Research on Models of Financing Culture
Models of financing culture
Research on models of financing culture was launched with the
intention of establishing a link between culture and the arts on
one hand, and financing sources for these activities on the other
hand. A questionnaire was sent to 27 countries, and responses were
received from 10 of them: France, Greece, Canada, Latvia, Norway,
Russia, Senegal, Slovenia, Sweden and, of course, Croatia. These
responses served as the basis for this report. However, we also
used other documents of the Council of Europe, UNESCO, the European
Union, the Audiovisual Observatory, the Budapest Observatory, the
CIRCLE Network and expert literature dealing with the issue of
financing culture, cultural policy and the relationship between
culture and the economy. One of the greatest problems we have confronted
is the lack of data on financing the non-profit civil sector, the
paucity of data on the role of private foundations in financing
culture, and the impossibility of comparing numerous indicators
that pertain to the relationship between the business sector and
cultural activities, because definitions differ considerably and
the data collected cannot be cross-referenced. All of this indicates
the need for joint work to create quality cultural statistics,
which will encompass all segments of cultural activities rather
than just institutional culture and public finances, for which
there are quality and detailed statistical data in most countries.
Models of financing culture arise from cultural policy models
and represent key instruments in implementation of specific cultural
policies. There are several basic cultural policy models that can
be distinguished on the basis of the status and activity of the
State in their implementation. These are: the liberal model, state-administrative
model, decentralized model and para-state model "arm's length" model.
The liberal model is characterized by insistence on private initiative
in culture and the arts, with the market as the sole regulator
of relations in culture. Under this model, the cultural industry
plays a central role, as it develops standardized cultural products
intended for mass consumption. The state-administrative model is
characterized by the overriding presence of the State in cultural
life. The State provides funding for development of cultural production,
and sometimes it even develops long-term concepts and visions for
the development of the arts and culture. Under this model, State-run
cultural institutions which create elitist programs play the central
role. The decentralized model is characterized by the coexistence
of a series of local cultural policies, because cultural policy
falls within the competence of towns and regions. Under this model,
towns and urban cultural institutions play a central role. The "arm's
length" model is characterized by the major role of professional
bodies vested with authority by the government, even though the
latter generally does not exert a direct influence on them. Although
this model is in essence elitist, it favours an elitism in projects
rather than institutions, so that under this model the central
role is played by cultural and artistic projects. To be sure, these
models are impossible to find in their ideal form, so that all
national cultural policies are imbued with features of each of
them.
Models of financing culture follow cultural policy models, so
that under the liberal model, the market is the basic source of
revenue, under the state-administrative model the State secures
most of the revenue, under the decentralized model it is the towns
that provide the funding, and under the arm's length model the
State once more provides the revenue, but by means of various foundations.
Clearly, this pertains to the majority of revenues rather than
all revenues, so that in each of these models one can find examples
of culture and the arts financed by the State, towns, various governmental,
private and mixed funds and foundations, revenues from sponsorships
and revenues generated on the market. Additionally, there are still
some donations from individuals, organizations and companies, which
have made a considerable mark on a long period of financing culture
and the arts, from Renaissance to the Avant-garde art. Nonetheless,
most revenues in a majority of countries can be classified into
one of two groups of revenues: state revenues and sponsorship revenues.
Revenues secured on the market for artworks are negligible. Cultural
industries represent a separate chapter and they cannot be treated
like other cultural products, just as they cannot be treated as
ordinary goods. Besides State revenues and revenues secured from
the business sector, considerable funds are invested in culture
through foundations. Foundations can be both state-run and private,
but they are autonomous in their selection of financing given their
defined raisons d'être. Foundations belonging to the non-profit,
non-state sector which are assuming an increasingly important role
in cultural production are a fascinating segment and form a bridge
between the private business and public sector. Therefore, we have
decided to structure this report so that a separate section is
dedicated to the issue of regulating the culture sector, the public
financing of culture, the business sector and its role in financing
culture, the non-profit civil sector with special emphasis on financing
culture by foundations, and cultural industries as the best example
of the contemporary links between culture and the economy.
Back to Top Regulation of cultural activities
In most social systems, regulation of the relationship between
individual segments of society and relationships within these segments
rests on some form of regulation. The economic system, as one of
the fundamental social systems is nowadays generally regulated
by the market and the State. Perhaps it would be most apt to say
that in various social systems, regulation of the economic system
proceeds through a combination of market and governmental regulation.
Over the course of the past two decades, intense pressure on market
regulation has been present, formulated in the ideology of neo-liberalism.
