James Strong On The Art Of Business

James Strong AO addressed a business lunch in Perth on Thursday 1 March, discussing the art of business.

Growing up in northern NSW, the arts were far off. Like most people at the time, I had a fairly limited view of them as being the opera, ballet or painting for hoity-toity city dwellers.

As times have changed, and I have matured, what we regard as the arts has broadened significantly.

We now live in a world where one of Hollywood’s leading stars can make the transition to artistic director of one of our flagship theatre companies.

We live in a world where “arthouse” music and cinema can rake in box office and where visual artists pursue their art through a graphic or industrial design career.

In short, we live in a world where the impact of the arts is felt in the wider cultural sphere and far beyond.

If we take this broader view of what the arts are, and can be, we get a full picture of its impact on our lives.

For the arts and cultural industries are worth an estimated $13 billion, making them around half the size of the banking sector, and employs 260,000 Australians full time.

But more than this, these creative industries are a key driver of our largest industry segment – tourism. In fact, around 2.2 million international visitors participate in our culture and heritage each year.

And the importance of the arts will only continue to grow as digital technologies, and the content that creates demand for them, become more and more central to our lives.

However the value of the arts stretch further than the bottom line – they also play a vital role in bringing people together.

All creative work is ultimately an act of the community, with artists coming together and joining with an audience in a social act of creation and enjoyment.

We can see this in a real, tangible way where arts infrastructure serves as a magnet for the community and plays a role in enriching and revitalising a neighbourhood – such as the Federation Square/Southbank complexes in Melbourne, or another great example closer to home at the Fremantle Arts Centre.

This social and economic value is underpinned by the ways that the arts intuitively and instinctively connect with us as people.

Without this “feel good” factor – that sigh of pleasure as we sink in to a Tim Winton novel or tune out to a Peter Sculthorpe string quartet – there would be no demand for artistic work.

The greatest value of great art is to transform us, if only for a few moments or hours, and take us to a better place.

Anyone watching ABC TV last Thursday evening would have witnessed a perfect example of how an arts project can add personal, social and economic value to individuals and their community.

The community arts organisation Big hART worked for four years in one of inner city Sydney’s most notorious public housing estates – giving 1200 Northcott estate residents access to arts programs.

The results were impressive. A photography exhibition, called tenant by tenant, attracted 18,000 visitors to the Museum of Sydney.

And the production StickybrickS brought 1200 audience members into the housing estate grounds for an innovative multimedia, interactive theatre performance in one of the most talked about shows of the 2006 Sydney Festival.

But more than that, the initiative brought the community together in ways that they hadn’t before – ways that gave them the pride and the power to work together towards common goals.

These were recognised in a postscript to the program – the awarding by the World Health Organisation of “safe community” status on the estate just last month. The first public housing estate in the world to do so.

Supporters of the arts

Projects such as Northcott are not possible without a broad coalition from all parts of society.

In Australia, we can see that the arts have supporters from government, business, individual givers and the community.

At this point, I would like to dispel a common misconception about the “publicly subsidised” arts – the stereotype that arts companies rely heavily on government handouts to survive.

If we look at our performing arts companies – the part of the arts most reliant on public funds – we see that only around 21 percent of their income is derived from governments.

Generating income from a broad range of sources has been something that all arts organisations have become very good at – as all good businesses must do for their financial health.

Having said that, government support for the arts at the Federal and state/territory level is strong. It has remained relatively stable over the past decade, and the signs are good that this is set to continue into the future.

One of the main ways that the arts have broadened their income stream has been in raising support from the business community – with business support growing substantially over the past five to ten years.

A recent survey of sponsorship and giving to the non-profit sector found that Australian business gave a touch over $303 million in 2004. In that same year, Australia’s 29 major performing arts companies earned almost $33 million from private sources through both sponsorship and giving.

These are not small amounts, and if I may blow our own trumpet for a second, the Australia Business Arts Foundation has been instrumental in facilitating many effective relationships between business and the arts.

And we hope that more partnerships will flow from connections made at this lunch today.

If we look at where this support goes, we can see a trend that never ceases to surprise me. While companies donate freely to the arts, sponsorship levels are relatively low – around half that of sports and recreation.

This surprises me due to the opportunities that exist in the arts. The breadth of arts activity allows companies to position themselves across the spectrum from heritage to cutting edge. And the AB demographic skew of arts audiences is something marketers should drool over.

One example of sponsorships that are making a difference are those with South Australia’s Little Big Book Club, a program encourages parents to read to their young children, sowing the seeds for a lifelong passion for books, literature and learning.

A partnership with The Advertiser newspaper has delivered the program not only financial backing, but also significant in-kind support through media coverage and event promotion.

