Private sector fundraising “not enough”, warn arts bodies

Lalayn Baluch

One-third of arts organisations believe it will take until 2015 to recoup losses in public subsidy through other sources of income, new research has revealed.

Meanwhile, a further 30% of organisations do not feel confident enough to predict when full recovery will be possible.

Larger companies are more positive, with more than half of organisations with an annual turnover of £5 million or more predicting a recovery. This drops to just 22.5% among groups with a turnover of £250,000.

The figures have been revealed to The Stage by think tank Arts Quarter, following its fourth survey on the recession’s impact on the UK culture sector.

AQ managing director John Nicholls warned that the results signalled a second “sector-specific” recession and bad news for employment. He said: “There is now very clear evidence of the sector going through a profound second recessionary wave, with disappointing levels of private sector fundraising growth, drops in public sector support and questions being raised over the extent to which earned incomes are able to make up any shortfalls seen in other forms of revenue.

“As a consequence of this, there is possibly the highest risk of cultural sector redundancies than will have been seen in living memory – gone from not appearing in top five responses in 2009, [it is] now the fourth highest.”

He said organisations that were struggling as a result of losses in fundraising revenue, subsidy and earned income now had “nowhere else to go but to contemplate redundancies or at the very least delay filling vacant roles if they are not to significantly cut into artistic and other public programming”.

According to the report, companies that have built up their capacity for fundraising are seeing a return for their efforts, particularly those outside London. However, this was to the detriment of organisations that had not been able to afford such measures. The report stated this “could provide early evidence of ‘bottle-necking’, where fundraising capacity is considerably increased within the sector without a commensurate rate of growth in philanthropy” to meet its needs.

“There is a clear need for the Coalition to step up its plans to promote giving to the arts as soon as possible to prevent this issue from getting worse. If it does not do so, investment via Catalyst [Arts Council England's £50 million private giving investment programme] could be deemed to have failed,” Nicholls said.

The report also revealed increasing scepticism about the impact of the Olympics in London next year. Among theatre respondents, 35% felt the games may have a negative impact on their fundraising capacities, compared to 29% at this point last year, and just 3% believed they would have a positive impact. Only 6% of theatres believed the Olympics would boost their earned revenue.

In London, just over 14% of all respondents felt the Games would have a positive impact on their fundraising, compared to one-quarter last year.

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