The analysis of cultural policy models and funding mechanisms of the culture sector in Eastern Europe

Belarus 2022
Framework
The independent culture sector had an impact of several structural issues, especially in post-socialist countries. One of many issues is connected with the funding mechanism of culture sector. There is a need for redefining and reconsidering of these aspects because of the ineffective or non-transparent models. It has to be done if we strive for sustainability of cultural organizations and civil society initiatives and, eventually, plurality provided by the third sector (civil society) involvement in cultural activities.

In particular, our greatest challenges in this area are in the fields of culture and art. These fields are under heavy repression and lots of artists lost their jobs, got a career ban or had to emigrate.

In January -March 2022 The Belarusian Council for Culture with the support of Danish Cultural Institute through the New Democracy Fund program and in cooperation with the partners from Coalition of the Independent Cultural Sector of Moldova (Moldova), CuMa Lab (Georgia) and Belarusian Pen Centre conducted a series of seminars to present and discuss the cultural policy models of several countries in Eastern Europe titled "Inclusive Cultural Policies, Open Institutions and Transparent Funding Mechanisms for Culture in Eastern Neighborhood Region" https://cscirm.wordpress.com/

This analytical document was prepared by the Belarusian experts and it is based on a series of seminars and the documents provided by the experts with the involvement of International NGO Eurobelarus and Forum Civ.
1. Introduction
The culture sector is susceptible to constant change and ongoing reform process in the Eastern Partnership countries which include Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. These countries started to shape their independent cultural policy after the disintegration of the Soviet Union. Public structural change and the integration with European cultural space in several countries led to the transformation of conventional cultural institutions such as the Ministry of Culture and the creation of new funding mechanisms of culture sector alongside new models of culture management. At the same time, as will be seen from the review, Georgia, Moldova and Ukraine declare and strive to achieve the equal access to budget and grant financing of state and independent agents of culture including the EU grants. All that contributes to sustainability of cultural organizations and civil society initiatives. In the meantime such countries as Belarus rather inherited cultural institutions and vertical management system from the Soviet Union than transformed or reformed its culture sector. There are great challenges in the fields of culture and art in current Belarus especially now when these fields are under heavy repressions and lots of artists lost their jobs, got a career ban or had to emigrate. The State, represented by the Ministry of Culture and the Council of Ministers of the Republic of Belarus, is the main regulator and legislator of public relations in the field of culture in Belarus. They define expenditure patterns and performance targets of public cultural institutions which implement state policy in its area.
a. Overall context/ the situation with the culture sector in the Eastern Partnership region and Belarus
It should be noted that due to the various programmes of the European Union and the work of other European and American donors a powerful independent culture sector was recently formed in post-Soviet countries.
At the same time in Ukraine, for example, the independent culture sector actively cooperates with the state sector, and in Belarus, on the contrary, opposes it in many ways.

Regulation of the relations between the European Union and its neighbours is based on the EU global policy and the updated European Neighbourhood Policy which indicates there is a need to focus on improving stability and resilience of Eastern neighbours. Speaking of the agenda of the European Union, culture is one of the tools for supporting democracy, development of civil society and maintaining stability in the region. One of the largest cultural programmes is a programme titled "Creative Europe" - this is an EU programme which was founded in 2014 with a budget of 1.46 billion euros for culture and creative sector (2014-2020). In November 2020 this programme was extended for seven years (2021-2027) and its budget was increased to 2.2 billion euros. "Creative Europe" consists of two subprogrammes: "Culture" (which provides the advancement of creative and cultural sector) and "Media" (it supports the development and distribution of audio-visual creative products). The organizations from such Eastern Partnership countries as Georgia, Moldova, Ukraine and Armenia can apply for participation in the subprogramme "Culture" because the aforementioned countries officially take part in the programme and pay an official fee for participation. The full-fledged participation of third parties in the subprogramme "Media" depends on harmonizing their legislation in the audio-visual sector with European laws in this area (source).

In addition, the review provides the examples of third countries outside the Eastern Partnership such as Switzerland, Romania, Croatia and Estonia. Each of them underwent its period of transformation and is of interest in terms of created actors and financing stakeholders in the culture sector.

COVID-19 pandemic and the economic crisis caused by it, the political crisis in Belarus and the war in Ukraine certainly had an impact and still have a significant influence on the culture sector. However, we focus on the created mechanisms of financing cultural projects and activities and to a lesser degree analyze the influence of the occurred change on the cultural projects and activities themselves.

The idea to review the existing culture financing models is aimed at finding the models which could be integrated into the current situation as, for example, in Moldova. Or it could help to find the models which could prepare such a change in the future, as in the case with Belarus.
b. The formulation of the problem
The purpose of the document: collecting and organizing the data along with the development of the recommendations for the creation of systematic support of independent culture in Belarus and Moldova; defining the limits and possibilities of various models of culture and arts sector financing which will be used to design the Resource Centre or the Fund for Belarusian Culture Support.
This report is based on the data and information about the models of culture sector financing in the aforementioned countries and relies on open sources. The following text summarizes the information from international analytical documents which are focused on the overview of cultural policy and the models of culture sector financing, the data taken from the sites of the Ministries of Culture and other institutions as well as public presentations by experts and private consultations.

This kind of approach has its limitations. This way of providing and gathering information presents the facts in a rather simplified format. Therefore some aspects and nuances of cultural policy remain unavailable and elude us just on the analysis stage. We've been trying to minimize this lack of depth and vision of the system from within (that is the case with foreign countries) and use the information provided by experts in a series of presentations organized by the Coalition of Independent Culture Sector of the Republic of Moldova and published on the site: https://cscirm.wordpress.com/

The data from open sources and the following reports were used to prepare this review:

  1. Chatham House research "Cultural revival and social transformation in Ukraine. The role of culture and arts in supporting sustainability after Euromaidan" (2020).
  2. UNESCO report on Ukraine (2019).
  3. Ukrainian Cultural Foundation Strategy for 2019 -2021.
  4. Ukrainian Institute Strategy for 2020-2024.
  5. The country profile of Georgia from "The Compendium of Cultural Policies and Trends" (2018).
  6. Georgian Culture Strategy 2025 (2016)
  7. The Cultural Policy Overview of the Republic of Moldova (2019)
  8. The country profile of Romania from "The Compendium of Cultural Policies and Trends" (2020)
  9. Compendium of Cultural Policies & Trends https://www.culturalpolicies.net/database
  10. Annual reports of "Pro Helvetia Foundation" (2020, 2021) and the site https://prohelvetia.ch/en/
  11. Monitoring the implementation of "The UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions" by the Republic of Belarus, The Centre of European Transformation and the International Consortium "EuroBelarus" (2019)
  12. The report on the development of the cultural heritage sector in Belarus, Stepan Stureyko, the EU and the Eastern Partnership Programmes "Culture and Creativity" (2017)
c. The methodology and restrictions of the research
2. Analysis
Since 2014 Euromaidan Ukraine has taken a path of renewal and reform in its cultural policy. Therefore independent cultural initiatives has had a greater influence due to the financing by new cultural governmental institutions. Their appearance marked the transition from the post-Soviet culture sector management to the new one which bridges the gap between state and independent cultural figures.