Namely, the State is relinquishing its jurisdiction in the regulatory
system to the market, or in favour of self-regulation (although
there is some question as to whether this is truly self-regulation)
- which through its own rules is taking over and regulating the
economic system.
Market regulation has been present in the field of the economy
since the very beginnings of organized human communities, so that
in this sense one cannot speak of a novelty. However, the novelty
lies in the fact that today the economic aspect - at least in most
countries - has infiltrated almost every other aspect of human
life, so that values of this system have been transposed into other
systems: religion, culture, science, technology, etc. The values
inherent in these other systems have not disappeared, but they
have been lost their predominance. In historical terms, similar
processes have occurred in the past, e.g. there have been periods
in history when religious values predominated and permeated all
social relations - and such societies are not completely unknown
even today. Thus, a system of values inherent in one segment of
social relations gets imposed upon the entire society and determines
the overall functioning of the society. Various theorists have
used different terms to describe this process, from ideologies
to paradigms, but something common to all of them is the assessment
that the very evaluation of this process is dictated by the process
itself. Therefore, societies dominated by religious values or societies
dominated by values derived from the market economy are convinced
of their moral and cognitive superiority based on those very same
values. This surely encourages precisely these values to inculcate
all facets of social life.
When we speak of the arts and culture in this context, two crucial
questions arise: the first pertains to their content and form -
the values they express and convey, the aesthetic components they
comprise, and so forth; and second pertains to organizational models
within which this content is created. When we speak of the content
of culture, then it is similarly determined by the dominant values
in society. Culture is, in its broadest meaning, a system in which
information flows and circulates, so that values are transferred
and denied primarily through cultural practice. The content and
form of culture are therefore inseparable from the dominant values
in the society. However, the nature of this link may be very diverse,
from the absence of a direct influence on content, to open repression
of content. By the same token, organizational models are also determined
by the dominant values in society, albeit indirectly, because they
are conditioned by the forms and content of culture, but also directly,
through the influence of the system of values upon organizational
forms.
Nowadays, when market regulation is the desired formula for regulation
which is imposed on systems outside of the sphere of economy, and
when values derived from market relationships are also transposed
onto other relationships, culture and relationships within culture
are also essentially shaped by these factors. This can be easily
observed at the level of the language used in the culture of today
- for the language of the market is actually used: cultural products,
cultural goods, services in culture, cultural management, marketing
in culture and so on. This not only illustrates the dominant paradigm
in our societies, but - more importantly for the topic of this
report - it greatly illustrates the position of culture in society.
Culture and the economy were linked in the past, but today it
seems that culture and the economy are inextricably bound, so that
some authors believe that culture and the economy cannot be observed
as separate systems, and that the boundaries between them as two
different systems have been completely obscured. Perhaps this is
also true of other systems, but they are not the subject of interest
here. This linkage between culture and the economy is reflected
in two associated processes: "acculturation" of the economy
and economization of culture.
Culture has always played an important role in the economy, setting
the course and dimensions of economic development. Organizational
types, relationship to work, distribution models, production and
transfer of knowledge and other essential economic factors are
inseparable from culture. Even so, when we say that the economy
has been "acculturated," then we do not mean this role
of culture but rather the fact that culture has been the driving
force of the economy in the latter half of the twentieth century,
just as the automobile was in the first half. And truly, the growth
of the part of the economy we call the cultural industry has been
enormous, and it is still the fastest growing part of the European
economies, where it grows at an annual rate of up to 8%. We do
not have to deal with statistics to observe this: motion pictures,
the recording industry, the print and electronic media, and publishing,
just to name a few, have in recent years become the most significant
economic factors. This is the most visible portion of cultural
economy, but it is worthwhile mentioning that other portion, no
less important, which pertains to the increasingly prominent role
of design and marketing in the sale of products. The aestheticizing
of even the most banal products, and the linking of marketing with
lifestyles and sets of meanings today represent an important component
of the economic process. To illustrate, it is sufficient to say
that firms considered to be producers often actually produce only
images (in the original meaning of pictures), which is a quintessentially
a cultural process.
However, what happens to culture under such conditions - when
it becomes an increasingly important economic factor? This is the
question that interests us here. Above all, measures and criteria
that govern the economic system are becoming more and more significant
in culture. Box office receipts, sales receipts and attendance
are the basic measures of success in cultural industries. The terms
used in discussions on culture are economic terms such as resource,
sustainability, development, feasibility, etc. This naturally has
an impact on the creative process in culture, and criteria in culture.
