Love, Largesse, or Large Return on Investment? Issues Concerning Corporate Support of the Not-for-Profit Arts Organizaiton in the United States

Abstract

If one believes that the arts have intrinsic value, educational value, and social value, then one should also, it would seem, believe that the arts deserve to be financially supported by public resources. Primarily, this would mean that the government should support the arts. And it does. But the arts receive plenty of other support as well. Donations from individuals, foundations, bequests, and corporations all work to support the government subsidies. The arts are, of course, not the only organizations requesting funding, and many argue that education, health, and other social services should cane first. This is a difficult stance to argue against, and it is rare that anyone tries to justify paying an arts administrator over. supporting the poor {although sometimes they are one and the same! ) The basic rationale is that arts support should not in any way displace social support, but that since the arts are an important social resource they should get sane slice of the monetary pie. The breakdown of contributed funds and the donors and recipients of these funds are discussed in Chapter 1. Corporate profits are derived from the public. Therefore, one could argue, corporations should be free to make contributions to the arts, since public art museums and public sculpture have positive externalities, and the existence of orchestras, theater companies, and public broadcasting services enrich the lives of many. Some argue that corporations do not have the right to donate funds: not to the arts, not to education, not to anyone. These issues are discussed in Chapter 2. Largely because corporations are self-interested and have an obligation to their shareholders to maximize profits, true philanthropy is slowly being replaced by charitable investment. This is particularly true of the art world, because the arts organizations have so much to offer to corporate donors. T!he history of charitable investment and philanthropy are examined in Chapter 3. The specific benefits that arts organizations and corporations receive from one another are discussed in Chapter 4. Particularly, it is very noticeable that corporations have taken a real interest in sponsorship of "blockbuster" exhibitions at major museums as a way of bettering their images and gaining advertising and association with the arts. And while the primary benefit that arts organizations usually receive from corporations is cash, there are many other possibilities which can be of just as much assistance. These include in-kind donations and "loaned executives. " However, the marriage of art and industry is not always a happy one. Some artists complain of "insidious censorship" by corporations with conservative tastes. Artist Hans Haacke is leading the charge against corporate support of the arts, and he seems to stop at nothing to make his point. His emotional and disturbing, yet insightful and ironic, work regarding Mobil Oil is described in Chapter 5. Other problems with corporate support of the arts are not based on ethical or artistic grounds. These are business problems. In other words, the problems that businesses encounter such as recessions and unpredictable profits, now are becoming a part of non-profit life as well. As arts organizations are now subject to fluctuations in the business cycle, they must adapt to sometimes radical changes in contribution revenue. There are many ways that corporations organize philanthropic donations. Most often, it is the Chief Executive Officer that initiates and carries out most donations. The CBO certainly has more influence over philanthropic decisions than any of the other factors. But as contributions become more professionalized, many factors begin to affect donations. Some of these are the size of the firm, what other firms are doing in the way of contributions, number of requests (there are usually many, far too many to fund), and, of course, profits. These methods and philosophies are examined in detail in Chapter 6. Many factors affect the need for corporate support. One inverse relationship is solid: when government support decreases, demand for corporate support increases. Arts organizations feel they have no where else to turn, and many believe that corporations are a virtually untapped resource. Tax laws also affect donations to the arts. Currently, a lack of government support in Michigan is forcing arts organizations to look to corporations for support. In Chapter 7, government issues are examined to state the case for the need for corporate support if the arts are to continue in an organized and efficient system. It would seem that Japanese philanthropy philosophies are tangential to the topic of corporate arts support in the United States. However, in fact the reality is quite to the contrary. Japanese firms which are located within the United States are realizing that hostility and tension can be mitigated by a degree of community involvement within the United States. And the Japanese are three times more likely to support the arts as opposed to other charitable organizations when they make donations. This is largely because the arts organizations have tangible and intangible benefits to give Japanese corporations. In Chapter 8, Japanese philanthropic philosophy and policy, attitudes of executives toward the arts in Japan and the u.s., and Japanese contributions are examined. It appears that the link between corporate support and the arts is here to stay. Resources are finite however, and it may only be a matter of time before corporations are not willing to give any more. But it is far more likely that arts organizations will become more commercial, more attuned to marketing needs of corporate donors, and that corporate executives ·will continue to recognize the potential benefits to be gained from the art world well into the future.