There is currently discussion about the introduction of new tax incentives for corporate and private giving to the arts in the UK. Unlike say the USA, the larger part of non-earned income for national, regional and local art museums and for "independent" non-commercial art galleries is from National or local government or the National Arts Councils (of England Scotland, Wales, Northern Ireland) . In general this covers or significantly contributes towards the basic staff and running costs but, increasingly the money is insufficient to provide realistic purchase grants or exhibition budgets. It has been suggested that if the Treasury were to seriously consider new tax concessions for corporate and private giving, this would only be agreed if it went with a cut back or elimination of part of the direct National government funding and the government funding to the Arts Councils. The situation on the UK is further complicated by the subject of The Lottery. Significant capital projects are now planned and Lottery funding for some have already been agreed, giving rise to the largest national capital input to the arts that any of us have experienced. But under the present rules, Lottery Funding cannot be used for the creation of endowment funds or direct running costs. One of the conditions of Lottery funding of capital projects is that a (variable) percentage of the costs have to be met from other sources. This has already led to the situation that the non-lottery contributions for projects already agreed, exceeds the annual total of current business sponsorship funding for the arts in Britain, which mostly goes towards revenue costs (including new productions, exhibitions etc) At a time when, despite government promises that Lottery Funding would be ADDITIONAL to the current level of direct Government funding to the arts and government grants to the National Arts Councils, we are seeing a cash cutback in annual Government funding to the arts which amounts to a significant cut (=A310 million) in real terms - at a time when many arts organisations are trying to deal with the problems of accumulating annual deficits. The National Museums and Galleries have lost =A319 million in rea= l terms in one year. The Government plans to cut a further =A33.2 million in the following financial year. The Government will have reduced the value of the arts grant (all art forms) in England by =A327 million by the end of its term in office - despit= e its manifesto pledge to "maintain support for the arts". (figures from the National campaign for the Arts) On this basis we will soon have some splendid new arts buildings with nothing going on inside them ! It has been suggested by some politicians that the Lottery money should replace capital AND revenue grants from central government to the arts, a move which is vigorously opposed by those working in the arts. Are we to see the arts in Britain *run as a Lottery *? We are interested in having the views and experience of art museums and galleries in other countries on the subject of the balance of funding sources and the problems they are currently facing. It would be very much appreciated if you could e-mail us summary information about your last year actual financial results and your budget for the current year, in the following format: YOUR LAST YEAR ACTUAL RESULTS and CURRENT YEAR BUDGET outgoings (please state currency) : Premises and general running costs Staff costs Collection management costs Exhibitions costs Education costs other costs TOTAL EXPENDITURE income (please state currency) : Central Government / Federal Local and Regional government =46oundations Business sponsorship (does this have tax incentives for the sponsor ?) Individual giving (does this have tax for the donors ?) Admissions income Income from touring your exhibitions income fromsupply copyright images, gallery publications etc net income from trading (bookshop, restaurant etc ) TOTAL INCOME Donations of works of art to permanent collection: value last year : private donors (did this have tax benefits for the donors= ?) AND could you let us have your views on the advantages and problems of the present balance you have between state, regional or local funding, business sponsorship, foundation and individual giving - together with your views on the balance that you would ideally like to see between the various funding sources. Finally could you identify problems that you see with funding sources in the near future. This information (please state if you wish it to be unatributed) will be used in additional written evidence to the National Heritage Committee of the House of Commons, London which is currently enquiring into the Funding of the Performing and Visual Arts - to which VAGA has already given written and oral evidence. Thank you very much for your help it is in a good cause ! Jeremy Rees Chairman, VAGA (Visual Arts and Galleries Association). Jeremy Rees Director, IVAIN [International Visual Arts Information Network] 24 Lots Road, London SW10 0QF e-mail [log in to unmask] voice 44 171 376 8759 fax 44 171 352 7055