Crisis Management in the Arts Sector

Jonathan Gunson and Dr Alessandro Merendino from the Centre for Business in Society write the second in our series of Crisis Management posts.

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Jonathan Gunson

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Dr Alessandro Merendino

The impact of the financial crisis of 2008, as well as a move towards a mixed model of financing the arts sector whereby arts organisations were encouraged to look towards the private sector in addition to public funding, has exposed the arts sector to potential crises with regards to reductions in their funding.

This has been further emphasised in June 2016 by the vote of the United Kingdom to leave the European Union which has caused uncertainty and concern from the United Kingdom arts sector. In this way, crisis management is an important component for the arts sector.

For a sector which in Western Europe has to a large extent been reliant to some degree on public funding, it is becoming increasingly important for arts organisations to seek alternative means of financing. This means adapting their funding goals and learning to address proposals towards the needs of the private sector as well as the state. The history of arts funding has meant that an often changing direction and focus of government policy towards the arts and culture has meant that arts organisations have found themselves having to adapt their policies on a regular basis according to the political direction of the time (Flew 2013; Turnbull 2008; Wu 2002). Likewise with private funding, organisations must balance competing approaches and pressures on how they seek to operate. The ability to handle these competing demands, and the ability to continue operating whilst adapting to increasing pressures on public funding and a changing role for the welfare state, is a skill which is vital for organisations in the arts sector. With the publication of the Culture White Paper in March 2016 by the Department for Culture, Media and Sport, the first such white paper for culture since Jennie Lee’s White Paper for the arts in 1965 (Department for Culture, Media and Sport 2016), and the ten point philanthropy plan for culture announced by the then Secretary of State for Culture, Media and Sport, Jeremy Hunt, in 2010, the United Kingdom Government is encouraging philanthropy and alternative private sources of finance. This is in addition to continuing public support for the arts via the Arts Council England. This is also acknowledged by the arts sector as they seek new ways of fundraising (Gaio 2009; Mermiri 2010; Schiuma 2011; Phillips 2012). This emphasises that, whilst the arts sector has found itself in a changing landscape and needing to adapt its funding model, there is nonetheless a strong future which can be found through both public funding and through Government encouragement of private arts financing and philanthropy.

From this experience, two lessons on how to tackle crises in businesses can be learnt. Firstly, it becomes vital to have the financial and strategic support of stakeholders (e.g. the Government). Secondly, the ability of industrial sectors and companies to adapt quickly to the changing environment is utterly fundamental for the success of the sector and the company. This means that the board of directors should have a pro-active approach, i.e. it should in advance detect all the seeds of a looming crisis, before the crisis hits the company.

The latest CBiS research findings on tackling crises will be presented at our upcoming ESRC Festival of Social Science Event ‘Crisis Management in Business: Finding Resilience?’ on Tuesday 8th November at the Techno Centre in Coventry. The event will encourage active engagement whilst offering you the opportunity to hear from company experiences first hand. Funded and supported by ESRC and Coventry University, the event is aimed at businesses, local authorities, practitioners and academics. Head over to our website to find out more and to register.

Reference:

Department for Culture, Media and Sport (2016) The Culture White Paper. London: Crown copyright

Flew, T. (2013) Global Creative Industries. Cambridge, UK: Polity Press

Gaio, A. (2009) Local Pride: Individual Giving to the Arts in England. London: Arts & Business

Mermiri, T. (2010) Arts Philanthropy: The Facts, Trends and Potential. London: Arts & Business

Phillips, P. S. (2012) Philanthropy Beyond London: A Report Commissioned by the Secretary of State for Culture, Media and Sport: Department for Culture, Media and Sport

Turnbull, O. (2008) Bringing Down the House: The Crisis in Britain’s Regional Theatres. Bristol and Chicago: Intellect Books

Wu, C. (2002) Privatising Culture: Corporate Art Intervention since the 1980s. London and New York: Verso

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