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 2 of his speech, Vilar suggests ways for arts organisations to nurture private sponsorship; outlines his concerns for the transition in arts funding from the booming ‘90s to the new millennium; and discusses criticisms surrounding private donors, including the role of the press.
CLICK HERE to read Part 1 of Alberto Vilar’s speech
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.
While a modest recovery in the US economy seems probable in 2003, few sectors can be expected to do well in such a muted environment. From my perspective of investing in technology for more than three decades, I believe, nevertheless, that electronic and healthcare technology stand a far better chance than currently expected to be a major exception to the next few year’s overall sub-par growth. In electronics, we should start to see the resumption this year of the so-called “Third Wave of Technology”, the Internet-Networking Wave, which comes on the heels of the mainframe and client-server waves that reigned between 1960 and 1997. Incidentally, the latter wave created some two trillion dollars in US stock market value in the 1990s. The Third Wave will be based largely on e-commerce for businesses, enabled by wireless-broadband across both business and consumer markets.
But can the arts expect to share in technology’s forthcoming new fortunes? If the past is prologue, the record is not encouraging.
What can performing arts organisations do to get their fair share of whatever new funding is generated in the economy in the next few years? It must be remembered that the arts are far more dependent on private individual philanthropy than they are on corporate sponsorship for the bulk of the giving they receive. (Because private philanthropy is not very large in Europe, corporate sponsors play a much bigger role than, for example, they do in the US, which exceeds private donations.) In the US, corporate sponsorship, which is clearly not philanthropy, accounts for well under 5% of total funds raised. (There are places in Europe where corporate sponsorship represents far more than 5%.) Individuals play a crucial role in making sizeable or “naming” gifts to fund specific projects, notwithstanding that the trend towards public ownership of global companies reduces the likelihood that a new generation of individual donors such as J P Morgan or Andrew Carnegie will surface again. Naming gifts are important because they set examples for others to emulate.
Here are some suggestions for how to nurture private sponsorship:
What other ongoing problems could hamper a successful transition in arts fundraising from the booming 1990s to the dampened prospects of the new millennium?
I am especially concerned about four issues:
The philanthropic community asks why the press routinely gives short shrift to its coverage of philanthropy; why it believes it is superficially driven by ego, or that it exists just to leave a lasting personal legacy.
The role of the press in philanthropy has become so large if not outright heavy-handed, in recent years, that it needs to be addressed. In far too many cases, press coverage gets caught up in the numbers game, focusing on how much money was donated, and the timing of payments, at the cost of a sound grounding in the cultural and social benefits of the gifts themselves. Last year’s press coverage of arts philanthropy, for example, missed the forest for the trees, as it focused principally on one issue, delayed or rescheduled payments, which were quite obviously caused by the recession and the bear market. Even in the best of times, however, donors count on the receiving institution not to divulge financial terms such as payment schedules. It must always be remembered that the entire structure of philanthropy, at least in America, depends on this compact of privacy. (Who in their right mind would want an organisation to which they give money to discuss on the first of each month who is late in paying and who is not?)
In my experience, an important aspect of the generally poor coverage of arts philanthropy is that most journalists who write about arts philanthropy simply lack a deep understanding of the subject because they haven’t studied it in depth, as they would for example, study music, if they wanted to be a music critic.
The press often does not show much interest in why people contribute to the arts, the sacrifices these gifts collectively represent, or the goals donors have for their gifts. Most donors are passionate about the essential role they know the arts play in humanising society and enriching it culturally.
Negative press surrounding a donation can be demoralising to the gift giver, and can discourage or drive away potential benefactors. Excessively critical coverage might well kill a golden opportunity for bringing readers’ attention to philanthropy that could inform and inspire others to give.
In my reading of arts philanthropy coverage, it seems to me that reporters often go out of their way to find a negative aspect of what is invariably an upbeat story in the name of a “balanced story.” I would be the first to acknowledge that fairness in journalism is essential. But carried to an extreme, it runs the risk of eroding and knocking off-balance an inherently positive story.
Few would argue that philanthropy is not by nature an act of goodwill – like a fireman to the rescue – and should not require off-setting criticism as, for instance, might be the case with politicians. Whatever philanthropic goals each donor establishes, the common bond in giving is, above all else, a generous disposition.
The two most frequent examples of criticisms which I encounter from the press about arts philanthropy strike me as misleading at best, and dead wrong at worst. The first concerns naming gifts, where the criticism is that they are nothing more than ego trips – on public property. This completely overlooks the fact that arts fundraising campaigns, which must solicit naming gifts, have only one currency to trade: ie. naming recognition. The arts institution also wants to attract a well-recognised donor; this gives credibility to the institution and establishes a public competitive edge.
Another criticism specific to the performing arts is that large donors ‘meddle’ in the artistic direction of the institution. This one is especially common, and especially annoying. I am in no way atypical in being a donor who goes out of his way not to meddle in artistic decisions. Not a single institution has ever gone on record to say otherwise about my role.
An additional criticism is why one supports wealthy institutions when many smaller ones are struggling. The answer is that large, widely respected institutions are world venues; they set the standards for others to follow.
In conclusion, I believe that the ultimate success of large-scale performing arts philanthropy requires an integrated, three-tiered approach to flourish: first, the development and adoption of a sustainable culture of giving by business leaders, entrepreneurs, and private citizens; second, some degree of collaboration or partnership with government; and third, a fair and knowledgeable media.
At the end of the day, the next wave of arts philanthropy, not likely to be easily achieved, will remain increasingly dependent on individual donors. It is not realistic to expect businesses to increase their giving anytime soon. And if payments from private contributors ever need rescheduling in the future, for whatever reason, we need to fully appreciate that the house-lights would be dark without them.
Thank you for letting me share my views on a topic so close to my heart and pocketbook.
The speech has been provided with the kind permission of the author and the Association of British Orchestras.
