Denver’s arts nonprofits generated $2.6 billion in economic activity last year, according to a recent report, a figure that local art community members said is record-setting and a sign of the industry’s resiliency through the pandemic.

But in-person attendance at events is still lagging and may never return to what was once considered normal. The report found in-person attendance fell by 15.6% from 2019 levels, and that the cultural sector continues grappling with additional challenges, such as shifting workforce trends and rising personnel costs.

The Colorado Business Committee for the Arts has published its “Economic Activity Study of Metro Denver Culture” since 1993. The study, released on Thursday, relied on 2022 data self-reported by nearly 300 nonprofit arts organizations in the metro Denver region that are funded by the Scientific & Cultural Facilities District.

The report does not look at for-profit organizations or nonprofits that are not funded by the SCFD. Data used for the 2023 report was analyzed by BBC Research.

The amount of economic activity, both direct and indirect, reflected a solid 72% increase over 2020, and a jump of 13.6% from pre-pandemic activity in 2019.

“That’s billion, with a ‘B,’” said an enthusiastic CBCA Deputy Director Meredith Badler as she announced the report’s findings to an audience at the Denver Art Museum. “Not only does this show our arts and culture sector’s rebounding and resiliency from the impact of the pandemic, but actually additional growth from the previous record in 2019.”

To gauge the amount of economic activity, or spending generated by the sector, researchers looked at operating expenses, capital projects and audience spending. It’s not just about how much people spent on a ticket, for example, but how else money flows through the local economy. The study also aims to capture whether audiences grabbed dinner at a nearby restaurant after a show or traveled from outside of the metro area.

While the level of economic activity rose, the sector’s estimated economic impact fell by nearly 4% from 2019. Capital improvement projects in particular showed a 68% decrease in economic impact from 2019. On a brighter note, the economic impact driven by cultural tourism — which measures spending generated by visits from people outside of the metro area — increased by 15% from 2019.

During a panel discussion on Thursday, the CBCA asked local arts community leaders to put the study’s results in perspective.

James Holmes, executive director at the Cherokee Ranch & Castle in Douglas County, dug into what is the “new normal.” Holmes said that because his venue is smaller and able to host more intimate gatherings, its events are consistently selling out. But people are still adjusting to life after the pandemic, he said, and seeking safe spaces to engage with arts and culture that don’t necessarily involve large crowds or events.

“The ‘new normal’ is a great way to say it, because I don’t think we are going back,” he said regarding pre-pandemic event attendance for large venues.

The pandemic was not the only major event in 2020 to reshape what is normal in the arts and culture world, he said. Social justice movements spurred more organizations to incorporate diversity, equity and inclusion initiatives into their operations.

The organizations that “are really embedding” DEI into their operations “are going to benefit for many, many, many years to come” because of it, he said, noting changing state demographics and what that means for future employee and customer bases.

The pandemic also spurred historic levels of federal funding for arts and cultural organizations. The CBCA report found that federal funding made an $81 million economic impact last year, largely from pandemic relief dollars. That marked a 448% increase over 2020, and a 2,754% increase from 2019.

As some panelists noted, though, the federal aid that served as a lifeline for arts nonprofits during COVID-19 is about to run out.

“I’m not sure we’d be here today if it weren’t for that federal infusion,” said Philip Sneed, president and CEO at the Arvada Center for the Arts & Humanities. A combination of furloughs and roughly $6.2 million in pandemic aid allowed the center to keep most of its employees on staff between 2020 and now, he said.

“I think the challenge is closing the gap after that,” he said. “We know that we are going to go back to the much lower levels of federal funding.”

The report reflected workforce and cost challenges he is seeing play out too, Sneed said. The sector employed 13,551 people in 2022, up nearly 40% from 2020 and 1.2% from 2019. Wages increased by more than 7% in the cultural sector when compared to 2019. The increases to wages could be a result of organizations hiring more staff as opposed to relying on volunteers, and could be a result of inflation, according to the report.

The study showed a 33% decrease from 2019 in the number of people volunteering at cultural organizations, but also that the sector has added a considerable number of jobs since 1993.

Employees are beginning to change their expectations, Sneed said, requesting both more compensation and “also a more reasonable work schedule.”

Gone are the six-day work weeks, 12-hour rehearsal shifts and theater’s “the show must go on” mentality, he said. His center has scaled back the number of productions it offers each year as it adjusts to new workforce trends, he said.

Sneed said it can be difficult to explain to some employees why an organization with a $14 million budget does not pay as much as a company with a $50 million budget, and that nonprofit employees increasingly ask for pay that matches what they could earn in the private sector.

He doesn’t blame them, he said. He also nodded to the study’s findings that attendance is down by 15% at the same time personnel expenses are up 15%. Sneed is still looking for an answer to that challenge, he said.

“We don’t begrudge people wanting more money,” he said. “But it becomes a math problem.”