The Long-term Cultural Development Strategy in Ukraine (Reform Strategy, 2016) was adopted in 2016 and included the refinement and upgrading of legal, structural and financial tools of cultural support, etc.

A series of legislative reforms and political initiatives led to the creation of new state actors in the culture sector such as the Ukrainian Cultural Foundation, the Ukrainian Institute and the Ukrainian Book Institute. Also it restructured the former State Agency for Cinema of Ukraine. These four organizations have become the key providers of funds for the culture sector. They promote new governance and management principles, perform an analysis and indicate the obsolescence of the existing financial system and legal framework (source).

At the end of 2014 Ukraine ratified the Ukraine–European Union Association Agreement which came into effect September 1, 2017. The Agreement includes chapter 24 “Culture” with 4 articles listing the obligations of the parties in the culture sector. That includes the proper implementation of the 2005 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions (source).

In 2016 Ukraine joined the EU programme “Creative Europe” which supports the culture and audio-visual sector. The Ukrainian culture, audio-visual and creative sector got the opportunity to have the EU financial support, work across Europe, reach new audiences and develop the skills needed in a digital area, which also preserves cultural and language identity (source).

The Ukrainian Cultural Foundation
In 2017 the Ukrainian Cultural Foundation (UCF) was created to provide the equal access to finance for state and non-state institutions, bridge the gap between them and release the Ministry of Culture from the duty of allocating funds between artists. The UCF aims at promoting the establishment of modern Ukrainian competitive cultural and art projects. The key objectives of the foundation are expert selection, financing and monitoring of the cultural projects supported by the Ukrainian Cultural Foundation. The UCF is a state institution, its activity is defined and coordinated by the Ministry of Culture of Ukraine. The UCF has developed a strategy where the strategic aims are the following: strengthening institutional and financial capacity; promoting the creation of the cultural product; strengthening the role of culture in the development of society and the internationalization of Ukrainian culture.

During the first two years after its formation, the Foundation has sponsored over 700 projects in all 24 regions of Ukraine. The Foundation involved about 500 sectoral experts - from the civil society, local authorities and academic sphere - to assess the applications for funding. That solidified its position as a bridge between a state and cultural creative industries of Ukraine. The UCF also set up a partially automated application process to minimize the conflict of interest between experts and raise efficiency.

- The budget for 2019: 16,7 mln. euros
- The budget for 2020: 20,3 mln. euros, was decreased to 11,66 mln. euros after the budget cut connected with COVID-19 (source)
- The budget for 2021: 20 mln. euros (695 mln. hryvnia)

During the grant season-2021 the Ukrainian Cultural Foundation supported 546 projects, signed 510 agreements about the funding provision and 36 agreements about scholarships with a total value of 499,3 mln. hryvnia and 3,9 mln. hryvnia respectively.

The structure of the UCF is the following: the Supervisory Board, the Foundation administration and Expert Councils. The administration of the Foundation includes: the fund management, a project department, a communication and public relations department, an analytical department, a department of international cooperation, a 'Creative Europe' programme department, a project finance department, an accounting department, a planning department, a procurement and contract management department, a legal support department, a documents, organization and control branch, a programme technology branch and an economy security department. Expert councils exist for each Foundation activity and include the representatives of different cultural industries (source).

Currently, there are 9 grant programmes in operation: 'culture without barriers', 'audio-visual art', 'an innovative cultural product', 'cultural heritage', 'Research.residence.scholarships', 'the cultural capital of Ukraine', 'Grand event', 'Culture. Regions' and 'Culture Plus'. Each programme has its lots, the date of application and the budget. More details of the lots can be found on https://www.ucf.in.ua/ (Open Calls).

In 2018, as a result of 11 strategic sessions with the involvement of experts and practitioners from the cultural, creative and audio-visual spheres, the Foundation Strategy for 2019-2021 was developed. Further during this period the Strategy and its tools and mechanisms had to be corrected and improved, which had to create the long-term strategy for 2022-2027 for the Ukrainian Cultural Foundation.

The Ukrainian Institute
The Ukrainian Institute began functioning in 2017 by order of the Cabinet of Ministers of Ukraine. The Institute was created to promote "opportunities for interaction and cooperation between Ukraine and the rest of the world". The Institute encourages the participation of Ukrainian artists in international platforms. It also develops the potential of a local creative sector via international cooperation and the stimulation of Ukrainian studies and teaching Ukrainian all over the world.

The mission of the organization is to strengthen the international and internal identity of Ukraine through cultural diplomacy. The activitity of the Ukrainian Institute is divided into sectors: cinema, music, visual arts, literature, performing arts, academic projects and programmes, image projects and programmes, the development of cultural diplomacy and research.

The majority of the Institute events in 2019 were connected with the programme “Bilateral Year of Culture Ukraine-Austria”, which included joint projects with Austrian museums and universities, art exhibitions and festivals along with the Ukrainian Culture campaign in the Austrian media. The Ukrainian Institute reports to the Ministry of Foreign Affairs (source).

- Budget for 2019: 1,760,591 euros.
- Budget for 2020: 2,285,271 euros, was later decreased to 1,442,869 euros after the budget cut connected with COVID-19(source).

The strategy for 2020-2024 for the Ukrainian Institute was developed, and it included the main priorities of the foreign cultural policy of Ukraine.

