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Date published: 25/07/2013
Peter Tullin, from the UK's CultureLabel, leads a debate on the transforming nature of arts philanthropy. This article features in the winter edition of the Artsource Newsletter. The full article is available here.
Philanthropy is changing. The context for giving is being shaped by the changing demand, investment potential and emerging disruptive forces such as the digital revolution. Encouragingly, interest in the arts and culture has never been greater.
The growth of the cultural industries in recent years is attracting new players. In the UK, the cultural sector grew from 0.1% of GDP to 0.4% during the recession when other sectors shrunk, and creative content accounts for about US$1.6 of every US$15.6 that Britain exports.
The investment potential of the visual arts have also seen them become a safe haven in an uncertain global economic environment. Christie’s, the auction house, reported annual sales were £3.92bn in 2012, up 10% from 2011. Crucially, 19% of sales were from new buyers and the average number of registered bidders is up 53% compared to 10 years ago.
Finally, disruptive forces like technology are fundamentally changing the interaction between donor, artist and work as innovations such as The Google Art Project and Rijks Studio (launched as part of the newly renovated Rijksmuseum) continue to demonstrate.
We can’t hope to fully understand the implications for all of this yet and technological advances mean we need to be able to operate in a world of perpetual change. However, what is clear is just how far the terms of the debate around philanthropy have moved on.
CultureLabel recently teamed up with Bloomberg and Google for REMIX – a oneday summit on culture, technology and entrepreneurship, following our recent book in exploring the trends shaping the future of the cultural sector. The diversity of the participants was a clue to the myriad of disciplines that are merging and cross-pollinating: 50 inspirational speakers from organisations such as the Tate Gallery and V&A (the Victoria and Albert Museum), technology companies like Microsoft and Sony and world-changing startups such as
Spotify and Eventbrite.
One panel explored new ways of funding the arts. The session juxtaposed the Managing Director of Ingenious Media, a leading European Venture Capital firm (and the leading independent funder of the creative economy in the UK with investments of over $10 billion) with the CEO of Arts Council England – the main public sector funder in the UK with a budget of close to £1 billion – to debate public and private funding approaches.
Patrick Bradley of Ingenious chose a performing arts example when he talked about the changing nature of how culture is being financed, describing a recent investment in DigitalTheatre.com, a ‘Netflix for theatre’. This takes the performances from organisations like the Royal Shakespeare Company to a large online audience who pay a fee to see digital versions on demand across a wide variety of devices including Smart TVs.
In addition to commercial financing, we are seeing a middle ground emerge in the form of ‘venture philanthropy’, where investors seek both cultural and commercial dividends. This has been aided in the UK by policy decisions and tax incentives. For example, the recently introduced SEIS initiative (Seed Enterprise Investment Scheme) offers attractive tax breaks for investments up to £100,000, making it low risk to invest in creative ventures such as films or exhibitions.
There are other models: The Fine Art Fund Group, started by Philip Hoffman, a former finance director at Christie’s, has a range of funds based on art investments. In 2010, it launched a managed art portfolio service targeted at private investors who want to build up an art collection that will hopefully give them a future return.
As some UK patronage adopts commercial characteristics, a number of visual artists have been involved in programs such as School for Startups and Debut Contemporary to tap into this new line of funding from individuals and to scale up their output. The former, set-up by Doug Richard of BBC’s Dragon Den, has an annual showcase event at Somerset House in London, where entrepreneurial artists get a chance to meet a variety of potential investors and partners.
It is perhaps not surprising that some donors who have made their living through their commercial skills are applying them to their artistic interests. Foundations are also starting to follow this model where enterprise potential as well as artistic talent is a consideration. The internet is another transformative factor that offers artists the chance to go direct to patrons and remove geographic constraints.
Perhaps the most obvious example of this is crowdfunding where creative ideas can be backed by anyone with pledges both large and small. Kickstarter.com, a New York based startup, aims to fund creative ideas in any shape or form. There are many others such as IndieGoGo (US$100 million raised so far) and in Australia, Pozible.com has come of age in the last year securing AUD$5.3 million in pledges across a wide range of projects from motorcycle repair to food.
