One of the coalition’s big ideas for arts and culture is to encourage philanthropy, with culture secretary Jeremy Hunt looking enviously at the US, where cultural giving per capita is £37 a month compared with just £6 in the UK.
Hunt wants to see corporate sponsorship and private donations become a significant slice of income for museums and galleries in this country. But some museum professionals fear this is simply paving the way for withdrawal of state funding, although Hunt insists this is not the case.
“Philanthropy is not about replacing state funding with private support,” said Hunt at the launch of the government’s philanthropy action plan in December.
“Nor is it about importing a US model wholesale into the UK. Over-dependence on endowments has been as dangerous to cultural organisations there as over-dependence on state support is here.”
So what is Hunt’s vision for a UK-style philanthropy model? He says the aim is to “combine the best of US-style philanthropic support with the best of European-style public support”. What does this mean in practice?
Firstly, there is some new money on the table. The philanthropy action plan included an £80m fund for organisations to invest in “match funding” schemes. This means the cash will go to projects that raise “at least” the same amount from private sources.
Meanwhile, a department for culture report on philanthropy by Neil MacGregor, the director of the British Museum, was published in December. This explores how privately donated endowments (capital that is used to provide an income) might be attracted to support national museums.
Arts management consultant David Gordon was chief executive of Milwaukee Art Museum from 2002 until 2008, during which time he eliminated the institution’s $30m debt. He points to the long history of philanthropy in the US. “Except for the Smithsonian, arts organisations have always been funded by the private sector,” he says.
Gordon, who was director of the Royal Academy of Arts in London from 1996 to 2002, says the difference in the UK is that there’s the feeling that it’s the state’s duty to support mu-seums and galleries. And he says the US culture of giving is driven by the link between philanthropy and social status.
“US society values people who give generously to good causes,” Gordon says. “If you’re seen to be giving, your respect is enhanced. There’s no honours system in the States, and giving is a way people acquire a reputation for being good citizens.”
In her paper on philanthropy in the UK, Could the Rich Give More?, Theresa Lloyd, a consultant on fundraising in the non-profit sector, concludes they could, if approached in the correct way.
“There are far too many organisations whose management of significant prospects and really major donors is inadequate – undertaken by inexperienced and junior staff, with no engagement by trustees or senior staff outside the fundraising team.”
Steve Little, director of the Renaissance South East hub, believes many prospects are being simply ignored. The hub got consultants, The Management Centre, to look at improving the commercial offer of eight museums.
To test fundraising skills, the consultants wrote a letter to each museum, and pretended it was from Yorkshire pensioner Ethel Postlethwaite. She said how much she had enjoyed visiting the museum, and confided that since her husband died she was looking for new hobbies.
“The consultants planted lots of indicators that the person had money and was interested in the museum,” says Little. “Then they stapled a £10 note to the letter and waited for the response.” Only one museum sent a brief letter of thanks.
“The National Trust would have invited her to social events and sent someone round to advise her about her will,” says Little. “It’s a question of training. We’ve sent members of staff on the National Arts Fundraising School course, which is excellent – but with cuts, the first thing that goes is often training.”
The US culture of lifetime giving is also underpinned by a simple tax-relief system where the tax benefit of a charitable donation goes to the donor. If a US taxpayer gives cash, they can deduct its value from their income before income tax is calculated.
In the UK, it’s more complex. For a lower-rate taxpayer, the tax they have paid on the donation can be claimed back by the charity, under Gift Aid. If they are a higher-rate taxpayer, they can claim back the difference between the lower-rate tax claimed by the charity and the higher-rate tax they have paid.
But, for these givers, there is an upper limit of £500 on the amount of benefit that any donor can receive, even if they give millions.
In America, full-board giving, where every member of the museum board or trust makes a regular donation, is expected. Verity Haines, the national arts director of Arts & Business, says the practice influences trustee selection.
“In the US system, at the Metropolitan Museum or MoMA, the practice is to have people on their boards that are in a position to make a difference to their finances,” Haines says. “Full-board giving is not a tradition in the UK, and board members here are chosen to represent a diversity of perspectives.”
