Business Funding for the Arts
Business funding for the arts involves the financial contributions made by corporations and individual executives to support artistic and cultural organizations. This practice has evolved over time, influenced by economic conditions and societal attitudes towards both the arts and philanthropy. Companies often leverage their support for the arts to achieve various strategic goals, such as enhancing brand image, establishing community relations, and increasing employee morale through workplace art collections. Historically, private funding has significantly outweighed public funding for the arts in the United States, with corporations using a mix of cash sponsorships and in-kind contributions to support various artistic endeavors.
Organizations like the Business Committee for the Arts (BCA) play a crucial role in fostering partnerships between businesses and the arts, offering resources and recognition for corporate involvement. While corporate support can lead to substantial benefits for both parties, challenges can arise, especially during economic downturns or when donor interests conflict with artistic integrity. As the landscape of arts funding continues to change, understanding the intricate relationship between business support and the arts remains essential for both sectors.
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Subject Terms
Business Funding for the Arts
Abstract
This article examines the relationships between businesses and arts organizations, including how companies contribute to the arts and invest in art collections. Historical and contemporary trends in corporate support of the arts are reviewed. The benefits that companies can derive from supporting the arts are explained, as are the various goals that businesses attempt to achieve through support of the arts. The relationship between public and private funding is also reviewed. Problems that both businesses and arts organizations may encounter when businesses contribute and when arts organizations mimic private-sector marketing practices are discussed.
Overview
Business funding of art and cultural activities has been an ongoing enterprise that has changed with economic times as well as with social attitudes toward the arts and toward philanthropy in general. How businesses have contributed to the arts has evolved as societies have evolved and arts organizations have matured.
Historically, the perspectives of corporate board members and the top executives of the firm have driven business contributions to the arts. The wealth of companies, the location of their corporate headquarters, and their business goals have all influenced giving trends over time. In the United States, private funding of the arts has long exceeded public funding. By 1990, private funding had reached several billion dollars annually ("Scope of Federal Arts Funding," 1991).
Types of Private Funding. It has not been uncommon for board members or senior managers to use corporate assets to support their own cultural agenda or that of their spouses or families. Corporate contributions have been used to gain status for both the corporation and the people who control the wealth of the corporation. Some corporate donations of cash have brought little more than recognition to the company, board member, or executive making the contribution. In many of these cases, there was little or no expectation of any tangible benefit, but the reward of status in the community has often served its purpose for those seeking to leverage contributions as a social mechanism.
In some cases, corporate giving has been a rent-seeking activity, as managers leverage their involvement with arts and cultural organizations in order to influence government officials or existing and potential clients and suppliers. Corporate contributions to the arts have also been made to help achieve or support strategic goals when businesses link their contributions with strategic objectives, such as staff development, corporate incentive programs, or image building (Stanziola, 2007).
Some corporate contributions have taken the form of cash sponsorships, which include payments to arts organizations in return for benefits such as promotion of the business name, products, or services. Corporations have also leveraged their in-kind sponsorship, which includes contributing equipment, materials, services, or advice in lieu of cash payments, in exchange for promotional benefits.
Corporations have also been big purchasers of memberships in museums or theater organizations. This has generally involved payments for annual subscriptions by a business in return for benefits such as a number of event tickets or passes, the use of the facilities, or discounts on advertising in printed programs or catalogs (Stanziola, 2007).
Types of Private Funding. In addition to private funding for the arts, many countries provide a substantial amount of national, or public, funding for the arts. In the United States, there is federal funding for the national art museums: those affiliated with the Smithsonian Institution, including the National Gallery of Art, the National Portrait Gallery, the Hirshhorn Museum and Sculpture Garden, and the National Museum of African Art. However, there is a lack of significant federal funding for other art museums (Skinner, Ekelund & Jackson, 2009). This trend has provided opportunities for businesses to contribute, but it also presents challenges to local and regional museums when seeking funds.
In 1965, the National Endowment for the Arts (NEA) was established, and it has since awarded more than 135,000 grants totaling more than $4 billion. The NEA has supported arts activities across the United States, including in rural areas, inner cities, and military bases. Funded projects have included artist residencies in schools, museum exhibitions, Internet initiatives, literary fellowships, national tours, international exchanges, theater festivals, design competitions, folk arts, and historic preservation. Each dollar that the NEA has granted has typically generated up to seven times more money in matching grants. It is important to note that NEA funding represents less than one percent of total arts philanthropy in the United States ("NEA at a Glance," 2010).
