What’s in a Charitable Status?

What’s in a Charitable Status?

Michael Adamson Profile

Michael Adamson was Arts Fundraising Fellow for Studio Wayne McGregor until September 2016, and has remained at the organisation in the new role of Development Officer. 

Charities are vital to society, however, in recent years, the work of non-profits has been left tainted. Poor fundraising practice, lack of transparency, and the high profile collapse of Kids Company have all contributed to the public’s lack of confidence in charities. The arts have been less mired in controversy than many of the national charities, nonetheless the consequences impact the entire charitable sector.

With the Charities Act 2016 now taking effect, including the set up of a new fundraising regulator, perhaps now is a good time to think about the current position and perception of the arts and its charitable status.

Memphis Barker commented last year that now is the time to change the definition of charity. Barker mainly focuses on criticising the current tax relief system, suggesting that instead of the state rewarding all donations with equal tax relief, it should only be offered to charities that work to alleviate poverty and suffering.

So what does this mean in terms of the value of the arts as charities?

The Charities Act outlines the list of purposes that are currently recognised as charitable in England and Wales. These include the prevention or relief of poverty, the advancement of animal welfare, and the advancement of the arts, culture, heritage or science, amongst others. The latter is what Barker regards to be less important and not deserving of fundraising initiatives like tax relief. However, why is it less important? Are charities that work in the fields of arts, culture, heritage or science not positively impacting our community enough?

Many arts organisations uniquely place themselves between the objectives of making great art and establishing a purpose that benefits the community. In fact, all arts organisations that are registered charities have an obligation to be to the public benefit.

In my own view, making art, as long as it is accessible, is of great benefit to the community. It feeds the cultural life of the community and enables individuals to engage and think creatively to benefit their own lives. It also illuminates the past, which can then enable us to shape the future, and it is also well placed to achieve a number of health and wellbeing outcomes.

However people are often surprised that the arts are mainly non-profit. Perhaps, as Jodie Marsden points out in her previous blog, this is because so many arts organisations are just not open enough with their charitable status. But if an arts organisation is less vocal about their status, does this mean that they are not properly fulfilling their charitable requirements? As questionable as this is, surely it is more about what you do and less about shouting about what you do? Nonetheless, at a time where the charitable sector as a whole is going through a public image crisis, the more that the public can see the great work of charities, the more their trust and confidence will increase.

So why is it that arts organisations may come under fire for being charitable? I think it partly stems from the notion that these arts charities may be taking away the funding from other charities that are perceived to be more important. Barker remarks that he is surprised that English National Opera is a charity, and that tax relief may equally go towards either “bringing a Russian mezzo-soprano to the UK or clothe a Syrian refugee through winter in Za’atari camp.” The ENO’s turnover in 2015 was £38.1m whilst the UK has contributed £1.1bn to the Syrian crisis. So I don’t think it can be effectively argued that arts charities are taking funding from important national charities. In fact the CAF UK Giving 2015 report shows that the arts received just 0.3% of the total amount that was donated in 2015. If anything this suggests that the arts is in need of more funding.

I think it also has something to do with the dual purpose of many arts organisations: producing excellent art and benefitting the community. Jess Boyes scrutinises public funded arts charities that strive for artistic excellence, but there is value in producing excellent art. Producing world-class art celebrates our artists and audiences, reinforces our position as a cultural leader on a global scale and most certainly defines the cultural life and diversity of our country.

Ultimately we need a diverse range of charities, which includes the arts, each serving a distinct purpose that is to the public benefit.  As Joe Saxton puts it “A flourishing voluntary and community sector depends on a dynamic and energetic set of organisations within it. To have this, we need a breadth of new start-ups to drive innovation and satisfy all of the different and growing needs in society.”

What do you think about the role of arts organisations as charities? We’d love to hear.