Funding of the arts and heritage

Written evidence submitted by Cause4 (arts 163)

1. Summary

1.1 On recent evidence, we are concerned that there is a danger that the arts could be disproportionally affected by cuts in public funding. Additionally, we do not want to see arts and heritage suffer greater cuts than other DCMS responsibilities.

1.2 We are optimistic that the current economic climate offers opportunities as well as threats, particularly in developing more sustainable funding models, innovative partnerships and a greater entrepreneurial approach. If these are implemented successfully, they could open up additional sources of non-public funding.

1.3 However, it is our experience that few arts organisations have the time, resources and expertise to really exercise this sort of innovation. Therefore, investment in information sharing and capacity-building to this end would be valuable.

1.4 Corporate supporters and individual philanthropists can and do play a long-term role in funding the arts alongside government. However, it is counterproductive to ask or expect philanthropists to fill the gap in public investment. Indeed, this approach lacks a fundamental understanding of the relationship between donor and charity. It is also important that the process of encouraging greater philanthropy is led by philanthropists themselves.

1.5 We believe the appropriate role for Government in supporting a culture of giving is in making giving easier, making it more tax efficient for individuals and companies, and recognising those that make a contribution. Match funding of private support needs much more exploring within Government. We feel it provides an incentive to raise, an incentive to give and a means by which Government can get very best value.

1.6 The contributions of existing donors must be made to go further through more effective donor relations. We believe that the most sustainable investment from Government would be in training fundraisers. The sector suffers from a lack of talented, well-trained staff able to develop strategic programmes capable of attracting significant funds.

1.7 It is also vital that lower levels of giving are maximised. It is in allowing everyone to give, and in encouraging everyone to give, that a stronger philanthropic culture can be created. There should be a renewed focus on life-long giving, career-long giving and developing giving among the young.

1.8 Social media has the potential to revolutionise giving at lower levels. Currently, the majority of charities and social enterprises are not maximising the impact of social media, for both profile raising and fundraising.

1.9 We believe that the UK’s culture of philanthropy would also benefit from promoting the National Lottery much more as a vehicle for charitable giving.

2. Introduction

2.1 On recent evidence, we are concerned that there is a danger that the arts could be disproportionally affected by cuts in public funding1 and a desire to reduce the number of cultural sector quangos.2 Programmes aimed at increasing engagement in culture have already been cut.3

2.2 It appears that the sector is still seen as an easy target by Government overall, despite the strength of support we have experienced from civil servants at the Department for Culture, Media and Sport (DCMS). The cultural sector has traditionally struggled to make its case in a way that is appreciated by the Treasury and those that ultimately hold the purse strings.

2.3 This is in spite of the significant contribution the arts and heritage make to the economy through the creative industries and particularly tourism, not to mention their intrinsic value to individuals and communities. The Prime Minister recently cited the tourism sector as ‘fundamental to the rebuilding and rebalancing of our economy’ and ‘one of the best and fastest ways’ of generating jobs and income, using the economic success of Liverpool as European Capital of Culture as a direct example of this4.

2.4 According to Arts Council England figures, every £1 invested in culture produces £2; two thirds of the adult population in the UK enjoy the arts, visit historic sites and go to museums and galleries. Of the top 10 UK visitor attractions, 8 are national museums. The cultural sector is making a contribution to the economic recovery through offering work and training.5

2.5 At a local level, the arts are particularly vulnerable. We are aware of the difficulties already facing libraries, through our work with The Reading Agency, and our fear is that without a statutory responsibility, local councils will be left with little choice but to scale back their support for arts too.

2.6 It is our view that the arts and heritage sectors should bear their share of the pain in the current economic climate as a matter of ‘fairness’. However, given the levels of investment in the sector, and indeed the DCMS as whole, this should not be proposed as a way to fill the budget deficit. The DCMS overall has one of the smallest budgets in Whitehall.

2.7 Additionally, we do not want to see arts and heritage suffer greater cuts than other DCMS responsibilities, primarily sport. Both are equally important – particularly with London 2012 now firmly on the horizon.

