Serbia/ 6. Financing of culture  

6.1 Short overview

In September 2001, Serbia introduced a new budgetary system based on internationally accepted financial statistical codes, which enables the whole public sector to formulate and monitor all public expenditure in new ways.

This new system gives the Ministry of Culture, as well as all public cultural institutions, a new "philosophy" on public financing. At the same time, the new system gives Serbia an opportunity to establish a comparative system, which would be of great help to the Ministry to analyse and formulate new methods and instruments of cultural policy concerning public financing. The recent changes provoked a lot of dissatisfaction because taxes on each contract have been doubled.

The statistical system that currently exists in Serbia does not provide the real or full picture on the level of state expenditure for culture. In addition, allocations made to numerous cultural institutions are included in the budgets of different ministries, such as:

• Ministry of Education (art education, student cultural centres, etc.);
• Ministry of Foreign Affairs (international cultural co-operation);
• Ministry of Science (research in art and culture);
• Ministry of Diaspora (Diaspora community projects);
• Ministry of Youth and Sports;
• Ministry for Kosovo and Metohija; and
• Extra-budgetary lines to cover expenses for the Serbian Academy for Art and Sciences.

The Ministry of Culture of Serbia finances the work of 40 public cultural institutions of national importance (plus 14 cultural institutions on the territory of Kosovo and Metohija) and, via project funding, several hundred more cultural institutions and NGOs. The City of Belgrade finances 34 institutions that have city importance and 9 events and, through project funding, the number increases to a few hundred institutions, NGOs and individual projects.

To improve the system of financing culture, the government established an Agency for Cultural Development in June 2001. The main tasks of the agency were to:

• make and suggest programmes to improve the economic status of culture;
• identify fundraising programmes available on the international level;
• monitor and distribute foreign donations; and
• co-operate with public institutions and NGOs.

As the work of the agency has not been clear or transparent, and its level of efficiency is very low, the new Minister of Culture has dissolved the Agency and engaged the Ministry staff to undertake its tasks.

Reform initiatives in the financing culture were introduced in 2002 by new procedures for financing cultural projects. It is very interesting that project funding (informal) includes two main budget lines: the first represents small action projects – the scale of the average grant is from 1 700 EUR up to 7 200 EUR. The second budget line is for major investments, dedicated to film production, library purchases and support to capital publishing projects.

Table 6:     Structure of projects financed by public competitions in the field of arts and culture, 2007-2012

Source:     Ministry of Culture of the Republic of Serbia, 2007-2011.

Table 7:     Structure of projects financed by public competitions in the field of media, 2007-2012

Source:     Ministry of Culture of the Republic of Serbia, 2007-2011.

The amount of money intended for competitions (in the field of arts and culture as well as media) accounts for approximately 2-3% of the total budget of the Ministry of Culture. Focusing on competitions, in terms of grants, there are three priority fields: performing arts, music and visual arts. In 2012, these activities will receive two thirds of all financial support granted by an open competition system (41% for performing arts and music and 22% for visual arts and multimedia). There are no clear criteria for allocation funds of different art disciplines and the process of managing funds at the Ministry of Culture are still on an ad-hoc basis and very often too far from the real needs of artists’ organisations (e.g. the visual arts fund it too small to meet the needs of the visual art sector).

It is important to underline that since 2005, cultural heritage became a financial priority of the Ministry of Culture of Serbia. In 2005, approximately 5.4 million EUR was allocated for cultural heritage projects (e.g. reconstruction of Hilandar Monastery – 1.15 million EUR; reconstruction of Palace Complex Dedinje- 1.44 million EUR; projects of archaeological research – 196 000 EUR etc.). In 2006, the budget for cultural heritage projects increased by 25% (7.1 million EUR). In 2011, cultural heritage projects received funding of only 1.44 million EUR, more than two thirds less than in 2006. In 2011 Cultural heritage have become again investment priority due to truism projects in several cultural heritage site.

