With charity funding in crisis, we need more private philanthropy

Sport, the arts, education and community causes have all enjoyed public and private support during the boom years, but funding from both sectors is in crisis.

There are likely to be significant cuts to public expenditure of the arts, and the picture is similar for sport and community-focused projects, where lottery funding and European money have been subtly diverted elsewhere.

In Glasgow alone, where more than 150 organisations have shared about 3 million in annual council funding, there are likely to be cuts in public funding of 10 to 20 per cent. The Edinburgh International Festival is also facing a public investment reduction of more that 200,000 over the next three years.

Many arts organisations are currently solely dependent upon council funding. Others survive courtesy of the Scottish Arts Council; but its successor, Creative Scotland, will have a tighter remit and thus more limited potential to invest in worthwhile projects.

Events such as the London Olympics, where there is a legal and political commitment at Westminster to deliver, are already leveraging more public resources – particularly with the impact of inflation on construction costs – and this will leave other causes in Scotland further stretched.

In the private sector, sponsorship has largely been off the agenda, except where sponsorship can reach target audiences more effectively than advertising: Tennent's recent deal with Celtic and Rangers is one (though non-charitable) illustration.

Certainly, there are also some notable charitable programmes, such as that by Tesco's bank, which has pledged a seven-figure sum to community sport in Scotland; or ScottishPower's continued support of the Celtic Connections festival. However, in tight fiscal times it is extremely unlikely that charitable sponsorship by government is able to plug the lacuna left by corporations attempting to repair their balance sheets.

Perhaps there has been a perception of corporate indulgence in some quarters, meaning that institutional shareholders have acquired a negative attitude to certain forms of sponsorship. Royal Bank of Scotland's Formula One exposure is one such case that has perhaps jeopardised future, more altruistic expenditure.

The main problem for corporate sponsors is usually the time lag between the investment and the commercial return. Much of what is sponsored has an indirect, public-relations style effect that is difficult to quantify, particularly in the short term.

So where does that leave needy causes? One possibility is a resurgence of philanthropy from the wealthy. There is physical evidence of past altruism all over Scotland, in buildings such as Paisley's Town Hall or McCaig's Tower in Oban. More poignantly, there is intangible evidence through the far-sighted philanthropy of the educational trusts set up through our universities to further human endeavour and widen educational access.

Duncan Bannatyne, such as Andrew Carnegie before him, has set a goal of dispersing his fortune within his lifetime. Others, including Tom Farmer, Tom Hunter and Ann Gloag, have also gifted much of what they have amassed. These individuals are aware of the widening gap between rich and poor, and the need for redistribution.

Scotland will desperately need the generosity of successful entrepreneurs to give others the chance to fulfil their potential in a world where corporate and public funds are in diminishing supply.

Russell Campbell is programme leader of the MSc International Marketing course at the University of the West of Scotland.