This Study is one of the tools which supports not-for-profit (NFP) directors and boards to be their ”very best” according to John Brogden AM, AICD’s CEO and Managing Director. And for the first time, the 2015 NFP Governance and Performance Study includes a chapter on the arts sector entitled Culture and the arts – balancing on a tightrope.
It discusses the challenges faced by arts organisations in Australia today. To complete this study, the AICD held two focus groups with arts organisation directors and posed additional questions in a survey.
For Arts Organisations, it’s All About Income
The Study reveals the biggest and toughest issue for arts organisations is income, whether it is building income or diversifying income. Several organisations cited the economic slowdown and a reduction in public sector funding as catalysts which brought about significant changes in operations and income generation.
Australia has been fortunate in its arts funding model. Since 1967, the Australia Council has provided recurring and ad hoc funding to arts organisations and individual artists from across Australia. In 2014/2015, the Australia Council disbursed $191.5 million. As Rupert Myer AO, Chair of the Australia Council, puts it so succinctly in the 2014/2015 Annual Report:
Individual state governments also support their own Arts funding bodies, although Western Australia is mentioned as the only state “to have an independent Chamber of Arts and Culture, which is able to advocate without fear on behalf of the sector.”
The report states “there is very little accurate information relating to these NFPs, their activities or their funding”. I do not know what they base this on as information can be found online:
- The Australian Government’s Register of Cultural Organisations lists the Australian arts organisations which have applied for and been granted a deductible gift recipient status, which enables them to provide tax deductible donation receipts. (Public art galleries, museums and libraries are generally not included on the Register as they are approved by the Australian Taxation Office under another Deductible Gift Recipient category).
- The Australia Council’s Major Performing Arts companies, which must meet a specific set of criteria, are listed on the Australia Council website, with links to their websites. An examination of these arts organisations’ websites should deliver information on projects underway and funding sources. Many also include annual reports, although some annual reports are harder to locate than others.
The statement “There is also very little up-to-date information on the source of income for NFPs in this sector” should be questioned. Again, accessing the individual arts organisation’s audited annual report will render information on income sources. Arts organisations which do not make their annual reports available should not actively fundraise. Donors tend to like to know what their donations are funding.
Relationship of Arts Organisations with Government
The Study cites “a relatively low level of collaborative advocacy.”
The 2015 Budget announcement by Senator George Brandis is mentioned: 15% of the Australia Council’s budget, or $105 million, would be diverted to a new National Program for Excellence in the Arts (since re-branded as Catalyst – Australian Arts and Culture Fund). While this diversion of funds is seen as a poor decision by many, directors said they would not be voicing complaints for fear of retribution from the government.
This was an opportunity for membership groups or peak bodies to speak fearlessly when individual members could not.
“Give, get or get off”: The Role of the Board in Fundraising for Arts Organisations
The Study also raises the issue of “a much greater expectation that directors would … donate and raise donations from their contacts.”
As governance includes ensuring effective strategic and financial planning is undertaken, and if fundraising forms part of an income stream for an arts organisation, the expectation that directors would donate and raise donations from their contacts seems logical. The fact that 64% of directors surveyed made a donation to their organisation demonstrates leading by example – and it is a higher figure than the 39% of directors who donate to their organisations across all sectors
For those directors who “preferred to see fundraising and governance separated,” I would direct them to the Australia Council’s informative guide On Board: Serving on the board of an arts organisation, which mentions, under Strategic Planning, some useful pointers on success factors demonstrated by organisations with “more effective fundraising track records”. They include “an active board, who are willing to use their networks and in some cases to donate substantial sums personally”.
In conclusion, the AICD Study states that 52% of directors expect their organisation to be stronger in 12 months. This is heartening news. After all, balancing on a tightrope is only dangerous if there is no safety net, and many arts organisations have woken up to the realisation that fundraising can provide that very safety net.
Discuss with a fundraising consultant about how your fundraising program and strategies can provide a safety net to your organisation or how to get your board involved in fundraising. Email admin@AskRIGHT.com or call 1300 758 812 (Australia) / 0274 929 636 (New Zealand) for a free 30-minute consultation.
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The Australia Institute of Company Directors 2015 NFP Governance and Performance Study published recently is available for reading for members and non-members alike: http://www.companydirectors.com.au/director-resource-centre/not-for-profit/nfp-governance-study