3. The impact of spending cuts

3.1 Without doubt there will be hugely visible impacts of funding cuts for both arts organisations and audiences, based on current proposals of 25 to 40 per cent. The range and volume of arts will be reduced; and we may see less risky and cutting-edge work on offer as organisations look to maximise audiences and box office takings. Education and participation programmes are likely to be scaled back, and smaller, community-based organisations will suffer from local authority cuts. We fully expect to see organisations closing, greater staff redundancies and more individual artists struggling for commissions.

3.2 During this difficult time, the arts sector needs to prioritise what it can achieve, and be clear with the Government on what role it will play in the current climate. We know that the arts can provide enjoyment, inspiration, education and economic value - but whether the sector can continue to deliver on all of these with less funding remains to be seen.

3.3 Perhaps unusually, we are optimistic that there are also opportunities presented in the current economic climate. Organisations can and should be looking to be more sustainable in terms of their funding mix. During this golden period for the arts, and the boom in public investment, many organisations have become over reliant on the State. This has resulted in a lack of innovation, creativity and resourcefulness in the operation and management of some arts organisations.

3.4 Therefore, we would expect arts and heritage organisations to take a more entrepreneurial approach to diversify funding streams, and increase the creativity in developing projects. We believe that these activities, if implemented successfully, are likely to attract additional interest from non-public funders. However, it is our experience that few arts organisations have the time, resources and expertise to really exercise this sort of innovation. Investment in information sharing and capacity-building to this end would be valuable.

Case study: Reading Agency

3.5 On 1 July 2010 Culture Minister Ed Vaizey MP outlined the Conservative vision for libraries, which he believes have a "home at the heart of the ‘big society’". The Big Society is particularly relevant to libraries which have the needs of communities and library users at their heart. However, in this age of austerity, it is also essential that creative activities and learning across the sector are given room to thrive and flourish.

3. 6 Cause4 knows from first-hand experience of working with The Reading Agency how this can happen. The Reading Agency has developed large-scale community reading programmes in partnership with library services. Its Summer Reading Challenge engages 725,000 children in reading and creative activities across the six week summer holiday, providing volunteering opportunities and collaboration with local schools.

3.7 Undoubtedly, libraries offer a lifeline between the information rich and the information poor. They can support people to get involved in local life in all sorts of ways: volunteers taking services to the housebound; or residents running reading groups. It is this sort of new partnership operating at a national and local level, and linking the statutory and arts sectors, that is essential to a new type of thinking and fundraising across the sector.

www.readingagency.org.uk

www.summerreadingchallenge.org.uk

4. Partnerships

4.1 While mergers may be a step too far for many arts organisations, partnerships are essential. The potential of mergers can quickly dissolve into parochialism, concerns about identity and branding, and difficulties about managing assets and staff.

4.2 There are, of course, gains to be made in sharing backroom functions and reducing wastage. But we believe the greatest opportunity lies in developing innovative projects in partnership that will be attractive to donors, both individual and corporate. This is particularly pertinent where there are a number of smaller organisations undertaking comparable activities, which is relatively common in the arts. Partnerships allow all parties to achieve their charitable objectives in an interesting and cost-effective way.

4.3 There is huge potential for new and exciting collaborations to be developed as a result of the restrained funding environment. This could be between arts organisations, and between arts organisations and funders. Joint working between charities on the delivery of projects would appeal to donors and cut down on duplication and waste. The Office for Civil Society’s work to reduce the burden of bureaucracy faced by charities is to be welcomed in this context.

Case study: London Chamber Orchestra & Barnado’s

4.4 The London Chamber Orchestra and Barnardo’s are working in partnership to deliver Music Junction. This is the first collaboration of its kind in the UK between a leading orchestra and a children’s charity looking specifically at joined up delivery. Together they are developing a project which focuses on bringing music making activities to vulnerable young people.