For instance, artists, scholars, researchers, writers and philosophers
nowadays engage in creative activity fully aware of the marketing
impact or sales potential of their own works. Even prior to the
commencement of the creative process, target groups are defined
for which the work or research is intended, cost benefit analyses
are conducted, focus groups are organized and all available mechanisms
taken from the economy are employed. This approach ensues from
the logic of the market which also operates in the field of culture.
Thus, at a paradigmatic level, the framework of our consideration
here is set by the acculturated economy and the economized culture,
which poses many question for culture in the future, from the use
of public space, public forms of communication, critical expression
in the arts, etc.
Nevertheless, although these processes dictate the course of cultural
development, culture is not under the exclusive influence of the
economy and market forces, so that many countries have retained,
and others only just introduced, cultural policy instruments whereby
they wish to protect culture's autonomous position. In post-socialist
countries, the emphasis has been placed on preserving the independent
position of culture in the face of politics, which generated the
overriding paradigm of values in society over a fifty-year period.
Today, when the ruling paradigm has changed, the position of culture
has also changed, so that new circumstances generate new perils.
But it would be wrong to conclude that cultural policies are developed
solely to protect the autonomy of culture. They are developed for
other reasons as well: more just and broader distribution of culture
(democratisation of culture), protection of specific national cultures
(here it is interesting that there are two different underlying
motives for such protection: one is economic and it's aim is to
protect the national cultural industry, while the other is political,
and it aims to protect the national identity as a mechanism for
political management), establishment and/or maintenance of ties
to other cultures, etc.
There are several basic cultural policy models, but what they
all have in common are cultural policy instruments, which these
policies utilize in various ways. These are financial, legal/political,
organizational and value-laden instruments. In this research, we
have concentrated on financial instruments of cultural policy,
which encompass grants, subsidies and interest and tax policies.
Financial instruments of cultural policy protect the field of cultural
and artistic creativity from influence by the market and the economy.
This is because many forms of art would not be able to survive
without subsidies. However, subsidizing culture and the arts on
the basis of autonomous value measures proves problematic, because
culture is then isolated from its social context. Subsidy policies,
unfortunately, lead to a reduction rather than an increase in audiences.
An entire series of indicators speaks of the public's lack of interest
in events in the contemporary arts, in culture which is not some
form of spectacle, etc. Culture that is isolated and protected,
which develops independently of its surroundings, is simply not
interesting to the public, and without an audience, or consumers,
to use the economic term, culture does not exist. Therefore, subsidy
policies must be broadened so that they have a direct impact on
the public, as consumers of culture, and encourage various projects
that have social and educational components and will in the end
generate public interest in culture that offers more than just
spectacles. Another possibility is to have cultural activities
and the arts develop within the framework of general paradigms
that represent and determine creative conditions. It is true that
the market has its own mechanisms to evaluate products which are
different from the evaluation mechanisms that operate in the field
of culture, but in this case culture will have a specific relationship
to such evaluations. This relationship is developed through sponsorships
and direct competition between cultural products on the market.
However, the real question to pose is in what manner and to what
extent should financial instruments of cultural policy be used
to protect culture and the arts?
Cultural policies set the framework for artistic production which
represents the most sophisticated form of human expression. Art
expresses the most essential meanings of a culture, it is the fruit
of social experience which communicates with the deepest aspects
of human spirituality. And this is precisely the value which cannot
be reduced to simple economic considerations. In a world that has
been organized on the principles of efficiency, utility, objectivity,
analytical disassociation, fixation on material values and accumulation
of wealth, the arts have expressed the other side of human experience:
subjectivity has subsumed objectivity, while creativity has subsumed
industrial calculation. Nowadays, when the business world has embraced
the principles of subjectivity and creativity and adopted the principles
of pleasure, desire and play, meaning that it has incorporated
the arts into the creation of the consumer culture, our concern
is to continue securing independent conditions for the development
of the arts and culture. Sometimes it seems as though today it
is enough to simply relinquish the arts to the market and sponsorships
and they will develop independently. This may be true, if the arts
are assessed according to market criteria, which are actually the
criteria of passive mass tastes. But if we retain aesthetic criteria,
the arts will need to be protected from the market with certain
measures. To be sure, it will be necessary to find a balance between
protective measures and leaving the arts to the whims of market
forces. In this sense, it is interesting that the German Federal
Industrial Alliance - in its Green Book of 1996 - recommended that
the State protect culture precisely due to the interests of industry.
