The impact and effectiveness of the increase in government subsidies to professional theatres, orchestras and museums

The Finnish Ministry of Education and Culture increased statutory state subsidies to professional theatres, orchestras and museums by 50 million EUR in the three years from 2008 to 2010, an almost 80 % increase on that of 2007. The total government subsidy for these professional performing arts organizations and museums was 62.3 million EUR in 2007 and amounted to 111.8 million EUR in 2010.

A project for evaluating how a rather substantial increase in central government subsidies influenced the activities of theatres, orchestras and museums was started at CUPORE in May 2011. The aim was to find out the impact on the financial structure, volume and features of the activities of the ‘VOS’ institutions. First, by using financial statement data from these institutions, changes in the proportion of governmental subsidies to municipal subsidies and other income and changes in the various items of expenditure will be identified. Then, two Internet surveys were conducted among the management. Data on changes in the ‘VOS’ institutions’ activities and use of the increase in subsidies as well as perceived effects of the increase in subsidies was collected and analyzed. Qualitative analysis focused on activities for improving quality of contents and exhibits and on audience development activities of ‘VOS’ institutions.

In Finland, professional performing arts institutions and museum services are mainly financed by the state and the municipalities. Central government financing covers the costs of state-owned national cultural institutions. Through a statutory system of subsidies, the central government also supports municipal cultural institutions and the activities of independent, non-profit cultural and arts institutions. Municipalities maintain the basic cultural service systems and their infrastructure in collaboration with non-profit third sector organizations. The purpose of governmental financial transfers is to level out disparities throughout the country. (http://www.culturalpolicies.net/web/finland.php, p. FI-49 – 50, FI-58 – 68).

Under the statutory system of central government subsidies known as ‘VOS’ (the state’s share system, which came into effect in 1993), the statutory state share goes either directly to the recipient, e.g., to a local or regional theatre, orchestra, or museum, or to the municipality which is supposed to but not obliged to pass it on to an assigned municipal cultural institution. As the statutory state share did not react to the increase in the volume of activities or the increase in the costs of activities in 1997 – 2005, a revision to the system was needed.  In 2007, the reform of the statutory system compensated for the cost deficit that had emerged in the statutory transfers to arts institutions. (http://www.culturalpolicies.net/web/finland.php, FI-50, Fi-65)