4.5 The pioneering project provides high-quality music-making activities and education, a programme of digital music technology training and a mentoring and befriending scheme, each catered to local needs and circumstances. Pupils from Academy schools, Barnardo’s schools and centres, and Independent schools will take part in shared activity, thereby directly breaking down divisions and prejudices.

5. Philanthropy

5.1 Corporate supporters and individual philanthropists can and do play a long-term role in funding the arts alongside government funding. Philanthropy for us encompasses the spectrum of charitable giving by business, trusts and foundations, by high net worth individuals as well as everyday giving by the average person. Increasing a culture of philanthropy requires an increase in both the number of people giving charitably, and the level of donations.

5.2 There is a danger in this current climate of existing philanthropic relationships shifting as the government talks of philanthropists stepping up to fill the gap left in public funding. We believe that this is counterproductive and, in light of the deeply personal nature of the relationship between organisation and philanthropist, such an expectation seems naïve. This approach shows a lack of fundamental understanding of the relationship between donor and charity.

5.3 It is important that the process of encouraging greater philanthropy is led by philanthropists themselves. The success of The Giving Pledge in the States arises because it is led entirely by philanthropists, those who have themselves ‘put their money where their mouth is’ and who stand as an exemplar.6 Attempts by Government to lead on this agenda are likely to be unproductive. At a time when the Government is reducing funding, the culture of philanthropy may benefit from leaving it to those that give to set the pace.

Case study: Salisbury International Arts Festival

5.4 Much is made of the difficulties that regional arts organisations have in attracting philanthropy. However, with the right energy and momentum, the potential to engage local philanthropy and business at a high level has just as many possibilities.

5.5 The Salisbury International Arts Festival is an example of regional tenacity and innovation. In looking to identify ways to maintain adequate levels of corporate sponsorship, the Festival team has looked to develop a stream of corporate funding that has been matched by an eminent local philanthropist to protect the amount of traditional headline sponsorship. This will secure the Festival’s diverse artistic programme throughout 2011 and enable the Festival a platform to engage with other local philanthropists providing flexible new models for philanthropic support.

5.6 We believe that the appropriate role for Government in supporting a culture of giving is in making giving easier, making it more tax efficient (for both individuals and companies), and recognising those that make a contribution. We welcome the moves by Government to look at reforming Gift Aid to increase the levels of take up; other means such as payroll giving and lifetime legacies would benefit from greater promotion. We recommend that Gift Aid, as well as other channels, are kept as simple as possible, and that any reforms are accompanied by an awareness campaign backed by the Government. Whatever the method – tax breaks, matched giving, charity bonds – radical change is needed which will outlast the term of any Government.

5.7 We believe that pragmatism should be at the heart of the decision making process of which organisations and projects should be funded by the state. The key consideration is what programmes of value would absolutely not otherwise take place – and would therefore merit support from the Treasury. This is, of course, not necessarily an easy question to answer and involves a large element of subjectivity.

5.8 Match funding initiatives would open up real possibilities for philanthropy. Government match funding of private support, potentially up to a 50/50 split, offers an excellent compromise solution, offering the ‘best bang for the private buck’. It provides an incentive to raise, an incentive to give and a means by which Government can get very best value.

5.9 The contributions of existing donors must also be made to go further through more effective donor relations. This requires increased learning within the arts sector and adequate training for emerging fundraisers. In this funding environment, innovative fundraising is an absolute necessity. It requires a breadth of business understanding as well as enterprise; skills which need developing in the arts and heritage sectors. Additionally, fundraising would benefit from some promotion as a respectable and professional career choice in order to attract new talent into the sector.

5.10 We believe that the most sustainable investment from Government would be in training fundraisers. Encouraging improved fundraising practices should also be integrated into funding agreements. Currently a large proportion of Arts Council funding is spent on the annual programme of arts organisations. A strand of this might be more effectively spent on fundraising staff and resources (such as internal IT systems) to support the organisation in the long-term and help it stand on its own two feet.

