A Government-backed scheme to support the development of arts endowments will give 18 of England’s arts organisations access to a £30.5m fund if they can generate a total of £54.5m in match-funding from private philanthropic sources. A further 16 heritage organisations and museums could receive £25.5m if they raise £51.5m. Some of the successful applicants have already secured pledges from private donors, or are in discussion with potential sponsors.
The most ambitious match-funding target has been set for The Old Vic, which could receive £5m to kick-start an endowment which aims to “support long-term resilience and arts activity”, but under the terms of the scheme, they will have to generate three times that sum in match funding over the next three years to claim the full amount. The organisation is already in talks with some potential donors. At the other end of the scale is the Orchestra of the Age of Enlightenment. It will be awarded £0.5m to take The Night Shift, its alternative classical music event targeting a younger audience, outside London for the first time, if it can double this amount with private funding.
The endowments are not designed to cover core costs but rather to act as “challenge funding to support additional arts activity”. The scheme will match funds raised by the organisation: an Arts Council England spokesperson told AP that they will release “up to four payments a year against eligible fundraising so all organisations should develop an endowment to some degree”. Organisations have set their own targets, but if they fail to meet them, they can only claim match funding for the amount raised. They have three years to reach their targets, and the endowment funds are expected to be managed for a minimum of 25 years. A spokesperson for The Old Vic described the scheme as “the promise of £5m… it’s an incentive scheme – an incentive for The Old Vic to invest in its own future”.
Culture Minister Jeremy Hunt described the new scheme as the “culmination of a lot of thinking to help our cultural sector to build long-term financial sustainability” and sees it as putting “a significant number of organisations on the road to long-lasting and sustainable endowments which will continue to support their work for years to come”. In his launch speech he claimed: “This is not in any way an attempt to replace public support for the arts with private support… but it is an attempt to reduce over-dependence on any one source of funding.” Hunt also pointed to the success of US endowments, and cited “organisations like the Met in New York that have an endowment of $1.9bn generating an annual income of over $100m a year”. But US funding expert Kara Larson is sceptical as to whether endowments are the right route for the UK in the current economic climate. She described as “curious” the Government’s decision to make a major investment now in endowment funds, and told AP: “In times of economic growth and prosperity, it is a good way to add a valuable funding stream. However, in times of low interest rates, there often isn’t enough revenue generated by conservative investments to make payouts… the past five years should be sufficient illustration of the result of risky investments on sustainability.”