Financial crises in Serbia have a strong influence on public financing of cultural activities. The first sign of the current crisis appeared in the third quarter of 2008 with a drop in manufacturing output. In 2008, GDP decreased by 2%, but in 2011 it slowly increased by 1.2 %. There are 524 cultural organisations that have public institution status, out of which 67% (359 institutions) are based on the territory of Central Serbia, and 23% (167 institutions) on the territory of AP Vojvodina. In accordance with the latest available data for Official Statistics for the year 2008, 136 million EUR were allocated to financing public cultural institutions (national, regional and local).

Traditionally, a primary economic instrument of cultural policy in Serbia has been subsidies and grants to creative producers. Those direct supports were mainly in the form of financial assistance to individual artist and cultural organisations. Other means of economic measures include indirect assistance which has been providing by using very limited tax concessions. The paradox is that both areas are equally neglected and it is necessary to develop adequate tax measures dedicated to artistic producers as well as consumers and to give by indirect measures support to financial sustainability of cultural organisation as well as private and corporate investment in cultural sector.

There was increased emphasis on supporting local cultural life and folklore and folk festivals, especially in Central Serbia (e.g. "Cultural summer in Paracin"- presentation of folk music and culture; Jagodinsko kulturno leto in Jagodina etc). The economic crisis has deepened the imbalance between the institutional cultural system and popular (political-oriented) local festivals. Some festivals had budgets that are equivalent to the annual budgets of local institutions (e.g. in organising "Days of beer", Zrenjanin local municipality had a budget of 160 000 EUR, which is the same as the annual budget for the Contemporary Gallery or Archive in Zreanjanin). In 2008, for example, local municipalities organised 1 250 local events and festivals, while local cultural institutions cut their programmes by 30% due to a lack of money.

There are many examples of how the lack of funding has impacted on programme activities: at the end of 2009, Belgrade Philharmonic Orchestra was unable to participate at BEMUS; by mid-2010, the Ministry of Culture did not have enough money to support participation of Serbian cultural organisations in the programme Culture 2007-2013; the budget for "Sterijino pozorje" Novi Sad was reduced by 50%, most cultural events with an international reputation (BITEF, Sterijino pozorje, BELEF, etc.) were oriented to domestic cultural production due to reduced budgets etc.

Philanthropy and donations to art and culture developed in Serbia in the 19th century as part of a nationalist resurgence, when the new bourgeoisie felt responsible to support the creation of national cultural institutions. The Serbian National Theatre in Novi Sad, and all the other theatres in Vojvodina, had been created exclusively through private support and donations. During that time, donations played a crucial role, both in the form of large individual donations, but also smaller collections of private support for important cultural initiatives that were not supported by the state - such as the gallery "Cvijeta Zuzoric" in Belgrade, which was built around 1930 with private donations.

After World War II, private ownership of property was banned and the only form of private support to the arts was made by individuals to museums, etc., or by collectors operating in the art market. However, enterprises (socially owned) acted as "corporate donors" up until the economic crises at the beginning of the 1990s. Nowadays, a small number of enterprises use sponsorship as part of their marketing strategy, mostly supporting art production with services or with goods. A revitalisation of the Serbian economy, as well as legal provisions, are the basic conditions which are needed to create more efficient partnerships between the business sector and culture. Recently, new art and business partnerships have been created by foreign companies that operate in the Serbian market. The companies such as Aktavis, Telenor, Philip Morris, LUKOIL, Mercedes Benz etc., continually support cultural programmes and activities in the framework of their "corporate social responsibility strategy". In 2007, as an instrument for promoting corporate philanthropy, the VIRTUS award was introduced by the Balkan Fund for local initiatives. Research on corporate philanthropy in Serbia (2008) has shown that more than 46% of companies like to support cultural activities.  

The number of possible donors (foreign foundations for example) is very small because the law does not currently provide sufficient incentives to stimulate private investment in culture.

Your Comments on this Chapter?