Funding the arts

by Sally Blundell / 06 August, 2011
Support for the arts is lacking from a younger generation of collectors, but does the answer lie in newer ways of doing things?

Philanthropist Sir James Wallace, photo/Getty Images

Ten paintings of 10 billy goats by 10 pupils from Auckland’s Newmarket Primary School – Sir James Wallace, arts collector, patron, philanthropist and founder of this country’s most valuable art awards, is thrilled with his latest purchase.

“They are fantastic. It’s in the category of primitive art. There’s an honesty which is interesting and worthy of collecting.”

Since his first purchase of a Toss Woollaston landscape in the mid-1960s, Wallace has amassed a collection of 5000 works by leading New Zealand artists, made accessible through Auckland’s historic Pah Homestead and loans to schools, universities and hospitals. Now he’s laying down a challenge to those able but apparently unwilling to follow in his philanthropic footsteps.

“If you look at the back of [arts] programmes, you see the same names over and over. The younger generation are not taking time to participate. And it’s not only the young. I find it extraordinary that so many business leaders are getting obscene salaries, making millions as individuals, and I don’t see any of that coming back into the arts.”

He’s not alone in his concerns. Frozen arts budgets, reduced spending at the box office and recessionary caution by corporate sponsors have put the spotlight on philanthropic giving – and the view is not pretty. Ministry for Culture and Heritage figures show in the 2007/08 year, just 3% of the $383 million given as gifts, grants and sponsorships to 480 cultural organisations came from individuals. That’s half the amount given by the corporate sector, barely registering against the central and local government contribution.

“I don’t think younger people, people in their thirties and forties, are as engaged,” says philanthropist and fundraiser Dayle Mace, who is chairwoman of the Auckland Art Gallery patrons group and will be taking part in the panel discussion “Why Give to the Arts?” at this year’s Auckland Art Fair.

“They are buying the $40,000 artwork, so they are contributing in that way, but they aren’t going along to those [fundraising] events or being involved in supporting them. We’re talking about that culture of philanthropy – it’s a small group that is being drawn from all the time. How do we make people see that it is important to support the art gallery, for instance, because it is for the betterment of everybody – for their children, for their grandchildren? It is a really interesting challenge.”

And it’s a challenge for arts organisations around the world. In the US, long regarded as a model for philanthropic giving, 41% of non-profit arts organisations surveyed in 2009 were unable to balance their budgets – symptomatic, commentators say, of a sector over-reliant on an upper middle-class cultural elite.

Last year, wealthy philanthropists in the UK wrote to Prime Minister David Cameron warning they could not make up the shortfall left by arts funding cuts. Alongside tax changes to boost private giving, there have been calls to enable cellphone donations, to allow charities to cash in legacies before the donor’s death and to set up free banking for the entire charity sector.

In this country, charitable giving has been made easier and financially more attractive through the lifting of the cap on tax credits and the introduction of payroll giving, by which employees can allocate a proportion of their pay to an Inland Revenue-approved donee organisation. Although employees are rising to the challenge – in March, 5000 people made donations through the scheme – Ministry for Culture and Heritage data shows only 53% of respondent arts organisations had donee status with the IRD.

Last year, a Government-convened philanthropy task force recommended a greater recognition of donors, the introduction of gift aid allowing charities to claim the tax benefit of donations, a system of matched funding, and the consideration of cultural gifting where the market value of a gift is deemed fully or partially tax-deductible.

It also suggested a new entity be established to help arts organisations develop their philanthropic potential, along the lines of Artsupport Australia, which clocked up more than A$45 million in new philanthropic income over seven years for an investment of A$4.6 million.

“We want organisations whose default idea will not be to go to Government,” says Arts, Culture and Heritage Minister Chris Finlayson, “but to say, ‘Right, we need to raise $500,000, let’s go for it.’” The idea is not to replace Government funding, he says, but “to grow the pie”.

From next year, Creative New Zealand’s multi-year and contestable-funding programmes will be replaced by two new schemes, both requiring evidence of financial viability or at least alternative sources of financial support. Confronted by a seemingly reluctant demographic, arts organisations will also need help to convert subscribers and ticket buyers into active supporters.

“The idea of supporting people’s capability so they can be more successful is fundamental to how we see ourselves as a development agency,” says Creative New Zealand chief executive Stephen Wainwright. “One [way] is to remind people more broadly of the many good things of philanthropy. Another is to more specifically help organisations feel more confident in this territory. Some New Zealanders feel a bit yucky about making the ask.”

Clearly they do. Of those organisations surveyed by the Ministry for Culture and Heritage that did not receive funding from individuals, 78% had not sought it. New Zealanders may not be mean-spirited, just oblivious. “I don’t think they are being invited in a very effective way,” says Arts Foundation director Simon Bowden. “And I don’t think the arts community is geared up to do that effectively. It’s all about improving that ability within the arts community, asking in a dynamic way and maintaining and growing those relationships.

