Fundraising Management: Sponsorship, Philanthropy, and the State
CharleneYY
Week7lecturev1.pptxCorporate funding
Sarah brin guest lecture - Thursday at 1pm
Today we will cover
1) Corporate funding of art and culture – key principles
2) Corporate sponsorship of CCI
3) Corporate foundations
Learning outcomes
This week students will be able to: 1) Recognise different forms of corporate sponsorship 2) Evaluate risks and benefits of corporate sponsorship for corporations 3) Analyse risks and benefits of corporate sponsorship for cultural and creative industries
Part one: privatizing culture
Privatizing culture
There has been a decline in public funding for cultural institutions since the 1980s, particularly in the UK and the US.
This dovetails with a move away from individual philanthropy, towards corporate funding of arts.
Each kind of funder we examine during this module has distinct and diverse goals, which are mediated through complicated organizational cultures.
Individual philanthropists do not expect returns on their investments (although motivations are complex)
Corporate funders are more interested in public relations, and stoking perceptions about their social responsibility.
Cultural elites and art
Cultural capital (a concept introduced by sociologist Pierre Bourdieu): “transmission of art from generation to generation serve to preserve and reproduce the dominant position of a dominant class” (Wu, 2002: 7)
In her work, Wu moderates this concept, which was originally introduced to discuss individuals.
For corporations, ‘cultural capital’ can be bent to mean the “material appropriation of symbolic objects” (Wu 2002: 8)
trustees
Many trustees who sit on the board of arts organizations are corporate executives.
There are many ‘inside dealings’ on boards of trustees – informal relationships between corporate trustees behind closed museum doors.
How this process works is difficult for academics to study.
There is evidence that trustees can have ‘insider information’ on art purchases, or enjoy being connected with other powerful operators through the board social events.
Boards of trustees can show us how corporate power works through ‘soft interventions’ – how do board trustees end up shaping the art and culture we experience?
The corporate sponsorship of contemporary arts
Positive associations with modernism, avant garde and innovation.
Makes business look innovative and progressive.
Corporate executives play a significant role in arts sponsorship and in corporate arts intervention.
Involvement in arts provides cultural capital and ‘social distinction’.
Corporate engagement in arts spans between individual interest and corporate interests.
Addressing the art going public
Who are corporate art sponsorships hoping to target?
The art-going public is very small.
Brands are hoping to change their image among cultural elites, decision makers and prominent people in society.
They offer a ‘niche market’ of business power.
Who are the art going public today?
The Panic! Report was published in 2018 by Dr Orian Brook, Dr David O’Brien, and Dr Mark Taylor and Arts Emergency – who will be coming to deliver a guest lecture this semester.
Panic methodology: draws from the ‘taking part’ survey of over 10,000 participants in the UK.
Points for reflection
When public funding into arts and culture are cut, cultural organizations become more reliant on corporate funding.
Corporate funders have diverse motivations that can range from individual to organizational.
They will often be looking for some public relations benefits.
The arts going public are a desirable market for these corporations – they represent elite groups in society.
Part two: Corporate sponsorship
Sponsorship
The provision of resources (e.g., funds, people, or equipment) by an organization directly to an event or activity in exchange for a direct association to the event or activity. The providing organization can then use this direct association to achieve either their corporate, marketing, or media objectives. (Lee, Sandler & Shani, 1997, p. 162)
Corporate sponsorship can promote:
Favorable associations between a brand and a CCI.
Deeper personal meanings and connections for employees and consumers.
Draws from community and a sense of ‘oneness’ – for example with a cultural or sports event
Positive assumptions about corporate support (eg that it causes lower ticket prices)
Tax Relief
In the UK, companies can deduct charity sponsorships as a business expense.
Corporate sponsorship: Advertising by ‘trojan horse’?
In the context of cultural sponsorship, funders will require the display of a logo in recognition of their support.
Sponsors may hope to target consumer groups who will not be amenable to other forms of advertising.
One concern is that sponsorship has been used to help advertisers ‘get around’ certain rules and guidelines
Tobacco companies and the arts
A ban on Tobacco advertising in the UK in 1965 triggered the increase corporate sponsorship by Tobacco companies.
Tobacco Companies then embraced sponsorship of the arts – at least in part as a way to get around these rules.
The Tobacco company Imperial Tobacco sponsored the National Portrait Award prior to BP (John Player was one the tobacco companies which merged to become Imperial Tobacco).
In 2002 it became illegal to advertise tobacco in the UK, and sponsorships in exchange for promotion were banned.
However tobacco companies do continue to sponsor the arts in the uk if you look hard enough…
The future: CRYPTOCURRENCY?
10 minute break
bp arts sponsorship in the uk
National Portrait Gallery (the ‘BP’ British Portrait award – winner )
The Royal Opera House
The British Museum
These contracts run until 2022
Tate (ceased in 2017 after 26 years)
Royal Shakespeare Company (ceased in 2019)
Deepwater horizon oil disaster (2010)
Killed 11 crewmembers
Leaked more than 300 Olympic sized swimming pools of oil into the Gulf’s water – the biggest oil spill in United States history.
Scientists called this a ‘toxic waste dump’ and showed how this significantly effected the marine biology of the
A huge media and cultural shift in awareness about the risks of drilling oil.
BP was found to not have taken safety seriously enough and paid out $20 billion in penalties and damages.
For mel evans (art wash)
The oil industry is responsible for some of the most devastating social and environmental disaster in history.
The oil industry is complicit in many deaths and injuries around the world and cause catastrophic ecological harm.
She describes big oil’s involvement in art and culture as an ‘artwash’ like a ‘whitewash’ – a laundering process for big oil reputation.