Their view was that the funds used by industry for sponsorships
to assist cultural life should be in close compliance with national
cultural policy, but that they cannot replace the latter but rather
have only a complementary and corrective function. The extent to
which culture and the arts are independent of feasibility, profits
and sustainability is reflected to a certain degree in financial
measures of cultural policy.
Back to Top Public sector
Financing culture with public funds is generally associated with
an authority (an administrative body) responsible for implementing
laws governing culture, among others, laws governing the public
financing of culture. This is why financing culture with public
funds above all depends on the organization of such an administrative
body in individual countries. Administrative organization is the
product of many years, and very often many centuries, of tradition
and is the result of a country's political, social, economic and
cultural development. The historical development of culture is
a starting point for models of financing culture in individual
countries. Over the course of history, some cities or regions have
developed a sensibility for cultural activities and have financed
them generously, while in others comprehension of culture's value
and the need to finance it appeared only recently. Obviously, this
resulted in completely different practices of financing culture
in various cities, regions or countries.
Even so, despite these differences, one can speak of two basic
models of financing culture using public funds with regard to administrative
levels. The first model rests on the bilateral division between
cities/municipalities and the State (e.g. in Latvia, Slovenia),
while the other rests on the trilateral division between cities/municipalities,
counties/regions and the State (e.g. in Sweden, Canada). The situation
in some countries in which there is a trilateral model, but where
the regions only symbolically participate in financing culture
should be deemed as adhering to the bilateral model (e.g. in Croatia,
Norway). The unilateral model, in which only one administrative
level predominates, that of the State, can only be found in some
developing countries (e.g. in Senegal) in which cultural financing
models are still being developed. These two models have developed
in accordance with the general development of administration, and
it is difficult to speak of some overriding reason to apply one
or the other model.
In both of these models the State generally finances the arts
and culture that have a representative character: theatre, opera,
museums, libraries and archives of national significance. It endeavours
to preserve the national cultural heritage, and in many countries
the State grants considerable subsidies to motion picture production.
As a rule, it finances cultural exchange programmes between countries,
as well as programmes that encourage cultural exchanges within
a given country. Other cultural activities are also financed, but
to a lesser degree, while the funds from other administrative levels
are more present there.
According to available data, the ratio between financing costs
for maintenance and salaries in institutions on one hand and financing
of programmes and projects on the other, is firmly linked to gross
domestic product. That ratio is more to the favour of programmes
and projects the higher the per capita GDP. This complies with
expectations that basic maintenance and salary needs are settled
first, followed by investments in the development of programmes
and projects. The most favourable ratio according to available
data is 60/40 to the benefit of projects and programmes (e.g. in
Finland, Netherlands), while the least favourable is that in which
all public funds are spent to cover maintenance and salaries (e.g.
in Senegal).
Financing priorities depend on governments' political programmes,
so it is difficult to speak of a general trend in setting priorities.
Something we have noticed as a priority, however, is governmental
concern for the cultural heritage and increasing attention paid
to projects in the fields of theatrical and visual arts which are
not held in classical cultural institutions. In countries in which
the media fall under the jurisdiction of the ministry of culture,
concern over the diversity of the media scene is apparent.
When financing culture with public funds, it is necessary to establish
clearly-defined authority and co-operation between different administrative
levels. Authority is defined by law, and in some countries special
agreements between cities and the State are concluded to govern
the financing of individual institutions, investments and, more
rarely, projects.
Capital cities have a special status in culture, because the majority
of cultural institutions are located in them. This is apparent
even in financing of culture, for capital cities participate in
such financing with shares as high as 22%, which is the case in
Croatia. A developed cultural infrastructure naturally brings with
it the accompanying costs. In a situation in which there is a concentration
of artistic and cultural production, which is inseparable from
the process of globalization and the consequent development of
megalopolises, many countries develop measures at the national
level to de-concentrate cultural and artistic production, and special
support is provided to cultural programs in individual regions
or cities/municipalities. This policy is regulated within the framework
of laws that govern the financing of culture (e.g. in Croatia),
or such rules are established at the level of priorities (e.g.
in Canada).
When setting priorities in financing culture, some countries have
decided to emphasize those programs which facilitate access to
the use of cultural goods to persons with disabilities, which is
the case in France.