But Haines believes the US model is gaining popularity among donors. “Increasingly, prospects are asking, ‘Does your board give?’ If the answer is no, you will have a problem… How can you ask others for money if you aren’t prepared to give yourself?”
In the UK, donors tend to support metropolitan museums. This is almost unavoidable: corporate sponsorship is a commercial investment that must be placed where it will work hardest for shareholders, and wealthy individuals prefer to give to high-profile collections with reassuringly professional development departments.
Colin Tweedy, chief executive of Arts & Business, says 75% of philanthropic donations and 55% of corporate sponsorship goes to London. “There’s a huge concentration on the big institutions.”
He adds: “It’s the smaller concerns I fear for. Tate has fundraisers as good as anyone at the Met, but there are hundreds of small museums terrified they’re going to get their grants cut, and they don’t know how to reach out to philanthropists. We now need to create a model of giving outside of the metropolitan centres.”
In the US, museums outside the wealthier conurbations have been hit by the recession, but American philanthropists, especially the self-made variety, take a pride in their roots that can result in giving at a local level. As David Gordon points out: “You only need one local billionaire.”
Alice Walton, heiress to the fortune of retailing giant Wal-Mart, is building a museum in a small town in her native Arkansas. Crystal Bridges Museum of American Art promises to be a world-class collection that will “encourage community uses and activities as one of its highest priorities”.
UK national museums already benefit from the benign US system through American Friends groups. Two years ago, American legal scholar Arthur R Miller donated almost 2,000 prints by 19th-century Japanese artist Utagawa Kuniyoshi, valued at several million dollars, to the American Friends of the British Museum.
The museum’s director, Neil MacGregor, concludes in his report: “American taxpayers enjoy greater fiscal incentives to give objects to UK collections than do their British counterparts – an anomaly that ought to shame us into speedy action.”
He proposes extending the Acceptance in Lieu scheme, which allows works to pass to the state on the death of donors, in lieu of tax, to living donors. It’s probably not possible to transplant the US system here, but there are some practices that could be imported to boost income from private sources.
But first, public feeling needs to change so that it becomes more acceptable for private donors to support what are seen as public-sector projects.
Katrina Burroughs is a freelance arts journalist
Neil MacGregor’s report on endowments for national museums: www.culture.gov.uk/publications/7642.aspx
DCMS 10-point plan to encourage philanthropy: www.culture.gov.uk/news/media_releases/7631.aspx
• Develop a fundraising department – start by sending a member of staff on a course.
• Refine your pitch. Be as articulate on why you need funds as you are about the highlights of the collection.
• Radiate competency. Donors will only give if they are reassured their money will be properly administered.
• Institute an all-board giving policy. It needn’t be much, but it will encourage donors.
• Remember, each contact counts. Chief executives may cultivate the major patrons, but bear in mind that every member of staff meets potential donors daily.
• Show appreciation. From private tours to on-site parties, devise exclusive events to thank donors for their support.
At the Mary Rose Museum in Portsmouth Historic Dockyard, chief executive John Lippiett has been raising funds towards the conservation of the ship’s hull and the development of a new museum for the past eight years.
Lippiett, a retired rear-admiral, says that fundraising for the £35m project hasn’t been plain sailing. “Five years ago we put in a bid to build a new museum to the Heritage Lottery Fund (HLF) and failed at the first hurdle. They said one of the reasons we failed was that we had insufficient fundraising capacity.”
He recruited a team that included two experienced fundraisers and a secretary to run a database of donors. “And we set up an appeal committee, chaired by one of our trustees. The next time we approached the HLF, in 2008, we achieved a £21m grant, on condition that we raised match funding of £14m.”
“While the committee set about recruiting individuals to join the Mary Rose Commodores’ Club (for those donating between £10,000 and £100,000), we concentrated on approaching the trusts and foundations that support heritage causes. At the start, donations from the Wellcome Trust and the Garfield Weston and the Fidelity foundations lifted our appeal off the ground and gave others the confidence to back us.”
He says the team broadened its approach to attract corporate sponsorship, gaining two large deals before the recession bit. With just £3m left to raise, Lippiett looks back on the fundraising and describes it as, “five years of sheer hard grind”.
