The arts are integral to Britain. Their importance extends beyond the cultural sphere. The Treasury receives £5 for every £1 that it invests in the arts. And it isn’t only a competitive tax regime that attracts business to these shores; Deutsche Bank relocated to London specifically because it’s an almost unrivalled cultural and artistic hub.
This and the coming crunch has inspired Arts&Business and Alec Reed (founder of Reed Recruitment), whose launch I attended this morning, to encourage private philanthropy to protect the arts in the short term, and to propose a mixed funding model that balances public, private and corporate funds to increase arts funding without overstretching the nation’s purse in the future. The plans are radical. Private lump sums will be released only if arts institutions match the grant with their own private sources, forcing them to build a closer relationship with viewers.
Can it work? Getting hard-pressed people to donate large sums to, for instance, a local theatre will be tricky but not insurmountable. The real obstacle is the Byzantine tax system. Current legislation penalises substantial donations by UK domiciled taxpayers and the rubric of established provisions, such as Gift Aid, is so impenetrable that many cultural organisations do not use them, depriving them up to £85,000 a year. The tax system will have to be rationalised if philanthropy is to flourish.