Margaret Hodge's speech to launch the Arts & Business survey

30 January 2008
The Royal Festival Hall

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Thank you Helena. I’m grateful to have the chance to say something today about an area of my brief that means a lot to me.

Let me begin by saying that I am delighted by the positive trends reported in your survey on private investment in the Arts. They demonstrate that we are moving in the right direction and I welcome that.

But I know it will come as no surprise if I say that my ambition is to achieve a step change in private giving to culture and the Arts. And this – for me - means we need to go further and faster. I think we need to explore new and different ideas to help us achieve the dramatic improvement in the private contribution to public arts that I think is not just desirable, but essential.

Why does this matter so much?

Well, it matters because history tells us that a strong, mixed arts economy works. We have many, many world class cultural institutions, but this infrastructure has come about in many cases from a creative mix of Victorian philanthropy and – later - strategic public subsidy, be it from the taxpayers or from lottery income.

But because the arts landscape came into being in that order, this has very often led to a culture of dependency on state funding. This is not healthy in the longer term.

Now don’t get me wrong. I am not seeking or predicting cuts in art funding in the future – far from it. I’m extremely proud of the Government’s record in this, and there is absolutely no reason why this trend should not continue.

But if the plight of those Arts Council clients facing cuts in the next few days teaches us anything, it is that the company which puts all its economic eggs in one basket will always be more vulnerable than the one that doesn’t.

So, no, I do not seek the American model of scant public investment and huge reliance in private giving. I want us to develop a stronger mixed economy for the Arts.

In that way more investment goes in, and we ensure longer term stability for the Arts, with less dependence on the vagaries of public sector spending.

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And in that way we can compete more effectively on the world stage:

Not only making Britain a place where people want to live and work.
Not only supporting the creative economy in the UK which is so dependent on the cultural sector.
But also giving us all excellence which can lift our souls and change our lives.

There are, of course, many great givers in Britain today. And you, Helena, have set out their generosity in your survey. And there are many cultural institutions that are extremely successful in raising private funding.

However there are also some worrying statistics. Let me pick a few:

In the United States private giving as a proportion of GDP is more than double what it is in the UK.
And in this country the richest 20 per cent donate only 0.7% of their household expenditure to charity, whilst the poorest 20 per cent devote four times that amount

And if we look at the figures for corporate giving to the Arts, they have remained pretty static whilst city profits have soared – so the actual value, measured in terms of the proportion of the pot of corporate monies available, has halved in five years and

Around two thirds of private giving to our cultural institutions takes place in London.

But the crucial point here is broader still.

That is that the arts do not really hold their own in the ring of ‘causes’ to which people choose to give.

Only just over 4% of total charitable giving in the UK finds its way into the cultural institutions of the country. And this tiny proportion sits oddly with society’s undoubted appetite for culture as an expression of our shared identity, as defining the place in which we live and as a way of enhancing the competitive attraction of society.

So I have started a piece of work within the department looking at private giving. Of course there is much we can learn from the existing exemplars of successful practice, like the Tate, their staff and their Board from whom we are going to hear in a minute.

But I want to explore the issue in some depth. There are actions which we in Government, you working within the cultural institutions and all of us as members of our communities and society can take which would make a difference.

Let me share with you some of my initial thoughts.

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I think we need a new approach among our cultural bodies.

In my previous jobs as Higher Education Minister and Children’s Minister, we worked to move the sectors – the universities and the social care organisations - from seeing themselves as charities totally dependent on public funding to social enterprises, with a public purpose but enjoying a cocktail of income streams ranging from the public to the private to the personal.

Some of our institutions get that model. Others don’t.

And one of my jobs is to move the thinking on so that the social enterprise culture becomes the norm.

In part that starts with language. Let’s get rid of the word ‘subsidy’ and let’s start talking about ‘investment.’ Let’s liberate the Victorian word ‘philanthropy’ from its paternalistic roots and see it for what it is.
Quite literally, it means ‘love of mankind’, a love that finds expression in ‘private giving.’ And our arts bodies should stop seeing themselves as ‘charities’ and start seeing themselves as innovative ‘social enterprises.’

This is not about diminishing the importance of public investment in the arts and culture. It’s about helping to set the Arts free to innovate, grow and flourish.

We must also explore what more Government can do to breathe new life into philanthropy, to support private giving still more.

The last ten years have seen important changes – with the introduction of a range of tax incentives and a campaign to promote Giving. But there are other proposals in Nicholas Goodison’s report that have yet to be addressed.

Now of course I know that this is not the easiest of environments in which to take this on, with fiscal constraints and instability in global markets. But if we wait for a ‘right’ time we’ll never get anywhere so I do want to explore with colleagues whether there are opportunities to make progress here.

However my view from talking to a range of private donors is that it’s recognition and acknowledgement of their contribution which matters as much, if not more than further tax concessions.

And we are bad in Britain at being generous with our ‘Thank yous.’ Our instinctive reticence makes us reluctant to express gratitude and appreciation. We feel embarrassed by awarding public honours for private giving. Yet the Presidental Medal in the USA or the Legion d’Honneur in France have long proved their worth as incentives to encourage private giving.

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But at the same time But we also need to transform the attitudes of those who give – both the very wealthy and the ordinary punters who enjoy the fruits of artistic endeavour.
Last week in Davos saw Bill Gates talk about his ideas on ‘creative capitalism.’ Whilst he was primarily concerned with the needs of the poor, his words are relevant to the world of the arts too.

Society may need to get better at celebrating giving, but individuals – particularly those who have enjoyed the benefit of great financial success from the society in which they live – need to do more about supporting the public good with the fruits of their hard earned labour by giving more generously to enrich the public realm. Of course there are many great examples of generous giving – only last week saw a £5million donation to the National Portrait Gallery – but we could achieve so much more if more individuals recognised both the obligations and the benefits of giving back to society.
In the last five years, the City’s share of the national wealth cake doubled. Just imagine what that could have meant for the ecology of the Arts if their contribution to our cultural heritage had also doubled.

So our shared ambition must be to create the conditions in which giving to society becomes not the exception, but the norm; where those who have enjoyed success in their communities recognise the benefit of investing back into those communities; where philanthropy ceases to be a word associated with historic and outdated Victorian values, but where it becomes a badge of pride and celebration in contemporary life.

That is what we can achieve if we work together in pursuit of our common purpose. To ensure that we employ all means to raise private giving so that we continue to enjoy the best cultural heritage in the world.

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