Mel evans - artwash
https://www.youtube.com/watch?v=Yqe0qe8aEGY&ab_channel=PlutoPress
Artwash: big oil and the arts
Oil companies hope to associate themselves with prestigious arts institutions as a survival tactic of a precarious industry.
‘Art sponsorship becomes a way for the global, transnational corporation to present and benefit from a national specific brand identity; it offers a pretense of corporate responsibility for the callous profiteer, and becomes an illusionary act of cultural relevance for outmoded institutions” (Evans, 2015: 6)
Liberate tate
Founded during a workshop on art and activism commissioned by Tate in January 2010,
Aimed to take creative disobedience against Tate until it dropped its oil company funding.
“We believe Tate is supporting BP rather than the other way around. Given Tate’s relationship with a corporation engaged in socially and ecologically destructive activities, in our view, every exhibition at Tate and other oil-sponsored public cultural institutions is part of the creation of climate chaos through the construction of a social licence to operate for oil companies
We situate our interventions in the growing wave of desire for citizens to reclaim public space: a gallery should be a place to enjoy great art, not a site where an art museum makes visitors complicit in the ecological destruction of its corporate partners” (Liberate Tate)
Human cost
Liberate Tate undertook a number of creative actions until BP ceased funding the Tate in 2016.
Human Cost was a performance which took place on the first anniversary of the spill.
This lasted for 87 minutes – one for every day of the spill.
Bp ceased sponsorship of the tate in 2017
BP said this decision was because of plunging oil prices and a “challenging business environment” – they said this was a “purely economic decision”.
A BP spokeswoman said the decision to end the sponsorship was unrelated to any pressure from activists. “They are free to express their points of view but our decision wasn’t influenced by that. It was a business decision,” she said, adding that were no plans to end sponsorship of other arts institutions.
However, BP did not end any of their other cultural partnerships.
Claims about financial costs are dubious - BP had only been giving £224,000 a year to Tate.
The royal Shakespeare company
In 2019, the Royal Shakespeare Company occluded its partnership with BP.
BP sponsored their £5 ticket scheme for 16-25 year olds.
However surveys in schools and their ‘Youth Advisory Board’ found that young people did not want to engage with the RSC due to their ongoing relationship with BP
Shell and the science museum
The Science Museum’s ‘Our Future Planet’ exhibition was sponsored by Shell, a big oil company.
There have been protests from many different groups, including Extinction Rebellion and the School Strikes movement over this deal.
In the video, Channel 4 shows that they found the Science Museum signed a gagging order, which meant that they could not tarnish Shell’s name or reputation in the exhibition.
Critics say this represents a clear conflict of interest.
Measuring the effects of sponsorship
Brand image transfer – ““the transfer of associations attributed to the sponsored activity to the sponsoring brand” (Grohs et al., 2004, p. 123).
The ultimate goal is change in consumer perception and behaviour.
Abreu Novais & Arcodia (2013)
findings
In studying brand image transfer in sponsorship, the authors of this study have observed:
Sponsors must choose what to sponsor carefully, the fit between CCI and sponsor is very important.
Highly involved consumers are more likely to develop positive attitudes towards the sponsor.
Frequency of sponsorship does not make a significant difference.
Sponsorship is more effective when it is leveraged with additional advertising and promotional activities.
Points to consider
Corporate sponsorships give PR benefits and tax benefits to corporations.
Many arts organisations are sponsored by corporations in industries with reputational risks (eg tobacco and oil)
Changing attitudes will effect how accepting consumers are of these sponsorships – as will policy and legal changes (eg Tobacco advertising being made illegal).
Both parties get the most out of sponsorship if there is a clear ‘fit’ between organizations and if this is leveraged by other promotional and advertising activities.
Part 3: corporate foundations
Corporate foundations
Trust and foundations contribute significantly to the UK’s cultural funding ecology.
Foundations are organizations set up with income from either business profits or individual/family wealth.
They are independent organizations that often focus around making grants.
Grant applications often required significant detail, financial information, and record of impact.
Foundations will have their own governing principles, and areas that they wish to fund. Some have their own independent trustees, and some are appointed by the company.
Trust and Foundation funding for arts and culture: Overview of Data 2019/20
Esmee Fairbairn Foundation
benefits of foundations (FOR corporations)
They provide focus and structure, and they allow a corporation to express its values in a clear way.
They make corporate giving more structural and systematic (allows clear rationales for saying yes/no to different requests).
Can develop expertise in more focused giving.
Foundations can offer more long term giving – although this is not always the case
Visible demonstration to commitment to doing good.
Risks of foundations (for corporations)
They are resource heavy to set up and manage.
They are time and resource intensive to maintain.
They don’t allow flexibility to change original mission.
It’s difficult to measure the CSR impact of foundations.
Foundation risks for ccis
Applications for grant funding are complicated, and there has been a specialised industry developed around helping support organisations in applying for foundation funding.
This is difficult for smaller CCI organizations especially.
There are risks in relying on foundation funding as this can be tied to the market.
Foundation priorities (eg ‘impact’) will dictate how money is spent.
Foundations and covid-19
Some foundations experienced large falls in the value of their investment portfolio.
This had an effect on returns, cashflow and availability of liquid funds .
There have been increases in giving in certain areas, as a COVID response.
However, this is unstable and the charity sector as a whole in the UK has shrunk by 24%
Points to consider
Foundations offer a more robust framework for corporate philanthropic giving than ad-hoc gifts.
They offer a more ‘hands off’ approach than corporate sponsorship.
Trustees can be appointed independently.
Corporations can become experts in particular areas (like arts and culture).
However for CCIs there are risks –
Their work must fit with the corporations aims (who should be setting these terms?)
There is a long-form and intensive application processes
Foundations can be tied to the market, making them risky
Question: What are the key benefits to corporate sponsorship and foundation funding?
