What do Sam Mendes, Daniel Craig, Judi Dench, Ralph Fiennes, Naomie Harris, Phoebe Waller-Bridge and Ben Whishaw all have in common? Well yes, they’re all part of the billion-dollar James Bond franchise. But they’ve also all had their talent nurtured through public investment in arts and culture. More specifically, through a delicate, three-part funding model – a uniquely balanced mix of government investment, box office income, and philanthropy and sponsorship. This special and particular model fuels the UK’s global reputation as a creative superpower. Yet it is under severe threat. Increasing protests around elements of corporate sponsorship of the arts – most notably last month, when support from investment firm Baillie Gifford for the Hay, Edinburgh and Borders book festivals ended after pressure from Fossil Free Books – are starting to make the sector look too risky for corporate brands to back. What are the alternatives? Unlike in the UK, in Europe there is massive state subsidy. Stuttgart State Theatre, for example, is subsidised up to 70%. As a result, the average Stuttgart theatregoer feels little need to contribute through philanthropy, and although it’s a great way for artists to make work, ticket prices are high and there are questions about audience diversity. Who is the work for? Does it have broad enough appeal? By contrast, the US government provides very little funding for the arts. The annual budget of the National Endowment for the Arts, an independent federal body, is $207m, a tiny 0.005% of the total government budget of $4.49 trillion. This lack of government investment means that US arts organisations rely much more on box office revenue and fundraising than in the UK, and rely more too on individual philanthropy. But to appeal to the widest group of donors, and to make sure that all the houses are full, the work risks being less innovative and adventurous. What impact on climate change do such boycotts have? And why are the arts held up to this purist, unachievable standard? In the UK, although the arts are woefully underfunded, the (slightly haphazard) model we have gives us the best of both worlds. Unlike in the US, we have committed (if declining) funding from government that allows arts organisations to take creative risks. War Horse from the National Theatre is a particularly successful product of this approach. But unlike in Europe, UK state investment is a far smaller percentage of organisations’ total income (about 14% in the case of the Royal Opera House in 2022-23, for example). This means that UK arts organisations have to call on philanthropy and sponsorship to balance the budgets. The arts should engage with philanthropy and sponsorship. Culture doesn’t exist in a sealed bubble, it is part of society in the same way that business and commerce are, and it’s right that the arts should have an active and lively dialogue with business in this way – as they always have done (not to mention the sheer financial necessity of sponsorship because of the huge decrease in government and local authority spending on arts and culture). Corporate sponsors bring much-needed cash, and in many cases visionary support, too. But it’s important to understand that this sponsorship is a two-way street. From my long experience in this field, I know that corporate partners only engage in sponsorship of arts and culture because it makes business sense for them to do so. Ultimately, arts sponsorship is nothing more than two enterprises doing business with each other, a transaction that benefits both parties. The sponsor has business needs – hospitality, customer benefits, branding, staff or community engagement – that the arts organisation can help deliver, and at its best visionary sponsorship can be transformative for both organisations. Think, for example, of Uniqlo Tate Lates at Tate Modern, or Aviva Studios in Manchester. Despite this positive track record, the binary framing of protests against some corporate sponsorship of the arts are a dark cloud on the horizon, having a deadening effect across all sponsorship. Be careful of what you wish for. Other high-profile campaigns against institutions sponsored by fossil-fuel companies beg another question: if climate change is the most pressing issue of our time – and it surely is – then what positive impact on climate change do such sponsorship boycotts have? The sponsors carry on as they were, after all – it is the arts organisations’ precariously balanced budgets that lose vital funding. They are forced to do less and audiences lose out. And why are the arts in particular held up to this purist, unachievable standard? Does this mean that all sponsorship is fine, no questions asked? Of course not. But we need a mature, nuanced discussion that takes account of the reality of our imperfect, interdependent, interlinked, globalised world with all of its complexity. The UK’s arts and culture sector really is world-leading. Attacking the delicate funding model means we threaten it at our peril. The right to protest against sponsorships is legitimate and important, but is there not a more effective way to go about it? Current protests seem only to damage the long-term health of the arts. Visionary corporate sponsorship must be a bigger, not smaller, part of the future of the arts, and we all – governments included – should do everything we can to defend and encourage it. Martin Prendergast is a director of the European Sponsorship Association and a consultant specialising in cultural sponsorships and public affairs