Hunt wants to see corporate sponsorship and private donations become a significant slice of income for museums and galleries in this country. But some museum professionals fear this is simply paving the way for withdrawal of state funding, although Hunt insists this is not the case.
“Philanthropy is not about replacing state funding with private support,” said Hunt at the launch of the government’s philanthropy action plan in December.
“Nor is it about importing a US model wholesale into the UK. Over-dependence on endowments has been as dangerous to cultural organisations there as over-dependence on state support is here.”
So what is Hunt’s vision for a UK-style philanthropy model? He says the aim is to “combine the best of US-style philanthropic support with the best of European-style public support”. What does this mean in practice?
Firstly, there is some new money on the table. The philanthropy action plan included an £80m fund for organisations to invest in “match funding” schemes. This means the cash will go to projects that raise “at least” the same amount from private sources.
Meanwhile, a department for culture report on philanthropy by Neil MacGregor, the director of the British Museum, was published in December. This explores how privately donated endowments (capital that is used to provide an income) might be attracted to support national museums.
Arts management consultant David Gordon was chief executive of Milwaukee Art Museum from 2002 until 2008, during which time he eliminated the institution’s $30m debt. He points to the long history of philanthropy in the US. “Except for the Smithsonian, arts organisations have always been funded by the private sector,” he says.
Gordon, who was director of the Royal Academy of Arts in London from 1996 to 2002, says the difference in the UK is that there’s the feeling that it’s the state’s duty to support mu-seums and galleries. And he says the US culture of giving is driven by the link between philanthropy and social status.
“US society values people who give generously to good causes,” Gordon says. “If you’re seen to be giving, your respect is enhanced. There’s no honours system in the States, and giving is a way people acquire a reputation for being good citizens.”
In her paper on philanthropy in the UK, Could the Rich Give More?, Theresa Lloyd, a consultant on fundraising in the non-profit sector, concludes they could, if approached in the correct way.
“There are far too many organisations whose management of significant prospects and really major donors is inadequate – undertaken by inexperienced and junior staff, with no engagement by trustees or senior staff outside the fundraising team.”
Steve Little, director of the Renaissance South East hub, believes many prospects are being simply ignored. The hub got consultants, The Management Centre, to look at improving the commercial offer of eight museums.
To test fundraising skills, the consultants wrote a letter to each museum, and pretended it was from Yorkshire pensioner Ethel Postlethwaite. She said how much she had enjoyed visiting the museum, and confided that since her husband died she was looking for new hobbies.
“The consultants planted lots of indicators that the person had money and was interested in the museum,” says Little. “Then they stapled a £10 note to the letter and waited for the response.” Only one museum sent a brief letter of thanks.
“The National Trust would have invited her to social events and sent someone round to advise her about her will,” says Little. “It’s a question of training. We’ve sent members of staff on the National Arts Fundraising School course, which is excellent – but with cuts, the first thing that goes is often training.”
The US culture of lifetime giving is also underpinned by a simple tax-relief system where the tax benefit of a charitable donation goes to the donor. If a US taxpayer gives cash, they can deduct its value from their income before income tax is calculated.
In the UK, it’s more complex. For a lower-rate taxpayer, the tax they have paid on the donation can be claimed back by the charity, under Gift Aid. If they are a higher-rate taxpayer, they can claim back the difference between the lower-rate tax claimed by the charity and the higher-rate tax they have paid.
But, for these givers, there is an upper limit of £500 on the amount of benefit that any donor can receive, even if they give millions.
In America, full-board giving, where every member of the museum board or trust makes a regular donation, is expected. Verity Haines, the national arts director of Arts & Business, says the practice influences trustee selection.
“In the US system, at the Metropolitan Museum or MoMA, the practice is to have people on their boards that are in a position to make a difference to their finances,” Haines says. “Full-board giving is not a tradition in the UK, and board members here are chosen to represent a diversity of perspectives.”
But Haines believes the US model is gaining popularity among donors. “Increasingly, prospects are asking, ‘Does your board give?’ If the answer is no, you will have a problem… How can you ask others for money if you aren’t prepared to give yourself?”
