Colin Tweedy, Chief Executive, Arts & Business, key note speech at this year's CPPS conference: 'Maximising the Importance of Arts and Culture throughout the Economic Downturn'.
Would you call people "bastards" in public? Would you write an article welcoming a perceived collapse in global philanthropy?
Michael Lynch's attack on the City as "a bunch of bastards" who failed to cough up for the arts, even when times were good, singling out Goldman Sachs for particular condemnation, received considerable coverage. Polly Toynbee in The Guardian arguing that public funding is always better than private philanthropy, using as an object for censure the Bill Gates and Warren Buffett foundations, voiced a not uncommon sentiment.
Arts & Business last November gave Michael our Garrett award for his achievements at the Southbank Centre and I look forward to Polly Toynbee's trenchant remarks every week.
Nick Hytner, the Director of the National Theatre, wrote to The Times on Monday disassociating himself from Michael Lynch, praising the corporate sector and Goldman Sachs in particular. Alan Davey the CEO of Arts Council England in his Guardian blog this Wednesday stressed that "now is not the time for negativity" - "public and private funders of the arts need to stand firm and stand together".
Public good, private bad" is a mantra I have heard throughout my professional career. Arts & Business's founding father Lord Goodman, the greatest advocate of public funding of the arts, in creating Arts & Business 32 years ago, argued that the private sector should be the "court of final appeal". When public funds have turned you down, there should be others who can support you. Through the years we have articulated this in the phrase that the private sector should be a "supplement to, never a substitute for, public funds". However, the role and importance of the private sector has increased significantly, often to the point of parity. We believe that this public, private partnership, this mixed economy, is the hallmark of the British system, the bedrock of our creative endeavour, and, I would argue, our success story.
This global recession has already caused considerable damage to the arts. Look to the USA where arts companies are on the edge of bankruptcy and look to Italy where half the country's opera companies could close their doors forever in the next two years. I believe and hope that in the UK we will be spared the worst of these horror stories. The reason why? Because the US is reliant in effect, solely on the private sector and in Continental Europe, the public sector. The British mixed economy is far more resilient in these difficult times. This "third way" is vital in sustaining our cultural landscape in the next decade.
A nation's wealth is generated by its people, by its companies, not by its governments. The wealthy never get sympathy; I am not advocating it either, but Polly Toynbee's description of the "filthy rich" is just plain stupid. Wealth generation in the last two decades both globally and particularly in the UK, has been stupendous. We have all benefited from that wealth generation, in tax revenues alone. We are now suffering partly because so much of that tax revenue has disappeared.
The Forbes 400 richest people in 1982 had a combined net worth of $92 billion, by 2006 they owned $1.25 trillion. To make it on to the first list in 1982, you needed a net worth of $75 million and by 2006 you had to be a billionaire. A lot more of this money was self-made; inherited wealth made up over 21% of the first list and under 2% of the 2006 list. Almost a quarter of the 2006 rich owed their fortunes to the finance sector, compared with less than a tenth, back in 1982. In 1952 there were 39 UK millionaires, in 2005, 50,000 and in 2011, potentially 760,000 sterling millionaires.
Many of the world's richest people have seen their wealth dramatically reduced, businesses have crashed into bankruptcy and banks nationalised. Arts & Business's business survey sees that 30% believe the recession will have a negative impact on their arts support and 75% believe the recession will continue to have an impact on their giving until April 2011. The focus of their engagement is changing. Before the recession it was marketing and entertainment; now the priority is on staff engagement. Many companies still want to support the arts, but will keep their heads below the publicity parapet - "we will keep sponsoring - but no parties and less PR".
Small and medium sized arts organisations are being hit worst. Our new figures reveal that 63% are already suffering a drop in business funding, 43% a drop in philanthropic giving and 55% cuts from trusts and foundations.
But as Peter Aspden wrote in The Financial Times on Monday, not all is gloom and doom. Jonathan Mills, the Director of the Edinburgh Festival, has seen sponsorship and donations increase by 20% this year. Jonathan Mills said "It is more altruistic to support the arts than sports, because it connects to local communities. It produces good work and no one is earning vast fees out of it (unlike high profile sports sponsorships).
As present the UK sponsorship total of £934million breaks down to 51% sport, 20% broadcasting, 18% arts and "other" 10%.
I believe that one of the outcomes of the recession will be that arts sponsorship will pick up faster than sport - for just the reasons that Jonathan Mills has explained.
