Free-Market Art?

What do Audi and Haydn have in common? One would think not much. Audi has a different opinion on the matter, however. The automaker has come to the rescue of the Salzburg Festival -- one of Europe's biggest summer music and drama events -- and become its main sponsor. It's a fortunate move since festival organizers now only receive enough public funds to cover about 30 percent of their costs.

The rest must be covered through entrance fees and, even more important, private sponsors.

Manfred Schwaiger, an economics professor at the University of Munich, said, however, that Audi is not merely being benevolent.

"It's a very straight-forward deal: money for benefits, and in this case, the benefit is that a sponsor is associated with an artist or a cultural event," he said.

Matches with a message

How the two sides come together, however, largely depends on the company's brand.

The Deutsche Bank, for instance, wants to stress its tradition and discriminating taste by supporting the Berlin Philharmonic. By sponsoring the art exhibition "documenta" in Kassel, Germany's group of state-owned banks -- the Sparkassen-Finanzgruppe -- wants to appear trendy and cutting edge.

The Arbeitskkreis Kultursponsoring -- an association to promote cultural sponsoring relationships -- estimates that sponsors spend around 350 million euros each year on cultural projects and programs. When funds from private foundations are added in, the total comes to around 600 million euros.

The number of private sponsors of cultural projects in Germany, however, is minimal compared to the United States.

Different tax breaks

In Germany, about 90 percent of funding for cultural programs comes from public funds, while in the US, it is only about 10 percent.

Part of the reason for that, said Schwaiger, is different tax incentives for cultural sponsoring in the two countries.

"But there's another reason: in Germany, people still expect the government to come to the rescue, also for cultural projects," he said.

Stefan Frucht, of the Cultural Committee of German Business, sees a clear trend: "Generally speaking, public funding of cultural projects is decreasing while funding from private companies is increasing."

Most cultural funding goes toward visual art and various music projects. Frucht said that literature and architecture programs are also sometimes sponsored.

Employee satisfaction

Other companies, such as consulting firms Roland Berger or KPMG, envision more than just benevolence for the public or more business from clients when they supports projects such as the world-famous Dresden Staatskapelle (Orchestra).

Ultimately, charitable companies are also viewed positively by their employees.

"Cultural sponsoring does not necessarily lead to more motivated employees, but if a company is not a sponsor, it may lead to more employee dissatisfaction," said Frucht.

Whether it's for employees, customers or to serve the greater good, companies who sponsor cultural projects promote it through press conferences, advertising and events. But how much a company actually spends to that end is often not publicly announced.

"It's a success when a company spends 'x' amount on cultural programs and journalists speculate that twice that 'x' amount was spent," said Schwaiger.