Untapped potential? Options of financing beyond public funds

For a number of years, orchestras, just as other cultural institutions, have been under growing pressure to look for additional funding options beyond public subsidies, not only in Germany. Based on a recent survey by the German Board of Industrial Companies (BDI), there are important factors that influence private sponsorship activities in the cultural sector, even in a more public funded environment. Corporate social responsibility is one of the keywords.

The Festspielhaus Baden-Baden for example knows about the fundamental importance of the friends’ association for this house. Not only do membership fees contribute to the budget (which is largely raised without public support), the association is also a crucial contact place through which to build relations with individual potential patrons. At the same time, many German theatres and opera houses still display a distinct lack of interest in private fundraising. Marketing departments are often small and overloaded, and the acquisition of sponsors frequently lacks professional management, resulting in mutual disappointment. These shortcomings are often aggravated by inflexible legal frameworks regarding taxation or accounting. On the other hand, there are also positive examples, such as the five-year sponsoring partnership between the Gürzenich-Orchester Cologne and Lufthansa, which was formed in 2010. Here two organisations have been able to find a match between their institutional values and the mutual benefits they can offer each other.

Another case study is the Konzerthaus Berlin (pictured). Again, a friends’ association is part of the fundraising activities, important because of its possibilities for social networking as well as its contribution of membership fees. At the same time there is also a political aspect to their work – helping to finance the Konzerthaus, while signalling the importance of continued public subsidies as the irreplaceable foundation of cultural funding.

Konzerthaus Berlin

Other cultural leaders point out an even more cautious note. Sponsoring by private patrons and businesses, they argue, can only ever pay for additional activities, but never for core activities and day-to-day running costs. Frequent calls to solve the financial straits of cultural organisations simply through private funding are often simplistic. More important, perhaps, is the generation of truly creative cooperations, which may or may not involve financial aspects. Self-generated revenues represent a third source of income apart from public subsidies and private sponsoring.

However, there may be many possible activities under the aspects of supply (what activities could an orchestra offer?), price (how should it charge for these?), distribution (how do they reach their audience?) and communication strategies (how do audiences learn about them?). Pricing strategies in particular are often an untapped potential in the almost intransparent price structures of many orchestras and concert halls in Germany. Set by intuition more than rational planning, one may advocate a systematic approach based on controlling, customer surveys and data mining.

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