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Darlington Arts Project Working Together Group – Meeting Two, Friday 1 April 2011, 10am, The Arts Centre

Report on interim findings of research into governance models, good practice and funding Introduction The purpose of this report is to provide an update on progress on the arts mapping, identification of funding / financing models and interim findings in relation to potential governance models for Arts and Culture. Arts Mapping A list of the arts and cultural organisations and venues is attached (Annex C). This will be further developed. (members of the Group are asked to review to see if there are any gaps) Governance ..if we are to have an enriching and successful creative economy, we must have excellent leadership of it. David Kershaw, Chair Cultural Leadership Programme: Governance Leadership Programme, 2009, Governance now, the hidden challenge of leadership

Good governance is about how decisions are made and the process by which decisions are implemented. It is about formal and informal structures and processes that have been set in place to arrive at and implement decisions

Baroness Prashar of Runnymede, Governance Leadership Programme, 2009, Governance now, the hidden challenge of leadership (2009)

What is good governance? Work undertaken by the Cultural Leadership Programme called Governance Leadership Programme, 2009, Governance now, the hidden challenge of leadership. The research has identified a number of key attributes that collectively make up “good governance” for arts and cultural organisations. The work was predominately focused on models where (at the heart of the model), there was some form of constituted body with a remit to provide strategic direction and manage resources – such as a Charitable Trust. The key attributes are; however, applicable to any governance structures. These are set out below: Page |1


Value based leadership

Constructive partnership and relationship between the chief exec and the chairperson

A clear mission

Effective boards

Creating a culture that encourages discussion

Independence and independence of mind and always acting in the public interest

An ethos of openness, accountability and transparency

Ensuring sustainability in all types of resources such as finance, people, talent, expertise and networks

Adopting processes for continuous evaluation of performance and embedding learning opportunities into the organisation

Good behaviour and conduct

Source: Governance Leadership Programme, 2009, Governance now, the hidden challenge of leadership, pp12-13

Interim findings of best practices from elsewhere Globe have recently produced an draft (interim) report on setting out examples of models of governance within England. The work has tried to identify a range of models that broadly fit within the four options identified by the Spaces and Places Group. The work is as yet only partially complete and it is therefore not possible to fully understand which models may contain the sorts of feature that would provide a good framework from which to design a model that could best match Darlington’s needs. The potential models of governance include: •

Charitable Incorporated Organisations (CIO)

Charitable Social Enterprises (CSE)

Community Benefit Societies (BenComs)

Community Interest Companies (CICs)

Limited Liability Companies (Social Purpose) LLC

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Trusts

Unincorporated Associations

See Annex A ...we consider that the charitable model in itself is not the source of conservatism or instability of which it has been accused. Rather the problems of governance that exist in the sector tend to stem from incongruent values, dysfunctional organisational culture, and incompatible personalities” Source: Governance Leadership Programme, 2009, Governance now, the hidden challenge of leadership. Best Practices from elsewhere Globe’s interim report points to examples of how a selected range other Local Authority areas demonstrate similarities with Darlington. The report is an interim position statement. A full report will be produced and the detailed findings brought to the group in the next few week. The areas identified to date are: North Kestevern (Lincolnshire) Arts services outsourced through a 10 year public / private partnership agreement Service delivery though a special purpose vehicle constituted as an Industrial and Provident Society Received Arts Council funding in 1990s The model has relied on Arts Council funding Annual public sector subsidy £264,815 Council has 1 officer who oversees the contract

Herefordshire Cultural Arts Team restructured in 2010 with likely outsourcing in 2011 Council commissions arts activities through a procurement process Creative industries post in the LA funded jointly by Cultural Services and Economic Development Herefordshire Arts Forum – with two specialist networks (craft and literature organisations and individuals) Annual costs £500,000 p.a.

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Lincoln City A “Mixed Operational Model” combining “a range of approaches and structures some of which are linked through an umbrella programming organisation” Lincolnshire Arts Trust “Lincolnshire One” Lincolnshire One Venues (LOV) – Audience development organisation Lincolnshire One Arts Lincolnshire One Arts and Cultural Festivals Lincolnshire One Arts Practitioners and Voluntary Sector LOV not a registered organisation, staff are hosted by Leisure Connection (North Kestevern) Grant dependent

Rotherham Rotherham Council has rationalised its arts team (fallen from 5 to 1.5) with their role moving from programming, development and commissioning to strategic development. Social Enterprise (ROAR) develops and manages studio space for artists in the town centre There are also models of outsourcing of leisure services (alongside cultural services) such as Hounslow and Selby. Hounslow - The model involved establishing a “top company”, two charities and a trading subsidiary. The top company had charitable objectives but was not a charity but it provided management services to the three other companies. The model failed when the contract was not renewed in 2008