PixiFoto and Kmart have also provided financial sponsorship for the program to align with the young family market.

The success of the Little Big Book Club has been such that they are expanding the program nationally – announcing earlier this week a Queensland program sponsored by the Courier Mail newspaper.

Another business partnership that I am sure many people in this room will be familiar with is BHP Billiton Iron Ore’s $4 million program of support for the arts in the Pilbara region.

In communities such as Newman, where BHP is the main employer, growing the local culture delivers clear benefits to them community and also to the company directly.

In Newman, the program worked in association with FORM to revitalise the local visitors centre and provide a boost to tourism in the region.

While business support is growing, it is its younger cousin – individual and philanthropic giving – that has exploded in Australia in recent years.

As you can see, individual giving to arts and cultural organisations has increased six times over from 1997 to 2004 to reach $131 million.

As we see the dramatic growth of individual giving across the board, we can only hope that we are seeing a sea change that will see more Australians putting more into their communities. And we hope that the arts will benefit from this change.

This giving takes many forms, from individual donations to volunteering, and a number of changes to tax laws in recent years have enabled greater levels of philanthropy.

In particular, the establishment of private prescribed funds has led to new, systematic ways for high net worth individuals to put more back into their communities. Over 500 of these have been established since the first just over five years ago.

Some arts organisations have been quick to take advantage of these developments. One such example is The Song Room, an organisation that takes music to children and schools across the country.

The Song Room has been particularly successful at raising funds from private foundations, PPFs and workplace giving programs. The gifts that the organisation receives become the gift of music for many disadvantaged, refugee, Indigenous and other children.

Underlying these three areas of support is a broad base of community engagement with the arts.

A major market research project undertaken by the Australia Council for the Arts five years ago highlighted just how important the arts are to everyday Australians – who see the value of the arts, want to experience them and want their children to engage with them as well.

And the statistics on Australians actual engagement with the arts speak for themselves.

One in five Australians involved in paid and volunteer cultural work, 55 percent attending the performing arts or an art gallery each year and just less than one third of schoolchildren participating in after-school arts.

This level of community engagement forms the main pillar of support for the arts through ticket sales and box office.

But more than that, it is this community engagement with the arts that makes them relevant, important and vibrant.

The arts need your support

But I would like to finish off by speaking about a few practical ways that we can support the arts – as voters, as businesspeople, as individuals and as community members.

And the diversity of the arts – from large performing arts companies, through to small community arts organisations and individual artists – means that there is almost no end to the ways that your engagement can take place.

So look at the options I speak about as merely being a starting point, and let your personal preference and imagination take you where it will.

The most obvious way that you can support the arts is by exercising your power as a consumer.

But as business decision makers, we are in a stronger position to help than most.

We have the decision making power over what goes into our corporate art collections and libraries, we can encourage our colleagues to take part in a book club or choose to employ an local actor or musician for our next corporate event.

And for those of you who are in a position to do so, I strongly recommend exploring one of the many ways that an arts partnership can enhance your business.

For a two-way partnership that allows your arts partner to tap your business knowledge and expertise – and you to tap into their creative streak – can pay dividends.

A creative approach to business problems can be the intangible spur to innovation that could provide you with an edge.

And as I’m sure you are aware a number of core artistic skills – be they writing, design or stagecraft – can be invaluable in the business arena. After all, who here has not used a bit of play-acting to change the direction of a difficult meeting?

There are many of you here who are already participating in the growing area of workplace giving.

Legislation in the past three years has given Australia the best workplace giving framework in the world, and businesses have responded with over $11 million now being raised each year through them.

There are few more cost effective ways of making a difference in your community than by making a regular contribution through these individual giving programs.

This is an important part of the fabric in developing a deeper culture of giving in our nation.  I urge you to share your experiences, work through the challenges together and encourage more of your business colleagues to organise workplace giving programs.

And for those of you with existing programs, or considering establishing one, consider including arts organisations as a funding option.

We are seeing organisations such as The Song Room and the Australian Children’s Music Foundation gaining support for their inspiring work as part of corporate workplace giving programs.

And my final suggestion for engaging with the arts is one that I have personally found most rewarding.

Serving on the board of, or volunteering within, an arts organisation, can expose you to a different way of working and give you a new take on business.

I have served on many arts board – the Australian Brandenburg Orchestra, Sydney Theatre Company, State Library of Victoria, and most recently the Australia Business Arts Foundation and the Australia Council for the Arts.

Each of these have given me new insights, skills and relationships that I have found rewarding not only in themselves, but in what they have allowed me to take back into my professional life.

It is an inspiration that I cannot do without.