£55m challenge fund for endowments

 A £55m scheme to help arts and heritage organisations build endowment funds has been launched by the DCMS. Grants will be awarded from the new Endowment Fund, which will be available to match funds raised from private donors. Bids will be reviewed by an independent advisory panel chaired by ex-Cabinet Minister Michael Portillo. Around 50 organisations are expected to benefit from the grants, which will start at £500,000 and rise to up to £5m. To apply for these new grants, organisations will also have to raise money from private philanthropic sources. Different leverage ratios will be required for grants of different sizes, but these should on average raise £2 from private sources for every £1 of public funding. So £55 million in public funding will unlock £110 million from private support, possibly more.

This announcement forms part of the £100m Government, Arts Council England (ACE) and Heritage Lottery Fund (HLF) pledge to support philanthropy, and will go towards building endowments on a challenge-fund basis. Last week’s announcement of the £40m Catalyst Arts scheme from ACE also forms part of this pot. An additional £10 million from ACE will form part of the £55m available for endowments.

In December 2010, Culture Secretary Jeremy Hunt announced an £80m fund to help increase philanthropy, made up of £50m from ACE and £30m from DCMS. This has been boosted by an additional £20m from the Heritage Lottery Fund (HLF), taking the total to £100m. Five million pounds of the HLF money will go towards helping smaller cultural and heritage organisations build their financial resilience and improve their fundraising abilities, with the remainder forming part of the £55m available for endowments.