The Ukrainian Book Institute
The Ukrainian Book Institute was founded in 2016 and it supports particular publishing projects, popularizes reading, donates books to libraries and arranges Ukrainian stands at international book exhibitions. It also creates the free electronic library of Ukrainian culture. The library reform remains a major challenge because librarians need to be retrained and repositories should be digitized. The budget for 2020: 4,401,479 euros, decreased to 2,914,886 euros after the budget cut connected with COVID-19 (source).

The State Agency of Ukraine for Cinema
The state Agency of Ukraine for Cinema was founded in 2006 but has started to actively develop only since 2014. The new law on state support for cinematography was adopted in 2016 and provided the budget funding equivalent to 0,2 per cent of GDP for films, TV programmes and series production. In accordance with the law, filmmakers get an opportunity to cover 80% of production costs from public funds. Due to it, in the period between 2014 and 2019 the budget for co-financing of film production increased by 700 per cent from 63 mln. hryvnia to 505 mln. hryvnia. During the same period at least 173 films were released - a significant increase in comparison with the previous years. The share of domestic films in the country’s cinemas for the same period has risen dramatically - from 1,7 to 8%. A number of Ukrainian films received prizes at international film festivals. The State Agency of Ukraine for Cinema also supports domestic film festivals, participation in international film markets, promotion and distribution - all that contributed to a creation of a dynamic and fully functioning national film industry (source).

In 2017 an educational programme Cultural Leadership Academy was established, which was aimed at training and professional development of managers in the field of culture. In 2017 the Concept "Decentralization: the culture sector" was also introduced establishing strict indicators of decentralization reform in Ukraine in the field of culture. This enabled the development of a road map for further decentralization in the culture sector and the involvement of regions, cities and towns, as well as communities (source).

As new cultural institutions come on the scene with new standards of governance and management, the Ministry of Culture was more resilient to change, demonstrating that to build new institutions from scratch could be simpler rather than reform the old structures.
2.1. Support and funding models in the fields of culture and art in Ukraine
The Ministry, which has changed its name several times over the years and is now known as the Ministry of Culture and Information Policy, still maintains a number of outdated Soviet practices such as the support for official creative unions. It also failed to provide the necessary incentives to improve the performance of publicly funded institutions.
In the 2017 audit commissioned by the EU, it was noted that "the Ministry should move from command and control management of cultural institutions to a flexible policy approach", "evidence-based monitoring and policy-making" and "reorienting towards greater participation and communication" (source). Responding to these recommendations and under the pressure from civil society, the Ministry has made progress in separating the development of cultural policies and their implementation, which minimized conflicts of interest and corruption. It was decided to form a number of separate institutions, each responsible for a certain area. However, by early 2020, only one such agency had been established - State Agency for Arts and Art Education (its heads are appointed through open competition) (source).

At the end of 2020 The Verkhovna Rada adopted the Law "On Amendments to the Tax Code of Ukraine on State support for culture, tourism and creative industries". The Law provides for tax exemption of targeted grant funds, establishing the reduction to 7% of VAT on cultural products.
It is worth noting that Ukraine is on the way to reform support and financing models for culture and its experience can be useful in establishing such mechanisms in other post-Soviet countries.
After the collapse of the Soviet Union and until today, Georgia’s cultural policy is in the process of development and establishment. With the participation and support of the EU, the main directions and priorities were established, and Cultural Strategy 2025 was established.

Private companies offering cultural goods and services were generally formed independently of the state’s cultural policy and acted without the state support.
2.2. Support and financing models for culture and arts in Georgia
However, a partnership has been established between the Ministry of Culture and Monument Protection of Georgia and some companies involved in publishing business, concert business, etc. In general, relations between central and local authorities and state cultural institutions and private initiatives can be characterized as irregular; the contacts between them are not permanent and are limited to joint cultural activities and projects.

In the first half of 2015 Georgia joined the programme Creative Europe, which led to the transformation of the culture sector.

In 2016, with the participation of European experts, Cultural Strategy 2025 was developed and adopted (July 1 2016 №303). This strategy is a long-term strategic document of the Government of Georgia, defining the vision of the State, objectives and perspectives, taking into account the various problems which the culture sector in Georgia faces.
Strategy objective: Georgia is a creative country and a regional centre where innovation and creativity, as well as the preservation and revitalization of the national heritage and cultural diversity, are fundamental principles of social well-being and sustainable development.
The Mission of the Government of Georgia in the field of culture is the following: to create an enabling and enriched environment in which the national heritage and cultural diversity are well preserved and their potential fully developed, the creative business is developed and the cultural diversity is promoted.

The Ministry of Culture and Monument Protection of Georgia developed the document in cooperation with other public authorities and with active public participation. The strategy was developed using three principles: publicity, transparency and inclusiveness (source). To develop and implement the concept, a special department of cultural management (6 persons), a ministerial working group (10 members), an inter-ministerial commission (41 members), a sectoral steering committee (34 members) were established. The process of creating the strategy was supported by the EU institutions, and the Council of Europe and the European Union welcomed this cooperation. The main principles of the strategy are: publicity, civic participation and transparency. It is based on cooperation with state bodies and municipal authorities, the non-profit sector, international organizations, the business sector, educational institutions, independent cultural professionals and the general public, initiation of institutional and legislative reforms, which constitute the basis for the development of the cultural sector in Georgia. In addition to the traditional areas of culture, the Cultural Strategy 2025 focuses on the development of creative industries. This is one of the main tools for strengthening the business capacity of the cultural sector and sustainable development of the country as a whole (source).

According to the Strategy and also with a purpose for its implementation, a new state organization "Creative Georgia" was created in 2017. "Creative Georgia" is a legal entity established under the Ministry of Culture and Monument Protection of Georgia, whose spheres of activity are commercialization of the creative sector and support for its sustainable development. Creative Georgia’s Roadmap for the creative industries sector was developed on the basis of recommendations from a series of roundtables with sector representatives held in September 2016 and under the guidance of leading EU experts within the framework of the EU-Eastern Partnership programme "Culture and Creativity". The aim of the document is to define the vision, objectives and associated time frame, with specific actions to be taken.

