The Balancing Act of Cultural Philanthropy

Art reflects and critiques the human condition. Its symbolic role shapes regional and national social identity but it also inspires, stimulates, and entertains, generating pleasure and challenge. Art dates back to walls in caves and celebrations of important social events, but it also developed further in religious-aristocratic venues and gatherings around the world. Art patronage has provided social status, demonstrating wealth and sophistication (Shiner, 2003). More recently, artistic expression represents freedom of speech (UNESCO, 2019) in contemporary democracies. Artists often innovate beyond the tradition of their craft to convey their ideas. Individual creative genius is a stereotype, considered a calling and a hallmark of art, although collective creation among talented artists is, in fact, more prevalent (Becker, 1982).

The economic theory of ‘cost disease’ describes the effect of inflation in service sectors (Baumol & Bowen, 1965), with the result that the production of art increasingly requires financial support beyond revenue earned from the box office and entrance fees. Some observers suggest that art can be self-financing through an audience of consumers alone. In fact, commercial production of theatre does exist – notably on Broadway and in London’s West End – and auction houses and commercial galleries function similarly in the visual arts (DiMaggio, 2006). However, around the world, for many expressions of art, public and private sources can liberate artistic expression from market constraints.

The commercial aura of art raises questions about how it fits in the charitable non-profit sector. Nonetheless, in the Anglo-Saxon tradition, performing and visual art production is anchored in that sector and donors do receive charitable tax recognition for their gifts. Philanthropy has played an immense role in the production of art in the US while in Canada, Britain and Australia, its role is becoming important through the 20^th century. In national contexts in Europe, a purposeful philanthropic strategy is gradually becoming part of the funding mix. In many other national contexts, like India, Asia, Africa, and Latin America, public funding does exist, but philanthropic support for the arts is very limited, if present at all. Nonetheless, some private investment can be found. Parallel foundations for major arts institutions in Eastern and Western Europe reflect an effort to benefit from enthusiastic tourists and diaspora donors who live in philanthropic cultures like that in the US. While a social democratic philosophy of public funding often finances art, these governments also regularly seek opportunities to reduce spending. The allure of funding art through philanthropy becomes potent.

A growing interest in the practice of arts philanthropy in Britain and Europe is reflected in two new books on arts fundraising, published in 2023. One is from Italy’s Bocconi University and the other is part of the Routledge series on arts management (Peccorraro et al, 2023; Wright et al, 2023). They contrast with two much earlier books from the US and Australia (Brooks Hopkins & Friedman, 1997; Radbourne & Watkins, 2015).

Art is often experienced through events. The COVID-19 pandemic forced the closure of performance venues and museums to prevent public gatherings, and this absence of audience generated an overwhelming experience for many artists globally. In numerous free-market economies, artists were severely affected both financially and in the realization of their craft while in other economies they were funded through special programs, creating significant global inequalities amongst artists. The existential threat of the pandemic’s impact continues as arts organizations attempt to regain their public. Business models, mission objectives, who makes art, and the structure of artists’ support are increasingly debated.

Perceptions about the purpose of artistic production are evolving. The symbolic value of art as social status has diminished, whereas understanding its beneficial impact on society as a source of social support, change and inspiration is growing (Ostrower, 2003; 2023). Thus, art is becoming more charitably oriented, further justifying philanthropic support.

Focusing on philanthropy in the arts as simply a source of funding is a neo-liberal perspective. That perspective creates a discourse where arts events become celebrity platforms for business networking and the attraction of high net-worth individuals. This instrumental perception of how philanthropy might work in the field overlooks the essential passion and deep engagement that assembles a community of large and small donors that also includes committed foundations and corporate leaders to support artists, their organizations and its social benefit. A culture of philanthropy is well expressed in the aspirations of a recent collective campaign mounted by the institutional theatre companies in Québec: Community, solidarity, imagination, beauty, love, confidence, legacy, and pride.

Some private wealth has historically played a ‘patronage’ or founder’s role in Canada, but a systematic and strategic organizational approach to philanthropy in the arts was not always present. Sustainability in arts philanthropy is dependent on the link between its marketing function and philanthropic development (Lampel et al, 2000), generating reliable and generous support from a donor community.

In this special issue, there are two types of communication. First are previously published reflections about the social role of the arts and the practice of cultural philanthropy. Second, we commissioned further contributions from actors in the arts sector with experience in cultural philanthropy. The results have evolved into five themes that nourish this conversation. Three topics from the field are missing: the history of Arts and Business in Canada and an understanding of a current incentive program to motivate corporate funding of the arts (Artsvest), the impact of celebrity in arts fundraising, and the role of women as senior board members and volunteers in philanthropy in this sector.

Given that PhiLab is hosted at the Université du Québec à Montréal (UQAM), we provide a number of Québec-based interviews and conversations that reflect local efforts to grow the underdeveloped field of cultural philanthropy in a multi-media offering. However, these documents provide insights about the essential philosophy of ‘proximity philanthropy’ where the physical presence of an audience opens the door to a philanthropic conversation with artists – a useful perspective everywhere. Discussion of this approach has recently become a focus in Québec, but we learn that in Toronto, training in philanthropic arts revenue was available only in the 1980s. Training for arts income managers was originally anchored in the Canadian Opera Company, subsequently situated in the University of Waterloo, Centre for Cultural Management and now at Queen’s University. Similar training is now offered in a consortium of HEC Montréal, the Université de Montréal, and the Conseil des arts de Montréal.

Similar philanthropic strategies in the education and health care sectors appeal to alumnae and former patients whose formative experiences in the past connect them to the institution. But the arts are lucky that the interaction of audience and art, lying at the heart of philanthropic motivations, occurs in event-supporting specialized infrastructure like theatres and museums. Philanthropic professionals can effectively engage in the development of donor relationships in the moment of the audience-art interaction.

In order to accomplish philanthropic development in the arts, many performing and visual arts organizations require specialized databases combining the full client experience in one program. However, requirements to maintain cybersecurity in Québec, Canada and Europe, while necessary and appropriate in today’s AI context, have generated new practices to optimize philanthropic revenue. Many artistic organizations are presented by third parties and hence lack direct access to their audience. Similar challenges are present in other philanthropic sectors.

Cultural philanthropy involves a personal commitment by audience members to art producing a community of donors who extend the culture of philanthropy across the sector and into the larger community. The value of art in society can become better understood through the passion and advocacy that arises from within this personal commitment.

Wendy Reid

Wendy Reid est professeure honoraire en management à HEC Montréal en retraite après son rôle de professeur agrégé. Avec une carrière de 25 ans dans le milieu des arts, des musées et des médias au Québec et au Canada, elle a complété son doctorat à l’Université York à Toronto. Ses expériences se trouvent dans les postes de DG ainsi que la direction du financement (marketing et philanthropie) et des opérations. Affiliée à la Chaire de gestion des arts Carmelle et Rémi-Marcoux à HEC Montréal, ses intérêts de recherche et de consultation se situent dans la philanthropie, le leadership et la gouvernance des organismes OBNL en culture. Elle trouve que, inévitablement, ces sujets se filent bien ensemble. Elle a récemment dirigée l’étude Repenser la philanthropie culturelle à Montréal : Les relations et la communauté (Conseil des arts de Montréal, 2020) et vient de terminer avec Hilde Fjellvaer, en Norvège, la publication : Co-leadership in Arts and Culture : Sharing Values and Vision (Routledge, 2023). Finalement, elle est co-éditrice du Routledge Companion of Arts Governance avec soumission en 2024.

This article is part of the September 2023 special edition: Philanthropy & the Arts. You can find more here.