Painting in Oil - Tainted donations and the arts.

August - Its Festival season here in Scotland. In Edinburgh the International Festival, Fringe and Book Festival are all underway. In Pittenweem, Fife the annual arts festival has just started. A joyous time of year for all art lovers.

It’s also the season when funding for the arts comes under the spotlight. Greta Thunberg has just pulled out of the Book Festival because it is sponsored by Baillie Gifford, major funders of the arts in Scotland and, as fund managers holders of significant investments in the fossil fuel industry. Without their support the book festival (and much else) would probably come to an end.

Whilst it is sad that one of the worlds most effective eco protestors will not be coming to Edinburgh it would be even sadder if Scotland’s incredible arts sector was destroyed by being conflated with environmental activism. Both are very important but they are separate and both are losers if they work against one another.

Last month Andy Haldane, CEO of the Royal Society of the Arts and former Chief Economist at the Bank of England accused the charity sector generally of sometimes having a rather infantilised relationship with central government with an attitude of “we’re doing all these good things so give us more money”, without backing up its claims with clear evidence and without necessarily seeking alternative sources of financing.

It’s not just the sectors relationship with government that should be under the spotlight. Charities also need to consider carefully their relationship with corporate sponsors whose patronage sustains so much of the arts world.

In 2019 the National Portrait Gallery severed its links with the controversial Sackler Trust foregoing a £1 million donation. Later that year the gallery also came under pressure and severed its links with BP who had sponsored its annual portrait competition for 30 years. The National Gallery of Scotland has also severed links with the oil giant. Hard decisions to reverse.

More recently the “Me Too” movement has shone an uncomfortable light on the fortunes made during the slave trade 2 centuries ago which still endow some of our greatest institutions. Funding for charities is coming under increasing scrutiny when its source is somehow considered to be tainted by the way in which it was first made.

At the same time public funding has come under huge pressure. International development budgets have already been slashed and funding for sectors such as the arts will not be at the top of the government priority list. When he was Culture Secretary, Oliver Dowden warned museums that they risked their public funding if they refused to display artefacts or pull down statues because of public pressure. Charities must beware of engaging in virtue signalling.

Charities are going to need to be very careful if they want to be able to both refuse certain sources of private funding and apply for public funding.

Where there is a direct conflict between the source of funds and the charity’s mission the case is often fairly simple. It would be perfectly reasonable for a cancer charity to turn down tobacco money or an environment charity to reject fossil fuel money on ethical grounds. So far so good.

Refusing donations because they are at variance with with a charity’s trustees and employees personal views (rather than the charity’s purposes purposes) gets into difficult territory, especially when there is nothing illegal about how the money has been made. Trustees must act in the best interest of the charity and turning away much needed funds, risking the ability of the charity to fulfil its work needs to be objectively and transparently justifiable.

So how should trustees deal with the question of what they consider to be tainted money?

If they are going to consider turning away funds trustees must justify the action with resilient, defensible policies. Donations need to be considered agains robust criteria established before an offer is made and not on a case-by-case basis. Trustees must leave their personal prejudices at the boardroom door.

Just giving in to the loudest pressure group is a dangerous road to go down. The National Gallery’s termination of funding agreements with oil companies hasn’t stopped Just Stop Oil protestors throwing tomato soup over Van Gough’s “Sunflowers” in the National Gallery or the Scottish Group eco group This is Rigged defacing Victoria Crowe’s beautiful portrait of The King in the Scottish National Gallery’s collection.

On justification might be that, by accepting such money, a charity might prevent even larger sums being raised form other sources. Possibly they could also argue that it could impact their ability to attract the best talent or dent their visitor numbers, effectively restricting their ability to fulfil their purpose.

In the case of the Sackler Trust trustees are entirely justified in refusing donations that have been made illegally, but what should they do about payments from endowments which, by todays standards are morally and legally reprehensible but were perfectly legal when the original fortunes were made? A clear, logical, defensible policy that is in the charity’s best interests is needed.

Policies need to be be appropriate to the charity’s mission and therefore also need regular reviewing. In the light of the war in Ukraine people have developed a far more nuanced approach to energy security. Perhaps its time for charities to review their relationship with oil too.

Just refusing donations from business and then expecting government to fill the gap isn’t an acceptable approach.

William Booth, the founder of the Salvation Army famously said “the trouble with tainted money is t’aint enough of it.”. You need to have a good reason to disagree with him.