Donations from tech billionaires, fossil-fuel companies and Big Pharma have prompted public backlash against some leading cultural institutions. Yet as public support shrinks, private finance is becoming a practical necessity.
Museums, galleries and theatres are increasingly reliant on corporate sponsors, philanthropists and legacy donors to help fund everything from major exhibitions to education programmes and day-to-day activity.
‘It is not a very cheery landscape’
Attracting that support has become more competitive and there are several barriers, ranging from knowledge gaps about the sector to limited awareness of the availability of tax breaks. But there is also a unique growth potential for arts and culture sponsorship.
Growing funding challenge
For many arts organisations in England, the financial landscape has become increasingly difficult. Inflation, higher operating costs and pressure on public finances have combined to create the toughest funding environment in decades.
‘This is perhaps the most challenging time period there has been since the institution of state funding for culture at the end of the Second World War,’ says Caroline McCormick, chair of the UK’s Cultural Philanthropy Foundation and director of fundraising consultancy Achates.
She points to an 18% real-terms decline in Arts Council England funding alongside a 48% reduction in English local authority spending on culture. ‘Local authorities, as far as they can, are fighting to support culture, but it is so pressurised for them,’ she says.
Private philanthropy remains equally important, but competition for donors has intensified. McCormick notes that culture accounts for only around 4% of all philanthropy in England, while charities more broadly have lost around six million donors in recent years.
Charities Aid Foundation data points to a broad-based decline in charitable giving rather than a generational shift: donor numbers have fallen steadily across all age groups and cause areas. Financial pressures are part of the picture, with one in five people saying they cannot afford to give. But giving is also becoming less habitual, with donations increasingly reactive and unplanned, influenced by financial confidence and trust. At the same time, fewer people are being asked to donate.
McCormick describes the arts and culture sector as a canary in the coal mine – an early warning sign – for the wider charity sector in terms of the impact of a decline in philanthropic funding. ‘It is not a very cheery landscape,’ she adds.
Untapped opportunity
Corporate funding is an increasingly important part of the mix. Arts Council England’s Private Investment in Culture Survey 2025 found that in 2023-24, 17%, or £463m, of all income was contributed (rather than earned or from public funding). Of that, a tenth – £43m – came from companies.
Yet arts organisations receive only a fraction of sponsorship compared with sport. European Sponsorship Association (ESA) research values European sponsorship at €32.91bn, with 71% going to sport, leaving charities, education, health and the arts to compete for the remainder.
The research also highlights untapped potential. While 61% of organisations surveyed had never sponsored arts and culture, 62% were open to doing so, and only 32% felt well informed about sector opportunities.
‘If the sponsors haven’t got the information and are not being approached by arts and culture organisations but are open to it and it’s a big market, all of those things come together to say this is an opportunity,’ says Martin Prendergast, ESA board director.
‘The Cultural Gifts Scheme has encouraged giving to museums’
Corporate priorities have also evolved. Rather than simply seeking brand visibility, businesses increasingly want partnerships that align with environmental, social and governance (ESG) objectives, community engagement and employee wellbeing.
‘The arts sector does ESG, community outreach and education programmes incredibly well,’ says Prendergast. ‘It’s an integrated, authentic part of arts organisations’ mission.’
Tax benefits
Tax incentives are an important tool for encouraging philanthropy. In the UK, Gift Aid, the Cultural Gifts Scheme and Acceptance in Lieu (AiL) provide incentives for charitable giving and donations of nationally important artworks and heritage assets.
Natasha Hassall, partner at Boodle Hatfield, says the Cultural Gifts Scheme has encouraged significant gifts to museums despite requiring careful tax planning. ‘You aren’t getting a complete tax break, but it has been a good scheme and for some people it has encouraged giving to museums,’ she says.
Hassall often advises clients to use the AiL scheme to settle inheritance tax liabilities by loaning cultural objects to museums before transferring them into public ownership as part of their estate planning. However, she believes the scheme could achieve more.
‘The budget has been the same for as long as I can remember,’ she says. ‘Having more of a budget would be a good way to encourage more funding.’
Other countries do similar. Canada offers enhanced incentives for donations of certified cultural property, whereby donors can claim donations of certified cultural property against 100% of their net annual income – which are exempt from capital gains tax – for up to six years.
Policy shifts
The UK government is increasingly looking to philanthropy and private investment as part of the solution to the arts funding challenge.
The independent Hodge Review of Arts Council England, published in December 2025, concluded that stronger incentives are needed to attract private capital into the cultural sector, particularly outside London.
Among its recommendations was a proposal to double the value of Gift Aid – which allows charities to claim an extra 25% on donations from eligible taxpayers – for eligible cultural organisations and events reaching audiences outside London and the south-east.
‘As few as 20 major corporations are giving in a systematic and organised way’
Other proposals included establishing a £250m Arts Council England endowment fund, designed to leverage matched philanthropic donations on a pound-for-pound basis, and making deferments of Culture Recovery Fund loans – provided to UK cultural organisations and heritage sites during the Covid-19 pandemic – conditional on organisations securing matching philanthropic investment.
Elsewhere, France provides a compelling example of what can be achieved through its Aillagon Law. Introduced in 2003, this allows companies to claim a tax reduction worth 60% of qualifying cultural donations, subject to annual limits. The law has been widely credited with significantly increasing corporate support for museums, galleries and heritage projects.
According to Prendergast, private giving to the arts in France quadrupled within a decade of the Aillagon Law introduction.
‘When Notre-Dame burned down, they raised the €880m needed to restore it from private sources within 72 hours,’ he says. ‘That was because of the incentive the Aillagon Law created.’
Similar approaches have since emerged elsewhere, including Italy’s Art Bonus, which provides a 65% tax credit for donations supporting public cultural heritage, and Brazil’s Rouanet Law, which uses tax incentives to encourage investment in cultural projects.
Australia, meanwhile, encourages cultural philanthropy through its deductible gift recipient framework and the Cultural Gifts Program, which allow individuals and businesses to claim tax deductions for donations of significant cultural property to eligible public collections.
More than money
In the UK, the Cultural Philanthropy Foundation is also pressing for cultural organisations, accountancy standards bodies and government to develop a framework that values and records in-kind corporate contributions.
Cultural organisations should recognise the full value of corporate support, not just cash. In-kind support from businesses – skills, time, facilities, networks, expertise – makes a substantial contribution to the cultural sector that currently goes largely unrecorded, McCormick says.
‘There are as few as 20 major corporations who are giving in a systematic and organised way. But there is a tremendous body of in-kind support coming from corporates and it is not being accounted for in those accounts,’ says McCormick.
More information
See the AB article on sponsorship opportunities in sport