The group agreed that there will be further consideration to the relative merits of the models and those which may best serve Darlington’s needs after: •

Feedback and direction is received from the Working Together and Creative groups

Globe have provided a fuller report

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Outline Findings from Arts Mapping and Discussions with Stakeholders The first meeting of the Working Together group identified 5 key design principles which were:

fairness and collaboration

protecting everyone’s individuality

designed to support/facilitate an environment to work collaboratively

getting the best of the models (i.e. be bespoke to Darlington) including local good practices

designing something that “works” for all sectors

Subsequent conversations with stakeholders have provided further “food for thought” regarding the prospective models of both governance and infrastructure / support mechanisms. There is a diverse range of organisations and activities that that operate within Darlington. A mapping exercise has been undertaken, building on the work that Globe initially undertook but broadened to identify as many of the organisations and individuals (private, public, voluntary) that operate broadly something that could be considered to be associated with arts or culture. The list of the organisations is set out in Annex C. Governance No single view on how governance should look It was universally recognised that there should be an ongoing role of the Council (and Government) to ensure that the value of arts in terms of culture and direct / indirect economic benefit is recognised and acknowledged as part of their role. It should be recognised by the Council as contributing to the “wellbeing” of the town and that it forms part of the town The role of the Council should not be seen as the driver but the “enabler” There is a view that there is a need for the Council to maintain a role as the provider of premises There is also a key role for universities (and other organisations) The governance model must be clear, fair and transparent A Third sector-led model(s) suggested with:

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a) Central “Culture Hub” potentially comprising a single or consortium of third sector organisations b) The Culture Hub could provide a (virtual) central resource offering a range of services in a “common infrastructure” that could be shared across or accessed across the sector such as: a. Venues b. Marketing c. Finance and financial management support d. Quality Assurance e. Safeguarding f. Specialist Training g. Such a model could either be the central or form part of a wider governance model h. The third sector model is based on activities that can generate their own incomes / finance and any surpluses being applied to cross-subsidise the “noneconomic” activities and / or to reinvest in infrastructure and development c) It was generally accepted that there will be differing roles for different individuals and organisations

Negatives: •

Some individuals / groups seem to be given preferential treatment

Over reliance on public sector subsidies / grants – a need to move from “funding to financing” but a recognition that there is a need to find ways to resource some arts and cultural activity

A perception that the Arts Centre has become something that is quite difficult to access for “new” organisation

Positives •

Existing strong organisations

Good examples of partnerships and collaboration exist

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Ideas for future working •

Need to recognise the importance that arts have in individuals’ wider development

A need to develop the sector(s) including forging links with businesses and industry

Ideas within the third sector around establishing Darlington as a centre of excellence with examples of ongoing work on accredited training such as volunteering and apprenticeship

Strong desire to collaborate

Potential Sources of Arts and Cultural Finance and Funding

1) Privately raised commercial finance 2) Venture capital 3) Charities Aid Foundation / specialist financing bodies 4) Income from land and property assets 5) Loan finance secured against land and property assets 6) Public Sector Grants 7) Public Sector Contracts 8) Grants from grant-giving bodies (such as charitable trusts) 9) Earned incomes from goods and/or services including performances 10) Incomes from one-off events or projects 11) Subscriptions 12) Personal Charitable Giving 13) Corporate Charitable Giving 14) Incomes generated from indirect “income generators” such as merchandise 15) Sponsorship (private and public sector – See also Sponsume below) 16) Endowments and legacies 17) Interest earned from cash reserves

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A list of eight of the organisations that provide funding to arts-relating activities is attached (Annex B). There is also potential to access European Funding.

Alternative ways to deliver arts and cultural activities 1) Standalone entities 2) Shared premises 3) Shared services 4) Shared marketing 5) Volunteering

Examples of Other Potential Sources of Funding / Fundraising Sponsume – “Crowdfunding” What is "crowdfunding"? “Crowdfunding is a new way of helping turn great ideas into reality. It means gathering funding and support for great projects from a crowd of people who choose to back them. Crowdfunding is not donating, as backers always get something back from the project they help make happen. Each backer receives rewards in exchange for their support. That’s the number one rule of crowdfunding! Crowdfunding is not investing either, as backers get in kind benefits (not financial benefits) generally linked to the project” Source: http://www.sponsume.com

Conclusions and Recommendations Work to date has concentrated on speaking to stakeholders, mapping activities and collecting information. When the work of Globe is complete, it will put us in a better position to match the potential structures and governance models with the recommendations of the Spaces and Places group.

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It is recommended that the model we choose reflects the good governance principles and our locally agreed design concepts.

Next Steps To be agreed

Websites: www.carvergovernance.com www.charity-commission.gov.uk www.cicregulator.gov.uk www.ncsl.prg.uk/dccl http://www.sponsume.com

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Working Together Report  

The final report of the Working Together sub-group

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