Trends in private sector support for the arts

(Image by WILK featuring Harriet Ritchie and Alisdair Macndoe for the upcoming season of Human Interest Story - courtesy Belvoir Theatre)  

The Australian Business Arts Foundation (AbaF) 2009/10 Survey of Private Sector Support showed that giving to the arts is going up, but it’s still got a long way to go.

Lynne Anderson, Managing Director of Repucom International - Australia and New Zealand apologised for the powerpoint presentation at 8am on a Monday morning as she went through the results but there were a lot of numbers to take in. She was followed by respected economist Saul Eslake, who gave a thought provoking framework to the discussion and a rundown of current Australian economic conditions. The upshot seemed to be that the trend in giving to the arts is good even if the Australian economy is wonky.

Overall private sector support for the arts stood at $221.1 million in 2009/10, up 4.25% on 2008/09 levels, and contributed 10.4% of the total income of arts and culture organisations. Private support for the arts has almost doubled over the past ten years. Income from sponsorship has increased 52% and the value of donations is 161% up on 2001/02 levels.

Private giving drove the growth in 2009/10, that is money from individuals, grants from trusts, foundations and other non-government bodies, rather than from sponsorships or partnerships, even taking into account non-monetary or in-kind assistance. Giving grew 10.8% for the year, or $12 million, and accounts for 56% of total private support. Sponsorship fell for the first time in five years, dropping 2.7% from 2008/09 levels and is now worth $98m to the arts sector.

Anderson stressed that the demand for sponsorship is still significant, particularly in the community and grass roots sectors, which are seeing a big upswing, rising 11.8% in the same period. There are companies looking for partnerships and sponsorship, it’s up to arts organisations to find the right company and the right story to sell their offerings.

‘The big buzz word for all marketers now,’ says Anderson is ‘engagement’, something the arts is particularly well placed to provide. It’s not about the number of eyeballs, or mass reach, anymore, she says.

This should be encouraging for arts organisations seeking private support either through donor programs or partnerships. Indeed, much of the success over the past ten years should be seen as a product of the increased focus and strategies many arts organisations have had on building relationships and securing donations. Yet there is also a lot of uncertainty and confusion about the state of the Australian economy at the moment. What does this mean for arts organisations trying to predict future giving trends?

Saul Eslake, Director of Productivity Growth Program at the Grattan Institute and former Chief Economist at ANZ, noted three key and closely linked observations on the current condition of the Australian economy.

* First, Australia is experiencing the largest mining boom in our history thanks to the growth of China and India. This fortuitous situation may continue for another 15 or possibly even 25 years.

* Second, despite coming through the GFC relatively unscathed Australian consumer sentiment is subdued. We’ve stopped spending and started saving. This should be a good thing in the long term and mitigates the risk of us having the sorts of problems being experienced overseas. However, it is having a negative effect on areas of the economy directly affected by household expenditure such as the retail sector and state governments reliant on subsequent GST revenues.

* Thirdly, the high Australian dollar is making it harder for some local industries to compete with relatively cheaper imports and that plus the effects of the GFC on the rest of the world is bringing less tourists and foreign students to our shores.

The current economic experience in Australia is a difficult story to tell with aggregate numbers. The mining boom has given Australia an economic map like a very unequal see saw, with one half sitting low and brooding moodily and the other swinging high in the air kicking its feet in the air. Some areas of Australia are experiencing their best economic conditions in a 100 years. But the south east corner of the country, where most of us live and work, isn’t seeing the benefits directly, in fact in political speak it feels like we’re ‘doing it tough’.

Even so says Eslake, ‘it is still fair to say that Australia’s economy is doing, and will continue to do, remarkably well’ in comparison to the countries we usually compare ourselves to, such as the US.

Some of Australia's new found wealth found its way into the arts but other areas cut back. There were significant rises in the levels of private support in the mining states of Queensland, Western Australia, South Australia and the Northern Territory albeit off lower bases than NSW and Victoria. For instance, Queensland had a $4.9m rise, which was a 22% increase on 2008/09 levels.

NSW with the largest share of the private support pie also had the largest decline, almost $7.1m or 8% on 2008/09 levels. Victoria was relatively steady due to a change in the mix of support. While Victorian sponsorships declined there was an 18% increase in donations across the state’s arts organisations.

The resources boom should enable us to build and bequeath to our descendants a better society,’ said Eslake. Quoting from last month’s The Economist* magazine he said:

‘Australians must now decide what sort of country they want their children to live in. They can enjoy their prosperity, squander what they don’t consume and wait to see what the future brings. Or they can actively set about creating the sort of society that other nations envy and want to emulate.

Such a society cannot be conjured up overnight, least of all by government; they’re created by the alchemy of artists, entrepreneurs, philanthropists, civic institutions and governments coming together in the right combination and the right time. And for Australia this is surely such a moment.’

It’s a fair question, said Eslake. ‘What cultural legacy will beneficiaries of the present mining boom, and the wealth created by it, leave future generations of Australians.’ Will Australia’s boom breed our own Rockefeller, Carnegie, Getty, or even a Buffett or a Gates?

The past decade has seen an unprecedented rise in Australia’s wealth and income. ‘Aggregate personal disposable income rose by 69% over this period, while household net worth rose by 83%,’ he said. ‘As a proportion of GDP which rose by 66% over this period, the increase in private sector support for the arts represents just 0.002 percentage points, from 0.015% to 0.017%. That’s a figure that needs to increase if the arts in Australia are to flourish and thrive,’ Eslake said.

Oddly as we get richer we give less away and our richest people, with a few notable exceptions, are giving very little indeed. In fact, Eslake said, tax payers with taxable incomes more than a million dollars in 2008/09 donated 1.71% of their income and a third of them made no charitable donations at all, or at least none for which they claimed a deduction.

We are not America, either in its cultural inclination for philanthropy or tax law incentives, nor do we have the same desire to name things after ourselves for posterity– at least not yet. Yet, this seam of mining boom wealth is surely one the arts must tap in to.

The take home message from the presentation said AbaF CEO Jane Haley was that there should be a degree of confidence about that economy and the opportunities for arts organisations to attract further private support, particularly sponsorship. ‘I guess the problem is finding the perfect match between where the economy is strong and the appetite for sponsorship is right.’

Artists have an important role to play in determining what a post-boom Australia is going to look like. Australia has an unprecedented and not-to-be-repeated opportunity to use this wealth to make itself an extraordinary place for generations yet to be born. But as Eslake said, ‘Australia has a very poor track record of managing these things successfully.... We normally tend to stuff them up.’

To read more or to download the Survey visit: www.abaf.org.au and see the News and Research section.

* Quote from: Economist, The (2011), ‘The next Golden State’, Vol. 399 No. 8735, 28 May.