The Art Newspaper

Support for UK museums: Public funding vs private giving

Directors and collectors say US-style incentives required for American-scale philanthropy

By Georgina Adam and Javier Pes. From Frieze daily edition
Published online: 15 October 2010

Serpentine Gallery summer party: the UK government wants more fundraising events like this

LONDON. Nicholas Serota, the Tate director who was at Frieze this week, and his peers are bracing themselves for drastic cuts in arts funding to be announced next week (on 20 October). Cuts of 25% to 30% are bound to have an impact on museums and non-profit galleries—with expectations that there will be redundancies, fewer exhibitions and programmes, reduced opening hours and smaller acquisition budgets. The government says that the cultural sector should make up some of the gap by following the US model of encouraging private giving—but can, and will, British collectors make up the shortfall?

Culture minister Ed Vaizey, speaking at Frieze, said that he wanted to see a “shift” in attitude that would encourage people to donate more generously, but added that, in the past, governments had not been good enough “at thanking people” who had contributed to society in this way.

However, the museum directors, collectors and wealth advisers we spoke to during Frieze say there are too few concrete reasons to be generous. “The government can’t have it both ways,” says Simon Weil, a specialist in charities and tax planning. “If they say private philanthropy will have to step in, then they will have to provide better incentives.”

Boris Johnson, the Mayor of London, seems to agree. Yesterday at Frieze, he said: “The most important thing is the tax incentives need to be clearer. We need to be incentivised to give—so you can deduct charitable giving from your tax.”

“If the government were to change the tax regime it would trigger some gifts—I know of certain donors who are just waiting for this,” says Stephen Deuchar, former Tate Britain director and now head of the Art Fund, the charity that raises money for British museums to acquire art. “I have just been talking to a collector who transferred a number of works of art to a US museum, and who was saying how easy it was. That donation could have gone to a UK museum,” Deuchar says.

When in power, Tony Blair was keen to glad-hand US collectors on behalf of the Tate, but the Labour government still shelved, on cost grounds, Sir Nicholas Goodison’s 2004 report on how to increase private giving.

As well as new tax breaks, Goodison highlighted the lack of knowledge of the existing UK incentives. Manchester-based collector Frank Cohen, who was at the fair, admitted he was not sure whether, if he donated a work of art, as opposed to cash, to a museum, he would get any tax advantage.

“In the US, the tax incentives are known to everybody,” says Paul Thompson, rector of the Royal College of Art in London and former director of New York’s Cooper-Hewitt: National Design Museum.

In Britain you get most tax breaks from the grave: the Acceptance in Lieu system reduces death duties by the value of the work of art donated. When alive, people who give over £25,000 a year (or £150,000 in six years) earn a tax deduction of 25% under the Gift Aid scheme, but if they give a work of art, they get nothing.

Leading philanthropist and Dallas-based collector Howard Rachofsky says: “The model in the US is completely different to the UK. Public institutions are indigenous to your culture, and, of course, once the government steps in there is no incentive for private help.”

But Iwona Blazwick, director of the Whitechapel Gallery, says you must have a balance of private and public money. She also warns that donors may not want to support all aspects of a museum’s programme.

Anthony d’Offay, whose £125m gift of contemporary art, “Artist Rooms”, starts its third tour next year, says a US-style system would “absolutely” work here. London collector David Roberts agrees that the government needs to do more, but says: “The institutions have to change their mindsets. There is not a warm glow of appreciation, as with US museums.”

So what are the chances of the government doing more to encourage philanthropy? Deuchar is upbeat: “We talk to the government all the time and are optimistic that it will stand by its promises.”

But Julia Peyton-Jones, Serpentine Gallery co-director, says: “I understand from George Osborne [Chancellor of the Exchequer] there is no plan to change the current system.” She adds: “What’s missing is recognition. There isn’t a structure for government to recognise—from the Prime Minster down—and celebrate philanthropy.”

But Vaizey had some good news. “I hope we can use Number 10 as a vehicle to encourage large-scale donations,” he told The Art Newspaper. So even if museums directors can’t offer potential donors a tax break, they might be able to invite them to a swanky party at the Camerons.