Decision-making procedures in the allocation of public funds and
methods to implement these decisions are among the key elements
of cultural policies, which usually causes them to be seen as state-administrative
policies. Decisions on central budgets are proposed by governments
and adopted by parliaments. Central budgets always contain a section
that pertains to culture, and in some cases parliaments decide
not only on allocation of funds for individual segments of culture,
but also for specific institutions. Parliaments play an important
role in cases in which there are para-state bodies charged with
specific segments of cultural activity whose budgets are most often
determined by parliaments. Nonetheless, it is more often the case
that parliaments approve a general budget for culture and individual
segments of cultural activity, which are then allocated to specific
actors on the cultural stage by ministries; in most countries the
most important role in the allocation of these funds is played
by the ministry of culture. These allocations are based on decisions
made by administrative bodies, usually in co-operation with commissions
or councils staffed by experts. Expert bodies play a vital advisory
role, and in certain cases they directly decide on the allocation
of specific funds intended for projects or programmes. Decisions
on salaries and maintenance, and long-term projects, are usually
made independently by administrative bodies. The decision-making
procedure is dictated by a series of factors such as the labour
law, union negotiations, policies toward specific cities or regions
and even the traditional position of cultural institutions, the
importance of projects not only in the cultural sense but also
in their social and/or economic dimensions, the commerciality of
projects, etc. All of these factors have a major impact on decision-making
procedures and they cannot be excluded, so States have developed
mechanisms whereby this impact is incorporated or minimized in
decision-making procedures. The creation of expert bodies is one
example of how to favour the influence of the artistic and cultural
public in decision-making on the allocation of public funds. The
involvement of an administrative body normally in charge of economic
development into decision-making on allocations for culture is
an example of recognizing and emphasizing the developmental dimension
of culture. On the other hand, the State can display a particular
interest in the development of an individual segment of cultural
activity, or respond to deep-set crises in these segments - so
that special para-state or State bodies are established to deal
with these sectors. Such bodies are founded to create organizations
whose structure will provide higher quality solutions to meet the
needs of these sectors. This is because administrative bodies are
often not adequately structured to become more involved in an individual
sector. Most often such bodies are established for motion pictures
and the cultural heritage, so for those cultural activities which
by their nature are organizationally and financially more complex
than others. The cultural heritage in particular countries is a
significant economic resource, but the costs of its maintenance
are enormous. So besides direct budgetary subsidies, there are
other solutions such as the charges or fees for the use of cultural
resources for promotional purposes. Thus, for example, in Croatia
there is a solution under which all commercial entities which engage
in their activities in cultural heritage sites or in the territory
of cultural/historical complexes must pay a 'monument rent,' which
corresponds to the exceptional advantages of utilizing a cultural
resource.
Capital investments in culture, in other words investment involving
construction of major facilities such as opera houses or national
museums or the reconstruction of major cultural heritage sites,
such as city centres or quarters of exceptional historical and
artistic value represent an additional burden to budgets in culture.
Capital investments are generally a part of the overall budget
in culture (e.g. in Norway, Sweden), but sometimes these investments
are completely independent of the national budget (e.g. in Senegal)
because by their very nature they deviate from the regular tasks
carried out by a ministry of culture. As far as financing of these
investments is concerned, as a rule the cities in which such facilities
or buildings are constructed participate in their financing.
In some countries, earnings from lotteries are earmarked for cultural,
health-care, environmental and social programs and humanitarian
and sports organizations. There are various distribution methods
and purposes for those funds intended for culture. One solution
is to have an agency authorized to conduct games of chance to directly
distribute funds. Another solution is to establish a separate body
(usually a State-run foundation) to carry out distribution of funds
so collected. Although there are no rules on the purposes of lottery
funds, three groups of beneficiaries can be discerned: capital
investments or funds meant to construct specific major cultural
facilities, the non-institutional sector in culture (festivals
of alternative/provocative art, independent drama and dance groups,
etc.) and foundations established to work on the renewal of the
cultural heritage. In most countries this selection indicates an
intent to invest additional funds (over and above budgetary funds)
in fields of culture that traditionally operate with lower monetary
amounts (non-institutional sector) or in fields that are exceptionally
costly and require considerable investments (investments in and
renewal of the cultural heritage)
Back to Top Civil sector in culture
During the past two decades, in parallel with the important social
transformation that went in the direction of a neo-liberal regulatory
model, there has been a noticeable development of the so-called
third or civil sector. The main characteristics of the civil sector
regard its non-profitable and non-governmental nature, as well
as the voluntary association that enables it to preserve its independence
from political influences and vertical hierarchical conditioning
by state or local authorities, but also from market strategies
aimed at profit maximisation. Non-profitable nature of organisations
and institutions in the civil sector does not mean that they cannot
make profit, but only that such profit must be used for further
activities and not distributed according to the ownership structure.
