Raising £49 million in new funds for the arts

Today sees the publication of BOP’s Year 2 evaluation of the Arts Council’s £68m Catalyst programme, which also coincides with Arts Council England’s next iteration of the scheme, Catalyst Evolve.

As the largest one-off investment in encouraging arts organisations to get better at fundraising, the results of the Catalyst scheme have been much anticipated. This year’s report coincides with the end of the programme, in terms of the distribution of funds from Arts Council. Next year’s evaluation will look at what the legacy and impact of the scheme has been, one year on.

We found that overall, the organisations in the first two of the three ‘tiers’ of the programme (tiers 1 and 2) collectively raised at least £49m, slightly more than the eventual Arts Council investment in these organisations (£48.5m). In particular, tier 1 organisations – larger arts organisations that were more experienced in fundraising – all focused on fundraising for endowments. Arts Council match funding was available to incentivise donors and collectively the tier 1 organisations raised at least £29.7m in private giving income.

The endowments have probably been the most talked about element of Catalyst as it has meant that large sums of public money have been invested in a small number of organisations. However, as Clare Titley, Director of Philanthropy at Arts Council explains in her blog, incentivising endowments in the arts was a particular priority for the then Culture Secretary, as they are a staple part of US arts organisations’ finances but not yet so in the UK.

As the amount of private giving that the tier 1 organisations raised shows, the scheme has been largely successful and much learning has resulted. Endowments are technical and not sexy. Several tier 1 organisations struggled to communicate and convince their boards about their value, let alone the general public. But through dedicated campaigns, and by putting their endowments to a specific, imaginative use, organisations were able to convince existing donors to dig deeper and attract new donors. Overall, it has showed that, for the right organisations (larger ones), at the right time (when not overburdened by other ongoing fundraising commitments), they can be a valuable and distinct element within an arts organisation’s funding.

The other major new findings within the report relate to seeking the answer to what factors influence an arts organisation’s ability to raise philanthropy income in the UK? Many opinions have been expressed on this matter, and some prior empirical research does exist (e.g. the previous Arts and Business Private Giving Survey). However, the analysis of the Arts Council Catalyst management data still provides us with a rare opportunity to look at this issue quantitatively, across a relatively large and consistent dataset.

Our statistical analysis across tiers 1 and 2 partly confirms and partly challenges received wisdom on the subject. While larger size and a location in London and the South East are both correlated with raising larger sums, they explain relatively little of the variation in sums raised. This means that other ‘confounding’ factors have more influence. Here, our evaluation to-date points to a number of internal organisational factors, including fit-for-purpose governance and management structures; appropriate fundraising strategies and accompanying ICT infrastructure; and the attitudes, skills and behaviours of staff towards fundraising.

Elsewhere in the report there are many practical best practices and specific case studies for arts practitioners that want to know more about the challenges and opportunities of raising private giving income.

– Richard Naylor and Rossella Traverso