I used to write about arts funding in the 1980s. I nearly went mad with
boredom. Every story was the same – money was short, government was
reluctant, the arts guys were whining and the Royal Shakespeare Company was
about to go out of business. Nothing, it seemed, would ever change.
Now it has. Last week’s announcement of the gift of a £10m endowment for the
Royal Opera House from the Paul Hamlyn Foundation is a symbol of a
transformation in arts funding in this country. At last, the big arts
organisations are growing up and taking charge of their own affairs.
Perhaps, as some now believe, we can look forward to the complete end of
state arts in the near future. If so, I might take an interest again.
The first effect of the Hamlyn gift is that it resolves a naming issue. For
140 years, EM Barry’s spectacular Covent Garden greenhouse next to the Opera
House was called the Floral Hall. Then, in 1999, it was renamed the Vilar
Floral Hall, after Alberto Vilar, who had pledged £10m to the ROH’s
development programme. Vilar, however, never came up with the full amount,
and, in 2005, the greenhouse became, once again, the Floral Hall. The new
name is the Paul Hamlyn Hall or, as far as I am concerned, Paul Hall.
The money that bought this renaming doubles the Royal Opera House’s existing
endowment. Endowments are capital sums attached to the organisation in
perpetuity. Through interest and capital growth, they provide income. Their
big advantage over straight grants is that they go on for ever; and, subject
to conditions imposed by the donor, they are controlled by the organisation.
Endowments are, according to Colin Tweedy, chief executive of Arts &
Business, the holy grail of arts funding, and, thanks to the big, splashy
gesture of Paul Hall, the rich are going to be plagued by arts organisations
demanding endowments rather than one-off grants.
Paul Hamlyn, an immensely successful publisher, his second wife, Helen, and
his friend Claus Moser began supporting the ROH in 1986, with special
performances designed to bring in new audiences. In 1987, the Paul Hamlyn
Foundation was formed; over the past 20 years, it has given the ROH in the
region of £400,000 annually, though not every year. The money has always
been specifically intended for education and the encouragement of access.
Hamlyn died in 2001. Large parts of his estate were allocated to the
foundation, and its total assets now amount to £520m, making it one of the
largest in the country (though well short of the Well-come Trust, with its
£13.4 billion). It gave out grants totalling £12.6m last year, and the ROH
endowment will take the figure to more than £20m this year.
The foundationsup-ports Hamlyn Daysat the ROH, with low-ticket-price
performances, school visits and singing and music sessions. This is the
biggest-ever gift from the foundation, but its smaller donations also fund a
range of organisations in music and the visual arts, from the National Youth
Theatre to the Citizens Theatre, Glasgow.
The common thread in all this activity, as Hamlyn’s daughter Jane puts it, is
her father’s enthusiasm for supporting the underdog. She was looking for a
permanent memorial to her father, and the ROH’s offer of renaming the Floral
Hall seemed about right. “The Opera House was one of the things that brought
Paul the most pleasure in what he was doing – when he could see the house
full to the brim with people watching the best opera or ballet. I suppose
this is a very personal thing, but it does seem appropriate.”
The Hamlyn money is hypothecated, in that it can’t be used to buy, for
example, costumes: it must be spent on education, on exposing people to the
performance and practice of opera. Hamlyn was always, says Jane,
antiEstablishment, and in the mid1980s, the ROH hierarchy was not
comfortable with this ideal of bringing M&S assistants into the theatre.
“And,” she says, “I don’t think they were happy about serving tea in the
Crush Bar.”
In revenue terms, the £10m will make little difference to the education
programme. But now the capital sum belongs to the ROH. The income is,
therefore, guaranteed; and, apart from the foundation’s stipulations,
spending it is entirely under their control.
This is why endowments have suddenly become so attractive to the big arts
organisations. They smooth the income flow and they increase autonomy. In
Britain, however, the arts are hugely underendowed. Big arts bodies in
America routinely have $100m or more, and Harvard University’s $26 billion
endowment is mentioned by people in this business with a slight sob. The
problem in this country is that the postwar system of government funding
discouraged organisations from going down the endowment route. They thought,
probably correctly, that grants would be cut if they were seen to be sitting
on millions. Givers were also reluctant simply to save the government money.
But Tony Hall, chief executive of the ROH, is sure we have moved on. “I don’t
think it’s a disincentive any more. I think people understand that
government subsidy as a proportion of turnover is going to diminish because
artistic inflation is higher, and because your ambitions cannot be
constrained by what you can do with your grant.”
