Evaluating Turning Point members business models to the ACE RFO sample

The next in our series of topics comparing different parts of the UK arts sector business models looks at the Turning Point group members nationally and compares their aggregated data to a sample of Arts Council England (ACE) Revenue Funded Organisations (RFOs). For a list of the organisations in the sample groups click here. For links to previous posts in this series click on the links at the end of this post.

 

 

A number of things merit further exploration in this slice:

  • The first thing that strikes us here is how similar the average is for the Turning Point (TP) group and the ACE RFO sample. Unlike the VAGA sample where we saw a far higher degree of grant dependence vs. the ACE RFO sample here they are much the same
  • Is this because the Turning Point sample includes CAV (combined artform venues)? Or perhaps because it includes a number of organisations who obtain a reasonably significant proportion of their income from ticket sales and other venue based income streams? To answer these questions we’d need to look in more detail at the organisations that make up the Turning Point, VAGA and CAV samples – doable as we know exactly who is in which group but more than we have space to analyse here
  • Having said that the grant income percentages are reasonably similar between the Turning Point and ACE samples there is still a trend through the numbers for the Turning Point members to obtain a higher degree of their total income from grant sources vs. either their tangible or intangible assets through earned income
  • This can be seen in ACE RFO grant levels (41.0% TP : 20.9% ACE RFO in 2009, 42.5% TP : 45.6% ACE RFO in 2010) and other Arts Council funds (14.7% TP : 9.9% ACE RFO in 2009, 19.9% TP : 12.8% ACE RFO in 2010) . This trend continues through the Trusts and Foundations income where we see 15.0% TP : 10.9% ACE RFO in 2009 and 11.7% TP : 11.8% ACE RFO in 2010
  • As with all the figures we’ve analysed in the subsets for ACW, ACE, VAGA and CAV the TP members show greater grant dependency in 2010 and for the time being we are assuming that this is an effect of the recession reducing income from non-grant sources rather than a longer term trend. We will see how this adjusts in 2011 as these figures come through
  • One of the analyses we are considering is to slice the ACE RFO data into small, medium and large turnover to see how this changes the picture we see when it comes to variations in income make up of organisations but until we do this we won’t know whether the figures are being skewed by one particular type or size of organisation
  • Overall however we still see a higher degree of total income coming from grant sources in TP member organisations than the average for the ACE RFO sample we are using. This varies a little between the two years – 67.2% TP : 65.0% ACE RFO in 2009 and 73.3% TP : 69.0% ACE RFO in 2010
  • Given the high proportion of free entry organisations in this TP sample we were quite surprised to see that ticket sales are worth on average some 15-19% of total income for TP members (vs. 22-30% for the ACE RFO). A job well done!
  • On the whole TP members do slightly less well than the average for the ACE RFO sample when it comes to shop & retail, café and space hire but the differences are not that large … a gap that could be closed we would suggest
  • This results in an average income from venue based/tangible assets of between 18.2% (2010) and 24.8% (2009 for TP members vs. a range of some 25-27% for the ACE RFO sample, again not a large difference
  • This trend continues across the non-Venue based income where again TP members see slightly less of their total income from their intangible assets (13-15%) than the cross-artform sample used in the ACE RFO data (16-18%).

 

Notes on the data:

  • The contents of each column cannot be added up vertically to reach 100%. For a detailed explanation of this see http://www.mycakefinancialmanagement.co.uk/blog/?p=3076
  • The data above is not from matched samples so any analysis cannot be conclusive at this stage but the data can be used to raise questions for further research
  • The data is has not been gathered to be representative of either of the RFO portfolios ie no attention has been paid to the covering of all sectors in proportion with their inclusion in the RFO portfolio. It is also possible that there is element of regional bias as we have not set up the sample group to ensure that such bias is avoided
  • The data above is not the full data set. There is considerably more detail in the income from intangible assets than is shown above. There is also data on both direct and indirect costs. For an overview of all the lines of data see http://www.primenumbers.co.uk/benchmark/forms/artsbm.htm for an example.

 

Previous topics in the Culture Benchmark series:

Sliced by Size 2010

The Visual Arts and Galleries Association (VAGA)

Combined Artform Venues (CAV)

Arts Council Wales vs. Arts Council England and 2009 vs 2010 detail

5 thoughts on “Evaluating Turning Point members business models to the ACE RFO sample

  1. Hi Sarah

    I’ve been meaning to comment on these posts for some time. After many years of being involved in performance measurement and data analysis at ACE its very encouraging to see this data now being analysed and used in a meaningful and timely way. Of course as soon as you look at the figures in detail they provoke more questions than answers but I think the real benefit of this is to encourage further exploration and ultimately improvement. A lot of resistance to comparing data in the past has been based on fear that it will simply be used as a judgemental end point.

    Many years ago the Arts Council/RABs used to do Appraisals of RFOs and it was always difficult to agree a peer group against which an organisation was willing to be compared. In general though organisations valued the opportunity to intensively exam aspects of the work alongside others working in their field. There’s no possibility of such a time consuming exercise being reintroduced on a regular basis but the availability of data means that organisations can set up their own virtual peer networks and do it for themselves.

    Like you I’m surprised by the similarity between the TP sample and the RFO sample overall although inclusion of the CAV group in the TP sample would go some way to explaining that.

    I’m assuming that the TP sample aren’t all RFOs which would account for the high proportion of other Arts Council income. It is alarming though to see that RFOs still receive nearly 13% of their income from other Arts Council sources. Just have to hope that has been taking into account in setting the baselines for National Portfolio funding. Particularly given that Local Authority and Other Government Grants will also be on a downward trend.

    All of which makes it more important to find out who is doing well on squeezing income from other assets – tangible and non tangible – and then shating that learning.

  2. Sarah

    This is great and useful stuff! I look forward to more analysis. Benchmarking has been a powerful driver of change and performance improvement in other sectors – it will be interesting to see what impact MyCake will have in this sector.

    One big question that it raises for me is how much of the venue based income represents a contribution to overheads let alone actual profit which can cross subsidise programme costs. My own experience is that few organisations make money from catering, retail or space hire on a full cost basis and many actually end up subsidising them. Does the Arts Council data allow you to get a handle on this?

  3. The data I’ve analysed here is a combination of the very detailed inputs by subscribers and the fairly detailed data from public report & accounts. I’m not actually using the ACE RFO data as it is not all ‘public’ data and therefore the process for accessing it is proving long winded!

    So, in short I do have quite a lot of data about the financial contributions from trading operations and yes I could calculate what the ratio is between % of income from trading vs. % total expenditure spent on this area and could therefore show the profitability (min, average, top quartile and max figures for this).

    For the time being however I’m focussing on analysing income … though quite a few folks are now asking for analysis of cost base as well so I’ll probably move on to that soon.

    any other requests for things to analyse?

  4. I wonder to what extent that other ACE funding is because TP is to some extent built on regional infrastructure that goes beyond the RFOs?

    The phenomenon Sally refers of people sourcing their own peer-review reminds me of the pattern I talked about recently of voluntary effort replacing infrastructure http://thinkingpractice.blogspot.com/2011/05/on-networks-and-filling-gaps.html and reminds us/me it is not a new thing, but a pattern that has been evolving for more than a decade.

  5. Pingback: Wooohoo! The RFO Culture Benchmark is live and FREE! | MyCake financial management

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