1. A few remarks on financing of culture European Parliament Brussels, 22nd November 2011 Public investment in culture and communications. A key challenge for Europe

2. Specificity of cultural goods Cultural goods and services:  require creativity,  generate and transmit symbolic meanings,  effects are covered by intellectual property rights. (D.Throsby) Specificity of cultural goods justifies the use of public funds → Public goods (P.A. Samuelson) → Merit goods (R. Musgrave) COST DISEASE in the performing arts (W.Baumol & W.Bowen) CREATIVE DESTRUCTION (J.Shumpeter)

3. How much state in culture?  The crisis of traditional welfare state model  Criticism of the extreme (neo-liberal and social democratic) models  The third way concept The non-profit sector is situated between public and private sector.

4.  Public financing of culture dominates over the private one;  The role of local authorities and NGOs increases;  The indirect financing of culture disseminates;  State encourages private financing;  State intervenes in the field of cultural industries;  New sources of funds for culture (lotteries, EU funds) are sought after;  State supports institutions, projects and artists;  Public cultural institutions become autonomous and financially stable. Trends in organising and financing of culture in Europe

5. Culture financing models AMERICAN MODEL: Culture is, above all, a matter of private responsibility and a subject of charity. EUROPEAN MODELS:  Nordic - based on social- cultural traditions,  Anglo-Saxon - with domination of global markets,  Mediterranean - strongly based on cultural heritage,  French - the last example of central planning in Europe, and  German - indicating the evolution from welfare state to information society.

6. CountryYearPer capita (€)% GDP Estonia 2009164.101.6% Finland 2009174.000.54% France 2002197.21.2% Germany 2007101.000.34% Hungary 200956.000.57% Italy 2008117.000.45% The Netherlands 2006183.000.6% Poland 200843.980.58% Slovenia 2007134.60.81% Source: Council of Europe/ERICarts: "Compendium of Cultural Policies and Trends in Europe", 12th edition 2011., ISSN: 2222-7334 Public expenditure on culture in chosen European countries

7. Financing of public television - the structure of revenues in 2002 (figures in %) CountrySubsidies Broadcast licence fees Advertising and sponsorship Other Estonia59.4-28.112.5 Finland12.282.8-5.0 France-64.327.78.0 Germany0.779.3 3.616.4 Italy-53.040.46.6 The Netherlands 62.5-27.99.6 Norway-95.70.63.7 Poland0.230.160.79.0 United Kingdom5.674.9-19.6 Media market Source: EBU Guides, Information Pack, Volume 4: EBU Members’ key financial and personnel data, December 2003 The way, money is raised by the private broadcasters is similar in all EU countries. In terms of access to public funds, they are usually treated as regular enterprises. They operate, nearly in 100%, thanks to ads generated income.

8. In the Polish model of culture financing, like in other European ones, public sector is a main but not sole funding source. Private funds are complementary, not alternative to public ones, though. Public expenditure for culture (2010) Total (€)% Total public expenditure for culture and national heritage protection 2 078 411 278 100 State expenditure 345 090 476 16.6 Local authorities expenditure 1 733 320 802 84.4 Source: Central Statistical Office, ‘Public expenditure for culture in 2010’ Financing of culture in Poland

9. Public expenditure for culture by fields Chosen fields of culture % of all state expenditure for culture and national heritage protection % of all local authorities expenditure for culture and national heritage protection Museums22.710.2 Cultural and art centres14.23.7 Theatres10.69.9 Monuments protection and conservation 9.0- Libraries6.516.4 Philharmonics and orchestras3.34.1 Culture houses-31.8 Source: Central Statistical Office, ‘Public expenditure for culture in 2010’

10. Definitions of culture Comparison of cultural domains covered by European and UNESCO frameworks LEG-CultureESSnet CultureUNESCO 2009 FCS Cultural heritage (historical monuments, museums, archaeological sites, archives) Libraries Books & Press News agencies Visual arts (incl. design) Photography Architecture Performing arts Films Radio Television Video Audio records Multimedia + Advertising Art crafts Intangible heritage + e.g. Natural heritage Craft in general Tourism Source: Project Essnet Culture, final report, October 2011

11. CORE ARTS FIELDS CULTURAL INDUSTRIES CREATIVE INDUSTRIES AND ACTIVITIES RELATED SECTORS Visual Arts Heritage Performing ArtsBooks and Press Television and Radio Music Video Games Film and Video Advertising Architecture Design Consumer Electronics Telecommu- nications Industrial Design Software Tourism Education Fashion Design User Generated Content Luxury brands Source: KEA European Affairs

12. In Europe, culture is a field financed by public authorities only in part. Therefore, it is extremely important to supplement public funding with private one.  Donations and sponsorship  Households expenditure  Cultural and creative industries  Non-profit sector Private sector

13. Country Main sources of funding for culture from private funds in selected European countries Average annual expenditure on cultural goods and services per household, 2005 (in €)* Finland  Private capital foundations – about 50 mln € per year for culture (15-20% - direct support for artists).  Corporate sponsorship – in 2008 about 17.4 mln € (mainly for music, visual art and cinema). 1 234 France  Fondation de France operates on the arm's length basis – ca.16% of its funds is transferred for culture, especially cinema and modern art.  Corporate sponsorship - in 2002 about 195 mln €. 945 Germany  In 2010 private sector spending on subsidized public institutions reached 1 bilion € (including ticket sales).  Corporate sponsorship - in 2000, 3% of total expenditure on culture.  Estimated value of private financing of culture per year – 500 mln € in 2003. 1 334 United Kingdom  Private sector investments in art – in 2008/09, 654 mln GBP.  Support for individuals is a main way of financing culture and represents 55% of private investments in this sector (363 mln GBP in 2008/09). 1 501 *Source: Eurostat, ‘Cultural Statistics Pocketbook’ 2011 edition ** Source: Council of Europe/ERICarts: "Compendium of Cultural Policies and Trends in Europe", 12th edition 2011

14. 2 240 bilion $ - the value of global creative economy in 2000 by John Howkins 6 100 bilion $ - the value of global creative economy in 2020 according to the prognosis of J.Howkins 654 bilion € - the sales of cultural and creative sector in EU countries in 2003 by KEA report ‘The Economy of Culture in Europe’ (2006) 2.6% - the added value to the EU GDP 19.7% - increase of added value of the creative sector in 1999-2003 (more than overall economy growth) Different countries provide research on the economic value of creative sector, however due to differences in definitions used, the results are often incomparable. Cultural and creative industries

15. Creative Partnerships / Public-Private Partnerships / CSR Krystyna Janda Foundation for Culture  Private theatre operating as a foundation  1.3 mln € from public funds in 2005-2010 (municipal grants - about 4% of income)  300 performances per year  2 theatres (260 and 450 seats)  20 full-time employees  260 000 viewers per year 17 public theatres in Warsaw get ca. 22 mln € from public subsidies. 12 private theatres in Warsaw get 2.2 mln €. Deutsche Bank Polska „Views” - competition for young Polish artists organised in cooperation with Zachęta National Gallery of Art Media Cluster in Łódź  Over 50 engaged entities and over 20 projects in various fields  Investment value estimated at 150-200  Aim: creation of 25 000 new jobs by 2010 and 40 000 by the end of 2015