Universitat Internacional de Catalunya - BarcelonaFunding for Culture
Main language of instruction: English
Head instructor
Dr. Francesc PRIOR - fjprior@uic.es
Dr. Josep TORRES - jtorresp@uic.es
Office hours
To be confirmed by email to fjprior@uic.es.
The course starts with an introduction of finance, in order to be able to understand how the decisions taken by the managers affect the profit and loss statement and the balance sheet of a cultural organization.
The course provides an illustration of the various sources of financing culture, focusing on the State, the market, and the private sector.
The analysis covers the following sources:
- Public direct financial support (subsidies, awards, grants, as well as lottery funds provided by central and lower levels of governments);
- Indirect public financial support (tax expenditures);
- Private financial support from non-profit organisations, business organisations and individual donations.
The analysis is both qualitative and quantitative. To best illustrate how culture is financed, the course explains data (where possible) in a wide cultural policy frame; basically at a European and Spanish level, including the analysis of arts organisational goals / objectives, priorities and decision-making patterns.
The course focuses on four main sources of funds for the arts: the government, the Non-Departmental Public Bodies (or QUANGOs as they were formerly known), the market, and the private sector (sponsors and donors). Each has its own rationale and tends to generate its own institutions and organisations. Any cultural organisation or project may need to take these sources and their consequences into account.
The same as for the Master's Degree.
To understand the different items of a profit and loss statement and a balance sheet.
To know the meaning of different economic and financial ratios.
To diagnose the economic and financial problems that a cultural institution may have.
To know the characteristics of the main sources of financing the arts and culture, and their motivations for funding cultural projects.
To set the funding needs of cultural projects and how they are related to the accomplishment of the organisational goals.
To highlight the financial composition of the different cultural organizations according to their mission (public, not-for-profit or profit-oriented).
To set the financing goals of the cultural organisations and projects.
To know what strategies the organisations use to obtain funding for its projects.
Basic competence
General competence
To search for and/or administer economic resources within the framework of an institution, a company, or a programme, project or cultural service.
Cross-disciplinary competence
Specific competence
The student:
Searches for and/or administers economic resources within the framework of an institution, a company, or a programme, project or cultural service.
Course’s overview. Course’s Coordinator: Dr. Francesc Prior
Session 1: Course’s overview (Professor Francesc Prior)
Sessions 2-8: Operational Finance (Professor Francesc Prior)
The aim of these sessions is to describe a simple model of financial analysis and diagnosis, or analysis of the profit and loss statement and balance sheet.
Firstly, the scope of operational finance will be exposed.
Secondly, before getting into the numbers, it is needed to try to understand a little bit of the business. Only if we understand the business we will be able to analyse the financial statement. Otherwise, wrong conclusions will be drawn. Different items of the business will be identified in order to understand it.
Thirdly, the profit and loss statement terminology is going to be clarified: sales, costs of goods sold, gross margin, salaries, overhead, EBITDA, depreciation, amortization, EBIT, financial expenses, EBT, taxes and net income.
Fourthly, the following economic ratios will be explained in order to understand the profit and loss statement: growth of sales, margin in percentage, EBITDA/sales, ROS, ROE, ROA, cash flow from operations, EBIT/ financial expenses.
Fifthly, the main concepts of the balance sheet will be clarified such as: cash, receivables, stocks, currents assets, fixed assets net, payables, taxes due, accrued expenses, spontaneous funds, credit, short-term debt, long-term debt and equity. Special attention is going to be paid to Needs of Funds for Operations (NFO) and Working Capital. The importance of self-financing is going to be highlighted in order to improve the financial structure of cultural institutions.
Sixthly, the following different tools to analyse the balance sheet will be analysed: identification of the main investments and financing methods, Sources and Uses (or Applications) of Funds (SUF) and risks of the balance sheet -with special reference to leverage ratios.
Seventhly, the following operational ratios will be explained and put a meaning: receivables in days, inventory in days, payables in days and days of cash.
Finally, a method to diagnose economic and financial problems will be explicated in order to know the real situation of the cultural institution.
Cases will be used in order to explain theoretical concepts and to practice the method learned.
Sessions 9-12: Public Funding of Arts & Culture (Professor Jordi Baltà)
- Introduction to public budgets and its principles: accountability, transparency, etc.
- An overview of rationales for public funding for the arts and culture. Recent trends.
- Direct and indirect forms of public funding for the arts and culture. Other forms of public support for the cultural sector.
- Overview of public models of financing the arts and culture: ministries vs. arms-length bodies. Some examples.
- The EU and its support for the cultural sector. General principles. Relevant programmes: Creative Europe and others. Some examples.
- Practical guidance for accessing public funds for the arts and culture and for managing project with public support.
Sessions 13-15: Private funding (Professor Oriol Aguilà)
Sponsorship
- What is sponsorship ? Sponsorship Definitions. An historical view.
- Developing a sponsorship strategy. How do you create a sponsorship plan? How to identify potencial business sponsors ? "10" steps to fundraise.
- Sponsorship: Brand Image, RSC, and the egagement with media.
- Experiences and examples around sponsoring opera and museums
- European benchmarking: tax models, and PanEuropean examples
- A classical model to Fund, and new horizons for Sponsorship: Big Donors, Friends, Cross Sponsorship, Crowdfunding.
The course will apply two methodologies:
1. Lectures: Theoretical concepts will be presented and discussed.
2. Practical exercises: students will have to solve financial exercises
Exam: 45%
Case (professor Aguilà): 20%
Case (professor Baltà): 20%
Participation (according to professor Prior): 5%
Participation (according to professor Aguilà): 5%
Participation (according to professor Baltà): 5%
Operational Finance
Public Funding
Private Funding