A decade of austerity has had a significant impact on funding models in the UK. Government figures reveal that grants from central government form a much smaller proportion of income of cultural institutions than they did 10 years ago. These changes have led to a shift in cultural business models with organisations having to rely more on mixed revenue generation than before.
Although the Charities Aid Foundation states that the amount of money going to charity as a whole rose from GB£ 9.7 billion in 2016 to GB£ 10.3 billion in 2017, the latest year for which data is available, the arts are the least popular charitable cause, receiving just 1% of the total amount given to charitable causes. At a time of economic difficulties when charities and good causes in many sectors are finding fundraising challenging, there is anecdotal evidence that some existing and prospective individual donors may be turning their attention to other areas of need.
An annual survey that assessed the extent of private sector investment in culture was discontinued after Arts and Business (A&B) lost its Arts Council England grant in 2011 and was forced to make about 80% of its staff redundant. A&B was absorbed into the Prince of Wales’s charity, Business in the Community (BITC), but there was insufficient money to continue the survey and the majority of its previous tasks. The final A&B survey for 2011/12 indicated that business support for the arts/culture in the UK was GB£ 113.8 million (broadly the same as the previous year), individuals gave GB£ 372.9 million (an increase of 6.5%) and trusts and foundations GB£ 173.8 million (a 15.8% increase). It also revealed a considerable imbalance between London and the rest of the country, with over 80% going to organisations in the capital. Subsequently, ACE has commissioned from mtm two three- yearly surveys on Private Sector Investment in Culture that cover England.
The first, for 2014/15, was published in 2016 and indicated that business support was GB£ 96 million, individual giving was GB£ 245 million and trusts and foundations provided GB£ 139 million. Some 60% of total private support went to the 50 largest organisations. A further report covering Private Investment in Arts and Culture was published in 2019 and indicated GB£ 545 million came from private sources in 2017/18. Individual giving still represented the largest amount at 43% of the total, while trusts and foundations contributed 38% and business 18%. The visual arts and museums sectors were the biggest beneficiaries representing half the total of private investment, but there were increases to all sectors except literature. Although the same methodology was used, the respondent samples were different and so comparisons need to be treated with caution. Significantly, 91% of the 889 respondents received some form of private investment.
In 2018/19 cultural organisations supported by DCMS attracted almost GB£ 436 million in fund- raising, including trading income and also the value of donated objects to museums and galleries.
Several initiatives were instituted by DCMS in conjunction with Arts Council England and others to help cultural organisations develop new revenue streams in the context of public expenditure cutbacks. These included the GB£ 100 million Catalyst Fund, which offers organisations assistance to diversify their income, develop philanthropic donations and endowments and help them become resilient and sustainable in the longer term. In addition, ACE has funded a number of pilot business support programmes with the same objective (see chapter 2.8)
Due to reductions in local government funding, arts organisations turned increasingly to trustsand foundations for assistance. Many of these have been generous in their support in recent years and some have also begun to provide core funding to arts organisations, whereas in the past funds would have been restricted to projects.
Proceeds from the National Lottery (after allocations for prizes, government tax, commission for retailers of tickets etc. and profits to the operating company) are provided for good causes, which are shared as follows: Health, education, environment and charitable causes (40%); Arts (20%); Heritage (20%); and Sport (20%) across the four UK nations. Since the first Lottery draw in 1994, more than GB£ 40 billion has been raised for over 565,000 good cause projects. Many of the grants have been under GB£ 10,000. In the financial year 2018-19, GB£ 1.6 billion was raised for good causes.
Initially, when the National Lottery was established, funds for the arts could only be spent on capital projects, not least to avoid any temptation future governments might have to use Lottery money as a substitute for government funds. This focus helped to rebuild and refurbish the cultural infrastructure. However, after a few years the nature of arts funding via the Lottery started changing, with government policy directions to allocate more of it to support smaller arts projects and later arts organisations. Today the arts in England and Wales are increasingly supported via Lottery funds. Not only has there been a significant expansion of funds for participatory and community arts and local heritage initiatives, but funds have been made available to artists, arts and cultural organisations and research in the sector. There is no doubt this is having a transformative effect on arts and culture, but at the same time there is concern that it is increasingly being used in place of government funds. Perhaps this has been fortuitous during a period of austerity policies, but it can be problematic given that lottery funding streams are dependent on income and in 2015-16 and 2016-2017 there were falls in Lottery ticket sales.