Government ‘should consider French philanthropy model’ to boost arts funding

Adopting French-style tax incentives to encourage corporate philanthropy should be considered as part of efforts to secure the future of the arts, a senior figure in the sector has said.

Writing in the Financial Times, arts consultant Martin Prendergast said that, while welcoming last week’s announcement by the Department for Culture, Media and Sport of £60m for the creative industries, in light of reduced financial support from central and local government, a “renewed funding model is needed”.

He pointed to analysis conducted by Arts Professional and MyCake of 2,800 arts organisations highlighting a combined deficit of £117.8mn — the worst financial position in five years – as an example of a “crisis” within the creative ecosystem.

‘Compelling solution’

Prendergast says a “compelling solution” could lie in France’s Aillagon law. Introduced in 2003 by then culture minister Jean-Jacques Aillagon, the policy incentivises corporate philanthropy for arts and charities by offering a 60 per cent tax relief on donations.

Since the reliefs, capped at 0.5 per cent of a company’s annual turnover, were introduced, the overall volume of declared patronage increased from €1bn in 2004 to nearly €4bn in 2018.

In 2017 the Louvre was generating €12m annually from the Aillagon law. The Palace of Versailles raised €10m and the Centre Pompidou €5m.

“Critics of the Aillagon law argue that generous tax breaks shift a lot of the burden of donations on to taxpayers. However, this overlooks the broader benefits,” Prendergast, who is director of the European Sponsorship Association and UK council member of Creative UK, said.

“A thriving cultural sector develops new intellectual property and supports jobs, tourism and innovation, while fostering community cohesion and national identity.

“This isn’t just about the money. It’s about stimulating collaboration between culture and commerce — much needed, given current arts sponsorship protests, which risk making sponsors think twice about aligning with the arts.”

Visionary policy

A government review of Arts Council England, ordered last month by Culture Secretary Lisa Nandy and headed by Baroness Margaret Hodge, will be tasked in part with considering the “wider cultural funding ecosystem”.

Prendergast says novel ideas should be considered.

“France’s Aillagon law demonstrates how visionary policy can transform cultural funding. It’s more than a fiscal mechanism,” he said.

“It’s a catalyst for cultural vitality and corporate engagement, while reducing reliance on dwindling public funds.

“Given the state of the nation’s finances, the UK government must match its commitment to support the arts with bold action.

“Adopting a French-style policy could win the Labour government a place in history for securing the future of the UK’s arts sector — and driving economic growth.”