Why philanthropy matters

by Guest Contributors: Louise Walsh and Katy Tyrrell, Australia Council for the Arts

Government funding is not a growth industry – demonstrated by increasing competition for grants, impending budget cuts and short-term funding priorities – it’s hard to keep up.

Philanthropy has become the great equaliser – bridging the gap between revenue and rising costs.

Results from the Australian Major Performing Arts Group (AMPAG) 2012 survey Tracking changes in Corporate Sponsorship and Private Donations indicate that non-government support of the major performing arts has hit a new high, increasing by $10.8 million or 20 per cent from the previous year to more than $65 million.

Arts and culture is the second most supported sector by private ancillary funds[i], equal to education; and overall donations given to registered cultural organisations through the Register for Cultural Organisations has almost doubled since 2004[ii].

But it’s not just about the money. It’s about the type of money, the role that the donor can play in leveraging other resources, and the ability to encourage a change in behaviour.

  • Philanthropic funding can be both a partner to government – driving the government dollar further – and an alternative to government – funding more risky projects that sit outside government funding priorities.
  • Philanthropists often become advocates introducing new contacts, networks and partners that generate value well beyond the financial gift.
  • Philanthropic partnerships are a catalyst to look outside government funding and program opportunities, and understand the interests and needs of the community within which an organisation operates.

As part of the 2010 election, the Australian government committed to commissioning Harold Mitchell to undertake a Review of Private Sector Support for the Arts in Australia (October 2011). The aim of the review was to identify ways for maximising private sector financial and in-kind support in order to supplement existing funding from government.

Mitchell provides a progressive framework for incentivising and broadening giving to arts and culture, building support from the ground up. His recommended improvements include:

  • Maxmising opportunities to give through reduced red tape and timeframes for the Cultural Gifts Program; tax incentives for testamentary giving; and a government matched funding initiative.
  • Enabling organisations and individuals to receive through an amalgamation of services; increased capacity building and skills development; improvements to the Register of Cultural Organisations; government initiatives to match crowdfunding and support micro-financing; an awareness raising campaign to target professional advisors; and a public campaign to promote giving to the arts.

One of our favorite recommendations is the development of a crowdfunding initiative with matched funding from government – incentivising capacity building at its best. Crowdfunding is an area of significant potential. The inspiration for impact demonstrated by Kickstarter (USA), who have successful raised over $245 million to date, shows us it works. The double whammy for the arts and cultural sector is that it is as much about building an audience as it is about raising funds.

Other countries such as the UK move ahead in leaps and bounds with initiatives like The Catalyst: Endowments programme – a partnership between the Department for Culture, Media and Sport (DCMS), Arts Council England and the Heritage Lottery Fund (HLF) – committing £100m in match funding to leverage private giving investment in cultural endowments and fundraising capacity building.

We are delighted that the Federal Arts Minister Simon Crean has recently taken the next step in acknowledging the recommendations offered in the Mitchell Report by announcing the creation of a new arts private sector entity to be operational from 1 July 2013 – stay tuned as this will herald a new level of partnership between philanthropy and the government.


[i] Australian Taxation Office Taxation Statistics 2007-08 and 2008-09, The Australian Centre for Philanthropy & Not for Profit Studies Current Issues Sheet 2010/1, updated 6 May 2010.

[ii] Annual Report, Department of Water, Heritage and the Arts, 2010.


[i] Australian Taxation Office Taxation Statistics 2007-08 and 2008-09, The Australian Centre for Philanthropy & Not for Profit Studies Current Issues Sheet 2010/1, updated 6 May 2010.

[ii] Annual Report, Department of Water, Heritage and the Arts, 2010.

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