Nevertheless, Georgian cultural policy expert Levan Kharatishvili notes the weaknesses of the 2025 strategy, in particular that it is a "strategy as a menu", i.e. it offers different development options, but does not assign the necessary priorities for the cultural policy of Georgia. In addition, according to the expert, after several years of implementation of the document, the Ministry of Culture did not conduct an evaluation of the implementation of the document and the analysis of what was achieved (source).
In recent years, the Ministry of Culture has undergone a number of optimizations and reforms, which have had a negative impact on cultural policy and funding because culture was part of other ministries and was not a priority.
Thus, the Ministry of Culture and Monument Protection was transformed into the Ministry of Culture and Sports (2017 - 2019), then it was transformed into the Ministry of Education, Science, Culture and Sports (2019-2021), and in 2021 it was included in the Ministry of Culture, Sports and Youth Affairs. There are reserve funds of the President of Georgia for Culture, Monument Protection and Sports and the funds of the Government of Georgia, which finance emergency programmes, including in the field of culture. Such programmes are carried out in cooperation with the Ministry of Culture and Monument Protection and contribute to a more centralized state cultural policy. The Presidential Administration cooperates with the Ministry of Culture and Monument Protection in planning, financing and organizing all major public cultural events in Georgia and abroad (source).

According to the legislation of Georgia, the Governments of the Autonomous Republics of Abkhazia and Adjara have their own Ministries of Culture, which are responsible for programmes within their administrative boundaries. Local authorities (municipalities) and self-government (sakrebulo - city or village council) are responsible for cultural activities in the regions.
Departments of culture, cultural heritage and monument protection of local self-government are structural subdivisions of local self-government. Most cultural institutions (theatres, clubs, museums, libraries, cultural centres and houses, art and music schools) under the jurisdiction of local governments and self-government have the legal status of NGOs, although they receive public municipal funding (source).

The main cultural events (e.g. exhibitions, concerts, festivals, performances, etc.) are financed from the state and municipal budgets. Most of Georgia’s funds from private foundations are allocated to cultural heritage. There is a whole series of private foundations, among which is the private fund Kartu, owned by the oligarch Ivanishvili (source), the private fund Adjara Group, which actively finances modern art in Georgia.

An important actor of the cultural scene is the Georgian National Film Centre (GNFC). The Film Company is a state agency responsible for promoting the state financial support of film production, industry development and international activities. GNFC is an independent legal entity of public law that receives annual funding from the Ministry of Culture and Sports. The Film Centre receives part of funding from European funds (source). Thanks to the activity of the Cinema Centre, a cashback system was created for the return of funds when shooting films in Georgia. A special book fund was also established for the Frankfurt Book Exhibition.

As far as taxes are concerned, the following activities are exempted from VAT (in agreement with the Minister of Culture and Monument Protection of Georgia): restoration, rehabilitation, design and research of monuments included in the list of world heritage belonging to the category of national importance or (and) religious purpose; sale and production of printed materials, including books and the press. According to Article 206 of the Law, the following land areas of organizations are exempt from property tax on the relevant object of taxation: the organizations for the protection of natural and historical monuments, where there are structures which are considered the historical, cultural or (and) architectural monuments by the State, if they are not used for economic activities, which does not imply the realisation of tickets.
As a result of the review, it can be noted that at the moment there is no single transparent system of funding the sphere of culture and art of Georgia in the form of a fund, although such expectations were placed on "Creative Georgia" organization.
Most national cultural projects are supported by the Ministry of Culture or municipalities, while many independent projects are supported by external support and rely on international funding and funding from private foundations and businesses. But not everyone has the skills and knowledge to receive international funding.
The present cultural policy of Romania began to take shape after the 1989 revolution on the basis of the previous model. At the moment, there are still problems in the distribution of areas of responsibility for cultural policy, but there are some practices worth considering. These include the establishment of a public fund to finance non-governmental projects and initiatives, as well as the practice of distributing 2 per cent of the income tax on cultural and social initiatives at the discretion of the payer.

In Romania, a number of strategic documents aimed at transforming the cultural model, have been developed. Thus "Sectoral Strategy for Culture and National Heritage 2014 - 2020" provided for the amendment of the law on heritage, the law on patronage in the field of culture and art. One of the points of focus is the official status of the artist, there are a number of initiatives to develop public policies to support and stimulate the cultural and creative sectors (source). Despite ongoing efforts to reform the cultural model, the creation of initiatives and the drafting of documents and legislation, these have not been translated into effective cultural policies or approved action plans.
2.3. Models of support and financing of the sphere of culture and art in Romania
The main actor in the Romanian cultural sphere is the Ministry of Culture. The Ministry is a donor and provides strategic funding for the cultural sector, supporting institutions and large-scale cultural projects.
Such projects include, for example, the "European Capital of Culture'' and regular major festivals. However, the Ministry of Culture of Romania is not involved in the distribution of all funds allocated to culture. For example, the Enescu Festival directly receives separate funding from the Government. Also, 42 cultural directorates in the regions and Bucharest receive direct funding for their activities. Funding is also provided at the local level through the mayoralties, Timisoara and Cluj-Napoca have autonomous project centres at the mayoralties. The main source of financial support for the cultural sector is the national budget (both the state budget and local budgets). In addition, individuals may redirect 2 per cent of their income tax to support non-profit organizations, including cultural and artistic activities. In this case, they choose which organization to support.

In Romania, there are three main institutions funding different areas of culture:
(1) The National Heritage Institute, (2) National Film Centre and (3) Administration of the National Cultural Foundation (AFCN), which coordinates cultural projects on various subjects. In addition, the Romanian Cultural Institute operates abroad and deals with cultural exchanges and external projects related to Romanian culture. It functions as a diplomatic mission.

AFCN should be given special attention in this analysis, as it is intended to reduce inequalities in access to resources by governmental and non-governmental cultural organizations and projects. The Administration of the National Cultural Foundation (AFCN) is an autonomous public institution established in 2005 within the Ministry of Culture. The creation of the AFCN was the result of the active involvement of the NGO sector in communication with policy makers after the 1989 Revolution. Initially, AFCN was supposed to focus exclusively on non-state cultural projects, but at the stage of the formation of the charter, it was decided to expand the focus of work to all actors of culture. AFCN has a wide range of projects, from supporting contemporary art to working with heritage. They finance not only all Romanian projects, but also those that are in any way connected with Romania (Romanian artists participate, the project is implemented on the territory of Romania or related to Romanian culture). The application is possible only in Romanian.
Most of the funds - up to 95% of the fund’s budget - is formed with the help of lotteries. The total amount of funding is 7 million euros per year.
In Romania, the lottery, as a source of funding, is unstable, as it is highly susceptible to the impact of the crises - so during the coronavirus pandemic, funding has fallen sharply, as people are significantly less likely to buy lottery tickets. According to the fund rules, applicants who receive funding cannot make a profit. The decisions on the allocation of the budget and the strategy of the fund are determined by a pool of experts, which consists of one representative of the Romanian Cultural Institute, one representative of the Council of Minorities, two representatives of the Ministry of Culture, as well as seven elected members from civil society representing different themes in the cultural sphere. The Council is elected for a term of two years (source).