Kickstarter is the largest (US$640 million) and most mature platform, now embarking on global expansion with its launch in the UK. There are some large-scale arts projects that have been successful but these are typically by established names. For example Spencer Tunick recently raised US$116,270 for his Naked Sea project in Israel. The cause related to the work remains an important trigger. The resulting exhibition will showcase the importance of water in Israel, bringing world attention to the disappearing Dead Sea.
However, the most successful Kickstarter projects involve giving tangible benefits in exchange for investment. For example, the project categories which have raised the most money to date are computer games and films,
where the opportunity to play or watch the results are a minimum expectation for a pledge. Larger donors can receive exciting benefits such as becoming an extra in the film or dinner with the Director.
The desire for participation – to get close to the idea – is echoed even more in the growth of another space, niche crowdfunding, an area that has great potential for the arts. Further platforms have sprung up to focus on specialist interests. Dig Ventures, for example, offers their audience the chance to both fund and take part in an archaeological dig. In 2012 they successfully crowdfunded an excavation for the first time, raising enough funding to enable a dig to take place at one of the UK’s most significant bronze age sites, Flag Fen, in Peterborough. One of their rewards, a ‘Dirty Weekend’, definitely brought a new meaning to the phrase!
Can the visual arts benefit from a similar specialised fund? Initial indications suggest that on average this will only ever be responsible for relatively small projects, and like all crowdfunding is typically only ever part of the mix of income as most are only for a few thousand dollars.
It should also be noted that like conventional philanthropy a range of donors are often required. In the Naked Sea project nine donors contributed US $5,000 or more (or at least $45,000) and they contributed more than twice the amount of the most popular level of donation, which was $100 (210 donors contributed at least $21,000).
Fundraising historically requires a pyramid approach with a variety of donor levels. Kickstarter is no different and unless projects catch fire (which is where the viral and community mechanics of the internet can be transformative) the project can often be only as successful as the network of donors reached by the organisers. Whilst the internet helps, classic marketing and donor outreach remains critical.
Another by-product of internet giving is that it is becoming more international. This has been evident from a number of global environmental disasters where 24/7 globalised media coverage has seen the disappearance of national borders as far as donors are concerned. Indeed, Australian crowdfunding site Pozible reports pledges from 89 countries in 2012.
A further development is the mobile internet, opening up intriguing possibilities for patronage. Australians in particular have fallen in love with their smart phones with research revealing the country has the second highest market penetration in the world (Singapore is highest) with 52% of the population now owning one (IPSOS, 2012). With half the nation walking around with the potential to be online at any time this opens up new possibilities in the proximity of works of art.
This trend will only increase with mobile browsing expected to overtake fixed access internet use in 2014. In this environment a mobile-friendly website is the minimum requirement to allow any sort of interaction
with patrons.
Experts have furthermore been predicting the end of cash for some time – an inevitability as smarter forms of payment evolve. With the arrival of services like Google Wallet and the integration of Near Field Communications into the market-leading Android devices you simply can tap your phone on a board with a call to action to donate (or SMS if preferred). Technology like this is already available in the National Portrait Gallery in London, and in the UK through the mobile based National Funding Scheme that was recently launched.
In a similar way to the emotional triggers of crowdfunding, the scheme is focused around individual causes such as the restoration or purchase of works rather than a blanket donation. Could this see the demise of the humble donations box? Maybe not for a few years yet, but one thing is becoming clear, the impact of the internet and these new forms of patronage are opening up new and exciting possibilities for artists.
Peter Tullin is the Co-founder of CultureLabel.com, a website selling limited edition art and products from some of the world’s leading cultural institutions, galleries and artists. The content of this article is in part inspired by REMIX, the latest book from Peter and Simon Cronshaw, the other co-Founder of CultureLabel.com. It can be downloaded as a free eBook at The Guardian website.
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