Corporate arts support slumps again

Business investment in the arts and heritage is at its lowest point since 2004, having fallen by 12% last year to just £144m, from an all-time high of £172m in 2006/7. It now accounts for just 22% of total private investment in the arts, having been overtaken by contributions from trusts and foundations. These rose by £20m (11%) and now stand at a high of £155m.

The headline figure for business sponsorship and donations, published in the new Arts & Business report ‘Private investment in culture 2009/2010’, hides an even sharper decline in actual cash contributions. Whilst in-kind sponsorship and corporate memberships rose by 8% and 2% respectively last year, cash sponsorship fell by a massive 18% and corporate donations by 17%. Support from financial services companies, which formerly led the field in cultural investment, has been decreasing year-on-year for the past three years, and sponsorship by the creative industries (including auction houses, advertising and design companies) now matches that from the financial services sector. The biggest year-on-year decline in support was by the retail sector – perhaps unsurprising during a period when the UK economy was suffering from the deepest part of the recession. The overall decline in corporate support for the cultural sector mirrors the 12% fall in business investment seen during the previous recession of 1991.

Individual giving still accounts for the lion’s share (55%) of private investment in culture – currently standing at £359m – though “a single heritage organisation” (assumed to be the National Trust) accounted for a very significant proportion of this. But while individual donations fell by 22%, income from Friends and membership schemes remained relatively stable, experiencing just a 2% decline on the previous year. Only legacy income showed growth, rising by 25% and now accounting for almost a quarter of all individual giving. Whilst the majority of bequests were made to major institutions, a few smaller organisations also received income from legacies for the first time.

To compound the gloomy picture, it seems that there has been no significant change in the overall distribution of private investment in the arts, which remains heavily concentrated in the 4% of organisations classed as ‘major institutions’. They collectively account for 72% of total private investment received – while medium and small organisations, which make up 84% of the sector, received 13%. Nonetheless, arts fundraisers remain positive about the future. 45% expect private investment to increase this year, primarily because of an increase in fundraising activity, but also due to the quality and range of programmes that arts organisations will be offering.

Commenting on the report’s findings, Colin Tweedy, Chief Executive of Arts & Business, has pledged that his organisation – which will see its £4m Arts Council England (ACE) annual revenue grant reduced to zero from 2012/13, and cut by 50% from April this year – will re-focus on the corporate sector: “…if we neglect corporate sponsorship we will damage the whole cultural ecology. Arts & Business is here to work alongside our cultural and commercial partners every step of the way. We remain committed to doing all we can to make sure the two sectors continue to profit from one another.” ACE is currently preparing to implement a philanthropy strategy of its own, which will include developing “a challenge fund to incentivise donors” (AP228), and will respond to the Government’s ten-point plan for philanthropy (AP230).