6.3 Trends and indicators for private cultural financing
According to the Arts & Business Private Investment Benchmarking Survey 2008/09, private sector investment in the arts in the UK was GBP 654 million, down from GBP 686.7 million in 2007/08. Individual giving remains the biggest private provider for culture with over 55% of total private investment at GBP 363 million, compared with GBP 382.4 million in 2007/08 (but still more than 2006/07). Trusts and foundations went down to GBP 134 million compared with GBP 141.1 million in 2007/08. Business investment was down once again at GBP 157 million from GBP 163.4 million the previous year. Provisional indications are that business investment in 2009/10 fell to its lowest point since 2004 and has been overtaken by contributions from trusts and foundations.
Moreover, at a time of economic difficulties when charities and good causes in many sectors are finding fund-raising challenging, there is anecdotal evidence that some existing and prospective individual donors may be turning their attention to other areas of need, such as health and education. An article in The Guardian newspaper (20 November 2010) indicated that whereas income from fund-raising increased in nine sectors in 2008/09 (when the banking crisis began to be felt) donors / giving for culture fell alarmingly by 21%.
For some time it has been recognised that too many cultural organisations are over-extended and under-capitalised, and very dependent on grant-aid from the public sector. A three year action research study conducted by the Mission, Models, Money (MMM) group completed in 2007 also found that cultural organisations were often ill-equipped to adapt to new structural changes brought about by technological advances, global interconnectedness and shifting consumer behaviour. They had inflexible business structures and the charity legal framework under which most non-profit cultural organisations operate acted like a straight jacket discouraging risk taking. Since 2008 MMM has been involved in a series of initiatives with cultural organisations and funders in such things as the use of new and alternative financial instruments and the creation of "more intelligent funding communities" (http://www.missionmodelsmoney.org) comprising both the public and private sectors.