Creative use of your inspiring venues to raise funds

A gallery is a wonderful way to enable the public to connect to a bygone era, provoke discussion, educate, inspire and to celebrate artistic endeavour and creation. But once regular visiting hours are over, are you making the most of your carefully curated venue?

It isn’t all that long ago that a trip to a museum or gallery meant simply gazing at the exhibits and perhaps grabbing a coffee and slice of cake in the café before the doors shut at 6pm. Now, after hours, many arts venues, and in particular those structured as charities and other not-for-profit institutions, are hosting a themed sleepover, crafting lessons or cocktail making classes. 

Fundraising can be a difficult business, especially for charitable arts venues and the advice that many are being given is that it’s time to get creative! External funding bodies need to consider their own lasting legacy and impact, and as such often look for evidence that an applicant is viable without their funding as they are usually keen to ensure grant recipients are well run, sustainable businesses. This means that any evidence of the generation of funds by the applicant in an intelligent, innovative and organised way is likely to impress funders looking to maximise their own funding / investment.   

Arts venues have for some time looked to maximise the use of the spaces they own and have benefited from the generation of new income streams in the process, but such activity historically simply involves the well-trodden path of letting businesses hire spare venue space to use for the usual corporate drinks events and meetings. However, increasingly venues are being used for more unusual activities – taxidermy lessons, knitting circles, pop up theatre and even hostels.  

These may be run by the venue owner themselves, but more frequently, unconnected businesses are seeking an unusual venue to host their paid-for events.

This creates some great opportunities, but it’s important to get advice about some of the finer details. Will you need to provide staff and/or other resources to assist in running the event and consider the need for extra security and protection of valuable exhibits? 

If you have an onsite café, are you tied in to using them for your event caterers? Can a third party event business make use of the kitchen facilities and on what terms will you allow them access to the premises? And if the venue is owned by a charity will this be considered to be a disposal of charity property for the purposes of the Charities Act 2011?

Careful consideration will also need to be given to the need to preserve the building/ venue for use for its primary purpose, whether this is a legal requirement in the case of a charitable organisation needing to ensure that it provides public access/ education, or a private gallery needing to ensure that the extra-curricular activities do not impact on the day to day running of the business. Use Agreements are usually required in order to clearly set out when each party may use the venue space, including the kitchen facilities, and to clearly set out the procedure required to manage bookings. 

Do you need an entertainment licence from the local authorities? For those galleries with modern works of art, consider whether the current filming and photography notices are sufficient and cover the type of use that may be made of the venue.

However, perhaps most importantly the legal structure of these arrangements needs some initial consideration in order to save tax and VAT. In the case of a charity, this activity is likely to be trading activity, requiring the need for a separate trading subsidiary in order to safeguard the charity from risk, and to maximise the income generated from the activity by structuring the arrangements in such a way so that the gross profits of the event can be passed to the charity gross of tax. With considered advice, you should feel comfortable in stepping away from allowing simple business drinks events and embrace the different, innovative and sometimes downright quirky uses that others may wish to make of your unique and inspiring spaces.

This article was written by Sarah Rowley and Natalie Elsborg. For more information please get in touch via sarah.rowley@crsblaw.com or +44 (0)20 7203 5370, or alternatively via natalie.elsborg@crsblaw.com or +44 (0)20 7203 5170.