Introduction:

This report brings together the findings of the most recent research on private sector philanthropy - from individuals, corporations, and foundations - to analyze trends in giving to the arts and the humanities in the context of total charitable giving to all causes. In an attempt to paint one portrait of private giving, information was compiled from a number of independent sources which used differing methodologies. These sources include: The American Association of Fund-Raising Counsel, The Foundation Center, Independent Sector, The Conference Board, and the Business Committee for the Arts. Numbers and trends cited in the summary and the text come from their research.

The report also discusses the relationship between private and public sector funding and assesses the impact of recent cuts in federal funding to the arts and the humanities on private sector donors to cultural life in the . These observations are derived from over 100 interviews and conversations, and from public testimony, recent studies and essays on these subjects. Private sector funding cannot be understood without looking at public policy and public sector funding. Since 1965 both funding and activity in the arts and the humanities across the U. S. have grown enormously, paralleling the creation and growth of the National Endowment for the Arts (NEA), the National Endowment for the Humanities (NEH) and the Institute of Museum Services (IMS). The funding patterns demonstrate a complex national culture structure in which private and public donor sectors reinforce each other, funding different pieces and parts, exercising different priorities within the whole. As one funder phrases it, the public and private sectors operate in synergistic combination.

Cultural organizations obtain their revenues from many sources; private grants, contributions, memberships and government grants and payments are part of a complex funding structure that includes earned income. Ticket sales, admissions, program ads, and gift shops are just some of the ways that arts and humanities organizations earn a significant part of their annual budgets; these sources of revenue are not covered in this report.

Summary of Research:

The Arts:
Intergovernmental funding for the arts came to at least $1.1 billion in 1995. Of this total, $162 million came from the NEA; $265.6 million came from the state appropriations through state arts agencies, and an estimated $650 million was from direct local government allocations to cultural organizations as well as to local arts councils. All foundation funding for the arts and the culture in 1992, the most recent year for which there are complete figures, totalled $1.36 billion. Most foundation dollars are given locally, concentrating on the largest, most prestigious institutions, often in response to capital campaigns. Small, innovative and community-based arts organizations will lose the most in the competition for private dollars and declining public funds. The totals for individual giving to the arts and culture mask a worrisome trend; the average size of donations to the arts per contributing household fell dramatically between 1987 and 1993. This decline is accompanied by a similar decrease in volunteer involvement in the arts. Statistics on corporate donations are kept by several sources and are inconsistent. The 1995 Business Committee for the Arts survey reports a sharp increase in corporate giving to the arts, from $518 million in 1991 to an all-time high of $875 million in 1994. However, the annual survey by the Conference Board finds that giving to the arts in 1994 among Fortune 1000 companies increased only slightly. Corporate giving to the arts is driven increasingly by marketing and human resource objectives. In general, corporate giving is determined by location and benefit to employees. The NEA has been the largest single donor to the arts since 1976.NEA has a national scope that allows it to study and influence disciplines, audiences and distribution systems. Foundations observe that NEA grants are an acknowledgment of merit which encourage local funders to contribute to an organization or project. Other funders report that they depend upon the knowledge and judgment of the NEA's review process.

The Humanities:
Funding for the humanities is not as well documented as funding for the arts. It is impossible to identify how much funding for higher education supports the humanities, nor are there statistics on individual or corporate giving to the humanities. Data is limited to the foundation sector and even that is incomplete. The humanities received only $182.2 million from state and federal sources in 1995 and even less from the private sector, not including grants to individuals. 1993 foundation data shows that the humanities - including funding for historic preservation and museums - received only 1.9% of all giving from the sample of 1,020 foundations, which provided more than 55% of all foundation giving. Of the eighteen main private sector supporters of the humanities studied, only three foundations fund the humanities as a distinct category. Only the Andrew W. Mellon Foundation, at $30 million in support provides extensive grant-making in the humanities. The National Endowment for the Humanities at $172 million in 1995, is by far the largest supporter of the humanities compared to the private sector and to other units of government. Private funders observe that only the NEH has the mandate to operate on a national scale and with a systematic approach to encouraging research and public participation in the humanities. (p. 4-5)

CONTENTS:
Introduction.
Summary of research.
The Arts.
The Humanities.
Note on methodology and sources.

Section I. Total giving in the private sector. 

A. Introduction. 
B. Overview: 1994. 
C. Longer-term trends within donor communities. 
D. Beneficiaries of private sector giving.

Section II. Funding of the arts and the humanities. 

A. Introduction. 
B. Individual donors. 
C. Corporate donors and the arts. 
D. Foundation donors.

Section III. 

A. Historical background. 
B. NEA and the arts. 
C. NEH and the humanities.

Section IV. The role of tax policy. 

A. The effect of tax law on giving behavior. 
B. The implications of tax policy for ACH organizations.

Conclusion.
Appendix I. Top 25 funders of grants with a primary, secondary or tertiary designation
                  in the humanities, for 1993.
Appendix II. Top 25 funders of the arts and culture, 1992.
Bibliography.