Diversifying Income for Creative Business Sustainability
If you're running a creative, arts or cultural organisation dependent on grant funding, you’ll already be well aware the traditional funding model that has sustained UK arts and culture for decades is disappearing.
Since 2010, grant-in-aid funding for UK arts and cultural organisations has fallen 18% in real terms. Arts Council funding has declined by 16% since 2017, with Wales bearing the brunt at 30%. But the worst of it- local authority investment in the arts has plummeted by more than 30% over the past decade in England. This represents a seismic shift in the funding landscape.
How did we get here?
The UK’s arts sector developed its funding model in the post-World War II era. Unlike countries where cultural industries developed through commercially driven systems and market mechanisms, the UK consciously chose public investment. Brilliant when budgets grew, and the reason we have a world class innovative creative sector. However, after years of austerity and rising inflation it's left many organisations unprepared for the current reality.
No longer can organisations risk putting all their eggs in the grant funding basket.
The answer? Income diversification. But what is it? What are the other ways income could be generated? and how does one begin to diversify revenue streams? Here are 5 avenues to explore:
Intellectual Property
Let's start with what you might not realise you own: your intellectual property. Anything you have created with your mind that someone else may want or benefit from could be an income stream waiting to happen. Every workshop format developed, every educational resource created, every piece of original content produced are all potential commercial assets.
That innovative community engagement programme? License it to other organisations. Educational materials that took months to perfect? Sell them digitally. Your successful methodology? It's consultancy gold.
The beauty of IP is the potential for passive income. Once you have put in the up front time and effort to create something, these assets can be set up to generate revenue repeatedly with minimal additional investment.
Earned Income
You may be generating some earned income already, but there could be untapped potential hiding in plain sight. Think strategically about how core capabilities can serve different markets.
Corporate Training - your creative skills have genuine business value. Companies increasingly recognise the importance of creativity and innovative thinking. Transform this into lucrative training programmes.
Educational Services - Schools programmes and adult learning are natural extensions of existing work. Structure them as sustainable revenue streams rather than funded projects.
Health and Wellbeing - The evidence base for arts' impact on mental health creates opportunities for paid partnerships with healthcare providers and community organisations.
Asset Leverage
Every hour your venue sits empty is a missed opportunity. Think strategically about utilisation without compromising your mission:
Corporate events - your space might be perfect for launches, conferences, or away days
Private hire - weddings and celebrations generate significant income during downtime
Co-working - creative spaces attract freelancers and small businesses
Mixed-use development - partner with developers to create ongoing rental income
With careful planning, you can significantly boost income while building community relationships. But always consider the risks, put protections in place and ensure commercial use complements rather than competes with artistic work. A private hire may be excited at the prospect of their event in your gallery, but will the artist be happy about it, and will the artwork need additional protection?
Partnerships and Collaboration
Smart leaders recognise collaboration isn't just artistically enriching, it's economically essential. The best partnerships are genuinely mutual, creating meaningful engagement while providing resources.
Strategic partnerships go beyond traditional sponsorship. Think in-kind support such as sharing space, legal services, marketing expertise, and equipment loans. These reduce operational costs while building lasting relationships.
Shared services create economies of scale:
Joint marketing campaigns and promotional resources
Pooled administrative functions
Co-production networks spreading development costs
Shared technical resources
Look for partners sharing your values, but serving different functions.
A dance company might partner with a fitness centre, a visual arts organisation with a manufacturer, an arts festival with a higher education institution, or community arts company with a health provider. Find genuine mutual benefit and nurture relationships over time.
Digital
Embracing digital innovation can help you reach global audiences and create new revenue streams.
Digital content and streaming - create premium content sold directly to audiences such as recorded performances, online masterclasses, educational resources, exclusive digital experiences.
Subscription models - digital platforms make membership programmes offering premium content or exclusive experiences easier than ever.
Virtual and hybrid events - reach global audiences with events combining physical and digital participation.
Digital merchandise - online platforms expand retail reach for digital products like prints or educational materials.
Treating digital as genuine revenue rather than an afterthought can lead to regular recurring income.
5 Steps to Building Your Diversified Portfolio
Creating diversified income isn't about randomly trying every stream, it's a strategic direction that should be aligned with your strengths and mission.
Research shows 92% of performing arts organisations consider business model innovation important to their future. The question isn't whether to diversify, it’s how to do it strategically.
Start with an honest capability audit. What are you excellent at? What unique assets do you possess? Where do expertise and market demand intersect?
Be realistic. Diversifying requires time, energy, and often some initial investment. This isn't a quick fix, it's a strategic transformation requiring thoughtful planning.
Start with the problem you want to solve and understand the value your solution will bring to your specific audience.
Begin small and build gradually. Pick one stream aligning with existing work, prototype and test it thoroughly before expanding.
Use audience data to research, develop, test, understand and inform success.
Financial Freedom to Create
When you're not dependent on single funding sources, you can take creative risks without jeopardising everything. The more commercially savvy you can become, the more artistic freedom you could gain.
Income diversification is about creating the financial foundation that allows creative vision to flourish. It's building dynamic organisations that can survive funding cuts, weather economic storms, and seize unexpected opportunities.
The path forward is about ensuring fundraising readiness for your business, whilst creating a mixed economy that leverages private resources and commercial innovation to serve creative and cultural purposes.
At Culture Rise, we support creative organisations on exactly this journey through tailored business consultancy, practical training programmes, and one-to-one coaching. We understand the unique challenges facing arts and culture leaders because we've been there ourselves.
Those demonstrating both artistic excellence and business acumen won't just survive the funding crisis, they'll emerge stronger, more independent, and better positioned for cultural impact.
It's time to get creative about sustainability too.
Ready to improve the future sustainability of your organisation? Register your interest in our upcoming workshop programme designed specifically to help creative leaders explore and build diversified, sustainable income streams.
Your creative vision deserves a business model that supports it.
Register your interest in our workshop programme here
