Recently the British government told the arts community, “Folks, it’s time to do things like the Yanks do.” That’s because many European countries are warning of large budget cuts to arts and culture organizations, including the U.K. Some estimates predict that as much as twenty-five percent of annual budgets could be withheld. The possibility that many organizations may close their doors is real and to make up the shortfall, the government is urging them to raise more private money from wealthy donors and corporate sponsors.
In an interview on public radio’s Marketplace, Christopher Werth asks Colin Tweedy of the nonprofit group Arts & Business, to explain the possible impact this will have: “Every arts organization is being told, much to their fury, ‘Look at the American system, talk to American donors, see how you can model yourself on an American fundraising pattern.’”
So what kind of role model is American philanthropy and do we offer hope for their future?
The arts donor is unique but not uncommon. According to Bank of America’s study on philanthropic giving, they are affluent and educated and live in high net worth households (those that have an annual income of $200,000 or higher). Nearly seventy percent of them say they make donations to arts and cultural organizations; many of which are made through giving vehicles these families have established for tax-advantageous reasons such as family foundations and donor advised funds. In 2007, the average direct art gift from such families was just under $3,500. But given through a foundation, donations jump to over $140,000 on average. Why the difference in giving? Because the wealthy want to take advantage of two strategic tools – philanthropic incentives provided by the federal government and the arms-length relationship that a charitable giving vehicle provides.
In reality, the task to garner more private funding may be harder than it looks for our British colleagues if they wish to “follow the Yanks.” First, they will need to build strong relationships with their audience constituents and make the case for private donations. Second, they must lead a reform in taxation so that the same or similar tax breaks are available as are in America. “Let’s be clear,” says Josie Rourke, artistic director of West London’s Bush Theatre, “it will be hard to get wealthy patrons in Britain to cover the difference. That’s because they can’t shield their money by giving it away tax-free like donors can in the U.S…. and [that’s] one of the very big incentives for giving.”
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