On the other hand, their non-governmental nature represents no
limitation to their public activities, that is activities in the
public sphere for the purpose of fulfilling certain public interest.
There are two main types of civil sector institutions or legal
entities in which the above features are most visible. These are
citizens' associations or non-governmental organisations and foundations.
In both types of associations (universitas pesonarum, universitas
bonaroum/rerum) the double nature of association is very prominent:
private individuals or private goods are associated around a cause
which is frequently very public in its nature. This leads us to
the conclusion that the civil sector represents a kind of non-governmental
and non-profit conjunction of the private and public activity.
These features enable the civil sector to be extremely flexible
and capable of quick transformation and adjustment, which makes
an important potential for development and exerting influence in
contemporary dynamic and competitive environment.
The importance of the development of this sector is also reflected
in the field of culture. The civil sector cultural organisations
have played an important role in recent transformations in the
field of culture, in particular with their increasing participation
in cultural production, adjustment to dynamic globalisation trends
that dictate the introduction of new forms of co-operation at the
international level, quick acquisition of new technologies which
they incorporate into their activities, and they significant contribution
deal to the transitional efforts in Eastern European countries.
As regards the models of financing culture in the civil sector,
our research as well as the relevant literature indicate that there
is an inadequate and uneven overview of the basic facts. Although
most countries have relevant legal regulations that governs the
non-profit non-government sector, fewer countries have regulated
the issues pertaining to foundations by a special piece of legislation.
Information on the extent to which individual countries finance
the civil sector in the field of culture, if any, are often not
comprehensive. There is a total lack of information on the participation
of other sources of finances for the civil sector's cultural activities
(various foreign sources, donations, sponsorships). Still, in most
countries efforts have been make to secure better conditions for
sponsorships and donations by the private sector.
The above mentioned meagre data are the result of the lack of
adequate mechanisms to monitor the activity of numerous initiatives
in the civil sector, but also the inability to obtain a quality
and comprehensive systematisation of the data due to the exceptionally
dynamic and confused nature of this sector.
Back to Top Business sector
In the total financing of cultural activities, the business sector
participates with between 1% (or even less) and 10% (in Europe
the percentage in the highest in the United Kingdom where it amounts
to 10%). According to data available to us, in European countries
this percentage mostly ranges between 2 and 4%, regardless of whether
the country is an EU member or it belongs to the so-called transitional
countries. It is impossible to say what is the ratio between sponsorships
and donations in the total amount, because such data in most cases
do not exist. Still, this difference is a very important one, because
in most countries sponsorship is perceived as a marketing activity
or developing of a company's image, and it receives the same treatment
as other marketing activities. This means that in most countries
sponsorships are excluded from taxation, because they are included
into companies' operative expenses. Since this is viewed as the
development of the company's image, funds are mostly invested into
cultural activities that are positively received by the public.
This is the reason for the discussion that has taken place in some
countries on how much can we rely upon sponsorship funding in culture
and how much the presence of such funding impacts the content,
provocative and critical nature of cultural activities. Some people
agree that nowadays many artists create works of art that have
been adjusted to the possibility of finding sponsors right from
the start and which therefore have limited capacity of expression.
All this indicates that although sponsorships are a desirable mode
of financing culture, when compared to other modes they are the
least desirable one. To be sure, there are examples of business
entities that develop their image by supporting provocative art,
but such examples are well known precisely because they represent
a radical deviation from the majority of cases.
Donations by private individuals or companies are the other mode
of financing culture by the business sector. Donations are a result
of the many years of philanthropy that has been present in some
form or the other in all the civilisations and most countries exclude
them in some way from taxation levies. In most countries donations
are exempt from taxes, and often the tax base is reduced by the
amount of donation, thus providing an additional incentive for
donors. Unlike sponsors, donors do not receive any services, but
donor companies also pay much attention to their image, so that
the same problems that burden sponsorships are also present here.
Certain countries do not differentiate between sponsorships and
donations and treat them in the same manner.
