Private Funding of Music

Private Funding of Music

Private funding comes to music in two ways: as a straight donation, which may be deductible from the taxable income of the donor if the recipient is registered with the Commonwealth Department of the Arts as a “Registered Cultural Organisation” to provide this benefit, and as sponsorship, a contribution by a business which accounts for it as an expense against its marketing budget.

Donations come from individuals, businesses, foundations and trusts. Donors seeking the offset from the taxation office are not permitted to receive a tangible benefit from the recipient. Some donations may be directly to artists such as composers, perhaps as a commission, but there can be no tax-deductibility in such instances since individuals cannot be Registered Cultural Organisations.

As a strategy to secure a base for private funding support, arts organisations often create ‘friends’ organisations which undertake fundraising activities such as dinners, raffles, appeals. Another common strategy is to form ‘advisory councils’ whose members can offer expertise in various aspects of management and may also be expected to assist in fund-raising by donating themselves or bringing others into the fold.

Sponsors expect a return, usually in the form of an enhancement of their business or product profile and public regard. The sponsor is not simply buying an advertisement (since in any case many arts organisations would not have a suitable vehicle for major advertising). But the contra deal could also include such things as free seats at performances, special receptions and so on. Because of the requirement to gain public profile, sponsors providing substantial funds tend to want a partnership with large arts organisations that can offer high exposure. It is difficult for small arts organisations to secure sponsorship support.

There is an increasing number of foundations and trusts. Some of these are private trusts set up and managed by individuals and may not be easy to locate. Others are large, often set up by corporations, and operate rather like government funding agencies with stated funding objectives, and guidelines and schedules for applying.

Some large businesses also have funding offices that work along these lines. We are told that increasingly, businesses offering donations or grants require that there is some sort of direct involvement by their employees with the recipient organisations.

Arts organisations report increasing competition and difficulty in securing private funding. The Coalition government (1996-2007) encouraged the private sector to increase its support for the arts, possibly as a way of limiting pressure on the government’s arts budget. Anecdotal evidence says that the strategy was not very successful. On the other hand, it probably did encourage arts organisations to seek private support!

www.creativepartnershipsaustralia.org.au Creative Partnerships Australia was created and is funded by the Commonwealth Government to play a sort of matchmaker role in bringing arts organisations and businesses together. For arts organisations, it offers guidance in how to develop and present a case for support to business organisations.

Philanthropy Australia is a national organisation for charitable foundations, some of which fund the arts. Through the information it can provide, it is possible to discover the existence of foundations and the type of things they fund.

Author

Richard Letts. Last updated 23 October 2014.