Do Cultural Tax Districts Buttress Revenue Growth for Budding Arts Organizations?

January 1, 2012

What role should the government play in financing the arts in America?

While previous research has noted the possibility of public funding 'crowding-out' private dollars, Schmitz finds evidence of a 'crowding in' of private investment in her investigation of Denver's Scientific and Cultural Facilities Districts (SCFD). She puts forward the following theories to explain this effect: (1) SCFD funding may function as a stable source of income, allowing organizations to create the quality programming needed to attract audiences; (2) SCFD organizations may benefit from a "signaling effect" to the community that relays the value of their programming and worthiness of support; and (3) SCFD funds may incentivize organizations to create more mainstream or marketable programming that appeals to a broader population.

Authors: Lauren Schmitz
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