Sponsorships and donations are not intended exclusively for the
cultural sector, but rather projects and institutions in the filed
of culture are competing for those finances with projects and institutions
from the sphere of sports, humanitarian activities, social programmes,
environmental projects etc. Each of the sectors in this "market" is
attractive to sponsors and donors to the extent to which general
public finds it attractive. This is the reason why culture has
stood on a kind of defensive during the past decade, because on
one hand it was not perceived as equally important to social or
environmental topics, while on the other hand, it does not attract
large audiences as sports do. Sponsorship contracts of some sportsmen
are equal to the amounts of cultural budgets of small states or
big cities, while donors prefer providing direct aid to people
- this being the result of the philanthropic tradition that can
usually be found in the roots of social or humanitarian programmes,
and recently also of environmental ones.
However, the amounts provided by the business sector are important,
not only for purely financial reasons, but also because they paint
a picture of the society and establish relationship between the
artistic production and the dominant taste of the society. Financial
considerations cannot be ignored, because these amounts may enable
certain institutions or projects to have much better production
conditions (and at the same time raise the quality of artistic
production to a higher level) or they may provide access to a wider
circle of visitors, etc. It has already been mentioned that this
kind of financing makes up between 1 and 10% of the overall cultural
budget, but it is worthwhile saying that in absolute terms these
are considerable sums that represent an important relief for State
and city budget segments earmarked for culture.
Back to Top Business sector - cultural industries
Cultural activities are not solely dependent upon external subsidies,
as can be seen from the example of cultural industries which greatly
contribute to the scope of the business sector, while at the same
time belonging to the cultural activity. However, regardless of
their commercial potential, in a number of countries cultural industries
re experiencing a crisis and the States are developing mechanisms
whereby they support the development of their cultural industries.
The economic globalisation processes have resulted in a drop of
interest for the products of one's own cultural industries and
the consumption of products of mostly American (motion pictures)
and Western European origin (sound recordings). Since these products
have an impact upon the development of language, customs, life
styles etc., in other words, the basic elements of culture, it
is understandable that the position of one's own cultural industries
causes concern.
Within the framework of cultural activities, cultural industries
hold a specific position, because they mass-produce and distribute
cultural expressions, techniques and concepts. One ought to bear
in mind that mass-reproduction is inherent to some artistic forms,
such as film and novelistic literature, while to others the mass-reproduction
is completely foreign, for example, to sculpture and painting.
However, their transfer to a different media, to photography and
film, makes it possible even for them to be reproduced on a mass
scale. The problem of mass-production in culture and the arts lies
in the fact that products of this mass-production take on characteristics
of a commodity and behave on the market as if they were any other
commodity, so that the only criterion for their success is their
market success. Still, they cannot be reduced to the same status
as any other commodity, because the message they contain and transfer
and the form in which they do so belong to the sphere of culture.
Even the worst motion picture, video or music CD contain complex
information that is founded in the culture of some social group.
To be sure, many such products are totally stereotypical, which
is in line with mass-production, and they are only expected to
be successful on the market, but this does not mean that they have
lost their cultural characteristics.
Cultural industries include the production and distribution of
books, films, music, video and multimedia recordings; and in a
wider sense the term "cultural industries" also encompasses
the media (the press, television and radio). Cultural industries
belong to the so-called creative industries, which also include
architecture, design, fashion, tourism and market communication.
Sometimes the terms "cultural" and "creative" industries
are interchangeable, and additional confusion in the terminology
is caused by concepts such as the "content industry", "entertainment
industry" etc. Partly due to this terminological chaos, statistical
data concerning this field are not comparable and we cannot speak
of an average share of cultural industries in gross domestic product
(GDP). However, what we can conclude is that their importance for
the gross domestic product has been growing in most countries,
and that the growth is the result not only of the production, but
also of the distribution services.
Most subsidies in this field support the production - primarily
the production of motion pictures. National filmmaking industry
is assisted by various measures, both by direct subsidies provided
by ministries or other bodies such as film institutes, and by contracts
concluded with TV stations that participate in financing of the
production. In European countries a significant role in financing
of film production is played by co-production European funds.
Particularly important for cultural industries are measures undertaken
by individual countries with the aim of securing certain space
in the media for products of the national cultural industry. These
measures regard setting of a mandatory share of domestically produced
programmes in television and radio transmissions, and determining
a linguistic standard to be used in the media. Such measures indirectly
support the development of national cultural industries.
