From David Dixon, Director, DixonRaines Ltd. and The Phone Room Ltd.
The article A Business Like any Other by Jon Harris in AP132 contains so many errors of fact and baseless assertions that Id need a whole article to list the mistakes. Here are just a few:
- He asserts that being a charity creates a culture of dependency. Having worked with charities for the past 25 years I can assure Jon that almost all charities have to make their own income in an entrepreneurial fashion, whether through fundraising or trading or both. In general, charities are just as businesslike as businesses!
- He says that charities rarely merge was he elsewhere when Imperial Cancer Research merged with the Cancer Research Campaign to form Cancer Research UK? Or when Childline merged operations with the NSPCC? Charity mergers are by no means uncommon.
- He claims that the idea that public subsidy can only be given to not-for-profit organisations has a common currency in the arts world. I have worked in the arts for 15 years and I have never met anyone who holds that view. We are not ignorant in the arts everyone knows that subsidy is not tied to charitable status.
- He claims that losing charitable status would not harm fundraising from individuals and trusts. I have been a fundraiser in the arts for 15 years, and on the basis of this experience I will counter-assert that it would be well nigh impossible for a for-profit company to raise donations or trust fund grants. According to Arts & Business figures, such income amounted to £313m for the arts in 04/05 (and it is growing rapidly).
- He claims that it would be worth arts organisations foregoing corporation tax relief if they can increase profits, saying that £10 of profit taxed at 40% is better than £5 of profit untaxed. In fact the top rate of corporation tax is 30%. An organisation would need to increase its surplus by 43% to break even on the basis he suggests. If Jon has a business plan showing that an arts organisation could increase its surplus by this amount if it gave up charitable status Im sure wed all love to see it.
I am in a good position to challenge Jons arguments since I have created two substantial businesses, I am on the board of three further businesses and am a trustee of two charities. Three of the businesses and both charities are involved with the arts. In my experience arts managers generally know a great deal about business because most arts organisations are businesses, even if they operate a charitable body as part of their structure. Could arts organisations benefit from being more businesslike? Certainly! But most arts managers are already skilled at operating at the interface of charity, business and government, an overlap which makes arts organisations so flexible and unique.