Non-state organizations in Romania can therefore apply for state funding through the Administration of the National Cultural Foundation, and can also be represented among the members of the Council of the Foundation, which makes the fund’s operating procedures more transparent and non-state cultural institutions more integrated both in the state cultural policy and in the general funding model.
In the cultural sphere of Moldova, the paternalistic model prevails, which has not changed much during the thirty years of independence of the country and retains the features of the Soviet system. It is outdated and requires significant budgetary financial resources for its operation. Moreover, the amount of funding provided is unstable and depends on political power and its relationship to the cultural sector. Cultural consumption in the country is low, so almost 80% of the population admit that they did not attend or participated in the cultural event during the reporting year (cinema, performing arts, a museum, an art exhibition, etc.) (source).
2.4. Models of support and financing of the sphere of culture and art in Moldova
Moldova has a centralized model of cultural policy - the main source of funding is the state. The central actor is the Ministry of Culture. It not only distributes funding, but also coordinates all the work of the cultural institutions that receive money from it (source).
The budget of the Ministry of Culture is approximately 35 million euros (as of 2018), which is 0.5% of the total state budget. Although the nominal level of funding for culture has been increasing in recent years, the share of funds allocated to culture has been decreasing, and currently the level of funding for culture in the Republic of Moldova is twice as low in relative terms, than the EU average (source1, 2).

Certain transformative changes began to take place in 2014, when Moldova signed the Association Agreement with the EU, which provides for deeper integration in politics, trade, culture and security. This process resulted in the Culture Strategy 2020. By the way, it became one of the first formalized cultural strategies in the countries of the Eastern Partnership. The Strategy identifies the following objectives:
  • preservation of the national cultural heritage in all its diversity;
  • ensuring real and virtual mobility of the cultural product;
  • increasing the economic share of the cultural sector and creative industries in the country’s GDP;
  • enhancing the contribution of the cultural sector to social cohesion (source).

Also in 2014, there were changes in the direction of including non-state initiatives in the system of support and funding from the state - it became possible to apply for funding from non-state cultural institutions. Previously, independent projects and initiatives had to apply exclusively for foreign funding to pan-European or Romanian foundations. In 2022, projects related to visual and performing arts, music, education through culture and cultural heritage were funded. The total amount allocated for the projects is about 220,000 euros (source). However, these amounts are not sufficient to balance the cultural model and fully support non-state cultural institutions and initiatives.
Some mechanisms, which could support cultural development, exist on paper but are not applied in reality. So in Moldova there is a Law on sponsorship, but in reality this mechanism does not work and the support of culture by business is very weak.
The new political authority announced the need to create a new "model of culture" and included the law on the cultural fund in the program of the Government, but has not yet taken practical steps in this direction (source).

One of the priorities in terms of optimizing the financing of culture in Moldova is to adapt the centralized (post-Soviet) model to the market economy. The problem is that in order to successfully pass this transit, we need more sustainable additional ways of financing culture, which are not available in Moldova. At a time of crisis, this model is highly vulnerable. One of the ways to make the transition more sustainable, according to Moldovan experts, is to create a "fund that will be formed from many sources. Including royalties from the sale of cigarettes, alcohol, entertainment events, etc. Sponsors are interested in efficient spending of money, and they should participate in the distribution of funds along with representatives of society, artists, scientists and other fields of activity" (source). Nevertheless, Moldova declares and is moving towards the reform of cultural policy. Nowadays experts led by the Coalition of the Independent Cultural Sector of the Republic of Moldova are preparing proposals and recommendations for the cultural policy of Moldova.
The formation of modern cultural policy in Croatia began in 1990. The Ministry of Culture was established only in 1994 and the legislative framework in the field of culture was also developed at that time. At that time, the cultural model focused on public cultural institutions and the civil sector was disadvantaged. For the first time after independence, cultural policy was limited by both outdated governance structures and the legacy of the past political system. This constrained the development of the sector, with civil society actors becoming real and effective cultural actors.

A new round of cultural development in Croatia begins with the political changes of the 2000s. This period was also marked by a major international financial crisis since 2008, which had an impact on the cultural sector. At that time, the Ministry of Culture played a major role in the management and financing of culture, relying at lower levels on other cultural institutions. At that time, funding was mainly allocated to the public sector of culture, with a significantly smaller share going to other members of the cultural field. The existing imbalance has led to the decentralization of decision-making, financing and empowerment of new actors in the civil sector, cultural and creative industries in the cultural model of the country, leading to the creation of two new institutions: the Haft Audio-visual Centre in 2008 and the Nova Culture Foundation (Kultura Nova) in 2011.
2.5. Models of support and financing of the sphere of culture and art in Croatia
The Nova Culture Foundation is the first public foundation in Croatia in the culture sector established to support civil society organizations in the field of contemporary art and culture. The state did not administer the institution, but delegated responsibility and gave it legal and financial autonomy in decision-making.
The objectives of the institute relate to the development and improvement of specific areas, and funds are channelled to beneficiaries through the decision of independent experts who participate in the process of evaluating project proposals.

The history of the Culture Nova Foundation dates back to 2004, when a number of civil society organizations working in the field of contemporary art and culture began advocating the creation of a separate fund of the civil culture sector, to serve as an additional source of funding which would serve as an additional source of funding. Many times the reasons for the creation of such a fund have been presented and discussed at numerous public events (conferences, seminars, public debates, round tables). With the support of the Council of the New Media Culture, the idea of establishing a new fund was submitted to the Ministry of Culture, which, after careful consideration, established a working group responsible for drafting a proposal for a law on the "Culture Nova" Foundation.