Presiding over private-sector generosity is Colin Tweedy of Arts &
Business, the prodigiously successful organisation that has led the growth
in private giving to the arts from £600,000 per year in 1976 to £530m today.
He sees endowments as the key that could unlock the handcuffs that bind the
big arts institutions to the whims of government. In fact, Tweedy believes,
there is a chance direct government funding of the arts may soon become a
thing of the past. Cutting that troublesome link is precisely what
politicians are now working on.
The reason this must happen is that the funding model created after the second
world war, with the establishment of the Arts Council, is utterly obsolete.
Government can no longer claim to be a modern Medici. State funding is no
more than a feeble maintenance programme guaranteeing gradual decline.
Things are slightly better than they were because grants are now set for
periods of three years (it used to be one), but long-term planning is still
severely restricted. Furthermore, neither of the big parties is committed to
any significant increase in arts funding, so grants are likely to decline in
real terms, as overall government spending is certain to be squeezed sharply
over the next few years. This becomes more acute when the high-inflation
characteristic of the arts is taken into account.
In the present climate, however, any arts business wants to grow. Audiences
are clamouring for art of almost all kinds (they never clamour for poetry),
and the only way to satisfy the demand is long-term investment. The arts
must escape the prison of state funding or die. Slowly.
All the big arts companies have been diversifying their income streams, with a
good deal of success. At the ROH, for example, a total income of £85m is
made up of £34m from the box office, £16m from fundraising and £31m from
government, with the balance coming from commercial operations. So, it
remains dependent on government, but not absolutely so. And with every
reduction in that dependence, it becomes more the master of its own destiny.
“I think we have all woken up to the fact,” Hall says, “that there are other
ways of bringing in funds. Over the past decade, we’ve all become a bit more
businesslike, and appreciate that our artistic ambitions have to be fed by
sources other than government.”
There is a catch, however. The new private giving has two distinctive
characteristics. First, a large proportion of givers are individuals, not
companies. They account for almost half of A&B’s £530m. Second, they
are, overwhelmingly, in work. This means they are not like the old
aristocratic and/or landed patrons, who were happy simply to hand out the
cash and let the artists get on with it. These people are as hands-on in
their giving as they are in their jobs. They have heard of the venture-philanthropy
idea – most spectacularly pursued by Bill Gates – in which the giver becomes
part of the project, and they want to make their own demands. These may be
mild and reasonable, like the Hamlyn stipulations, or more specific and
invasive, like having a say in the direction of the whole organisation.
Gifts in general, and endowments in particular, are coming with more strings
attached.
Indeed, as far as the big organisations are concerned, giving may not come at
all. Venture-minded givers are inclining towards individual artists or even
entirely new projects. Elton John, for example, is a big giver across the
charity board – The Sunday Times Rich List’s Giving Index shows recent
donations of £22.4m, almost 10% of his estimated wealth. But he does not
plan to give his art collection to a museum; he is setting up his own
purpose-built gallery.
So if, as Hall expects, there is going to be a competitive race among arts
bodies to grab endowments, they may find themselves with a lot of persuading
to do.
Of course, that assumes the kind of big money that is needed to make
endowments is available. This is by no means a given. As everybody agrees,
the giving culture in this country is feeble compared to that in America.
The usual assumption is that our tax regime is much less favourable. This is
wrong. Our tax breaks for giving are much more complicated – and, therefore,
discouraging – but, once you work it out, the deal is almost as good as the
one offered by the US authorities.
The real problem is the culture. Hall points out that the Americans have the
attitude that they are building their society together. Endowing arts bodies
is part of that community of interest. In Britain, we tend to assume that
society-building is government’s job. and, as a result, we can’t match the
high social value placed on philanthropy by the Americans. Tweedy thinks
London’s boom as a financial centre, notably its role as a new haven of
hedge funds, will mean we shall import the US giving culture, and there are
signs that this is happening. He wants to establish a kind of virtual
culture club in the City, to show bonus boys better ways of spending their
money than £24,000 methuselahs of Cristal to pour over the heads of their
pals at the Movida club.
It’s a tough pitch – these guys don’t seem that cultured. But if we can
relieve them of their bonuses, let’s go for it. With luck, and their bonuses
as endowments rather than spilt champagne, the Paul Hall could signal the
end of the tedium that was government’s misguided involvement in the arts.
www.bryanappleyard.com