Public funding of the arts in the United States has encountered numerous obstacles and problems, and the NEA has been at the heart of many debates. Throughout its history, the United States Congress has spent a disproportionate amount of time debating the NEA's relatively small appropriation. There has been considerable public criticism and outcry over some of the projects funded by the NEA, and the drama of that outcry has been played out in Congress. One of the most controversial projects funded by the NEA was an exhibit of Robert Mapplethorpe's work at the Philadelphia Institute of Contemporary Art. The retrospective exhibit of his work was funded in part by a $30,000 grant from the NEA. The exhibit included several explicit pictures that brought out an uproar from conservative Americans (Moen, 1997).
Other federal government support for the arts has not been as controversial, and some projects have become a permanent part of American culture. The United States Marine Corp Band, for example, was established in 1750 and remains active today. Many federal buildings around the country house works of art, and the government has had an ongoing program to commission art works for public display.
Many business families have made major contributions of art to the United States, and the federal government has responded in a positive manner. In 1848, Congress accepted a bequest from James Smithsonian and established the now world-famous Smithsonian Institute. In 1899, the federal government accepted a gift of an Asian art collection from Charles Lang Freer. The Freer Gallery of Art, built to display the collection, was opened as part of the Smithsonian. In 1937, Andrew W. Mellon donated an art collection and funded the building of the National Gallery of Art ("Evolution of Federal Arts Funding," 1991).
Applications
Leveraging the Arts in the Business Environment. Corporate support of the arts, and the support of arts provided by individual corporate executives and their families, often provides a range of benefits and returns. One of the key benefits is that it helps build a brand name and a corporate image. Secondly, funding of arts and other related activities brings recognition to the corporate executives who drive funding efforts. In the case of the twentieth-century industrial moguls who funded countless arts efforts, it also brought valuable family recognition.
The Business Committee for the Arts. In 1967, David Rockefeller founded the Business Committee for the Arts (BCA), a national not-for-profit organization that brings businesses and the arts together. The BCA provides businesses, regardless of their size, with a wide range of services and resources to help them develop and advance partnerships with the arts. The mission of the BCA is to help businesses, the arts, and local communities develop mutually beneficial relationships. The BCA uses forums, consultations, research, conferences, and workshops to help corporations develop and leverage their relationships with the arts. It also provides companies with eight basic steps to initiate their corporate arts involvement ("About the BCA," 2009).
In 2003, the BCA conducted a survey of over 800 employees at 32 different companies in the United States that have workplace art collections, asking how they felt about corporate art collections. Employees reported that art in the workplace helps reduce stress, increase productivity, and enhance morale. They also indicated that workplace art broadens employee appreciation of diversity and encourages discussions and expression of opinions. Above all, employees felt that art in the workplace demonstrates that a company takes an interest in improving the quality of life in and out of the workplace. Employees also believed that art helps build customer and community relations and can lead to networking opportunities ("Survey Reveals Workplace Art…," 2003).
The BCA gives annual awards to companies that demonstrate their support of the arts and leverage art as a corporate asset. Companies who received awards in 2013 include:
- Bacardi USA in Coral Gables, Florida, for its philanthropic support of visual and performing arts, workplace collection of Caribbean and Latin American art, provision of tickets to arts events to employees, and design competitions for ad campaigns ("BCA 10: Best businesses," 2013).
- M&T Bank in Buffalo, New York, for donating $34.5 million to arts organizations over ten years, sponsoring numerous art exhibits, encouraging its employees to volunteer with arts organizations, working to provide free public access to museums, and hosting a daily concert series ("BCA 10: Best businesses," 2013).
- Microsoft in Redmond, Washington, for donating $353 million to arts organizations between 1995 and 2013, hosting a collection of nearly five thousand works of art, and working to provide greater access to arts education worldwide ("BCA 10: Best businesses," 2013).
- PNC Financial Services Group in Pittsburgh, Pennsylvania, for introducing the PNC Arts Alive! program in Philadelphia and southern New Jersey in 2009, then later expanding the program to Ohio and the Saint Louis area, including southern Illinois. The program hosts both free and discounted arts programs, subsidizes tickets to arts performances, and sponsors public arts and art-creation events ("BCA 10: Best businesses," 2013).
- Premier Bank in Dubuque, Iowa, for spending 40 percent of its philanthropic budget on the arts since 1998, investing in local exhibitions and festivals, encouraging employees to volunteer with arts organizations, providing free passes to arts events, holding special events at art exhibitions, and displaying work by local artists ("BCA 10: Best businesses," 2013).
