Sponsorship is a huge factor in sports funding, but just how effective is the arts world in securing these deals? Rosita Boland sits in on the launch of a Business 2 Arts survey.

This week, it was ironic that on the same day as American billionaire Warren Buffett announced he was giving a staggering €24 billion to charity, the Irish Revenue Commission revealed that 43 people in the State who earned more than €1 million in 2002 paid less than five per cent tax on their income. We keep hearing that the State is now awash with money, but a large section of the public must be wondering how much of it gets diverted toward philanthropy or culture.

This week also, Business 2 Arts - an organisation which aims to foster and encourage creative partnerships between business and the arts - published the report of its National Arts Sponsorship Survey. An estimated €15 million was invested by businesses in arts sponsorship in 2005, but in comparison to sponsorship in other areas, such as sport, this is a relatively modest sum.

The survey was based on the findings of a research project carried out last year, focusing on three sectors: arts, business and consumers. Previous surveys have focused only on the arts sector.

The arts are an area which have always had to seek funding from a variety of sectors beyond the box office. While the Arts Council does grant-aid many organisations annually, it's always something of a lottery for the organisations, with no guarantee that they will be given the amount they have asked for. More and more arts organisations are now trying to attract sponsors, particularly sponsors that will commit to funding the organisation on a multi-annual basis.

Various representatives from arts organisations and from PR companies turned up at the Irish Architectural Archive earlier this week to discuss the findings of the Business 2 Arts report. The discussion was facilitated by arts consultant Doireann Ní Bhriain. On the panel were Gerard O'Neill, chairman and chief executive of Amárach Consulting, who sponsored the report; John Trainor, managing director of Onside Sponsorship, who were also involved in sponsoring the report; Donal Shiels, chief executive officer with the St Patrick's Day Festival; and Michael Whelan, head of sponsorship at Diageo Ireland.

"It's no accident that sport has ended up with a huge amount of sponsorship. They were going about it in a professional way years ago," Shiels pointed out, citing the rugby Heineken Cup as an example. "When an arts organisation lands a sponsor these days, that's only the first part. Servicing the client is the next part. Sponsors expect media partners to be in place when the arts organisation approaches them. They're running a business and they expect to get the message across that they are sponsors. The days of mere logos on posters and tickets are long gone."

The report finds that media coverage of sponsored events is perceived by businesses as the most effective way of measuring the success of their sponsorship.

Every speaker stressed the necessity for arts organisations to do their research before approaching potential sponsors, and to be professional in their approach.

"Businesses are not proactive," O'Neill pointed out. "It's up to the arts organisations to approach them."

Sponsorship in general, given the amounts of money involved, has become a much more sophisticated transaction. While one-off donations on which there is no tangible return are usually tax deductible, money spent on sponsorship is not, since the business is benefiting by publicity. Sponsorship money can be listed as a business expense: however, it is true to say that this can sometimes be less than straightforward, depending on the sponsorship.

All speakers also pointed out that the area of sponsorship in general is projected to grow significantly in the future. "Events like the World Cup and the Ryder Cup grow a belief in businesses in the strength of marketing and sponsorship," observed Trainor.

Trainor also made the point that areas of traditional advertising for businesses, such as television, are likely to become much less effective in the near future. Audiences will have the ability to edit out ads breaks using ever-more sophisticated technology, and businesses are increasingly looking at sponsorship as ways of reaching their customers.

Trainor believes that one of the potential untapped markets for arts organisations are retail outlets, such as supermarket chains. "Sponsorship is a great opportunity for retailers to connect with consumers."

"THERE'S NOTHING new in here," Whelan said of the report. Diageo's brands, of which Whelan is head of sponsorship in Ireland, were voted by consumers in the report as the best sponsors of the arts. Whelan stressed the importance of what he described as "the right fit" between sponsors and arts organisations. "The right fit is when we connect with our consumers through their passion for what the arts organisations does, such as jazz."

This prompted Ali Curran, previously director of the Dublin Fringe Festival, to point out from the floor that, "What motivates an arts organisation in looking for a sponsor is cash, rather than looking for a 'fit'." Curran, in agreement with others, voiced concerns that in seeking sponsorship, some arts organisation may feel a fear of being compromised artistically. It was pointed out that sports sponsorship is consistently compromised by sponsors, who dictate, for instance, the times of matches so that viewer numbers are maximised.

"The arts organisation is the one ultimately in charge of the programme," responded Donal Shiels. "If you're negotiating in advance with a sponsor - as people now have to do - and there is any question of interference, you can walk away if needs be."

"The public would very quickly discover if you were trying to influence a programme in any way and that would reflect very badly on your brand, so why do it?" said Whelan.

Patricia Quinn, former director of the Arts Council, spoke from the floor, welcoming the publication of the report. "But if the gap in the sponsorship market is to be closed by arts organisations, we need to track it more closely." (The Business 2 Arts report is not published annually, due to lack of resources.)

Quinn pointed out that the "big picture" of arts organisations and sponsorship is told in the report, but not the process of how organisations who are successful in seeking sponsorship go about it.

The ethics of sponsorship were also discussed. Sixty per cent of organisations in the US who avail of sponsorship have restrictions on certain sponsors, the majority of which are tobacco and alcohol companies.

By contrast, the Business 2 Arts report found that only 23 per cent of Irish arts organisations would not accept sponsorship from certain sectors of business, the majority of which - at 61 per cent - were tobacco companies. Only a third of Irish arts organisations who do have a restriction policy would reject sponsorship from alcoholic drink companies - which may be a reflection on the place that alcohol occupies in our culture.

[ www.business2arts.ieOpens in new window ]

Key findings of the National Arts Sponsorship Survey

In 2005, €15m was invested by business in arts sponsorship

45 per cent of Irish adults feel that there is not enough sponsorship of the arts in Ireland

41 per cent of arts sponsorship were as a result of direct approach to business by the arts organisation

Only one in five arts organisations are required to produce a formal evaluation report at the end of a sponsorship

One in four arts organisations rate a commitment of more than one year as the most important non-cash element of a successful sponsorship

Almost three in four Irish adults selected banks as the most suitable potential business sector for sponsoring the arts, followed by non-alcoholic drinks, insurance and telecoms companies and the media

The key rationale for business involvement in arts sponsorship is the improvement of company profile, brand development and achievement of corporate social responsibility

60 per cent of arts organisations feel that sponsors' expectations are realistic but over half found that meeting sponsors expectations is more difficult than it used to be.

Methodology

Business cohort

Conducted online, via e-mail, with link to questionnaire.

Invited participants: 406 senior executives in companies already sponsoring the arts

Respondents: 87

Arts organisations cohort

Conducted via postal questionnaire

Invited participants: 969

Respondents: 191

Consumer cohort

Conducted face-to-face at home

Completed interviews: 1,008 adults aged 15-74