In the UK, donors tend to support metropolitan museums. This is almost unavoidable: corporate sponsorship is a commercial investment that must be placed where it will work hardest for shareholders, and wealthy individuals prefer to give to high-profile collections with reassuringly professional development departments.
Colin Tweedy, chief executive of Arts & Business, says 75% of philanthropic donations and 55% of corporate sponsorship goes to London. “There’s a huge concentration on the big institutions.”
He adds: “It’s the smaller concerns I fear for. Tate has fundraisers as good as anyone at the Met, but there are hundreds of small museums terrified they’re going to get their grants cut, and they don’t know how to reach out to philanthropists. We now need to create a model of giving outside of the metropolitan centres.”
In the US, museums outside the wealthier conurbations have been hit by the recession, but American philanthropists, especially the self-made variety, take a pride in their roots that can result in giving at a local level. As David Gordon points out: “You only need one local billionaire.”
Alice Walton, heiress to the fortune of retailing giant Wal-Mart, is building a museum in a small town in her native Arkansas. Crystal Bridges Museum of American Art promises to be a world-class collection that will “encourage community uses and activities as one of its highest priorities”.
UK national museums already benefit from the benign US system through American Friends groups. Two years ago, American legal scholar Arthur R Miller donated almost 2,000 prints by 19th-century Japanese artist Utagawa Kuniyoshi, valued at several million dollars, to the American Friends of the British Museum.
The museum’s director, Neil MacGregor, concludes in his report: “American taxpayers enjoy greater fiscal incentives to give objects to UK collections than do their British counterparts – an anomaly that ought to shame us into speedy action.”
He proposes extending the Acceptance in Lieu scheme, which allows works to pass to the state on the death of donors, in lieu of tax, to living donors. It’s probably not possible to transplant the US system here, but there are some practices that could be imported to boost income from private sources.
But first, public feeling needs to change so that it becomes more acceptable for private donors to support what are seen as public-sector projects.
Katrina Burroughs is a freelance arts journalist
Neil MacGregor’s report on endowments for national museums: www.culture.gov.uk/publications/7642.aspx
DCMS 10-point plan to encourage philanthropy: www.culture.gov.uk/news/media_releases/7631.aspx
How to develop philanthropy for your museum
• Develop a fundraising department – start by sending a member of staff on a course.
• Refine your pitch. Be as articulate on why you need funds as you are about the highlights of the collection.
• Radiate competency. Donors will only give if they are reassured their money will be properly administered.
• Institute an all-board giving policy. It needn’t be much, but it will encourage donors.
• Remember, each contact counts. Chief executives may cultivate the major patrons, but bear in mind that every member of staff meets potential donors daily.
• Show appreciation. From private tours to on-site parties, devise exclusive events to thank donors for their support.
Case study: Mary Rose Museum, Portsmouth
At the Mary Rose Museum in Portsmouth Historic Dockyard, chief executive John Lippiett has been raising funds towards the conservation of the ship’s hull and the development of a new museum for the past eight years.
Lippiett, a retired rear-admiral, says that fundraising for the £35m project hasn’t been plain sailing. “Five years ago we put in a bid to build a new museum to the Heritage Lottery Fund (HLF) and failed at the first hurdle. They said one of the reasons we failed was that we had insufficient fundraising capacity.”
He recruited a team that included two experienced fundraisers and a secretary to run a database of donors. “And we set up an appeal committee, chaired by one of our trustees. The next time we approached the HLF, in 2008, we achieved a £21m grant, on condition that we raised match funding of £14m.”
“While the committee set about recruiting individuals to join the Mary Rose Commodores’ Club (for those donating between £10,000 and £100,000), we concentrated on approaching the trusts and foundations that support heritage causes. At the start, donations from the Wellcome Trust and the Garfield Weston and the Fidelity foundations lifted our appeal off the ground and gave others the confidence to back us.”
He says the team broadened its approach to attract corporate sponsorship, gaining two large deals before the recession bit. With just £3m left to raise, Lippiett looks back on the fundraising and describes it as, “five years of sheer hard grind”.