marcus westbury

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Philanthropy: forests and trees

May 27th, 2011 by marcus

 

JUST before Easter, Arts Minister Simon Crean announced that advertising guru and philanthropist Harold Mitchell (pictured) would undertake a major review of private sector support for the arts in Australia. The review will look at the range of existing government programs and incentives for philanthropic support for the arts in Australia and abroad, such as the Australia Business Arts Foundation and the Australia Council’s Art Support Australia, and make recommendations for tweaks and reforms.

At first look it is a promising and appropriate announcement. There are valuable arts programs in Australia to foster private philanthropy, but there is also perceived duplication, confusion between different programs, areas where badly designed incentives discourage private support.

Yet the timing raises fears Crean may be the latest arts minister so sidetracked by the trees that he misses the forest. Mitchell’s review is a new step towards the Rudd/Gillard governments’ long-delayed attempts to develop a national cultural policy. The decision to look at philanthropy in isolation and before finishing that process puts the cart before the horse. The role of private philanthropy is surely a function of the unanswered question of what exactly needs to be fostered.

Harold Mitchell himself will, we hope, bring with him the talent for innovative and forward-looking strategy developed through his business career as the nation’s savviest media buyer and not merely the Rolodex he would have filled as chairman, president and benefactor of the likes of the National Gallery of Australia, Melbourne Symphony Orchestra and the Melbourne International Festival of Arts. While those roles demonstrate a rare depth of commitment they are also extremely atypical organisations at the periphery and not the centre of the 21st-century Australian arts experience.

According to the Australian Bureau of Statistics, at last count about 3.5 million Australians  or 22 per cent of the adult population  were engaged in some professional work in arts and cultural activities. Most artists never work for, in, or with major arts companies, festivals and organisations, yet the philanthropy deck is stacked heavily in their favour.

Government funding of major companies has grown consistently at the expense of individual artists and yet it is among small-scale practitioners that participation and economic activity is surging. From 2004 to 2007 (the last period for which detailed data is available) there was a 117 per cent rise in people working professionally in photography, 93 per cent in drawing, 93 per cent in computer-based art, 76 per cent in painting, 96 per cent in textiles and 113 per cent in other craft and an astonishing 204 per cent in jewellery.

Yet in funding, philanthropy and policy terms, most of those 3 million-plus people are the forgotten constituency and seem likely to remain so.

The Mitchell review must recognise that the momentum and the most interesting work is taking place away from the major arts companies. The best initiatives in philanthropy are responding to this. Initiatives such as AbaF’s Australia Cultural Fund (allowing donors to give to individual artists rather than large, tax-deductible companies), the proposal by Julianne Shultz and others to establish a Foundation for the Artist to redress the growing imbalance between artists and institutions, and my own experiences through Renew Newcastle and Renew Australia in cajoling property owners to offer up empty buildings to incubate small-scale arts projects, are all motivated in part by responding to a changing reality that the government itself is yet to acknowledge.

We hope Mitchell brings the skills that steered his business through a dynamic media landscape to furthering those efforts.

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9 responses so far ↓

  • 1 john May 30, 2011 at 8:59 am

    Marcus, people who buy my art stuff pay full price for it -from their after tax income . People who make DGR donations to a producer of art stuff, get a 40 cents in the dollar tax deduction subsidy to their payment of support.
    What is the wider community benefit of this discriminatory treatment?
    At a policy level Australia has far too many ‘not for profits’ already.

  • 2 Peter Anderson May 30, 2011 at 10:02 am

    Marcus
    As you know, at the same time as the ABS study you refer to shows a big increase in people working in the arts, the Census data and Throsby’s most reecent study suggest some falls in the numer of professional artists / “main job” artists. What this could suggest is that there are increasing levels of cross-subsidy by artists to support their own practice, and that the viability of art practice as a primary work activity has become more difficult to sustain.
    What also seems to be missing in the discussion of philanthopy is the economic contribution artists make to the production of public culture. In earlier work by Glen Withers (“Artist’s Subsidy of the Arts” 1985) this was examined in terms of “foregone income” … which creates a situation in which ‘artists subsidise the arts at almost five times the total level of grant subsidy from general taxation’. This kind of argument played a big role in earlier debates about arts funding, but seems less significant now.
    In part the argument was linked to the on-going debate about artist’s low incomes … and in this respect it is worth noting that one response to the Wither’s arguments was the suggestion by economists Grossman & Kenyon (1989) that low income levels were in fact driven by “an excess supply of artists”.
    Sure these debates are ‘old news’ … but my sense is that we have not really made much progress in resolving the issues they raise.

