Where is Private Investment to the Arts going?

Summary
By Morgane
December 2016

Private Investment in Culture Survey 2011/12
A report from ‘Arts & Business’

Art & Business is a British organization of experts who develops collaborations and partnerships between the public / private sectors and cultural organizations. The present survey exposes the evolution of the private sector support in culture from the economic recession of 2008, to 2011 and 2012 in England.

“This year’s survey shows a relatively modest rise in total private sector investment of 7.6%. When compared to the state of the economy, however, this looks like a remarkably robust show of support for culture.”

Regional Variance

The study takes place in the UK, where the recession had pushed the government and the local authorities to make cuts for the culture, because of the economic recession of 2008. Cultural organizations based in London city are undoubtedly dominant and raise most of the private investments of the country. This business centralization has increased through years and emphasizes the “two-speed” UK.

Trusts and Foundation Support

Trust support of culture has increased by 16% from 2010 to 2012. However, this phenomenon is potentially unsustainable and that is why, cultural organization must find a better balance with their own investment income in order to be more independent from Trust and Foundation support.

Business Support

Even after the economic crisis, business investment in cultural organization have slightly increased, showing that art partnerships do add value to trade.

Business supports for culture is divided in four categories in descending order of importance: Sponsorship (60%), in kind support, membership and then donations (12%). Firstly, the survey reveals that commercial support tends to be greater when the donor receives benefits. Then, the surprising find concerns the fallen amount of in kind support for 2011- 2012, while we could expect that the monetary recession will increase it instead of the financial support.

Individual Giving

Individual giving to the arts in the UK has risen of 6.5% from 2011 to 2012.

This number includes purely philanthropic donation as given for free but also donations eligible for Gift Aid (if an admission price is 10% higher than the regular admission in order to benefit the organization).

It appears that in order to conduct a successful fundraising operation, the institution has to offer a (limited) number of advantages to encourage charity. The limits are not very defined, though.

  1. Individual memberships

The biggest number of individual support for art organization is represented by Memberships, with 58%. What reveals this number:

  • The on-going commitment of the public
  • The evidence of the large number of individuals involved
  • This a stable income
  1. Individual donations

The second biggest amount of individual support, at almost 23%. One third represents the money given as membership payment (Gift Aid).

  1. Legacy giving

At 19%, this income has raised since 2009 and then has stabilized because of successful strategy of legacy income fundraising from the art organizations.

  1. Payroll Giving and Gift of Shares

No relevant statistics.

Comments:

Arts & Business presents a useful study on the private investment to the Arts. It allows us to identify the specificities of the British system (centralization, system of Trust) and may be to compare them with the Dutch model. Two questions raises:

  • Is the Netherlands as centralized as the UK is on the city of London?
  • Is the system of Trust also existing in the NL?

Confirming our interest the study also argues that money donation is still the largest form of individual philanthropy.

Finally, I believe that we can follow the recommendations of this report:

  • To encourage charity, institution should offer a certain number of advantages to the donors

Institutions should allow and encourage

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