Back to Top Conclusion: private - public
During the past two decades important changes have occurred in
the relationship between the private and public spheres. These
changes can be observed in the economy, social and health-care
policies, urban planning, communications, the media etc. Obviously,
the cultural sphere has not been bypassed and it underwent important
transformations of its own. In this research we considered only
those that regard financing culture. Those changes were sped up
by the transformation of the area of Eastern Europe, which replaced
its socialist economic and political system with market economy
and democratic political system, thus strengthening the liberal-democratic
paradigm in the social system structure. The changes have also
been reflected in cultural policies, although their intensity has
not matched that of changes in some other sectors. While cultural
policies of 1970s were characterised by concepts such as cultural
democracy, culture as a right of all citizens, social and cultural
revival, cultural development of a community etc, in 1980s and
1990s the focus shifted and cultural policies became concerned
with ideas of management in culture, cultural marketing, developmental
role of culture (in the economic sense), sponsorships in culture
etc. In Eastern European countries this focus is still not obvious,
because culture played an important role in establishing national
identities, and consequently the cultural policies focused on those
elements of culture that are important for establishing a social
cohesion. Clearly, the shift of cultural policies' focus was determined
by economic, technological and political changes that occurred
during 1980s and 1990s and transformed the context in which cultural
activity takes place. That context can be best briefly described
as narrowing of the scope of the public sphere, both in its realistic
sense, and in the sense of a symbolic order. For cultural activities
that were traditionally incorporated into the public sphere, narrowing
of its scope meant that they had to turn towards the private sphere.
As regards financing, the private sphere means sponsorships and
donations, companies and foundations, maecenas and patrons. However,
not everything is so simple, because the private sector has not
taken over all the competencies of the public sphere. Especially
not in culture, because contrary to health-care which is capable
of collecting payments for its services, or sports which has an
enormous marketing potential, cultural activities cannot charge
for their services nor attract numerous sponsors. This is why cultural
activity is still mostly dependant on public finances. To communities
and the States culture provides social cohesion, it keeps a society
together and consequently cannot be allowed to simply disappear
which in case of culture means to get transformed into another
culture. This is the reason why culture is still a public sector
concern.
The development of the civil sector in Eastern Europe was greatly
stimulated by the large Soros foundation network. Its closing down
puts at risk the very existence and further financing of a great
number of initiatives. This network made major contribution to
the development of contemporary arts and culture, to which, it
has been shown, the private sector in those states does not devote
sufficient financial assets that would enable them to survive.
Therefore, it is necessary to intervene with public funds in order
to preserve that segment of cultural activity. This situation further
illustrates the requirement that public finances should be flexible
and provide more significant assistance to the development of the
civil sector in culture. The Soros foundation as well as other
foundations established by the corporate and private financial
sector have proven to be a successful model of financing cultural
activities, so that the States themselves are now establishing
foundations whereby they finance their cultural activities.
Despite the fact that cultural activities have remained in the
public sector domain, the relationship between the public sphere
and cultural activities has changed to a certain degree. Incentives
for cultural industry, especially for film industry, have been
increased in a number of countries. Growing importance has been
attributed to the cultural heritage and its renewal, and independent
cultural projects have been receiving larger financial support.
At the same time the institutions are rationalizing their activities.
All these changes are taking place under the influence of a new
paradigm in which value of the final result, reflected in the programme's
quality, has precedence over the importance of the institution,
and in which culture is seen as a potential economic resource.
One of the important elements of today's cultural policies is the
insistence upon the linkage between different sources of financing,
different public funds and private sources, so that nowadays the
structure of financing of cultural events such as festivals or
exhibitions is extremely complex, and requires certain skills from
institution and project leaders that they previously did not need.
This transformation has placed the profession of producer and cultural
manager in the centre of this activity. Similarly, the position
of a ministry of culture has become more complex, because it operates
within the new paradigm that requires culture to widen the scope
of its activity, to provide a constant quality and to correspond
with the social system. At the same time, culture must cut down
its costs or "rationalise" its operations, while preserving
the relevant market position and diversified sources of financing.
It is by no means simple to create a model that would favour the
development of such culture, but it appears that the current cultural
policies with their priorities and different measures described
in this report head in the direction of such a model. It seems
that the same paradigm is exerting pressure in countries that have
had very different historical evolution, because we have noticed
that a similar cultural policy model exists in some very different
countries. On the other hand, there are countries in which there
is no cultural policy at all, where culture is left completely
to the working of market forces. These are mostly developing countries
that have no financial means for the development of a cultural
policy, because they are burdened with efforts to solve existential
human problems. However, there are also some very rich countries
with no cultural policy. They represent the extreme position that
has developed under the influence of the liberal-democratic paradigm
that is predominant in the world of today. Cultural policies have
developed from the social tradition and today they find their role
in the liberal-democratic world as a stimulus for the development
of the values that exist in either these traditions or paradigms.
Back to Top |