Alberto Vilar, the Cuban-born billionaire and philanthropist for the arts, is well-known for his generous contributions to opera, in particular. He recently delivered a keynote address at the Association of British Orchestras’ Annual Conference, discussing the role private contributors can play in the future of arts funding in Europe. In Part 1 of his speech, Vilar explains the personal and professional reasons behind his own charitable giving to classical performing arts.
I’m delighted to have the opportunity today to share some personal views and experiences on charitable giving to the classical performing arts. I had the pleasure of living in London in the 1980s, which laid the groundwork for the very special relationship I have with the arts in England.
Some think that I only focus on opera, which is not true. I’m dedicated to classical music, which to me means that without the all important orchestra, opera and ballet for example, would be non-starters.
While I divide my time and support between the US and Europe, there is no question that in private giving, I represent the US model of philanthropy. However, with EC-mandated cutbacks in country deficit spending, it is my opinion that Europe (and in turn, probably the UK, for that matter), will ultimately have to adopt some degree of the US model of giving, sooner or later. The alternatives are simply unacceptable: a lowering of quality, and fewer performances. (This week, Berlin announced a 10% cutback across the board in its three opera houses; in last weekend’s Financial Times, Andrew Clark offered a grim outlook for opera going forward owing to money.)
Let me start by discussing my own philanthropy, within the context of its philosophy and goals, before turning to my principal topic, which is how do we get to the next wave of funding in the arts – and what will it look like. My comments are entirely personal, which is consistent with the nature itself of private philanthropy. Giving money away properly is a difficult challenge that requires a great deal of time, money and thought. I do not channel my philanthropy to areas that I believe are the appropriate moral and fiscal responsibility of tax-funded governments. Because of this, I have occasionally been criticised for being socially insensitive and elitist for supporting the arts. My view is that private philanthropy is not public welfare. I am also not a charitable foundation, so my comments do not extend to that specialised field.
My own philanthropy is divided into three areas, the classical performing arts, healthcare and education. The classical performing arts, which has always been my principal interest, is itself divided into four areas: new opera, choral and symphonic productions and co-productions; new technology for the arts (this includes principally the back-of-the-seat opera Translation Titles, now in Vienna, Barcelona and ROH); educational programs, mostly for aspiring artists, and the rebuilding of physical structures.
Initially by default, and now more by design, I have long been intrigued by the prospect of playing a role in the slow, but inevitable growth of private arts philanthropy in Europe, which has been highly dependent on government funding since World War II – which is something I enormously applaud. In this sense, it is quite misleading to suggest, as some have, that I have been trying to force the import of US-style philanthropy into Europe, when in fact I believe the US system of funding the arts is ‘nuts’, as it has virtually no government support. To me, the right mix of support for the arts is a combination of private and public funding, which is not the case in the US – which is almost entirely private funding dependent.
ANY SERIOUS DISCUSSION OF ARTS PHILANTHROPY SHOULD START BY ASKING: WHY WOULD ANYONE GIVE PRIVATELY IN SIZE TO THE ARTS, WITH ALL THE ATTENTION AND QUESTIONS THIS CAN GENERATE?
There are personal and professional reasons for private philanthropy:
PERSONAL REASONS ARE:
1. To share one’s wealth and good fortune with others and society.
2. The opportunity to support specific philanthropic activities that interest you – especially where one’s giving could have a significant impact on the direction of that activity.
Let me cite an example of a project having an impact. I am building a 70,000 square foot computer science centre at my undergraduate college, because I want the opportunity I had in technology to be made available to the college’s students.
In one’s later years, philanthropy can also become an important building block for the type of legacy and example you want to leave behind.
Lastly, there are at least two valid professional reasons for giving. First is to fund the specific project under consideration. The second, equally important reason, is to set an example for others to emulate. It is a myth that very large donors give anonymously. It is for this reason that I believe large gifts should be publicised, in order to leverage the impact of the gift. Unfortunately, there exists a bias in some circles, more so in Europe than in the US, that donor recognition is largely about satisfying giant egos. My answer to this is rubbish – it’s just the opposite.
Turning now to future funding, I believe that the next wave of arts giving that will come after the horrific global bear market and economic slowdown of the past few years is at a perilous juncture, for a number of reasons that extend well beyond economics. As a result of changes in the line-up of industries that create substantial new wealth, at least in the US, arts institutions will be forced to devise new strategies to cope with a reduced and evolving set of funding options. The strong economy and the extended bull market of the 1990s are behind us.
Unfortunately, the sectors most likely to generate new wealth over the next half dozen years have scant history of funding the arts. This means that arts institutions will have to learn to tap into new sources of wealth, while not losing sight of other important, ongoing problems, not least of which is the role of the press described ahead.
Navigating successfully through this altered landscape requires an understanding of the two main, time-honored tenets of arts funding, plus an assessment of how they are likely to unfold in the less favorable economic environment that lies ahead.
The first tenet is that private funding of the arts in the US often represents as much as half of the total income received. This is especially the case in the classical performing arts. The second principle is that private support for the arts is highly cyclical, rising and falling with both the economy and the stock market.
The inherent cyclicality of arts philanthropy is due to the fact that much of the wealth in the US has historically been amassed through the stock market. Fortunes derived from this source that were subsequently channelled into philanthropic foundations include those of Bill Gates, Gordon Moore of Intel, Ted Turner, George Soros, Larry Ellison of Oracle, among others. These philanthropists, however, largely chose fields other than the arts to support.
We are at a stage in the business cycle when the arts cannot expect to see a major resurgence of private funding anytime soon. The US NASDAQ stock market Index, for example, peaked in March 2000; its almost 80% decline over the following 31 months was unprecedented in the post-World War II era. Approximately $7 trillion in market value was lost in the US through the October 2002 stock market bottom. It should be no wonder that this extraordinary decline forced the rescheduling of many major, long-term pledges to arts organisations, as well as to other fields of giving. My own sector of technology-venture capital has additionally suffered from not being able to ‘liquefy’ its private investments in the public market, which has created severe cash-flow problems. Over the past two and a half years, technology witnessed its largest decline in valuation in the 42-year history of electronics.
An essential question arts institutions must continuously ask in good and bad economic times is: Where will the next wave of wealth be made and who will create it? To survive, arts funding must follow the creation of new wealth.
Look out for Part 2 of Alberto Vilar’s speech next week, which suggests the arts needs to look to the arena of technology in particular, for possible future funding opportunities.
The speech has been provided with the kind permission of the author and the Association of British Orchestras.