Arts & Business in January announced that in 2007/8 private investment increased by 12% - reaching an all time high of £686.7million. Business investment was down 7% to £163.4million. Trusts and foundations increased by 7% to £141.1million. Individual philanthropy leapt to record levels, by 25% to £382.4million.
This remarkable figure of £686.7million is however not likely to be reached again, Arts & Business estimates, till 2013. The next 3 to 4 years are likely to be very difficult, with a combined potential reduction in both public and private funds. But let the arts community take credit for their remarkable achievements securing £687million from the private sector - this is a strong base - a powerful base - hopefully to weather the economic storm.
Yes I am optimistic. Of course the recession will end, but of course it will take a long time for our economy and therefore our collective wealth to return to former levels. Attacking wealth, bashing bankers has to stop. Yes, there have been terrible mistakes, appalling bad practices, disgraceful greed. But business and individuals have no obligation to give, no obligation to sponsor. The arts are seen by some as not worthy of private support, as one investment banker last Friday, in the London Evening Standard observed, after Michael Lynch's attack on the corporate sector.
I welcome Alan Davey's six key model for arts funding - public (ACE & local), private - (business, foundations & individuals) and box office.
Three of these six keys are the territory of the private sector. The days that this was a "nice little add on" are long over, £687million is a substantial figure.
The time has now come to create a private sector policy for the arts to stand shoulder to shoulder with a public sector policy for the arts. A public sector policy for private investment is not enough - though we welcome the support of DCMS, ACE, the MLA and all the UK governments in advocating the value of the private sector.
Arts & Business is therefore creating a Council of leaders in both the business and arts communities to act as a task force to advise on policy and practice. We are particularly focusing on the business leaders who serve on arts boards across the UK.
Two years ago I was told that business was "hard wired" to support the arts and no more incentives were needed. Clearly that is nonsense. Arts & Business will campaign for the matching grant investment scheme that we enjoyed in England from 1984 to 2008 to be reintroduced. Arts & Business still run successful schemes in Scotland, Wales and Northern Ireland. Business investment in the arts will be critical as we move out of recession. Incentives to give, both fiscal and material are essential.
Individual philanthropy is one of the UK's success stories in the Blair/Brown decade. The Prince of Wales Medal for Arts Philanthropy, now in its second year, is our principle means to honour philanthropists. We are also working with the DCMS to host receptions across the country to celebrate philanthropy and to highlight giving of all sorts and of all sizes.
We welcome the initiative of Andy Burnham and Hazel Blears on "Empty Spaces" to find dynamic and creative uses for the recession hit empty shops on the nation's high streets. Arts & Business with Futurecity Arts will support the delivery of the Government's initiative to revitalise the high street.
Bringing new sectors and businesses to the arts and cultural table is critical and is the focus of our Commercial team. We will be building on the excellent work of ACE and the DCMS in strengthening our understanding of patterns of cultural consumption and participation, in order to create more compelling arguments for business brands to engage.
Our research department will step up its impact studies, provide quarterly market trends and continue to improve our annual survey on private investment and the value of the arts to the whole community. The economic as well as social arguments for private investment need to be based on sound research.
Arts fundraising master classes will be a new training platform which we will offer the cultural community. Arts & Business has placed 5,500 business people on arts boards. Through our Young People on Boards programme, we will mentor the under 25s to serve on boards as well. In the last decade we have seen the role of business people dramatically increase in the governance of arts and cultural organisations.
Business people on boards not only are there for good governance, but for fundraising and, as important now, for advocacy. Governments of all colour and persuasion listen (for good and ill) to business and some of the greatest advocates for continued public investment will be business leaders.
Alan Davey has called on private funders to be brave, to have courage to continue their investment in the arts. I totally endorse Alan's call. The UK model of public and private investment is working and while under severe threat, must not be allowed to falter.
We, as the spokespeople for the private sector call on the public sector to endorse their work, not to kick them when they are down. Keep and develop their friendship even at times when their funds dry up.
As Lord Mandelson the Business Secretary said recently "Britain will fight its way back by continuing to nurture the strongest creative sector in the world, exporting more cultural goods than any other economy in the world". Lord Mandelson is one of Arts & Business's Vice Presidents. His words are words of optimism. Business and creativity, together, commerce and culture. Not arts and bastards, but arts and business prospering together for their own and the common good.
Chief Executive, Arts & Business
24 April 2009
Delivered at the
2009 CPPS conference: Maximising the Importance of Arts and Culture throughout the Economic Downturn