The Arts Benchmark

8/8/2019 The Arts Benchmark

1/23

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The Arts Benchmark


2/23

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Two types of activityFirst order:

The creative core

Grant funded

Not expected togenerate a financialreturn

Delivers a cultural &social return

Intrinsically connectedto the expert labourforce in the organisation

Eg - exhibition

Second order:

Takes assets accrued infirst order

Seeks to develop theminto products & servicesthat have a commercialvalue

Disconnects from

labour costs and istherefore more scalable

Eg - merchandise


3/23

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The trouble is The pot of funding to pay for first order

activities is decreasing

Less govt money

Private Foundations endowments are worth less

But even in good times it was hard to add

value to supply side cash

You only get X% of the cost of delivery

No (profit) margin so dont have spare to pay for

new & speculative


4/23

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Two key points of differenceFirst order

1. Revenue connected to

cost of production as

intrinsically linked to

labour costs

2. Grant funding means

limited by supply side

economic factors

Second order

1. Revenue linked to market

demand

2. Market models means driven

by demand side economics

Acknowledgements: Proboscis, SCAN, Blast Theory


5/23

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The LUX mix

Grants

Trusts &Foundations

Products& Services

Research

Donors& Patrons1st Order 2nd Order

Policy devt

Artist devt

Commissioning

Education, access & advocacy

Publishing

Preservation, digitisation

& public access

Distribution & loan of works

Product sales

Consultancy & other

services

Licensing/franchising

of the LUX model

Research & Teaching

Org. & Indiv. donors


6/23

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How do I Determine which second order activities

are right for my organisation?

Avoid second order activities being

seen as a financial wart on the creative

face of the organisation?


7/23

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What are My tangible &

intangible assets?Tangible Assets:

Buildings

Archives Collections

Intangible Assets:

Individual & organisationalexpertise & experience

Reputation, brand & goodwill

Intellectual property

Research skills

Audience & customer base

Education reputation &resource

Methods & processes


8/23

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What income can you derive

from Tangible assets? Buildings

Caf & catering

Shop & retailing (incl. online)

Tickets & events

Space hire

Archives & collections

Products & merchandise - dvds, books,

reproductions, posters etc

Lending fees


9/23

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from Intangible assets Staff sector knowledge

Consultancy

Contracts (public & private sector)

Products eg publications, films etc

Research (academic & private)

Intellectual property

Licensing the use of the IP

Sale of the IP

Spin out of commercial products & services


10/23

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from Intangible assets Research

Subcontractor fees from HEI based research projects

Share of IP generated

Audience & customer base A USP that HEIs value re research

Donors & members

Education reputation & resource

Public sector contracts Sales of products & services

Brand Sponsorship & partnership


11/23

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Grant Based: Govt & LA Trusts &Foundations EU

Supply Side Demand Side

ArtsOrg.

Intangible Asset Based: Products & Services Research Partnership &

Sponsorship Contracts Donors & Patrons

Tangible Asset Based:

Tickets Collection Loans Retailing Caf & Catering Space Hire

Arts Income Types

Acknowledgements: Proboscis, SCAN, Blast Theory


12/23


13/23

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and in a bit more detailBe

m

rki

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Employed sta9 9

(FTE@

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e/contracted sta9 9

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G H I I C G

evenue grants applied for (): 152,354 381,999 18,526 202,370

Revenue grants applied for (No): 9 27 2 12

Revenue Income: P Q R eve % ) e Gr$ % & s '

Arts Council England 162,004 481,998 17,650 62,570

Private Trusts & Foundat ions 57,993 276,821 3,447 11,000

Local Aut S orities * * * *Gov't & related organisat ions 58,054 180,520 16,500 18,756

OtSer Revenue grants 17,574 84,494 500 1,579

T! & $ l R eve % ) e Gr$ % & T % U ! me ' 225,319 844,590 47,962 68,650

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8sse

&Base

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D! %

ati! %

s & S ! %

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rsXi

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Corporate sponsorship 25,636 43,671 5,000 41,507

