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Expert Papers

Private Cultural Funding: European perspectives

Prof. Dr. Andreas Wiesand, Executive Director of the European Institute for Comparative Cultural Research (ERICarts)

In 2014, the global sponsorship market is estimated to reach a total of ca. 55 billion US $ or 40bn EUR, according to US sources (1). If we take these figures for granted, Europe would account for a share of roughly 11bn EUR or slightly over 25 %. While large parts of this type of investment go into sports and smaller ones into education and research, social causes and environmental purposes, figures for some of the European countries indicate that culture, including heritage, often ranks second. In a conservative estimate, we can assume that annually funds in the range of 2 to 3bn EUR contribute to cultural events, to the work of institutions and heritage sites or to artistic productions (excluding, of course, investments made by media/creative industries companies themselves).

To this one could add other forms of private (cultural) support, including, but not limited to:

_Foundations and special funds, some of which play an important role in cultural life (e.g. in Denmark, Italy, the Netherlands, Portugal or the UK);
_Citizens’ associations, including “Friends of...” societies associated with museums etc.;

_Individual donations, increasingly in the form of “Crowdfunding” – a new method of sponsorship especially for innovative, sometimes even controversial, start-ups that is enabled by contemporary Internet technologies and is said to have successfully contributed about 735 million EUR (2012) to the financing of some 470 000 European projects.(2)

Despite such impressive figures, we need to be aware of the fact that reliable statistics validating the role of private or corporate contributions in the overall support to culture exist only in a few countries, as evidenced in the national profiles of the Council of Europe/ERICarts “Compendium of Cultural Policies & Trends in Europe”.(3) In addition, we should not overestimate the impact of this type of funding: While it may be considered as a relevant supplement to traditional sources of finance from the public purse or from banks in some (mostly Western) countries, it plays only a marginal role in others, due also to unfavourable or complicated tax regulations. A study for the European Parliament4 found private contributions to reach, on average, 2–4% of comparable public public budgets for culture.

Another aspect to consider is the volatility of corporate cultural funding in times of economic crisis. Contrary to some beliefs, chances to balance, at least in part, cuts in state and city budgets, are highly improbable. The “substantial negative effects of the economic downturn on total giving” are described in the Italian “Compendium” profile: “Whereas donations, and in particular individual donations, have been less affected, bank- ing foundations have been significantly hit: –35 % between 2008 and 2011, with a strong acceleration of –20 % in the last year. This is bad news for the cultural sector, as banking foundations represent, by far, the core of private giving to culture and the arts in Italy.”

Similar cutbacks are mentioned in other country profiles, e.g. in the Netherlands, Romania or Spain, and it clearly needs special conditions such as those existing in Mona- co to come to different results: In the Principality,11.4% of the overall funding on culture – 44m EUR in 2012 – came from private sponsors.
Comparing corporate funding with individual donations, “Friends of...” societies and volunteers working in museums and other cultural institutions, the Swedish “Compendium” author reaches this conclusion: “Civil society support of culture appears to be far more important than business”.

Two national examples (Source: Council of Europe/ERICarts “Compendium”, 15th edition, 2014)

The Netherlands: Cooperation models and additional forms of financing

“Before state funding came into being, the cultural support system in the Netherlands was built around private initiative and social associations. In the second half of the 19th century, many important Dutch museums were initiated, mostly in cooperation with municipalities... After World War II, central government intensified policy-making in the field of the arts and culture. From the 1960s on, almost all major institutions received subsidies from the state. But many of them were still managed by private board members. Together with central government, the board members formed the governance structure of a non-profit foundation [stichting]. Towards the end of the 20th century, these public-private organisation models returned to prominence. In the 1990s, both central government and the municipalities distanced themselves from museums. The museums were privatised; they became foundations with an autonomous management, separated from the subsidising governments. Due to the economic crisis of 2008 and the growing focus on the “value” debate, cultural institutions had to devote more energy to obtaining private income ...
Private associations and foundations: Next to government subsidies, funding comes from private associations and foundations ...
The Prince Bernhard Cultural Foundation is one of the largest private cultural foundations in the Netherlands. It stimulates the conservation of nature and culture by supporting over 3500 initiatives, individuals and projects every year.

Friends’ societies and volunteers: A growing number of subsidised cultural institutions have friends’ societies or private support systems. These allied organisations derive their income from membership fees, gifts and legacies. Especially in the museum sector, friends’ societies can play an important role ... In times of economic recession, cultural institutions are more dependent on volunteers. In the museum sector, the number of volunteers increased by 59 % between 2001 and 2011 ...

Sponsorship: In the 1990s, the Ministry of Education, Culture and Science drew up a code for the sponsors of cultural events, called Code Cultursponsoring. In this code, various rules for a sponsor relationship are defined and the framework for sponsorship agreements is stipulated. The most important aspect of the code is that, in principle, the sponsor is not allowed to influence the actual content of the activity organised by its cultural public partner ...

Donations: The government wants the cultural sector to become less dependent on government subsidies and to generate more money from private sources. For this reason, the Ministry of Education, Culture and Science set up the Cultural Entrepreneurship Programme (2012–2016). Cultural organisations and producers are supported in their entrepreneurial efforts and helped with advice, coaching and supervision to find alternative funding ... [In addition,] the government aims to support donations to the arts and culture with its Gift and Inheritance Tax Act and donation campaign.

Crowdfunding, the practice of funding a project or artist by raising small amounts of money from a large group of people, mostly via the internet, is gaining ground in the Netherlands. Since the state budget cuts to culture were announced in 2011, a lot of artists and institutions have started using the crowdfunding model to (attempt to) finance their projects, albums, plays etc.”

Lisa Van Woersem with Robert Oosterhuis

Serbia:An interrupted tradition

“Philanthropy and donations to art and culture developed in Serbia in the 19th century ... when the new bourgeoisie felt responsible to support the creation of national cultural institutions. The Serbian National Theatre in Novi Sad, and all the other theatres in Vojvodina, had been created exclusively through private support and donations... After World War II, private ownership of property was banned and the only form of private support to the arts was made by individuals to museums, etc., or by collectors operating in the art market. However, enterprises (socially owned) acted as “corporate donors” up until the economic crises at the beginning of the 1990s. Nowadays, a small number of enterprises use sponsorship as part of their marketing strategy, mostly supporting art production with services or with goods. A revitalisation of the Serbian economy as well as legal provisions are needed to create more efficient partnerships between the business sector and culture. Recently, new art and business partnerships have been created by foreign companies that operate in the Serbian market (Aktavis, Telenor, Philip Morris, LUKOIL, Mercedes Benz etc.) ... In 2007, as an instrument for promoting corporate philanthropy, the VIRTUS Award was introduced by the Balkan Fund for local initiatives. Research on corporate philanthropy in Serbia (2008) has shown that more than 46 % of companies like to support cultural activities...[However,]the number of possible donors (foreign foundations for example) is very small, because the law does not currently provide sufficient incentives to stimulate private investment in culture.”

Milena Dragicevic Sesic with Hristina Mikic

(1) 196898/global-sponsorship-spending- by-region-since-2009/
(2) Communication from the EU Commission: Unleashing the potential of Crowdfunding in the European Union, Brussels: COM(2014) 172 final, based on estimates in Massolution (2013): Crowdfunding Industry Report 2012
(4) Klamer, Arjoetal(2006):Financing the Arts and Culture in the EU. Brussels: European Parliament

Annual 2015