Representatives of civil society organizations, officials of various government bodies and experts participated in the establishment of the fund. The Fund’s objectives, core assets, funding as well as other provisions related to the fund’s activities are defined by the Law on the Culture Nova Foundation, which was adopted by the Croatian Parliament in 2011.
The establishment of the Culture Nova Foundation as a new source of financial support for civil society organizations in the field of contemporary art and culture marks one of the most significant positive developments in cultural policy in the last twenty years for Croatia (source).
The Culture Nova is managed by the Director and the Board of Directors whose work is organized as an administrative service and has no financial remuneration. The Director of the Foundation is appointed and dismissed by the majority of the Board of Directors. The Board of Directors consists of five members who are appointed by the Government of the Republic of Croatia on the proposal of the Minister of Culture. All members of the Board and the Director are elected for a term of four years and are eligible for re-election. The Administrative Service consists of three separate divisions responsible for the following specific areas of work:
  • Department of General Affairs and Finance, where general affairs and financial activities are carried out,
  • Division of the Support Programme, which implements the activities of the Support Programme,
  • Research and Development Department, which implements research programs and projects.

The Fund also appoints subsidiary bodies, such as the Open Tender Quality Review Committee and working groups, to implement activities falling within the scope of the Fund (source).

The Fund’s budget is mainly drawn from the lottery, with donations, property income and other resources constituting a smaller proportion.

The Support Programme is a common name for all public competitions through which funds are provided to associations and artistic organizations in the field of contemporary art and culture in the Republic of Croatia (source). Grants are awarded in a number of programme areas that have been identified to achieve the Fund’s objectives and to address common challenges faced by contemporary art and cultural organizations. A total of 9 areas have been identified:
  1. Organizational development support
  2. Conception and preparation of new programmes/projects
  3. Development of new artistic ideas
  4. Development of cooperation platforms in the Republic of Croatia
  5. Development of cooperation platforms in Europe
  6. Supporting the development of a participatory culture
  7. Support of organizational and artistic memory
  8. Support of professional development in the field of cultural management
  9. Support in crises

The Fund is continuously evolving and rethinking its activity. It's also striving to improve programme directions and the overall grant process based on the views and comments of the management and administrative services, the recommendations of the Quality Assessment Committee, comments and suggestions of the recipients of the Fund and the applicants for the Programme of Support through public consultations (source).

Thus, the case of the Nova Culture Foundation can be interesting in terms of the structure and programmes it deals with.
Estonian cultural policy began to reform after the collapse of the Soviet system. At present, its objectives include the strategic development of the cultural sphere, the preservation of cultural heritage and memory, and increasing the involvement of the people of Estonia in culture. The most important indicator of the activity of cultural institutions is the number of Estonians who are included in the cultural life of the country, namely, that they attend cultural events at least once a year. Other important indicators are the level of wages in the sector, satisfaction with the accessibility of culture and the level of digitalization of cultural sphere and creative products. Estonians strive to maintain a balance between the development of the creative sector, contemporary art and culture, and the representation of traditional culture. Their efforts are aimed both at the creation of public spaces and the development of the public sphere for the free discussion of culture, art, politics and the stimulation of creative activities.

The Ministry of Culture of Estonia is not the only institution dealing with cultural issues in the country. Thus, all universities, including the Academy of Fine Arts and the Conservatory of the Ministry of Education, are involved in this process. In addition, the Ministry of Agriculture also contributes to the field of culture, as they have EU funding for local development, which includes the creation and development of public centers, libraries and creative sector development in the regions. State cultural institutions (such as the National Opera, archives, etc.) and cultural institutions that act as foundations are important actors in the cultural sphere of Estonia (source).

In the 1990s, museums, theatres, orchestras and other organizations were subordinate to the Estonian Ministry of Culture. However, in the early 2000s it was decided to convert them into funds. Today, they operate independently as private organizations, but are owned by the State. The state remains their main donor, but their private status is also important. They are autonomous and flexible and have a simplified funding model and can adapt their budget by a decision of the board of directors, which is not approved by the State, but is self-selected. However, the State presence on the board of directors remains, as it includes one representative of the Ministry of Culture, one representative of the Ministry of Finance and three experts specializing in specific topics. Some cultural institutions, although they have the status of a foundation, are financed exclusively by the Ministry of Culture, some are co-financed by the municipality or other institutions (usually related thematically). Some have been quite successful in attracting external funds and making extra money from projects, which they are not obliged to return to the State. This is an additional incentive for institutions to develop project activities and to engage the audience.

Estonia also has a Cultural Fund, whose annual budget is about 30 million euros, which is almost 10 times less than the budget of the Ministry of Culture of Estonia, but it performs an important function, complementing and balancing the local cultural model.
2.6. Models of support and financing of culture and art in Estonia
The Ministry of Culture provides institutional support to cultural institutions, major projects, national traditional culture, as well as projects of national importance and international projects. The Cultural Foundation, in turn, supports projects rather than institutions, provides grants to organizations and individuals, and undertakes small and pilot projects, as well as local and regional projects.
Applications for funding of the Ministry of Culture can be submitted once a year, to the Foundation - four times a year (source).

Lithuania and Latvia also have similar funds, but their main difference is that the decision to allocate funds for their operation is taken annually by the Government, and in Estonia this process is automatic. The budget of the Cultural Foundation consists of 50% contributions from alcohol and tobacco excise, 48% from the tax on gambling and 2% from other sources - usually direct sponsorship. The funds received are distributed as follows: 65% of the grant and project support budget, 29% for the development of cultural infrastructure and 4% for the fund itself including the support for administrative processes (source). Thus, Estonia has developed its unique model, where the financing of culture is formed from different sources.
The Swiss Cultural Council Pro Helvetia is a state-owned organization that promotes Swiss art and culture worldwide on behalf of the Swiss Confederation.

In general, culture is at the disposal and competence of the cantons, which have their own programmes of international cultural cooperation, and which are primarily concerned with the preservation and development of local culture. This pattern of promotion of Swiss cultural exports at the federal level is therefore not typical for Switzerland as a whole. At the same time, the Council evens out the existing local cultural accent, allows to look towards the international dimension and act in the international arena as a state instrument of 'soft power' (source).

Created by the Federal Council on the eve of World War II in 1939, Pro Helvetia was originally a working group «to protect the independent cultural identity of Switzerland» from Nazi Germany and fascist Italy, and in 1940 the first offices were opened in Zurich, and in 1949 was converted into a public fund. Its mission was to preserve Swiss culture, promote it domestically and spread abroad. Helvetia Pro activity is regulated by public law and fully funded by the federal government (source).