In 2017, the BCA 10 honorees included 21c Museum Hotels and Humana Inc., both in Louisville, Kentucky; Cardinal Health, in Dublin, Ohio; Guitar Center Inc., in Westlake Village, California; Halekulani Corporation, in Honolulu, Hawaii; Houston Methodist, a healthcare organization in Houston, Texas; Kaiser Permanente, in Denver, Colorado; Lincoln Financial Group, in Radnor, Pennsylvania; Magic Hat Brewing Company, in Burlington, Vermont; and the Betsy–South Beach, in Miami, Florida.
The BCA also provides case studies of companies that have leveraged their contributions to the arts. The case studies cover small, midsize, and large companies from all industry sectors ("Case studies," 2009).
The Theater Development Fund (TDF) was established in 1968 as a nonprofit organization to help the New York theater industry. The TDF provides support to more than 900 plays and musicals and has generated over $2 billion in revenue for thousands of Broadway, Off-Broadway, and Off-Off-Broadway productions. Corporate sponsorships are available at various levels, and donors receive tickets as well as invitations to special events. Corporate contributors have included Planet Hollywood, SAP, the Walt Disney Company, Goldman Sachs, Home Box Office (HBO), JP Morgan Chase Foundation, the McGraw-Hill Companies, Sony Corporation of America, and the Xerox Foundation ("About TDF," 2009).
Maximizing a Brand Name. The Ford Foundation is one of the most well-known foundations that provide support for the arts. Edsel Ford, son of Ford Motor Company founder Henry Ford, chartered the foundation in 1936 with a gift of $25,000. Upon their deaths, Edsel and Henry each bequeathed the foundation his own nonvoting stock of the Ford Motor Company. From 1943 to 1976, Henry Ford II served the foundation in various capacities, including president, chairman, and member of the board of trustees. During this time, he helped transform the foundation from a local Detroit entity to a national and international organization.
Since its founding, the Ford Foundation has provided billions of dollars in grants. In the arts, grants have been made for several purposes, including supporting fellowships and awards that directly support the creation of artistic work and creative processes, both contemporary and traditional. In addition, grants were made to promote public understanding of the role of artists, to strengthen the infrastructure that supports artists, and to help cultural, community-based, and educational institutions promote creativity ("Our History," 2009). The Ford Foundation and the Ford family name became synonymous with efforts to improve the quality of life of people around the world (Kreidler, 1996).
Managing Corporate Art Activities. A small number of very rich people, some with their corporations behind them, have gone far beyond just donating art or cash to arts organizations. In 2006, Bernard Arnault, the billionaire head of the French corporation LVMH, commissioned the construction of a museum in Paris to house his art collection, an undertaking that cost over $200 million. Kering founder François Pinault purchased Venice's Palazzo Grassi art museum in 2005 and began displaying his personal art collection there. In Istanbul, the Koç and Eczacibasi families, moguls in heavy industry and pharmaceuticals, started their own modern art museums (Gumbel, 2009). Alice Walton, a Walmart billionaire, founded the Crystal Bridges Museum of American Art in the small town of Bentonville, Arkansas, which opened in 2011 (Vogel, 2011).
Several corporations and descendants of their founders have made enormous contributions from their collections. In 1998, Sara Lee Corporation announced that it was donating an estimated $100 million of artworks to twenty art museums in the United States, one of the country's largest corporate art contributions ("Sara Lee…," 1998). In 2001, Jeanne Gaffe bequeathed a collection of 25 paintings and sculptures worth an estimated $40 million to the United Nations Children's Fund (UNICEF) (Hruby, 2001).
On a smaller scale, businesses seeking guidance on their contributions to or investments in the arts can turn to an art advisor. The role of a corporate art advisor is to provide professional guidance to a company on the acquisition, installation, and maintenance of works of art. International Art Advisors (IAA) and the Association of Professional Art Advisors (APAA), to name just two, can provide guidance and assistance on the subject.
Companies with a large investment in art often hire a corporate art curator to be responsible for the acquisition, installation, and maintenance of an art collection owned by that company. Through the company arts program, the corporate curator is charged with advancing the company's mission, goals, and objectives. The corporate curator may also be involved with organizing art exhibits, giving tours of the collection, handling loans from the collection, labeling works, maintaining a catalog on the collection, or giving talks to the company employees and others about the collection ("Guidelines and Standards," 2009).
Issue
When the Arts & Business Do Not Mix. Private corporations and their founders have made incredible contributions to the arts. But sometimes when efforts are made to mix the arts and business, things do not go as smoothly as hoped.
Businesses have their cycles, and when things are good, their support for the arts is generous. However, when business is bad, corporations tend to contribute relatively small amounts of money and other resources (McConnon & Delevingne, 2008). The global financial crisis that began in 2008 led to arts organizations and others that depend on contributions feeling a crunch for several years (Hall & Moore, 2008). In addition to a slowdown in contributions, curators of corporate art collections indicate that when downturns come, acquisitions are also trimmed back, and companies look out for bargains in the art market (Shane, 1996). This leaves many arts organizations in financial trouble because the funds that they depended on have diminished.
