The Arts Sector and COVID-19 Relief April 2020
As Congress and the Administration consider additional forms of COVID-19 federal assistance that may be targeted or widespread, we urge support for relief that will sustain the arts sector’s unique capacity to support the U.S. economy, uplift the human spirit, and provide lifelong learning.
In the months to come, the American economy will need the arts and culture sector to deliver on its unique mission and also to catalyze economic activity in other devastated industries such as restaurants, hotels, travel, and tourism. In March 2020, the Bureau of Economic Analysis reported that the arts and culture workforce contributed $877.8 billion, or 4.5 percent, to the nation’s gross domestic product (GDP) in 2017. The arts sector is an economic engine that directly employs more than 5 million workers. Attendees at nonprofit arts events spend $31.47 per person, per event, (beyond the cost of admission) on items such as meals and parking—valuable commerce for local businesses and essential during times of economic recovery.
Investing in the arts sector is an investment in our nation’s capacity to drive economic activity, generate creative solutions to complex problems, support the health and well-being of communities, and educate and inspire lifelong learners. The arts sector serves artistic and educational missions through myriad occupations filled by individuals who work in full-time, part-time, hourly, seasonal, and freelance capacities. The unexpected loss of revenue and the declines in charitable contributions are immediately impacting arts organizations and individual livelihoods and will worsen over time. The next COVID-19 federal relief efforts should:
- Recapitalize and expand the programs in the CARES Act. Arts organizations, related arts businesses, and self-employed workers are attempting to access SBA Economic Injury Disaster Loans and Advances, the Paycheck Protection Program, and expanded unemployment benefits. Given demand and limitations, expanded eligibility and improved guidance is urgently needed.
- Increase funding for the Paycheck Protection Program and eliminate the 500-employee cap for 501(c)(3) nonprofit organizations. Provide dedicated funding available to nonprofit organizations.
- Fully fund the Economic Injury Disaster Loan program and eliminate the $1,000 per employee cap imposed by SBA so businesses with one or very few employees can access funds.
- Provide forgivable emergency assistance loans to nonprofit organizations of all sizes. Provide forgivable loan assistance to self-employed workers, sole proprietors, small LLCs and small 501(c)(3) organizations to offset fixed overhead costs such as rent, utilities, insurance, and debt service without per employee limits.
- Allow the option of income averaging for sole proprietors, contractors, and other small businesses for assistance that is based on net business income.
- Extend the duration of assistance to artists, arts professionals, and self-employed workers whose income has been negatively impacted by loss of sales or performance venues—especially those that are seasonal in nature—and for 501(c)(3) organizations that depend on income from seasonal events (festivals, conferences, etc.) that were cancelled due to social distancing measures.
- Expand the above-the-line tax incentive for non-itemizers to give more by removing the $300 cap and allowing all taxpayers to claim the deduction on both 2019 and 2020 tax returns. When Congress turns to provisions affecting 2021 and beyond, it should renew the CARES Act removal of the Adjusted Gross Income limitation on deductibility of charitable gifts.The arts sector is innovating to provide online arts experiences and distance learning opportunities, preparing to serve audiences when quarantine orders are lifted, and will be an essential partner in jump- starting local, state, and national recovery efforts during and after COVID-19. The arts sector and artists have unique production, facility, workforce, and programmatic needs that can be addressed through specialized federal assistance: