Private Investment in Culture Survey – What do we do now?

1. We need to be clear about the importance of public funding and its catalysing effect

From the outset, the report makes it clear that public funding has a crucial role to play in an organisation’s ability to attract and retain private investment.

Building on the Leading the Crowd report from earlier this year, the report notes that public investment helps organisations leverage private money by acting as a ‘kite mark’ for credibility, lowering risk for private donors, signalling potential growth opportunities, and opening the possibility of match funding. The case studies in Leading the Crowd evidence this, showing organisations able to radically transform and strengthen their finances through the effective utilisation of public funds. The following gives a snapshot of this change:

• The Baltic Centre for Contemporary Art in Gateshead used its £3million NPO funding as a kite mark for its quality and public value. This has underpinned the centre’s ability to double its private income between 2019 and 2024 and begin to develop a £10million endowment fund to provide long-term financial stability.
• English National Ballet was able to employ £7million of public funding to generate £10.6 million in private donations and a £20 million in-kind commercial contribution between 2015 and 2019. This funded the development of the Mulryan Centre for Dance.

As a sector, we need to clearly communicate this power of public funds in our fundraising and strategy work. Boards and senior leaders should be aware of the importance of public funding and seek to prioritise relationships with key stakeholders with this in mind. Applications for public funding should also draw out this theme, stressing the multiplier effect local or national funding can have. Our recent article on Making the economic case in arts and culture goes into more detail about how organisations can effectively make the economic case for funding and the multiplier effect of public funds should certainly be woven in here.

Making this case could be particularly important for smaller arts organisations. As the survey shows, organisations with a turnover of less than £100,000 are the most reliant on contributed income (money from Trusts and Foundations, corporates, and individual donors) seeing it equate to 40% of total income for the surveyed organisations of this size. Where capacity allows, organisations of this size should assess where public money can be acquired and prioritise this in fundraising strategy.

2. Collaboration not competition

Falling public funding, decreased individual giving, and increased competition for Trust and Foundation support have left organisations competing for a shrinking pool of funding.

In such an environment, it would be easy for organisations to turn inward and protect their own resources, networks, and expertise. However, and encouragingly for the sector, the report shows many in the sector are keen to collaborate in tackling these funding challenges.

As a sector, we should do all we can to encourage this collaboration and this is something we have discussed often in the past. With funding increasingly scarce and fundraisers difficult to recruit and retain, it is vital that organisations can come together and support each other. Networks for sharing knowledge and resources can provide vital support to organisations and charity leaders, as well as opening channels for greater collaboration further down the line. With record application numbers, funders are looking to support projects which will have maximum impact and joint funding bids, formalised partnerships and even mergers (stay tuned for more on this) could be effective ways for organisations to catch a funder’s eye and further its own mission whilst helping others.

3. Necessity is the mother of invention

Whilst the first two points think about ways in which organisations can increase success with traditional funding streams, it is also important to recognise that the fundraising landscape is changing.

As Will Harriss explored recently, the nature of philanthropy is evolving and arts organisations must be alive to these shifts in the landscape. The traditional income streams of public funding, Trust and Foundation money, and individual giving are declining and organisations cannot rely on them in the manner they once did.

With these changes in mind, organisations may well need to diversify fundraising efforts, ensuring there are not reliant on one type of income and are well-placed to access new and emerging forms of funding. This could come in the shape of corporate giving or sponsorship, developing a legacy giving scheme to capitalise on the success of this type of donation, or exploring what hidden funders might be out there.

Whilst exploring new income might sound appealing, we understand stretched resources and capacity might mean devising a corporate giving offer or legacy giving strategy are an impossibility in the short-term. It is in these circumstances that collaboration across the sector could become even more important. Building networks in the short-term could lead to resource sharing and partnership in the long-term, increasing the capacity of your organisation and the sector as a whole.