Arts funding in recession

Sage Gateshead © slmp.co.uk

‘Who cares who wrote the libretto? What about the guy who wrote the cheque?’ – reportedly the words of Alberto Vilar, serial donor to the world’s great opera houses and orchestras.

Since the mid-1980s, it is estimated that the American multi-millionaire financier pledged more than $250million to performing arts companies including the Vienna State Opera, Mariinsky Theatre, Metropolitan Opera and Royal Opera House. In return he wanted recognition: the Met renamed its Grand Tier after him, and the promise of £10million put Vilar’s name on the refurbished Floral Hall at Covent Garden.

Vilar claimed not to interfere with the opera houses’ artistic direction, but some observers accused him of pushing them towards conservatism by only backing the tame productions he enjoyed. His defenders argued that the generous philanthropist should be allowed to spend his own money however he liked.

The only problem? It wasn’t his money. At the end of November in New York, Alberto Vilar and his business partner Gary Tanaka were convicted of multiple counts of fraud; they are expected to be imprisoned for up to 20 years. Prosecutors argued that Vilar had stolen millions of dollars from clients and used the money to fund donations.

The Royal Opera House received less than half of the promised sum and in 2005, the year Vilar was arrested, they scrubbed his name from the Floral Hall, later rededicating it to publisher Paul Hamlyn.

Giving money away to fund classical music is an unusual way for a fraudster to spend his loot, but the adulation that came with being a big donor evidently appealed to Vilar. Every major performing arts company has a gang of professional schmoozers, known as the Development Team, whose job is to part wealthy individuals, businesses and foundations from their cash.

These fundraisers’ inducements range from seat-back plaques to seats on the board, and nothing seems to bring out the philanthropic spirit like a piece of customised masonry – hence the numerous walls of inscribed bricks dedicated to generous ‘Friends’ and ‘Angels’ propping up arts venues across the UK. Whilst patrons’ primary reason for donating may be to support the performances, the size of their gift can be influenced by the exclusivity of the package on offer: a modest sum will entitle you to a week’s advance booking; a more substantial amount lets you mingle with the maestro.

For businesses, the advantages are more calculable: high-art audiences are perceived to be high-income high-spenders. The older, upper- and middle-class people who attend concerts, opera and plays are difficult consumers to reach because they watch less TV and are less susceptible to conventional advertising, so sponsoring performances or ensembles buys access to a lucrative segment of the market.

In addition many of the values exemplified by performance – excitement, dedication, creativity – are positive qualities businesses want to be identified with. Sage plc is a software company, best known for making accountancy programs like that used to keep the ISM’s books in order. By giving £6million to the Gateshead Music Centre in 2004, it got to rename the Norman Foster-designed building the Sage Gateshead. Why did Sage do it? ‘It was always marketing led,’ said chief executive Paul Walker. ‘We worked out that in terms of marketing and branding, £6million was a pretty good price for perpetuity. The branding has given a new dimension to Sage which has helped our global development, without a doubt.’

However, this kind of funding could be at risk. Some of the world’s biggest sponsors of the arts – like Lehman Brothers and HBOS – have disappeared, and according to an Arts & Business survey, more than 40% of businesses predict that the current economic downturn will badly affect their arts sponsorship programmes. Those who mainly support the arts for marketing reasons are most likely to cut back.

Both the government and Arts Council England maintain that the way through the difficult economic situation is by hard work on the part of both artists and administrators.

‘This is a time to be bold and not to retreat,’ said ACE’s chief executive Alan Davey. ‘We know from previous hard times that if standards of aspiration and ambition fall, audiences don’t engage and organisations fall into a spiral of decline.’

Culture Minister Barbara Follett asserted that ‘there will still be significant potential sources of private investment, but they will need to be cultivated through effective engagement and sophisticated relationship management ... we need to help nurture appropriate skills and build fundraising capacity.’

So the schmoozers need to up their game. But organisations that depend too heavily on private funding not only subject themselves to the volatility of the broader economy but also to the fluctuating moods of their donors.

During the 24 years she lived in the UK, the American Carol Hogel gave a reported £20m to companies including the Edinburgh International Festival, Royal Scottish National Orchestra and Scottish Opera through the Dunard Fund. Yet she left the country in April 2008, partly as a reaction to the government’s tax on ‘non-doms’ and partly because of the ‘destructively spiteful, philistine attitude of journalists’ towards philanthropists in the UK.

In November, Arts & Business gave Ms Hogel one of its inaugural Prince of Wales Medals for Arts Philanthropy, alongside six other donors including Lord Sainsbury and Vivien Duffield (daughter of Selfridges owner Charles Clore). We can assume that the gesture was partly an olive branch to entice her back to Britain, but recognition of her genuine, sustained commitment to the arts in the UK was long overdue.

Whilst we as musicians may feel uncomfortable with any fundraising activity that distracts from the art itself, it is crucial – especially in a colder economic climate – that those who give money with the right motivation are appreciated and encouraged. The arts now operate in a ‘mixed economy’ made up of public and private funding as well as takings at the box office. We are more concerned with who wrote the libretto – or at least the score – than who wrote the cheque, but in most cases we can’t have one without the other.

What do you think of the way we fund the arts in the UK? How has private money affected the arts? How should we balance the contributions of concertgoers, public and private funders? E-mail .(JavaScript must be enabled to view this email address)

Callum Thomson is Head of Marketing & Media at the ISM