been mirrored by substantial gains in financial support for the arts. Private philanthropy has increased dramatically since 1960, and public agencies expressly devoted to the arts have come into being through acts of U.S. Congress. Private donors have created endowments, and foundations have placed the arts at the center of their portfolios.

Commentators tend to regard the arts as separate from fiscal policy, but in fact the arts are a substantial part of the economy, driving tourism, motivating business and residential relocation trends, shaping schools, and employing approximately two million professional artists.

Local involvement and funding takes numerous and diverse forms. Community development initiatives involve the performing arts, support arts education, or foster artistic and architectural heritage programs. While there are no systematic figures, local government art expenditures go well beyond the formal arts agencies.

Donating Your Money
Donations fund American nonprofits to a considerable degree. Museums, symphony orchestras, opera companies, and other cultural organizations reap only part of their overall revenues from ticket or entrance fees. Many of America's leading institutions would not exist if private citizens had not bequeathed their holdings and invested their resources.

The tax system provides the most significant arts support in the United States. Estimates suggest that Americans donated roughly $12.2 billion to the category "Arts, Culture, and the Humanities" in 2003. In per capita terms, the total amounts to about $42 for each individual in the United States. Private individuals account for about 50 percent of the total, foundations for 33 percent, and corporations account for 17 percent.

Under the U.S. system, any donation to a tax-exempt nonprofit organization qualifies as a potential deduction for the tax-paying donor. It is required only that the taxpayer itemize his or her deductions, rather than taking the standard deduction allowed by law. Today, about 60 percent of American taxpayers, most of all homeowners and the wealthy, itemize their tax deductions. For these individuals, the donation of a dollar to a nonprofit institution reduces taxes between 28 and 40 cents per dollar, depending on the individual's tax position. The tax incentive therefore applies to most giving to the arts. The estate tax provides further incentive to donate wealth rather than pass it along to heirs.

Donating Your Time
In the United States, donations of volunteer time, equal to 390,000 full-time volunteers, are a large part of the broader philanthropic picture. As of the early 1990's, the average time donor had an income of more than $56,000. The implicit dollar value of these time donations thus stands above $20 billion, with some estimates going as high as $25 billion.

The funding network is diverse and perplexing, to be sure, and sometimes arts organizations do not survive the vicissitudes of the economy. But, simultaneously, the flexibility of the American system may rightly be credited with fostering the boom in art making and arts participation that we have seen in the last 40 years. New arts organizations are constantly emerging, bringing new styles and perspectives to cultural life. No single agency or individual can set an artistic agenda for the nation; the contrasting values and tastes of different funders ensure a rich diversity of art works; tax incentives promote innovative methods of private support; and decentralization helps regional heritages and local communities retain their integrity.

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Boomers Resource Guide is a special supplement to the Senior Citizen's Guide