Following on from the very popular post comparing the Welsh and English RFO’s financial models here’s the second in the series of Culture Benchmark data analysis posts. Do drop us a line if you have suggestions for sets of organisations or data that you’d like us to look at. Forthcoming topics include:
- Turning Point
- The ‘big 10′ regional theatres
- RFO vs. non-RFO
Meanwhile here’s how the Combined Artform Venues (CAV) folks compare to a wider Arts Council England (ACE) Revenue Funded Organisations (RFO) sample.
Notes on the data:
- As the CAV network is fairly small we are looking at a smaller data set for this group than we usually look at when benchmarking. A degree of caution should therefore be applied when reading the data and the interpretation.
- 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
Even with all these caveats a number of things merit further exploration.
It would appear that the CAV members have a profile that is similar to two other types of organisations:
- Larger venues i.e. over say £5m turnover
- Ticket based and café based income strengths
These considerations are important as they make a clear separation in income models based on the availability, capacity and usage profiles of venue based organisations with highly varied venue based income strands. It is worth understanding how they operate not only if you are one of these venues or aspire to be but also because the combination of CAV and performing arts venues do significantly impact the overall ACE data set and often mask the very different non-venue based models. They are therefore a great example to look at when considering venue based business models.
- Whilst the largest of the venue based institutions do receive Grant in Aid (often around the 30-40% of turnover level based on prior years data) the average level of ACE RFO income is relatively low for the CAV members (15.7% in 2009, 18.3% in 2010) vs. the ACE RFO average (40.9% in 2009, 45.6% in 2010)
- Even if we restrict the ACE RFO group to the larger organisations (over £5m annual turnover) the CAV members, whose average turnover is approx £10m, are still showing lower levels of ACE RFO funding.
- This lower level of ACE funding is not to say that the absolute amounts are small but that they represent a smaller percentage of the total turnover of the organisation than such a sum would in say a visual arts organisation
- We see that CAV members have a lower level of other and other gov’t grants but this area is one where we’d hesitate to offer an explanation without a larger data set to validate these results further
- What is very clear however is that CAV members are derive a considerably smaller proportion of their total income from grants than the average ACE RFO with the figures showing CAV 29.5%: ACE RFO 69.0% in 2010 (the 2009 picture is similar) for total grant levels as a percentage of income. It would be interesting to correlate this to the programme content if we had a measure of innovative vs. mainstream (we don’t!) and to audience levels
- The expected corollary to this lower level of grant funding is the far higher proportion of income achieved from ticket sales (CAV 45.7% : ACE RFO 30.3% in 2010) and income from café & catering (CAV 26.7% : ACE RFO 13.2% in 2010) contributing to an average venue based income of CAV 62.6% : ACE RFO 25.4%).
- It is interesting to note that CAV members achieve a smaller percentage of total revenue from hire of space vs. the ACE RFO’s but until we have a better idea of the capacity level they are working at we cannot tell whether this is a missed opportunity or whether the spaces are already workng very close to capacity and therefore have little available for hire of space to externals.
- Given the focus on venue based income it is perhaps not surprising that CAV members achieve a smaller part of their income from their intangible assets than the wider ACE RFO’s. The question going forward however is to what extent they would be well placed to act as hubs for intangible asset income development. Looking at the activities of Watershed (a member of CAV up to 2011 but not from April 2011 onwards) we can see that they’ve developed a particular strength through the Pervasive Media Studio which has been translated into successes with the Technology Strategy Board and other investors in intangible asset lead income streams/products/services. Certainly the CAV members such as Cornerhouse and FACT have a brand presence which is known for being tech capable and creative industries connected.
- This CAV : ACE RFO comparison raises interesting questions not only for CAV members but for those whose business model is in some ways similar e.g. arts centres more broadly and mixed venues such as the ICA. If we were to compare the ICA to CAV what would this tell us in terms of the opportunity cost of using X square metres for visual arts programming and how might this change any of the arguments for the value of the space and the grant levels associated with this element of their programme?