Funding of the arts and heritage

Written evidence submitted by Dr Kevin Fewster (arts 100)

1. This submission relates to the following issue mentioned in the Committee’s Terms of Reference:

‘ Whether there need to be more Government incentives to encourage private donations.’

2. My comments are based on my experience as Director of the National Maritime Museum, Greenwich, for the past three years. Before coming to Britain I was the Director of several major museums in Australia over a 20 year period.

3. Britain is one of the only, if not the only, major western democracies which does not offer a scheme of tax deductions for donations during lifetime of cultural objects to approved museums, galleries and the like. In Britain, tax breaks to encourage cultural gifts flow only after death; hardly an incentive to encourage people to engage with and support their preferred cultural institutions during their life.

4. With museum budgets under severe pressure, there is scant funding available to buy objects, thus we are relying ever increasingly on the generosity of people to donate objects to us. Unlike other countries, however, we have no tax incentive scheme which can give the donor a degree of tax relief in return for their generosity of spirit. In my experience, many people are not necessarily expecting to receive the full value of their donation when they offer a donation to their favourite museum or gallery. They recognise the broader cultural value of what they are doing for their community and the wider society, now and for generations ahead. But they also would like some tangible recognition of their decision to gift the object to a public collection, something more than just seeing their name on an object label or listed in an annual report.

5. There have been many occasions during my time at the National Maritime Museum when possible acquisitions, often items which have already been loaned to the Museum, have floundered simply because we have neither the acquisition funds nor other appropriate incentives to offer the object’s owner. I am sure that, in many of these cases, the owner would have happily donated the object(s) if we had been able to offer some form of tangible recognition.

6. The gifting scheme with which I am most familiar is that run successfully by the Australian Government: the Cultural Gifts Program. This programme was established in 1978 and has led to the donation to museums, art galleries, libraries and archives of over AU$589 million of objects, ranging from visual and decorative arts, to cultural artefacts, social history, indigenous arts, scientific collections and archive materials. Under the program donors can claim a full tax deduction for the market value of the object. Donors can spread the deduction over a maximum of five income years. Such gifts are exempt from capital gains tax. Each proposed object must be valued by two

approved valuers, with the mean valuation being the accepted figure. A museum or gallery is under no obligation to accept any item that may be offered under the program.

7. The Australian scheme is open to donations of any form of cultural collection, whether it be a painting, a ship, historic costume, a run of historic scientific journals or a collection of beetles. As such, items donated come from a very broad cross section of the community, not just the great and the good. Many donors feel honoured that their ‘treasures’ are accepted under the scheme to be added to a significant public collection and that the government recognises their generosity.

8. This very broad donor base and the wide diversity of objects donated – wide both in terms of subject matter and monetary worth – essentially amount to a democratisation of philanthropy. I believe that this democratisation of philanthropy aligns perfectly with the Secretary of State’s pronouncements of wanting to see a broadening and deepening of philanthropy in Britain.

9. Donations of objects are as valuable to museums as cash donations. Under the current regulations, we are often driven to fund raise cash specifically to buy objects from third parties. If a cultural gifts programme were in place, cash donations could generally be used for direct development purposes, unlike now where the museum is often simply the ‘middle man’ raising money from person A to pay person B for the object we’d like to acquire.

10. Thank you for the opportunity to submit these comments for your consideration.

September 2010