Governance structure of the Swiss Council for Culture Pro Helvetia (.pdf).

The Board of Trustees consists of 9 people (source). Strategic and operational authority is clearly separated: the Board of Trustees is responsible for strategy and the Secretariat is responsible for operations and implementation.

Pro Helvetia supports the projects on the basis of applications, through the network of cultural centres and offices, within the framework of programmes and informational support (source). The Council pays particular attention to contemporary literature, design, music, performance and visual art. It seeks to strengthen long-term partnerships between cultural institutions and create joint projects, exchanges of different formats and artistic residences. Over the past twenty years, Pro Helvetia has formed a small international network: the council has cultural centres in Paris, New York and Rome (with branches in Milan and Venice), permanent missions in Cairo, Johannesburg, New Delhi, Shanghai and Moscow, and also supports the Swissnex programme in San Francisco. The headquarters is located in Zurich.

In 2021, Pro Helvetia supported over 2,500 art and cultural projects throughout Switzerland. Together, these projects reflect the diversity of contemporary artistic and cultural production and, at the same time, current social phenomena and problems. The application-based support for the creation of Swiss art in all its diversity and its dissemination in the various linguistic regions of Switzerland is the main activity of Pro Helvetia. The Council also seeks to give a new impetus to cultural life and to support projects of national importance.

Pro Helvetia also supported more than 2,400 artistic and cultural projects in 100 countries as part of its international activities over the past year.

Expenditure in 2021 consisted of 86.3% directly for cultural activities and 13.7% for administrative expenditures, which remained within the strategic objective set by the Federal Council (source).

86.3% of the 43.0 million Swiss francs spent by Pro Helvetia in 2021 went directly to culture as follows:
  • 46.9% for activities in Switzerland
  • 53.1% for activities abroad (39.5% in Europe) (source).

Projects are evaluated by a team of international experts, in addition, when approving international projects, the local and Swiss office must give consent. For example, in Russia, the council of Pro Helvetia supports the tour of Swiss experimental musicians, Swiss performances, gives an opportunity for Swiss directors to work on projects for Russia, organizes exhibitions of Swiss artists, supports the Swiss program at the book fair in Krasnoyarsk, etc.

Cultural activity abroad implies the solution of tasks to promote a positive image of the country. If you go deeper, you can see that the direction of the Council movement is set by the government and its "Cultural Message" (Kulturbotschaft) which has been published every four years since 2012 and defines not only the Federal Government’s policy on the financing of cultural exports, but also the strategic objectives of the Council (source). Another task of the Council is to map cultural Swiss exports to new markets, such as the Brazilian market.

Thus, the Culture Council of Pro Helvetia is an independent structure, implementing projects that relate to the state cultural strategy of Switzerland.
2.7. Models of support and funding for culture and the arts in Switzerland. The case of the Swiss Council for Culture Pro Helvetia
3. Recommendations
Having analyzed the financing models in various post-Soviet countries (Ukraine, Moldova, Georgia) and European countries (Croatia, Estonia, Romania and Switzerland), it is clear that in almost every country that has carried out cultural sector reforms, separate structures were established to finance the culture - cultural foundations. This step was prompted by the need to ensure equal access to funding for state and non-state cultural institutions and projects, to integrate them into the cultural model and to provide them with funds from the state budget. The establishment of new funds often results from the fact that it is easy to implement, as it does not require a complete reform of existing institutions and ministries. Moreover, it is clear from the history of such foundations that it is often civil society and independent cultural actors who have been the initiators and catalysts of foundation formation - take Ukraine and Croatia, for example.

The following common characteristics can be found among the cultural foundations examined in this survey:
  1. There is a single cultural strategy of the country, with an average of four or five years, and the funds operate according to the priorities of this cultural strategy.
  2. Most of the cultural funds examined are financed from the state budget. In addition, they participate in major European competitions and/or receive funding from lotteries, levies on alcohol and tobacco excise, gambling tax, etc.
  3. Foundations are often subordinated to or part of the Ministry of Culture, with an independent grant policy and support for culture.
  4. The funds have programme areas and provide funding for each of the directions with clearly defined conditions (see the examples of the Ukrainian Cultural Fund, the "Culture Nova" Foundation, etc.).
  5. The evaluation of bids is most often done by external independent experts who specialize in different cultural industries.
  6. The foundations openly publish data on the budget and projects that receive funding, making their work transparent and open.
3.1 Identification of possible models, prototypes and their assessment in terms of desirability and feasibility for Belarus in the given time frame (strategic and short-term)
The case of Belarus is quite specific, as the idea of establishing the Cultural Fund was born outside the territorial boundaries of Belarus, so any of the established independent organizations will not have access to budget funding in the near future, to excise taxes or national lotteries.
3.2 Recommendations and further steps

Thus, one of the first and most important tasks is to develop and find sources of sustainable funding for cultural initiatives.
In addition, the key objective of many funds was to ensure equal opportunities for governmental and non-governmental organizations, but this function is not available due to the lack of access to funding for governmental organizations and the organizations from Belarus. A wave of repression 2021-2022 eliminated most independent non-governmental cultural organizations in Belarus, which makes it very difficult to implement an independent cultural policy. Thus, the models formed in more open and democratic countries are very difficult to implement in today’s Belarus.
As a result of the review, we have tried to formulate a number of recommendations, the implementation of which is necessary to reform the model of financing the sphere of culture and cultural policy in Belarus.

1. Defining the boundaries of Belarusian culture, actors and formats of activities.
Today, the cultural sphere of Belarus is fragmented and consists of the public sector, an independent sector within the country, an independent sector abroad, digital and/or migratory projects, and private initiatives. This situation makes it necessary to clarify the definition of Belarusian culture, as well as to clarify the boundaries in which the Belarusian Rada of Culture or other newly created organizations will work. This clarification is necessary in order to specify the scope of influence and opportunities, to develop further solutions taking into account the interests of those on whom the activity will be directed. To understand the current situation, it is worth mapping cultural initiatives, organizations, experts and actors in the field of culture.

