Analyzing the Economic Impacts of Nantucket’s Cultural Corridor

Sponsor: Maria Mitchell Association, Nantucket Historical Association, Nantucket Atheneum, Artists Association of Nantucket, Dreamland Foundation, Nantucket Visitor Services and Nantucket Chamber of Commerce
Sponsor Liaison: Janet Schulte, Maria Mitchell Association
Student Team: John LaCamera, Xavier Leo, Camille Levy
Abstract: Cultural organizations have a substantial economic impact that can be difficult to measure. The goal of this project was to analyze the economic impacts of a sample of the cultural organizations on Nantucket, including the Artists Association of Nantucket, Maria Mitchell Association, Nantucket Atheneum, and Nantucket Historical Association. Using financial data, we estimate that these organizations contributed $9.5 million to the Nantucket economy in 2011, which is an increase of 21.7% since 2003. We developed a data entry form and two survey instruments that will allow these organizations to more easily estimate their contributions to the local economy in the future.
Link: MMA_Final_Proposal

Executive Summary

All findings presented in the report are based on data collected from the Artists‟ Association of Nantucket, the Nantucket Atheneum, the Nantucket Historical Association, and the Maria Mitchell Association. Initially, we included data from the Dreamland Foundation. Ultimately, we removed the Foundation from the analysis since the Dreamland Theater was only recently completed and the Foundation‟s expenditures are dominated by major construction costs which distorted the overall assessment.

The four organizations comprising the „Cultural Corridor‟ collectively spent roughly $8.7 million in 2011, including $3.6 million (42%) on salaries and fringe, $1.5 million (17%) in miscellaneous fees, $1.4 million (16%) in occupancy fees, $1.4 million (16%) on depreciation, and $776,000 (9%) on other organizational expenses. This was an increase in gross expenditure of about $3 million since 2003, when the organizations spent about $5.4 million. Adjusting for inflation, total spending in 2011 was $7.1 million, representing an increase of $1.6 million since 2003 in constant dollars. The direct impacts of the organizations are defined by IMPLAN® (Impact Analysis for Planning) as being exactly equal to gross expenditures, whether they are for salaries or payments for goods and services from outside vendors. IMPLAN® further defines indirect impacts as being the cost for vendors to service these requests, and induced impacts as spending by the employees of both the organizations and the vendors. The group determined that the Cultural Corridor had a total economic impact of $9,549,529 (in 2003 dollars), which was an increase of roughly $2.14 million since 2003, where they contributed $7,410,440. IMPLAN® also details various employment impacts correlating to the economic contributions made by the institutions. Based on the average weekly wage of a Nantucket employee, the contributions made by the institutions of the Cultural Corridor support 113.38 jobs; an increase of 26 jobs from 2003. As a group, the Cultural Corridor total employment impacts have increased by about 30 jobs to 134.89, up from 104.97 in 2003.

In order to better assess on- versus off-island spending, we gathered data on the top 20 vendors for each organization. Since different organizations use different vendors, this list included a total of 80 vendors, 46 of which were on-island. We found that 55% of total expenditures on the top vendors are off island, equating to $1,119,869. The organizations try to use on-island businesses whenever possible, but this can be difficult. For example, the Maria Mitchell Association uses formaldehyde which cannot be purchased on-island and some HVAC repairs require off-island expertise.

The group also estimated that out of the total $8.7 million (2011 dollars) spent between all of the organizations, about $4.9 million was on-island. This comprises $2.6 million in salaries, $1.4 million in occupancy fees (i.e., rent), and $0.9 million for goods and services bought from on-island vendors. This is probably an under-estimate of on-island expenditures, because we analyzed data for only the top 20 vendors at each organization. It is likely that many of the smaller vendors that do not appear among the top 20 of any organization are located on-island.

Furthermore, one third of the entire top 20 vendors expenses went towards insurance with 97% being off-island. This is because the organizations are so large, that both property insurance and health insurance must utilize off-island companies. There is no insurance company on-island that would be able to cover these organizations. Even though the expense is technically off-island because the insurance companies are located outside Nantucket, through employee use of local hospitals, dental clinics, and other types of medical facilities, the money comes back to the Nantucket economy, furthering the impact of the cultural organizations.


The group presented two sets of recommendations to the sponsoring organizations. One refers to the future collection and analysis of financial information necessary to calculate economic impacts and the second refers to the development and implementation of resident and visitor surveys to get a better sense of their spending patterns and perceived value placed on cultural institutions.

The group identified three recommendations pertaining to the future analysis of financial information to calculate economic impacts of the organizations. We recommend they continue to use the data entry forms developed to collect and analyze impact data in the future. The group recommends that the pool of participants be expanded to include as many of the other cultural institutions on the Island as possible. The group also recommends that organizations clarify any inconsistencies in the data collection tools and train participating staff in their use for future data gathering.

The future development and implementation of the resident and visitor surveys created by the group will allow the organizations to gather useful data on spending and the perceived value of cultural institutions. The group recommends that the organizations refine the survey instruments as necessary to meet the needs of the participating organizations. It is also recommends that they determine whether the survey will be administered entirely via Survey Monkey© or Google using handheld tablets and in-person encounters. The group also recommends that the institutions establish a timeline, protocols, and organizational agreements for administering the surveys in the future. Lastly, the group recommends that the organizations aim conduct a random sample of 200 to 300 surveys during the summer of 2013.