
It is hoped that capital funding initiatives could attract a 'new generation of benefactors and corporates'
Photo: Mark Ahsmann/Wikimedia Commons
National Theatre calls for new funding schemes to transform performing arts
Report concludes that business models of non-profit organisations in the arts and culture sector are ‘no longer working’.
New funding initiatives, including a “once in a generation” capital scheme designed to attract philanthropic support, are needed to transform ways of working in the performing arts sector, according to new research from the National Theatre.
The Scene Change report, which draws on input from 140 organisations, highlights the sector’s significant impact on the economy, with a turnover of £4.38bn and an annual GVA (gross value added) of £2.26bn.
But it warns that challenges including under-investment in capital, fragile business models and technological inefficiencies “have put the sector’s success in jeopardy”.
Combined with funding cuts and the effects of the Covid pandemic, this means many organisations are “struggling to stay afloat”.
In the report’s foreword, National Theatre chair Sir Damon Buffini says that business models among non-profit organisations in the performing arts sector are “no longer working”, and that “organisations delivering vital public benefit are struggling to survive”.
Strong appetite for change
The report reviews current business models in the arts, finding a range of ways of working as well as a strong appetite for change.
In a survey of more than 100 organisations in the sector, a large majority (92%) said it was either very important (54%) or somewhat important (38%) to innovate their business model.
But they also identified a number of challenges to doing so, including resources and capacity (97%), funding structures (65%) and skills and capabilities (54%).
More than half of the organisations (56%) also identified the sector’s “wider ecosystem and dependencies” as an inhibiting factor.
In response to this finding, the report notes that weaknesses in one part of the “deeply interconnected” performing arts ecosystem can have negative effects on another”.
The authors add that structural barriers including an aversion to risk, short-term funding cycles, and the “predictable outputs” expected by public funders, are holding back the ability to explore new ways of working.
‘Multifaceted approach’
The report says that innovating business models will require a “multifaceted approach”.
Its recommendations include a new leveraged capital funding scheme designed to attract support from a “new generation of benefactors and corporates”.
Noting that ministers have committed capital spending to the UK arts infrastructure, it suggests that the government target philanthropists to support this funding – focusing on those that want to support sustainable approaches.
As well as maintenance costs, this fund could support decarbonisation schemes, capital grants structured as a match fund, and “catalytic grants” to attract investment in long-term schemes.
Local government funding
The report also calls for “urgent” revenue and capital funding to support parts of the cultural sector that are now in “severe distress” due to cuts in local government funding.
And it says a business model innovation fund, backed by the UK’s arts councils and relevant government departments, should provide seed funding to organisations to explore new areas of work.
This could include contributing to local health and education work, diversifying commercial income, or developing shared services.
Other measures recommended by the report include creating a network of pro bono tech and financial experts to provide advice to smaller organisations.
It also makes recommendations for the sector itself, including introducing a tech roadmap that would “set clear benchmarks for technology adoption” to support efficiency and sustainability.
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