Mixed success for Catalyst as scheme is scaled back

Support for fundraising in the arts sector is set to drop as Arts Council England (ACE) scales back its Catalyst scheme.

A new report on the inaugural 2012-15 programmes paints a mixed picture of success, with 85% of organisations on the £30m ‘Capacity building and match funding’ arm of the scheme reaching their targets, but only 50% of organisations on the £55m ‘Endowments’ arm reaching theirs.

Arts organisations involved in the scheme have raised a total of £49.5m over the past three years, unlocking around £36.5m of ACE match funding. But a failure to meet targets means around £12m in ring-fenced funds have not been awarded. ACE told AP it will not necessarily put these unclaimed funds back into future initiatives, and with the Catalyst scheme being cut by over 50% for 2015-18, support for innovation in fundraising is set to drop.

The £26m budgeted for the 2015-18 programme will come from Lottery funds – down from £55m in 2012-15, when the programme was bolstered by an additional £15m in grant in aid from the DCMS. ACE told AP that it is not expecting further DCMS investment in the programme.

ACE is blaming budget cuts for its decision to take money away from a programme that is helping the sector to build alternative income streams, at a time when grant in aid funding could be cut by up to 40%. 

The Endowments scheme, which asked 18 arts organisations to raise £54.5m in endowments in return for £30.5m in match funding, ended in July with the 18 organisations involved having raised £29.7m between them, unlocking £19.5m in match funding. Only nine organisations reached their target and one organisation, Serpentine Gallery, failed to raise any eligible funds at all. Three others failed to raise 50% of their targets. 

Success was more consistent for organisations funded through the Capacity building and match funding scheme, which gave 173 organisations with some experience of fundraising grants of £120k-£240k over three years: the first year was dedicated to training and building resources and the second two years to fundraising. 85% of the organisations reached their fundraising target, raising £19.8m in total – an average of £115.6k each – and unlocking around £17m in match funding.

In its latest report on the Catalyst programme, BOP consulting describes the Endowments scheme as: “A once in a generation experiment to try and stimulate a form of private giving that is rare in the arts in this country.” The report finds that the organisations involved learned a lot and that the scheme has helped ‘normalise’ endowments within the arts sector, but questions whether the money could have been put to better use helping a greater number of organisations. It criticises the selection of the 18 organisations, eleven of which were music-focused, nine of which were London-based and half of which already had experience of endowments. It blames the unbalanced portfolio on a hasty start to the programme, which was initiated by the DCMS, and regrets that “learning regarding endowments across other artforms and regions has been less than it might otherwise have been”.

Despite the intermittent success of the programme the report concludes that, for the right organisations, at the right time, endowments can be a valuable part of a fundraising strategy. It highlights the need for clever targeting of donors and describes how some organisations found success by giving the endowments a specific purpose and branding, such as Sage Gateshead which achieved its target by using its 10-year birthday campaign as a shop window for the endowment fund.

The report warns that fundraising in the arts “remains hard work” for many arts organisations. With the average amount raised by the 173 organisations on the match funding scheme being around £30k-£40k a year, it questions whether employing a dedicated full-time fundraiser is viable for some organisations – though it does point to other benefits associated with private income streams such as freedom from funders’ requirements and greater flexibility.

The researchers found confirmation that it is easier for larger and for London-based organisations to fundraise. But says the data contradicts long-held beliefs that fundraising is more difficult for dance and literature organisations – which performed better than average. It did highlight problems facing touring and umbrella organisations though, and said there remains a relatively low understanding of the potential of technology to help fundraising.

ACE has recently announced a new Catalyst scheme for 2015-18, ‘Evolve’, which will grant £17.5m of ACE’s total £26m budget for Catalyst to arts organisation with limited experience of fundraising, to enable them to invest in skills and attract more private giving. It aims to give 150 grants of £75k-£150k – a larger number of smaller grants than the previous Capacity building and match funding scheme. In response to recommendations in the first BOP report, ACE will now be accepting sponsorship as a form of fundraising eligible for match funding.