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City Giving - How to Think About It

by Maddy Fry

Posted: 24 Oct 2017

 

The subject of philanthropy raises a host of issues. Add the City to the equation and emotions can run high. Yet the amount the City financial sector gives to support charity and culture is hugely underestimated and has come to fill a major gap in government funding. The subject is huge, but this article will attempt to give a short overview of the subject and the issues. The aim here is to give the reader the means to reach their own conclusions.

For all the negative press it has garnered in recent years, the role of the City in giving funding for the arts has a laudable track record. This has frequently gone unnoticed by the general public; although FTSE 100 companies almost doubled the amounts they gave to charity between 2007 and 2012, with 98% of such companies being recorded as giving money, opinion polls showed the public thought only 36% of them did.[1] In 2014 the financial sector still led the way despite the effects of the credit crisis, with combined donations totalling £245m - putting the sector at the top of the corporate giving league.[2]

In particular financial institutions have a strong tendency to give to the arts and cultural causes. In the case of funding for some celebrated films, this could almost be called a secret history; Kenneth Branagh's 1989 adaptation of Henry V, despite being critically acclaimed was not seen as a money-spinner, having only got off the ground due to financial backing from friends in the City. This is combined with a range of other charitable endeavours aimed at community welfare, education and young people, including the initiative by city trader Greg Secker, who raised £70k while flying his private helicopter over London to rebuild a Philippine village desecrated by the 2013 Haiyan Typhoon,[3] as well as the bank Santander's funding of 37,500 hours of nursing care by the charity Marie Curie Cancer Care in 2012.[4]

It's been pointed out that the financial industry does not do enough to promote its philanthropic achievements. The organisation City Philanthropy claimed businesses need to make a greater effort to publicise their giving - partly in order to demonstrate the value they bring to wider society, but also to set an example to smaller businesses about the positive impact they can have. Consumers are also more likely to buy from companies that have a charitable arm, while potential employees are more likely to work for such organisations.

Of course, there are controversies around this. Senior figures in the finance world that draw attention to their large-scale giving practices are often accused of trying to buy favours, secure positions of prestige in influential circles, or whitewash any unsavoury aspects of their own reputations or those of their companies. In other sectors such as gas and oil, efforts to support the arts have been met with disdain and even protest. The relationship between British Petroleum and major cultural institutions such as the British Museum and the National Portrait Gallery has been strained, with activists critical of the fossil fuel industry's impact on global warming insisting that major cultural institutions should sever such ties.

Furthermore, many would argue that relying too much on private investors takes the responsibility away from governments to provide funding, with grants for museums and theatres in particular having been constantly slashed over the years. The point was made by Martin Smith, a special adviser for investment company Ingenious, that public subsidy can lead to 'compromised artistic mission' due to governments imposing their own agendas on institutions. Although this is certainly true in parts, it would be foolish to claim that the business world is not guilty of this either. A notable example is the disquiet generated around the involvement of billionaire businessman Len Blavatnik in the V&A museum and Tate Modern gallery, specifically the decision by both to add new branches to their buildings bearing his name. Both institutions were criticised for accepting his money due to his links with Vladimir Putin and Donald Trump.[5]

Also, there is no denying that lack of government subsidies has made the arts across the board more inaccessible for a lot of people and has damaged the ability of many charities to reach vulnerable recipients of their work. The Grants for Good campaign warned last year that continued cuts to government grants to charities would badly impact services for children, the elderly and the disabled, as well as public amenities like streets and parks. The absence of subsidy is a damaging trend. The question is whether what replaces it can effectively fill the void.

However, the harsh reality is that for most institutions corporate sponsorship is the future. Government funding is unlikely to return to the level it was in the 1990s any time soon, and in-house funds within many creative industries will always be precarious and highly competitive. Diversifying sources of revenue and having multiple streams of funding can be a way for organisations to build resilience. Private sector organisations can sometimes bring a better sense of how to manage risk and encourage the best use of resources in areas where commercial failure is almost a given. It could also be argued that it hardly matters if the motives of those doing the giving are less-than altruistic, so long as the hard cash is going to the right places.

Director James Ivory, despite his pedigree in the movie industry, complained in August that he was unable to get funding for a production of Richard II due to film adaptations of Shakespeare not being seen as lucrative enough by the film industry. If Kenneth Branagh's example is anything to go by, the City could be his saviour. As Alistair Hicks, the art adviser for Deutsche Bank put it: "It's difficult to predict how the relationship between arts organisations and the financial sector will evolve, but it's up to both sides to ensure that it does."[6]

Corporate philanthropy is a difficult topic, so much so that the London School of Economics has established The Marshall Institute to look at issues of private funds used for public good. As we enter an age where the individual and corporate wealth has begun to resemble the days of the Carnegies and the Rockefellers, and where government budgets search for cuts in every possible way, this subject will only become more important with time.



[1] "Corporate giving: why the financial sector needs to put its mouth where its money is." Corporate giving: why the financial sector needs to put its mouth where its money is | City Philanthropy. August 20, 2014. Accessed October 13, 2017. http://www.cityphilanthropy.org.uk/news/corporate-giving-why-financial-sector-needs-put-its-mouth-where-its-money.

[2] "Financial sector leads corporate charitable giving league." Financial sector leads corporate charitable giving league | City Philanthropy. January 30, 2014. Accessed October 13, 2017. http://www.cityphilanthropy.org.uk/news/financial-sector-leads-corporate-charitable-giving-league.

[3] "Flying Trader raises £70k for charity from his helicopter over London." Flying Trader raises £70k for charity from his helicopter over London | City Philanthropy. September 18, 2017. Accessed October 13, 2017. http://www.cityphilanthropy.org.uk/news/flying-trader-raises-%C2%A370k-charity-his-helicopter-over-london.

[4] "How charities can win corporate backers." Third Sector. March 29, 2013. Accessed October 13, 2017. http://www.thirdsector.co.uk/charities-win-corporate-backers/fundraising/article/1175720.

[5] Ruddick, Graham. "Should Oxford and the V&A take millions from Ukranian-born billionaire Len Blavatnik?" The Guardian. September 03, 2017. Accessed October 13, 2017. https://www.theguardian.com/business/2017/sep/03/len-blavatnik-oligarch-controversy-philanthropy-resignation-oxford-professor.

[6] "The arts, creativity and finance: how will funding evolve?"The Guardian, Guardian News and Media, 18 June 2015, www.theguardian.com/culture-professionals-network/2015/jun/18/arts-creativity-finance-funding-evolve.


 

About this author

Maddy Fry is the Senior Researcher for the St Paul's Institute.


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The opinions expressed in this article are those of the author, and do not necessarily represent the views of St Paul's Institute or St Paul's Cathedral.