Another trend that has affected the arts side of the arts-and-business partnership is mergers and acquisitions of large contributing companies. There are, on average, at least a few mergers or acquisitions every year that impact corporate contributions. In some cases, the companies are busy with the nuts and bolts of restructuring the business, which in turn affects overall giving trends. In other cases, corporate headquarters may be moved to another city, taking its contributions with it and thus leaving a gap in local support for the arts (Armbrust, 1999).
Another circumstance that can strain the relationship between donors and arts organizations is when the donor attempts to control or manipulate the agenda of the arts organization. Regardless of whether it is politics, social beliefs, or religious perspectives, when donors want too much control over the activities of the arts organization, there can be backlash from members, staff, or other large donors. In addition, many donors want to maximize the recognition they receive from making a contribution, and having the corporate name on a building, an event, or a series is one way to achieve that recognition. This can also create some backlash among other donors or the community (Vilar, 2003).
As the trends in corporate support of the arts have evolved over the last century, it has become a common understanding that business want to leverage their contributions and investments. Arts organizations and artists also seek to leverage their social positions as well as their assets, some of which have been contributed. There have been several circumstances where these desires have created backlash.
When Brandeis University announced in 2009 that it would close its Rose Art Museum and sell its art collection, there was an uproar. Those protesting the loudest may not have spent enough time exploring the motivations, the financial position, and the long-term strategic goals of the university. For the most part, there was just negative feedback. The Rose Art Museum opened in 1961 and drew many contributions and about 12,000 visitors per year. But like many universities, the school needed money, and the art collection had an estimated value of over $300 million (Peers, 2009). Nevertheless, a lawsuit was filed to keep the museum open, and after closing briefly for renovations, the Rose Art Museum reopened in 2011 ("Brandeis, plaintiffs," 2011). Other colleges have also encountered opposition to their efforts to leverage their donated art collections.
When the Louvre mixed business and art by hosting an expensive and exclusive fundraising party at the museum, conservative members of and contributors to the museum had their chance to protest. The event was hosted by Houston socialite Becca Cason Thrash, and even though the 272 guests, who paid up to $10,000 each to attend, provided the museum with $2.7 million in one evening, some still complained (Gumbel, 2008). As other museums attempt to use business-style marketing efforts, there is likely to be more uproar.
In the late 1990s, the chairman and CEO of Black Entertainment Television (BET), Robert L. Johnson, purchased for an undisclosed amount the Barnett-Aden African American art collection from the Florida Endowment Fund for Higher Education. The deal included the acquisition of the museum building and property as well as the endowment of two doctoral fellowships to study the collection ("BET purchases," 1998). This event was more readily accepted by the public, as it perhaps demonstrated that wealth and art do have a relationship and that passion and status motivate individuals from all types of backgrounds. The overall impact was to drive up interest in the collection and boost BET's business reputation.
Conclusion
Corporations and heads of corporations have long been supporters of the arts in the United States, often doing so in the face of a lack of public support. They have made huge contributions to arts organizations, and some have amassed vast art collections. Many companies and executives have benefited from this support in the forms of brand building, corporate reputation, and personal social status.
In most cases, it appears that private funding of the arts has been remarkably successful. However, it is clear that problems can arise in the ways that companies try to leverage their contributions and investments and in how arts organizations manage bequests and gifts. It is also likely that problems will persist as universities, cultural centers, and other nonprofit organizations that have received bequests or gifts struggle with rising costs and declining contributions. Efforts to leverage donated art objects through sale, rent, or loan may result in unwanted negative public reaction and publicity.
Those who are seeking business careers would do well to understand the relationship between corporations and the art world. The challenge of managing and maximizing the benefits derived from supporting the arts is complex and can sometimes result in unanticipated backlash. Nevertheless, rising corporate executives can leverage involvement in the art world to promote their companies and advance their careers.
Terms & Concepts
Bequest: A gift to an arts organization that is made in a person's will and is generally executed after their death.
Matching Grants: Financial contributions or gifts to arts organizations from private businesses, publicly traded companies, individual citizens, or government agencies that match, or equal, contributions from other sources.
Private Funding: Financial contributions or gifts to arts organizations from private businesses, publicly traded companies, or individual citizens.
Public Funding: Financial support of arts organizations derived from tax dollars and granted by a federal, state, or local government agency.
Workplace Art: Any work of art, including paintings, sculptures, or objects, that enhances the workplace environment.
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