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Performing arts funding set to decline?

Performing arts funding set to decline?
July 10, 2009

Corporate support and sponsorship of performing arts was steady from 2004 to 2008, but a rise in private donations during the period underpinned funding in the sector. 

Overall support for performing arts (both corporate and private) increased steadily from 2004 to 2008 but is expected to decrease from 2009 as a result of the slowing economy, according to a report by the Australian Major Performing Arts Group (AMPAG). 

AMPAG is an umbrella organisation representing 28 major performing arts companies in Australia and its report looked at private-sector funding from 2004 to 2008. 

The report said that in 2008 corporate sponsorship and private donations received by the 28 major performing arts companies was $49.6 million. It said that in 2008, $27.1 million (55%) was received in the form of corporate sponsorship, $20 million (40%) from donations and $2.5 million (5%) from fundraising events. 

“These figures reflect the changes in giving patterns in Australia with the proportion of corporate support declining overall from 2004, when it made up 68% of the giving income, and the proportion of private philanthropy increasing significantly” said Sue Donnelly, AMPAG Executive Director. 

Donnelly explained that the real issue facing major performing arts companies was the impact on their cashflows over the next two years as the effects of the economic downturn intensified, stating “typically the arts sector lags 18 months behind the rest of the economy. Already companies are reporting that many private donors, who are more than happy to continue supporting them, can only do so at a reduced level.” 

Donnelly concluded that the companies that are most exposed are those with sponsorship contracts due for renewal at the end of the year.

Philanthropic revenue increase 
Philanthropic revenue increased by 119% from 2004 to 2008, with the strongest growth achieved in 2005 and 2007 years. In 2008 it was up 11.2% or $2 million from 2007, but the increase in philanthropic giving did not benefit all companies equally. In 2007, 26 major performing arts companies reported increased earnings from this source, while in 2008 only 18 companies reported an increase. 

Decline in corporate sponsorship slows 
Following two consecutive years of decline, corporate sponsorship was up $1.8 million from 2007. 

Dance companies were the biggest beneficiaries from increased corporate sponsorship compared to previous years, with an additional $1.1 million in 2008. 

The report's data suggested that companies with an overall income of between $7.5 million and $15 million, reported a 14% reliance on corporate sponsorship. Companies with turnover of less than $7.5 million had the greatest proportional reliance (66%) on sponsorship and were potentially more vulnerable to economic downturn.

Music companies reported a return to similar levels of corporate sponsorship as in 2006 – around $11.8 million - although it was dominated by the results of three of the 10 music companies. 

Image: AMPAG member the Bangarra Dance Company. 

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