Business Funding for the Arts Research Paper Starter

Business Funding for the Arts

(Research Starters)

This article examines the relationships between businesses and arts organizations, including how companies contribute to the arts and invest in art collections. Historical and contemporary trends in corporate support of the arts are reviewed. The benefits that companies can derive from supporting the arts are explained, as are the various goals that businesses attempt to achieve through support of the arts. The relationship between public and private funding is also reviewed. Problems that both businesses and arts organizations may encounter when businesses contribute and when arts organizations mimic private-sector marketing practices are discussed.

Keywords: Corporate Art Collections; National Endowment for the Arts (NEA); Private Arts Funding; Private Museums; Philanthropy; Public Arts Funding; Smithsonian Institute; The Business Committee for the Arts (BCA)


Business funding of art and cultural activities has been an ongoing enterprise that has changed with economic times as well as with social attitudes toward the arts and toward philanthropy in general. How businesses have contributed to the arts has evolved as societies have evolved and arts organizations have matured.

Historically, the perspectives of corporate board members and the top executives of the firm have driven business contributions to the arts. The wealth of companies, the location of their corporate headquarters, and their business goals have all influenced giving trends over time. In the United States, private funding of the arts has long exceeded public funding. By 1990, private funding had reached several billion dollars annually ("Scope of Federal Arts Funding," 1991).

Types of Private Funding

It has not been uncommon for board members or senior managers to use corporate assets to support their own cultural agenda or that of their spouses or families. Corporate contributions have been used to gain status for both the corporation and the people who control the wealth of the corporation. Some corporate donations of cash have brought little more than recognition to the company, board member, or executive making the contribution. In many of these cases, there was little or no expectation of any tangible benefit, but the reward of status in the community has often served its purpose for those seeking to leverage contributions as a social mechanism.

In some cases, corporate giving has been a rent-seeking activity, as managers leverage their involvement with arts and cultural organizations in order to influence government officials or existing and potential clients and suppliers. Corporate contributions to the arts have also been made to help achieve or support strategic goals when businesses link their contributions with strategic objectives, such as staff development, corporate incentive programs, or image building (Stanziola, 2007).

Some corporate contributions have taken the form of cash sponsorships, which include payments to arts organizations in return for benefits such as promotion of the business name, products, or services. Corporations have also leveraged their in-kind sponsorship, which includes contributing equipment, materials, services, or advice in lieu of cash payments, in exchange for promotional benefits.

Corporations have also been big purchasers of memberships in museums or theater organizations. This has generally involved payments for annual subscriptions by a business in return for benefits such as a number of event tickets or passes, the use of the facilities, or discounts on advertising in printed programs or catalogs (Stanziola, 2007).

Types of Private Funding

In addition to private funding for the arts, many countries provide a substantial amount of national, or public, funding for the arts. In the United States, there is federal funding for the national art museums: those affiliated with the Smithsonian Institution, including the National Gallery of Art, the National Portrait Gallery, the Hirshhorn Museum and Sculpture Garden, and the National Museum of African Art. However, there is a lack of significant federal funding for other art museums (Skinner, Ekelund & Jackson, 2009). This trend has provided opportunities for businesses to contribute, but it also presents challenges to local and regional museums when seeking funds.

In 1965, the National Endowment for the Arts (NEA) was established, and it has since awarded more than 130,000 grants totaling more than $4 billion. The NEA has supported arts activities across the United States, including in rural areas, inner cities, and military bases. Funded projects have included artist residencies in schools, museum exhibitions, Internet initiatives, literary fellowships, national tours, international exchanges, theater festivals, design competitions, folk arts, and historic preservation. Each dollar that the NEA has granted has typically generated up to seven times more money in matching grants. It is important to note that NEA funding represents less than one percent of total arts philanthropy in the United States ("NEA at a Glance," 2009).

Public funding of the arts in the United States has encountered numerous obstacles and problems, and the NEA has been at the heart of many debates. Throughout its history, the United States Congress has spent a disproportionate amount of time debating the NEA's relatively small appropriation. There has been considerable public criticism and outcry over some of the projects funded by the NEA, and the drama of that outcry has been played out in Congress. One of the most controversial projects funded by the NEA was an exhibit of Robert Mapplethorpe's work at the Philadelphia Institute of Contemporary Art. The retrospective exhibit of his work was funded in part by a $30,000 grant from the NEA. The exhibit included several explicit pictures that brought out an uproar from conservative Americans (Moen, 1997).

