The arts are an important part of life in Australia, despite the country’s reputation as being sports mad. In 2019-2020 cultural and creative activity contributed $122 billion to the economy (an increase of 27.1 percent over the previous ten years) (Bureau of Communications, Arts and Regional Research 2022) representing six point two percent of Gross Domestic Product.
Ninety-eight percent of Australians participate in the arts online, listen to music, read books, or attend events, festivals, libraries, and exhibitions (Australia Council 2017, Australia Council 2020). In 2019, prior to COVID-19, 68 percent of Australians attended live performance, 82 percent engaged with the arts online, 92 percent read books and 45 percent participated creatively (Australia Council 2020). In real numbers, from 2016 – 2018 there were almost twenty-three million paid attendances at performing arts events in major venues in Australia each year and in 2017 there were sixteen million attendances at public and national galleries (Daley 2021).
Until quite recently – July 2023, the key Federal government funding body for the arts was the Australia Council for the Arts, designed as an arms-length peer reviewed funding body modelled on the British Council. For the last few years, Australia Council funds have been stagnant in terms of funds distributed, and focussed on the larger major performing arts organisations (now referred to as the National Performing Arts Partnership Framework) rather than smaller or middle sized companies. Sixty percent of the Australia Council budget ($115 million) went to thirty-seven organisations which have received the greater portion of Australian federal government support over the last 20 years (Meyrick & Barnett 2017).
Despite this perceived imbalance, government support for the arts in Australia at all levels (federal, state, and local) eclipses support from philanthropy and corporate sponsorship (Throsby 2001). Government has provided recurrent grants and funds for infrastructure, as well as support for creating new artistic work, for arts organisations and individual artists. Despite support in the 1970s and 1980s, (Throsby 2001), government funding at the national level has been dwindling in real terms (A New Approach 2019; Daley 2021; Meeting of Cultural Ministers 2018). National support for the arts is also decreasing in terms of per capita expenditure while funding from the Australia Council remained relatively static for 12 years to 2018.
In August 2023 the Australia Council for the Arts was rebranded as Creative Australia, incorporating Creative Partnerships Australia which had been a separate statutory body responsible for bringing together arts and business and philanthropic partnerships since 2000. Creative Australia has inherited the Australian Cultural Fund from Creative Partnerships Australia. The fund is a philanthropic vehicle which allows donors to support individual artists, artist collaborations and informal and unincorporated bodies and receive a tax deductible donation. In 2022-23 the Australian Cultural Fund facilitated more than $11AUD million in donations flowing through to the sector.
Philanthropic support for the arts has been a growing source of funding for the arts in Australia contributing approximately 14% of arts organisations income compared to 7% for other charitable purposes (Perpetual Trustees 2019). The growth has been particularly noticeable in the area of institutional philanthropic giving vehicles, particularly Private Ancillary Funds (PAFs), (formerly Prescribed Private Funds), which have an endowed corpus usually established in perpetuity and set up by high-net-worth individuals and families. PAFs came into existence in 2000 and allow donors to contribute to a fund which pays out a minimum 5% of its capital value each year. PAFs have stepped in to fill gaps where government support has declined. The Support Report which tracks changes in giving trends in Australia notes that for the arts “the fall in Government funding (was) matched exactly by the rise in donations” (McLeod 2018).
PAFs have been growing steadily in number and value since first established, and the arts are often cited as among their top three priority giving areas. By 2020, PAFs had approximately $7.6 billion in funds under management (McGregor-Lowndes, Balczun & Williamson 2022). Initially, in June 2001 there were 21 PAFs, while in 2020 there were just over 1800, and in 2019-2020 PAFs distributed approximately $60 million dollars to cultural organisations (McGregor-Lowndes, Balczun & Williamson 2022). Another philanthropic structure, Public Ancillary Funds (PuAFs), which allow donors to establish sub-funds within another philanthropic entity support the arts to a much lesser extent giving just under $13 million to cultural organisations in 2019-2020 (McGregor-Lowndes, Balczun & Williamson 2022).
The arts have not been high on the political agenda in Australia (Craik 2007) and from 1996 until early 2023 there had been no clearly articulated national cultural policy (Commonwealth of Australia 2023). Despite decreasing government funding for the arts, institutional philanthropic funders have been growing their support (McLeod 2018). And, particularly during COVID-19 institutional philanthropic funders demonstrated varying degrees of adapting their grant making to make reporting and evaluation more flexible, allowing more flexible use of funds already committed or granted, and re-committing funds thus providing grant recipients with certainty and stability in an environment where planning was difficult due to lockdowns and the closure of theatres and arts venues.
In attempting to encourage more philanthropic support for the arts, the Government has commissioned several major reviews (McLeay 1986; Myer 2002; Nugent 1999) pushing for philanthropy to play a greater role in supporting the arts. Philanthropy and tax incentives for donors were emphasised as the way forward in 2011 (Mitchell 2011) with a focus on enhancing arts funding from the private sector through tax concessions for individuals, organisations, trusts and foundations and by promoting testamentary and workplace giving (Mitchell 2011) and corporate sponsorship (Myer 2002).
While government has sometimes intervened more closely in allocating funding for the arts (Gilfillin & Morrow 2018; Meyrick & Barnett 2017), the predominant focus has been on the possibility of outsourcing arts funding and potentially devolving government responsibility for this sector. This year the Productivity Commission is conducting another inquiry into the role of philanthropy in Australia with a draft report expected in November, but it has been noted that despite myriad reports, and reviews there is often very little take up of the recommendations presented (McGregor-Lowndes 2023).
Sharon Nathani is a Phd Candidate at Swinburne University of Technology, Australia. Her thesis considers whether institutional philanthropic funders are curating the arts in Australia. Sharon was the Executive Officer of a community foundation and now works for Helen Macpherson Smith Trust. She has a background in philanthropy, arts management and finance and blogs intermittently about philanthropy and the arts at www.ozphilanthropy.com
This article is part of the September 2023 special edition: Philanthropy & the Arts. You can find more here.