Our Arts Bodies Are Rising to the Challenge of Tough Times

The announcement that Titian'shas been acquired for the nation is a cause for huge celebration. Not just the fact that a masterpiece will not be going abroad - but also for what it shows about our cultural institutions. Many people thought I was wrong to make boosting philanthropy the mainstay of arts policy. But in difficult times I thought it was right to focus my energies on helping to stabilise the finances of the country's cultural fabric - which I passionately believe is one of our greatest assets.

The announcement that Titian's Diana and Callistohas been acquired for the nation is a cause for huge celebration. Not just the fact that a masterpiece will not be going abroad - but also for what it shows about our cultural institutions.

The need to make difficult budget cuts has presented the arts world with its most challenging environment for a long time. But rather than give up without a fight, most organisations have risen to the challenge by putting massive effort into boosting fundraising capacity. Not as a replacement for public money, but to improve financial resilience by reducing dependence on any single source of funding. Many organisations are showing how creative they can be off stage as well as on it, like the Southbank Centre creating a new form of organ donation, where donors are funding different sized pipes to support the restoration of its historic organ.

This is not only true of the larger London organisations, but also smaller projects, productions and exhibitions throughout the country. The Wordsworth Trust in Cumbria, the Hepworth in Wakefield, the Halle Orchestra and the Turner Contemporary in Margate have all been successful. And many have also brought new supporters on board using social media and embraced crowdfunding websites like sponsume, WeDidThis and WeFund.

Many people thought I was wrong to make boosting philanthropy the mainstay of arts policy. But in difficult times I thought it was right to focus my energies on helping to stabilise the finances of the country's cultural fabric - which I passionately believe is one of our greatest assets. As well as improving the lottery share going to the arts (which has reduced the net cut to the Arts Council budget from 30% to 12% and will mean an additional £200m going into the arts over the next five years), I have worked with the Heritage Lottery Fund and the Arts Council to launch a £100m match funding pot to help larger organisations launch endowment funds. This scheme will also help smaller and regional groups develop fundraising capacity.

On top of that, last year's budget introduced lifetime giving for cultural gifts for the first time as well as a highly significant tax break to encourage people to leave money to charity in their wills. That has led to a hugely successful campaign led by Roland Rudd to raise awareness of the tax benefits of legacy giving. Called Legacy 10, it now has cross-party support and is gathering real momentum.

The result of all these changes? Contrary to expectations, last week's Arts & Business figures showed private investment in culture rose by 4% to £686 million in 2010/11. Cultural organisations have risen to meet one of the greatest financial challenges in their history and managed to increase funding from non-government sources despite the harshest economic climate since the Second World War.

But there is much more to do. Part of the cultural change we need is to be less modest - and perhaps less British - about recognising generosity publicly.

Let me practice what I preach by mentioning Michael Hintze's incredible £2m gift to the National gallery, the Sackler Foundation's support for the Serpentine Gallery, Lloyd Dorfman's fantastic gift to the National Theatre and Sir Terence Conran's vision for the Design Museum.

And it is not just the big donations that give us cause to be grateful. We should also give a special mention to the Art Fund, which, through its 90,000 supporters is making a huge contribution to the arts in this country including helping to secure Diana and Callisto.

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