Art & Economy: Increasing Philanthropy’s Role in Quebec Arts Fundingby Philip Ehrensaft
/ April 1, 2014
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The landmark work of Quebec’s Groupe de Travail sur la Philanthropie Culturelle (GTPC), headed by arts philanthropist Pierre Bourgie, was followed in very short order by concrete government actions to apply key GTPC recommendations. Quebec now provides the best Canadian example of how to increase arts sector resources by creating a hybrid model of private philanthropic and government financing.
Contrary to common perception, a slightly higher proportion of Quebec tax-filers donate to charities than the Canadian average: 85 percent versus 84 percent, according to statistics from 2010. However, Quebec donors averaged only $208 compared to the Canadian average of $446. This significant difference is probably because Quebec incomes are lower than the Canadian average, and income tax rates are much higher than in other provinces; lower disposable income means lower donations.
Quebec’s arts organizations are also the poor cousins among all charitable sectors: only 3 percent of Quebec’s philanthropy goes to the arts, well behind healthcare, education and religion. The most comprehensive data on philanthropy indicates that, in 2010, Quebecers donated only $45 million to arts charities. The pressing question, then, is how to get Quebecers to donate more to the arts, and how can Quebec arts groups be empowered to raise more funds?
Seeking to increase arts contributions, the Quebec government created the GTPC in January 2013. It included several elites from Quebec Inc., increasing the chances that the GTPC’s proposals would become concrete policies.
The GTPC worked intensively and Vivement, pour une culture philanthropique au Québec; its thoughtful analysis of arts funding, was tabled on June 11, 2013.
In short order, the GTPC recommendations on tax deductions for charitable contributions to the arts, intended to increase arts contributions by 50 percent by 2014, to $68 million, were officially implemented by the Ministère de Finance with a quietly issued technical bulletin. Four new tax deductions rules for charitable contributions to the arts, designed to stimulate that increase, were announced on July 3, 2013: (1) an additional 25 percent tax credit for a first important contribution to the arts; (2) the tax credit rate is increased to 30 percent for individual contributions to cultural organization; (3) incentives to donate works of public art that will be installed in accessible locations or teaching institutions; (4) increased tax deductions for donations of buildings that will house artists’ workshops or cultural organizations.
Since its creation in 2006, Québec’s Mécenat Placements Culture (MPC) program has been a valuable incentive for arts groups to create long-term endowment funds. Conventional wisdom at the time was that endowment funds, with their annual income, would ensure the long-term survival of arts groups, and eventual decrease such groups’ dependence on government grants. For every dollar raised, MPC matched one to three dollars, depending on the organization’s size, measured by its annual revenues.
However, locking up fundraising proceeds for 10 years proved a deterrent for some smaller organizations, so in 2009, the program allowed the portion allocated for the two-year reserve fund to be used as a guarantee for a credit line at a bank. This was not the best solution, but an improvement.
GTPC recommended more changes to MPC, which were announced with a greater splash than the new tax deduction rules, on October 1, 2013. According to Le Devoir’s Fréderic Doyon, the gradual, modest increases in MPC funding will simply restore the program’s peak 2010 funding of $10 million to that same level by the year 2015, not even indexed to inflation.
However, other changes to MPC reduced bureaucracy and added two components that gave funding to more organizations: (1) organizations can now fund-raise before applying, reducing the wait time and administrative procedures; (2) a new less lucrative component that allows for immediate funding; and (3) a new component to help ensembles perform outside Quebec, thereby supporting arts exports.
Arts organizations must confirm that they meet two criteria to be eligible: (1) be a legally registered charity; apparently the procedure to obtain a charitable tax number has become more streamlined; and (2) be eligible for funding from one partner in the MPC program: the Bibliothèque et Archives nationales du Québec (BAnQ), the Conseil des arts et des lettres du Québec (CALQ), the ministère de la Culture et des Communications (MCC) or the Société de développement des entreprises culturelles (SODEC). An organization’s size and projects define the level of the MPC’s matching dollar multiplier.
So it’s time to go out and raise the money as fast as you can, and submit a professionally prepared, legally valid financial statement. The funds will be allocated on a first-come, first-served basis. If the MPC’s allocated budget for the government’s current fiscal year is used up by the time you submit your organization’s financial report, you get put on a waiting list for the next fiscal year.
There’s no waiting period and no committees that evaluate competing submissions to decide who wins and who doesn’t.
Beyond interjecting more dollars for the arts via new tax deduction rules and much less bureaucracy, philanthropy’s augmented role will increase the number of citizens who perceive themselves as stakeholders in the arts sector.
That will be the most important impact of this new, very smart arts financing policy.
MPC Contact: Gilles Pettigrew
Watch a one-hour webinar moderated by Gilles Pettigrew, available on the MPC website.