2. Formation of a common cultural strategy for Belarusian culture.
At present, the cultural policy of Belarus regulates mainly the state cultural institutions and has been established under the auspices of the Ministry of Culture of the Republic of Belarus. The code of culture of the Republic of Belarus covers only the state sphere and has met with a wave of criticism from non-state actors of culture. Until 2020, attempts were made to create a single culture strategy, but at the moment there is no relevant document that would regulate all parts of the cultural sphere in Belarus. For this reason, there are no common priorities or common development strategies for governmental and non-governmental institutions and organizations working in the field of culture. Therefore, we see the organization of a series of seminars and round tables to help formulate a strategy for the development of Belarusian culture as a first step. At the same time, the development of the strategy should be public, transparent, inclusive and accessible for comments by representatives of the cultural expert community of Belarus. Here you should pay attention to the experience of developing the cultural strategy of Georgia in 2016 or reforms in Ukraine. This task is complicated by the difficulty of organizing a truly transparent and open procedure that would include actors inside and outside the country, without endangering the safety of those cultural workers who currently live and work in Belarus.

3. Creation of new independent structures to support Belarusian culture both in Belarus and abroad.
Considering the cases of international experience described above, they often decided to create new organizations rather than leaving the implementation of cultural policy and funding solely to the Ministry of Culture. This was done in order to overcome the rigid structure and corruption of ministries. In most countries, there is a division between institutions that support the development of culture within and outside the country. For example, in Romania there is a Romanian Cultural Institute that works exclusively with foreign projects. But in Switzerland, for example, both functions are performed by the Culture Council of Pro Helvetia. In addition, the division of organizations into themes can be applied - at that time, support for modern culture, heritage and traditional culture, cinema (television) is carried out by different foundations/organizations, as in Lithuania.

Thus, our recommendation is to establish a Cultural Foundation or Council whose departments would specialize separately in working with projects inside and outside the country, and one of the objectives of the Fund would be to bridge the gap and find sites for interaction between the representatives of Belarusian culture inside and outside the country.

4. The search for different sources of funding for the Belarusian Council for Culture and/or individual cultural initiatives.
During the expert discussion of the document at the general session it became clear that the independent Belarusian culture both in exile and within the country needs to find new sources of funding. In particular, private funding and sponsorship could be developed more. Today, companies in Belarus are severely limited in who they can channel aid to because of the high risk of repressions against the organization. The relocated Belarusian business also does not want to finance Belarusian culture due to reputational costs risk because Belarus is currently an aggressor country. According to experts, solving this problem requires developing a strategy, in particular a PR-strategy that would reduce the stigma of associations mentioning Belarus, so that businesses can support cultural projects at least abroad. In the future, Belarus requires a separate Law on Sponsorship, which would stimulate business to cooperate and support cultural projects. It is also possible to increase the contribution of business to culture by providing additional benefits and preferences. All this needs to be reflected in the future cultural strategy of Belarus.

5. Development of a strategy for the reform of the state cultural policy.
Planning cooperation with the public cultural sector is not feasible in the short term. However, future reforms and political programmes should include a vision for changing the cultural policy in Belarus.

5.1. Creation of tax preferences for cultural organizations and stimulation of sponsorship.
The lack of tax preferences for organizations supporting cultural activities and projects does not encourage this development in Belarus. Taking as an example the situation of sports, where such privileges exist, and creating similar opportunities for culture, this would allow more active promotion of patronage and sponsorship of cultural projects, events and organizations. Reduced interest rates, partial or full tax exemptions, incentives for sponsorship are observed in Lithuania and Georgia, and such practices stimulate investment and support for culture and cultural events. In addition, people can be offered the choice of which organization to support with a portion of their income tax, increasing both the motivation of organizations to be more visible and recognizable among residents and the inclusion of people in decision-making in the cultural and public sphere.

5.2. Improvement of legislation on the regulation of the cultural sphere.
The development of culture is complicated by legislation on the establishment of public organizations or foundations in the Republic of Belarus. Many cultural organizations prefer to register as individual entrepreneurs or institutions. In the light of recent repressions and the closure of a large number of non-State cultural organizations between 2021 and 2022, cultural activities are often carried out on behalf of individuals and commercial organizations. Also the status of individual cultural workers and artists remains unstable because those without formal employment or membership in the official union of artists are considered "parasites". In this situation, the solution would be to introduce a single tax when performing a craft activity or tutoring, which would allow a cultural worker or manager in the field of culture to carry out their activities on legal grounds without the registration of individual entrepreneurship. It would also allow cultural workers to be legally recognized without the need for confirmation of professional group membership from the Artists' Union or other organizations. Instead of a permissive principle, a declaratory principle, confirmed portfolio of creative works and activity report could work here.

5.3. Expanding Belarus' participation in European programmes and simplifying the registration of grants.
In many European countries, the Ministry of Culture receives funds from the EU and continues to provide re-granting through foundations or other agencies for smaller organizations. The example of the Ukrainian Cultural Foundation demonstrates one of the ways how the financing of cultural projects in Belarus could work. The process of registration of grants after passing the competition, the need to approve this grant and obtain permission from the Belarusian state bodies, significantly increases the document circulation, labor costs and time to obtain funding. It is clear that the existing mechanisms for obtaining grants through registration of International Technical Assistance (ICC) and foreign grant aid make access to finance very difficult. In general, the Ministry of Culture is not involved in EU grant programmes, in supporting and lobbying the participation of Belarusian organizations in EU grant programmes, in particular the Creative Europe programme.
In the future, the registration of grant aid should be abolished and participation in European programmes should be simplified.

5.4. Formalize cooperation between state and non-state cultural organizations
We believe that an important development in the future should be the possibility of ensuring equal access to budgetary funding for state and non-state cultural organizations.

Thus, the necessary immediate and short-term steps to organize support for Belarusian culture are:
  1. Mapping of cultural actors, institutions and experts in the field of culture of Belarus;
  2. Development of a common cultural strategy for Belarusian culture for five years, involving experts and the public;
  3. Development of a road map for the implementation of the cultural strategy for 2-3 years;
  4. Formation of a single cultural fund and a model of its financing, which would accumulate grant funds and funds from business and private donations, and in the future public funding;
  5. Development of the Fund’s Strategy and selection of priorities for financing cultural projects;
  6. Formation of a pool of experts for each of the selected activities of the Fund;
  7. Development of transparent procedures for the competitions to obtain funding; development of criteria and a system for evaluating tenders;
  8. Monitoring of the strategy implementation in 2 years and its subsequent adjustment.
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