Other federal government support for the arts has not been as controversial, and some projects have become a permanent part of American culture. The United States Marine Corp Band, for example, was established in 1750 and remains active today. Many federal buildings around the country house works of art, and the government has had an ongoing program to commission art works for public display.

Many business families have made major contributions of art to the United States, and the federal government has responded in a positive manner. In 1848, Congress accepted a bequest from James Smithsonian and established the now world-famous Smithsonian Institute. In 1899, the federal government accepted a gift of an Asian art collection from Charles Lang Freer. The Freer Gallery of Art, built to display the collection, was opened as part of the Smithsonian. In 1937, Andrew W. Mellon donated an art collection and funded the building of the National Gallery of Art ("Evolution of Federal Arts Funding," 1991).


Leveraging the Arts in the Business Environment

Corporate support of the arts, and the support of arts provided by individual corporate executives and their families, often provides a range of benefits and returns. One of the key benefits is that it helps build a brand name and a corporate image. Secondly, funding of arts and other related activities brings recognition to the corporate executives who drive funding efforts. In the case of the 20th-century industrial moguls who funded countless arts efforts, it also brought valuable family recognition.

The Business Committee for the Arts

In 1967, David Rockefeller founded the Business Committee for the Arts (BCA), a national not-for-profit organization that brings businesses and the arts together. The BCA provides businesses, regardless of their size, with a wide range of services and resources to help them develop and advance partnerships with the arts. The mission of the BCA is to help businesses, the arts, and local communities develop mutually beneficial relationships. The BCA uses forums, consultations, research, conferences, and workshops to help corporations develop and leverage their relationships with the arts. It also provides companies with eight basic steps to initiate their corporate arts involvement ("About the BCA," 2009).

In 2003, the BCA conducted a survey of over 800 employees at 32 different companies in the United States that have workplace art collections, asking how they felt about corporate art collections. Employees reported that art in the workplace helps reduce stress, increase productivity, and enhance morale. They also indicated that workplace art broadens employee appreciation of diversity and encourages discussions and expression of opinions. Above all, employees felt that art in the workplace demonstrates that a company takes an interest in improving the quality of life in and out of the workplace. Employees also believed that art helps build customer and community relations and can lead to networking opportunities ("Survey Reveals Workplace Art…," 2003).

The BCA gives annual awards to companies that demonstrate their support of the arts and leverage art as a corporate asset. Companies who received awards in 2013 include:

  • Bacardi USA in Coral Gables, Florida, for its philanthropic support of visual and performing arts, workplace collection of Caribbean and Latin American art, provision of tickets to arts events to employees, and design competitions for ad campaigns ("BCA 10: Best businesses," 2013).
  • M&T Bank in Buffalo, New York, for donating $34.5 million to arts organizations over ten years, sponsoring numerous art exhibits, encouraging its employees to volunteer with arts organizations, working to provide free public access to museums, and hosting a daily concert series ("BCA 10: Best businesses," 2013).
  • Microsoft in Redmond, Washington, for donating $353 million to arts organizations between 1995 and 2013, hosting a collection of nearly five thousand works of art, and working to provide greater access to arts education worldwide ("BCA 10: Best businesses," 2013).
  • PNC Financial Services Group in Pittsburgh, Pennsylvania, for introducing the PNC Arts Alive! program in Philadelphia and southern New Jersey in 2009, then later expanding the program to Ohio and the Saint Louis area, including southern Illinois. The program hosts both free and discounted arts programs, subsidizes tickets to arts performances, and sponsors public arts and art-creation events ("BCA 10: Best businesses," 2013).
  • Premier Bank in Dubuque, Iowa, for spending 40 percent of its philanthropic budget on the arts since 1998, investing in local exhibitions and festivals, encouraging employees to volunteer with arts organizations, providing free passes to arts events, holding special events at art exhibitions, and displaying work by local artists ("BCA 10: Best businesses," 2013).

The BCA also provides case studies of companies that have leveraged their contributions to the arts. The case studies cover small, midsize, and large companies from all industry sectors ("Case studies," 2009).

The Theater Development Fund (TDF) was established in 1968 as a nonprofit organization to help the New York theater industry. The TDF provides support to more than 900 plays and musicals and has generated over $2 billion in revenue for thousands of Broadway, Off-Broadway, and Off-Off-Broadway productions. Corporate sponsorships are available at various levels, and donors receive tickets as well as invitations to special events. Corporate contributors have included Planet Hollywood, SAP, the Walt Disney Company, Goldman Sachs, Home Box Office (HBO), JP Morgan Chase Foundation, the McGraw-Hill Companies, Sony Corporation of America, and the Xerox...

(The entire section is 5180 words.)