Sydney's MCA, photo/Getty Images

“The arts have a real advantage: they know their audiences, even if they’re not yet fully equipped to communicate with them. So it’s a matter of tapping into those people who are generally in love with the arts and turning that love into support.” Last year, Sydney’s Museum of Contemporary Art (MCA) launched its Young Ambassadors Programme aimed at the 25-40 age group. Within the first seven months, the A$500-a-year subscription programme had exceeded MCA’s expectations, with 160 young “ambassadors” signed up to an impressive schedule of openings, curator-led tours, artist talks (all artists are paid) and studios visits.

But it comes at a cost. “Young ambassadors’ money is not tax-deductible because we are giving them too much,” explains MCA director Elizabeth Ann Macgregor. “It’s not a donation; it’s a programme they pay for.”

But isn’t that missing the philanthropic point? “I do worry about that. Of course, there has to be a social dimension, and every time they come to see a great show we know they are going to tell their mates, who tell their mates. But most are there to learn about the art – I think we will be able to develop the philanthropic side of it.”

But such high-cost philanthropic investment has little traction in this country. “If it is true philanthropy,” says the Auckland patrons group’s Mace, “the money that is given goes to the institution or project, not to support fabulous functions and someone to organise it for you. That’s defeating the purpose.”

Time and again the advice is the same: charitable giving is born out of enthusiasm, good communication and a clear and achievable goal. “It’s about tapping into existing communities,” says Te Papa’s -Victoria Esson, “making people realise there’s not some magic pot of money to keep your organisation operating.”

It’s about keeping supporters engaged with what’s happening, says William Somerville, chairman of Auckland’s Artspace. “They like to talk to the director, maybe get a few ideas about things they should look at. Almost inevitably, the major donors are the major collectors and a personable director that people like and respect is often the best fundraiser. There’s a lot of wealth in the younger generation, both inherited and made – certainly enough to write a cheque for $50,000 without being too concerned.”

Although volunteer time is essential to the running of Dunedin’s Blue Oyster Art Project Space, plans to increase investment have to be carefully negotiated, says director Jamie Hanton.

“It can be tricky balancing the two priorities of attracting our core audience and reaching out to people who may be interested in donating,” says Hanton. “It’s a challenge to us not to dumb down the programme or make it any less cutting edge but to make it more accessible.”

Increasingly, philanthropy is happening outside top-dollar, gala-type events, whether it’s from wealthy patrons like Wallace opening their collection to the public or, at the other end of the financial scale, from web-based “crowd-funding” schemes, such as Kickstarter in the US and IndieGoGo in the UK. This type of scheme allows donors to give small sums directly to specific projects, be they disaster relief, political campaigns or art projects, often with add-on perks to the donors. It’s fast, direct and project-focused.

Four years ago, Wellington marketing graduate Nathalie Hofsteede set up Give-alittle, an online programme raising funds for a range of sport, disaster relief, medical and arts projects. “We felt there was a large disconnect between charity and the community. When I looked at the ways I was getting information, which were largely online, there wasn’t a lot of participation by charitable organisations.”

Hofsteede says peer-to-peer web-based programmes such as Givealittle and Facebook suggest there’s an increase, rather than a decrease, in philanthropic giving, reliant not on black-tie events and big-brand organisations “owning” donors but on individuals responding directly to specific needs. “It’s a way of giving that is personal and very rewarding. It’s not polished – it feels more authentic.”

The Arts Foundation is planning its own crowd-funding scheme, but like -Givealittle, it won’t be offering rewards.

“It is based on donations being altruistic. I don’t think people will be inspired to give more because the reward is slightly better. If you’ve donated to a theatre and it’s reached its funding target, then the theatre could say, ‘We couldn’t have done this without you, please accept our invitation to attend opening night at no charge.’ It’s a thank you, not a promise.”

Some argue that connecting donors directly with artists and projects jeopardises creativity. That runs the risk of “the Hoff does Hamlet”, warns Patrick Hussey, of Arts & Business in the UK. But it does show how philanthropy can operate on a variety of levels, such as the 74 Venice Biennale patrons who raised close to $315,000 to take Michael Parekowhai and his sculptures to this year’s event or a student volunteering to work for two weeks for Blue Oyster.

Says Artspace’s Somerville: “It’s a strange economic activity in a way. If you take someone like Peter Jackson – the starting point is someone willing to give money to a shambling long-haired young guy who wants to make a weird film about zombies – you need people who can see the talent, the drive, the energy. It’s about making judgments.

“It’s fatal to be a woolly arts co-operative where everyone gets money because it’s their turn, but at the start you need public or charitable money to support that -activity.”
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