Private donat ions 709 1,638 200 795

Other sponsorship & donat ions * * * *

R esearU X '

Research Councils * * * *

Technology Strategy Board

Other Research funding

T P T % U ! me '

Royalties

Franchise, Licensing & other IP income

Tradi% # '

Product sales 12,468 70,000 136 14,216

Services & consultancy 26,382 96,153 100 36,919

Ticket sales 32,690 118,184 806 37,410

Subscriptions & membership * * * *

Y ! %tracts &Y ! mmissi ! % s '

Delivery contracts * * * *

Commissions 42,786 125,000 9,368 53,462

T! tal T % tangi0 le 8 ssetBasedT nco 66,669 237,876 136 74,839

Investment interest 1,935 3,618 355 2,818

Any other Income 2,958 4,909 1,759 3,366

Total R evenue T ncome ' 402,679 2,779,846 65,254 398,105

Number in

sample17

If sample is 3 or less, data is suppressed


14/23

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Bleugh, give me headlines! Income types fit tangible / intangible model

23 participating organisations

with a bias towards intangibles

Revenue income ranges from 60k - 3.5m

the max for non-venue based is approx 1.2m

National distribution but London is dominant


15/23

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And the income distribution?Best in class:

Large venue (>2m annual revenue):

30% grant : 60% tangible : 10% intangible

Small venue (


16/23

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BUT Small venue - average in 2009

70% grant : 25% tangible : 5% intangible

Non-venue based:75% grant : 0% tangible : 25% intangible

Where ACE grant is over 50% of total income


17/23

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Tentative conclusions At present Intangible asset income potential

Tangible asset income potential

Reason? Market state + skills gaps in the arts

Sources of optimism

Creative Industries growth = intangible asset exploitation Now have a clear & well tested model and method for assessing

an organisations options

In a position to benchmark best in class and help others achieve

this


18/23

Participating Organisations: Proboscis

SCAN

Blast Theory LUX

Furtherfield

Workplace Gallery

Snug & Outdoor

Dance United

A Foundation

Candoco

Moti Roti

Mute

Matts Gallery

Chisenhale Gasworks

The Showroom

Electra

Afterall

Studio Voltaire

Watershed

and a few others


19/23

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Developing the Arts

Sustainability IndexIncome Indicators:

Regular vs. one-off grants

Growth in regular grants vs.

inflation

Growth in ticket prices vs.

inflation

Diversification of earned

income

Tangible asset based

Intangible asset based

Reserves

Patronage, membership,

donations

Cost Indicators:

Staff turnover

Fixed : variable cost ratios

Expertise that is free

Chiefs - strategic expertise

as in-kind

Indians - No of

volunteers/100k t/o


20/23

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0 5 10 15 20 25

Irregular Funding

Revenue Diversity

Surplus / Deficit

Reserves

Growth

Patronage

Capacity

Volunteers

Points on Offer (100 Total)

Sustainability factor

FTE per 1M revenue

Workers, managerial & Pro BonostrategyAll paid Labour FTE/1M revenueAnnual Hours Open for Business

% of Total Revenue

Personal & Individual patronage thatis Unrestricted% Growth

In Regular FundingIn Ticket Price

Weeks of Revenue

Liquid Reserves

% of Total Revenue

Surplus / Deficit

% of Total Revenue% Non-Core Income

% of Total Revenue

Bloc Funding that is Irregular


21/23

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Things to do next Contribute thoughts today on sustainability

index contents

Benchmark your finances to see what yourcurrent position is

Get some help assessing your asset portfolio- moi! ACID (for IP)

Also consider your attitude to risk and returnand the motivations/definitions of successthat would work for you


22/23

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An Announcement MyCake.org will launch an online arts benchmark

It will contain the ACE RFO data (960 organisations)+ detailed data from the pilot + other public datasources

Coverage: National

Searchable by art form, size of organisation, region etc

Financial, staff and audience data Starting price 250/yr


23/23

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Want to learn more?

www.mycake.org

http://www.mycakefinancialmanagement.co.uk/bl

og/?p=2473

For background reading see:

Documents

The Arts Benchmark