Patterns of inequality in private funding of culture across the UK

Abstract

By calculating an additively decomposable inequality measure following the lines of Shorrocks (1980; see Econometrica, 48(3)) we are able to evaluate regional disparities in private funding of cultural enterprises in the UK in a novel way. The country-wide index of inequality separates funding differences across regions from disparities within regions. Using data on private investment in UK cultural organisations, we consider three datasets: the first includes 139 organisations between 1993 and 2005; the second includes 573 organisations between 2002 and 2005; the third includes 898 organisations between 2005 and 2006. Differences among the 12 UK regions account for between a quarter and a third of overall funding inequalities. The largest contributor to funding inequality of cultural institutions in the UK is the degree of heterogeneity among cultural organisations within each region. We find that successful private fundraising is not significantly associated with the region where the organisation operates or with the particular cultural expression object of its activity. These are significant findings for cultural policymakers working on addressing issues of regional concentration of culture and diversifying sources of funding for the sector.

Keywords:

• cultural policy
• private funding of culture
• regional distribution

Notes

For literature on the motivations for private funding and what funders expect in return for their investment, see Spedding (2006), Leclair and Gordon (2000), O'Hagan and Harvey (2000) and Martorella (1996).

The nine regional development agencies (RDAs) set up in the English regions are non-departmental public bodies. Their primary role is as strategic drivers of regional economic development in their region. The RDAs aim to co-ordinate regional economic development and regeneration, enable the regions to improve their relative competitiveness and reduce the imbalance that exists within and between regions.

Of these 4000 organisations, 16.02% are located in London, 62.7% in the rest of England and 21.28% in the other three nations. Fifty-four percent of them are classified as visual arts, museums and performing arts organisations; 35% are combined art forms such as festivals; 2% are Heritage organisations; 12% are classified as “Other”.

Stanziola (2006) compares trends for this group of cultural organisations with a sample of the more than 600 regularly funded organisations (RFO) by the Arts Council. In general, these RFOs tend to rely less on private investment than A&B's sample.

Since Northern Ireland is represented in this sample by only two cultural organisations we will not try to draw any inference about private funding trends in this nation.

Detailed tabulated results are available from the authors upon request.

In order to facilitate their reading the regional decomposable inequality indexes have been multiplied by 100. This transformation does not alter their relative values or interpretation.

Reframing this question in terms of geographical location instead of administrative location, that is, focusing on “place” and not on “region”, could yield different conclusions. This line of inquiry would be best followed employing geographical information system (GIS) software, which lies outside the scope of our analysis. Our datasets qualify the surveyed organisations as operating in a “rural”, “urban”, “equally divided” or “other” local. In our sample of 573 organisations less than 10% of private funding inequalities are associated with differences across the aforementioned locales. Private funding of cultural organisations in “urban” and “equally divided” locales is about three times more unequal than that received by organisations established in “rural” locales.

We will refer the reader to our previous discussion of the decomposable inequality index, noting that now n stands for the number of organisations in each region and g is the number (17) of different cultural forms recorded in the A&B survey. A list and description of such cultural forms is available from the authors upon request.

Namely: Arts centre, Arts Services, Community Arts, Crafts, Dance, Festival, Film/Video, Heritage, Library/Archive, Literature/Poetry, Museum, Music, Opera, Other Art Form, Other Combined Arts, Theatre/Drama, Visual Arts/Gallery.

In some regions only one organisation reports positive levels of private funding in a specific cultural expression (e.g. one opera-related organisation in the East Midlands). In these cases the index of funding inequality within that particular cultural expression has a zero value. Eliminating these observations from our sample eliminates one source of bias although it creates another one by distorting the calculation of the inequality index between cultural forms. We have computed the inequality indexes after eliminating the 24 data points described above. This small loss of information (2.6% of the total number of observations) does not bring about any significant change to our conclusions.

This result cannot be exclusively the product of a comparatively large number of organisations, and therefore higher heterogeneity, in the South. Although 41% of the data points in our sample are located in the South, the pattern holds almost unchanged when we eliminate London-based organisations from the southern group. The northern group remains significantly less unequal, on average, within each cultural form considered even when we eliminate organisations based in Wales, Scotland and Northern Ireland from our computations.

For instance, A&B's New Partners, Arts Council England's Banking on Culture, Mission Models Money, and more recently the Private Giving for the Public Good campaign led by the National Museum Directors' Conference, the Museums, Libraries and Archive Council and Arts Council England.

We owe this last point to one of our anonymous referees.