  • 3 john May 30, 2011 at 12:50 pm

    Peter
    Pragmatically, is subsidising otherwise uneconomic activities the way to create economically self-supporting activities?

    Volunteers (and all sorts of free associations for community benefit ) contribute a lot the the country– should we pay them all, also?

  • 4 john May 30, 2011 at 2:35 pm

    peter
    the methodology of the survey’s sampling of people who are not professionally/ecconomicaly connected to organisations was not good.

    The figures for the visual arts have a big skew between average and median – ‘apples and oranges’

  • 5 marcus Jun 1, 2011 at 10:35 pm

    Sorry for the delay. I’m on the road in China at the moment.

    Firstly, on the ABS stuff. The definition they use is broad but it is consistent and what interests me about it is that it captures the shift taking place in art and cultural production. What’s happening is a massive surge in the number of people who semi-professional/ pro-am producers at the expense (to some extent) of a separate class of professional artist and (to a much greater extent) of the idea of the passive consumer.

    I’ve written a fair bit about his elsewhere but i would argue that it’s not merely a statistical anomaly, bad data, or an inconvenient blip — it;s a structural shift in the nature of cultural production and consumption from a highly centralised model to a diverse and participatory one. We can arge the strength and weaknesses of that change — on the whole i think it is a good thing — but the key point is that it is real and the old structures that are focussed around a small number of centralised organisations/ funding platforms aren’t well designed for it.

    On John’s point about philanthropy. It’s a fair point as to why or whether donations to the arts should be tax deductible, however as long as they are the fact that they are deductible for a small number of companies, organisations and institutions and not for frameworks that support where most artists and most cultural production is operating inherently skews the playing field.

    Either we are trying to find mechanisms for the private sector to support the arts or we’re not. If we are, it’s imperative that we minimise the effect of those mechanisms skewing to disproportionately privilege and protect some artists over others.

  • 6 john Jun 2, 2011 at 1:56 pm

    Marcus you know I broadly agree about fossilized and circular system. However there are real and very good policy reasons why handing out DGR status is not done at the drop of a hat .

    The potential for fraud is very real – For example- get DGR status, get donations at 40 cents in the dollar discount , use donations to buy an asset from a friend at well above market value.

  • 7 john Jun 6, 2011 at 3:30 pm

    Most philanthropy, by value, comes from the high end of town.

    30 years ago a lot of corporations would spend say, 100K a year on buying 20 artworks from 10 to 20 living artists.
    As PR departments took over this spending was largely shifted to spending on more newsworthy events; for example sponsoring One Big Name Artist to do something newsworthy or, perhaps more typically, spending 50k on holding an Art Prize that would, in a newsworthy way, award 50k to just one artist.

    How would you stop deductible private philanthropy from being little more than a subsidy to corporate PR , and becoming a measure that further reinforces the problem it is meant to correct?

  • 8 marcus Jun 6, 2011 at 3:44 pm

    John, you’re confusing sponsorship and philanthropy with the last point there. As i understand it, one of the key rules of DGR status is that any gift can not receive a benefit such as advertising or promotion — there are some limited means (eg. a name plaque) of acknowledgement.

    Sponsoring an art prize would likely be deductible as a form of business promotion. However it wouldn’t be eligible to be counted as a philanthropic gift in most circumstances — again, i am not an expert in tax law but this is generally how i understand it.

    The examples of companies buying art collections fall into a nether region that is neither gift nor marketing. I suspect for accounting purposes it is the acquisition of an asset and that the reason it has died off in recent years is the proliferation of MBA types who won’t indulge the acquisition of non core assets OR who feel compelled to realise the cash value of collections by selling them or turning them into deductible gifts (to a museum or gallery) and therefore getting a tax benefit.

  • 9 john Jun 7, 2011 at 10:46 am

    marcus The papers have regular articles about the philanthropic sponsors of big events , not a bad thing, but they are private names linked to big public events.

    The DGR and not for profit sector is a real concern, it has proliferated hugely over the past 20 years , is far from transparent and in some places is whiffy there have been a few cases of people who live in (and drive in), their philanthropic foundation

    Art prizes ‘cost’ to run ; in net terms there is less paid to art .(and they involve picking winners- same problem)

    You are right about collections being tax effective, they were so then and they still are now , however they are not so nearly good at attracting publicity as the big name advent is.