More fundraising teams but less philanthropy leads to ‘bottlenecks’, Arts sector survey shows

By: 

Cheryl Chapman

Managing Editor, Philanthropy UK

An increase in the number of fundraising teams, coupled with a lack of commensurate growth in funding and philanthropy is leading to ‘fundraising bottlenecks’, a phenomenon identified by Arts Quarter’s latest survey of UK arts organisations.

It is one of the key findings in the fourth survey on the Impact of the global recession on the UK Arts sector since 2008 that questions 452 arts organisations of all scales, regions and art forms.

It reveals the first signs of 'bottlenecking' as more organisations begin private sector fundraising, competing for support with established fundraising teams.

“The lack of economic growth and funding, particularly from trusts and foundations whose endowments have been hit by the current market conditions, has meant that the organisations gearing up their fundraising teams are now competing with established teams for a diminishing pot of money,” says John Nicholls, managing partner of Arts Quarter.

Other findings show:

• A majority of respondents reporting that they will be unlikely to recover losses in public sector funding from other sources until at least 2015.    
• Continuing modest growth in both fundraising and earned income streams combined with the impacts of public sector cuts felt across the sector point clearly to the arts being in the midst of the Second Recessionary Wave as predicted in AQ's 2nd and 3rd such reports.
• Declining faith in the 2012 Olympics and Cultural Olympiad's capacities to generate much needed additional revenues and create a long term legacy of greater arts attendance post 2012.

Other tell tale signs that the Arts sector is suffering as a result of the recession is the increasing number of organisations who are now looking to make staff redundancies in response to a lack of funding.

Nicholls says: “Making staff redundant is creeping up the rankings as the most popular way of responding to funding shortfalls. Two years ago it was not on the radar, last year it was fifth in the rankings and this year it is number four. It shows Arts organisations who have undergone two waves of cuts by the Arts Council, a third wave of cuts by local authorities, and who are perhaps facing a fourth wave if austerity measures have to be revisited by government, are already pared to the bone and are having to resort to redundancy to cut costs.” 

Number three in the ranking was ‘cutting back on public programmes’ which Nicholls says put organisations in a dangerous position in appealing to philanthropic funders for whom public programmes are important.

“The findings provide very clear evidence that the current economic climate is having a significant and long-lasting affect on the sector as economic growth remains weak and cuts in public sector support take hold”. 

The £100m Catalyst Arts Programme launched by The Department of Culture Media and Sport earlier this year to encourage private giving through matched endowment building and boosting fundraising capacity within organisations is unlikely to help with these immediate funding issues says Nicholls.

“Any hope that the Catalyst Arts programme might offer any form of even medium term recovery for the sector is looking increasingly unlikely with many of our respondents recognising that support will only be secured in the medium to long term.  That said, our findings this year, as before continue to demonstrate a clear commitment by our respondents to thrive in the longer term but at what cost to the sector in the short term?”

The report can be downloaded from Arts Quarter website

To read about a £100m philanthropy scheme for the Arts