Private investment in the arts sector has fallen by 3 per cent to £658m since last year, according to new figures from Arts & Business.

The 3 per cent decrease is primarily driven by a large 11 per cent decrease in business investment, which includes corporate donations and a moderate decrease of individual philanthropy of 4 per cent.

This has been offset by a positive growth in trusts and foundations funding of 11 per cent. Funding from this source accounts for 23 per cent of investment in the arts sector and now stands at £154.6m.

Since Arts & Business first started capturing this data in 1976, private investment in the arts has been following a general upward trend, which has been interrupted in the past two years with decreases from various sources of investment.

Individual philanthropy decreased for the second year in a row, continuing the interruption of its fast-paced growth since 2001. The 4 per cent decrease however, is slightly lower than the previous 7 per cent decrease, bringing the levels of arts philanthropy down to £359m, which is still higher than in 2007.

Business investment has fallen by 11 per cent to £144.1m. 

The report says: “Although businesses are still committed to working with the arts, they are not hardwired to do so.  Corporate money is a discretionary spend, particularly in hard times. As a result, business investment in 2009/10 is now lower than it was in 2003/04.”

Colin Tweedy, chief executive of Arts & Business said:
"Our initial feeling is one of relief as these figures could have been so much worse. At the very peak of the recession private investment in culture held up, though the majority of investment continues to be swept up by the major cultural institutions.

“We still collectively need to nourish all forms of private sector investment; in particular if we neglect corporate sponsorship we will damage the whole cultural ecology.

“Our new analysis identifies the pressure on our arts and cultural bodies, as they are expected to increase their income from private sources, as it is decreasing alongside most other sources of funding. Cultural bodies wait on tenterhooks to discover how their new financial settlements following local authority cuts and less national government money.

“At this time of cuts, much more is being asked of the private sector and of volunteers to create a Big Arts Society. Maybe we are set to see a new beginning when private investment becomes the dominant funding force of UK culture.”