Case study: Cause4 training programme

5.11 Cause4 is developing an innovative training programme which aims to attract new talent into development and fundraising and to equip trainees with the skills and experience needed for success. Development and fundraising must go hand in hand – a principle to which Cause4 is uncompromisingly wedded and one that should be deeply ingrained into the thinking of charities and the psyche of fundraisers.

5.12 Countless trustees and executives of charities tell us that they cannot find people of the right calibre to lead their fundraising – people with good instincts and natural judgment, strong communicators capable of building good relationships with donors; strategic thinkers equipped with a broad and practical understanding of the full range of fundraising opportunities.

5.13 Most of us who have found our ways into charity development and fundraising, have done so by accident rather than design. While there are development and fundraising qualifications, and also specific strands within some Masters programmes, these focus too heavily on the theory and insufficiently upon the practice.

5.14 We believe that there is no substitute for hands-on experience that will enable a new energetic and dynamic group of fundraisers to learn how to think strategically, how to develop projects and programmes which will deliver social outcomes, how to build relationships and develop good instincts by working alongside those with a few years – and a bit of success – under their belts.

5.15 The Government’s recommendation of a 1% income social norm is helpful, but we need to create a culture of giving in which everyone is able to participate at levels appropriate to them. This may be more than 1% in many cases.

5.16 It is also vital that lower levels of giving are maximised. Philanthropy should not be the preserve of the wealthy. We can only give according to our means but we will only give if somehow the instinct to give has been developed.

5.17 It is in allowing everyone to give, and in encouraging everyone to give, that a stronger philanthropic culture can be created. All philanthropic journeys, we assume, begin with a small initial step. If the instinct to give according to means is developed, we will see extensive small-scale giving complemented by an increase in those substantial gifts that really make things happen.

5.18 Social media has the potential to revolutionise giving of this sort. The pace of technological progress, especially with the spread of smart phones and the development of location-based services, means that fundraising possibilities are endless. Currently, the majority of charities and social enterprises use the tools of social media, such as Twitter and Facebook as a bolt-on, rather than integrating and optimising them with existing efforts and resources.

5.19 Increasingly, Cause4 has been asked to help charities and social enterprises maximise social media strategies, to think about an organisation’s story and to support them to enhance fundraising. Delivery of social media strategies are perfect volunteer activity but the framework needs to be robust and the outcomes strong with a clear means of delivery.

5.20 The Government might want to look at new initiatives for young people to encourage life-long giving, possibly as part of proposals for the national citizen service. There is certainly a role for schools, colleges and universities. Career-long giving is also important, and payroll giving could have a greater role to play. Organisations should also be looking to develop closer relationships with younger people on the ladder to career success. The Government should be recognising the contribution of donors, and those in earlier stages of their giving careers, through the honours system and in other ways.

6. National Lottery

6.1 We welcome the additional funds directed to arts and heritage from the Lottery, while at the same time recognising the value of the Big Lottery Fund as a source of funding to many community projects.

6.2 We believe that the UK’s culture of philanthropy could benefit from an examination of the role that the Lottery plays in the ecology of charitable giving. For example, how far are those who purchase tickets motivated by charity as opposed to personal gain; are philanthropic motivations considered when developing the criteria for distributing funds; do they help the right people and organisations; and are there ways to see income generated and spent in the same localities?

6.3 We would also like consideration to be given to the promotion of the Lottery, with it positioned more centrally in the sphere of charitable giving. Run well, and promoted much more obviously as a vehicle for supporting good causes, it could achieve even more for good causes. 

7. About Cause4

7.1 Cause4 was set up by Nick Gandon and Michelle Wright in May 2009 to support charities and social enterprises in development and fundraising across the arts, community, sport and education sectors. Michelle was the London Symphony Orchestra’s Development Director working across a diverse international fundraising portfolio, whilst Nick was Director of the Cricket Foundation, developing and overseeing the highly successful Chance to Shine programme. The company currently works with numerous organisations and philanthropists in the arts sector.

September 2010