6 September 2015

The Gate 2015 (Act I: revenue)

Following on from looking at Paines Plough, it seemed pertinent to explore the accounts of an organisation with a contrasting business model. The next series of posts will look at a real-life location: an actual brick and mortar theatre. A quick glance down the ACE Portfolio list reveals that The Gate in Notting Hill is the venue closest to Paines Plough in terms of Portfolio funding received, which seems a solid choice of secondary criterion.

The Gate are one of the smallest producing houses in the ACE Portfolio. They’ve secured continued Portfolio status for the 2015-2018 funding cycle and happily celebrated their 35th anniversary in 2014 (which means much of that 35th year’s activity is reflected in these accounts – who doesn’t love birthday accounts). Interestingly The Gate had never toured a production across the UK before 2014 (Grounded’s 12 week sojourn breaking through that barrier) and also chose 2014 as the year to start producing branded merchandise.

The Gate's ACE Portfolio funding has been confirmed out to 2018 and won't change much year-on-year for the foreseeable future. These funds are of course unrestricted and can be spent on anything fulfilling the core aims of The Gate. 'Project Specific funding' in the revenue table below refers to voluntary income from trusts, grants or donations provided for a specific purpose. 'Operating revenue' covers everything incoming from The Gate's charitable activities. 'Donations & other' includes general donations provided for an unspecified purpose, plus things like a very small amount of investment income.

£20152014Growth% Growth
Arts Council Portfolio Funding306,331305,0921,2390.41%
Project Specific Funding227,800119,017108,78391.40%
Operating Revenue262,666194,69467,97234.91%
Donations & other171,31898,82872,49073.35%
Total Revenue968,115717,631250,48434.90%

Project Specific Funding & Donations were clearly big wins for The Gate in 2015. The bulk of that increase comes from fund raising events, many of which were related to the 35th anniversary celebrations. Personal philanthropy was actually down from 2014, one would assume the reason being that the fundraising events will have cannibalised some of the funds which would otherwise have shown up as individual donations. The Gate have earmarked this additional revenue to support an increase in programming and essential overhead cost over the coming years.

The Gate have perhaps taken on board the chancellor's mandate that The Arts should be supported by philanthropists as £331,112 of their revenue (34%) came from a combination of donations, gift-aid and fundraising (IE not grants, portfolio funding or operating revenue). Compare this to Paines Plough, where less than 3% of their £690,766 revenue was classified in the same way (Paines Plough instead have a lot more Project Specific grants). A chunk of The Gate's 2015 revenue relates to special events in their birthday year (IE this performance is unlikely to be repeated in 2016) but there is still a world of difference between the two organisations. The Charities Aid Foundation report on UK Giving 2014 shows that only about 2% of people who give to charities in the UK donate to the arts and those donations amount to 1% of charitable donations in the UK. Compare that to 12% of donors giving to religious causes, with those donations amounting to 14% of the amount donated in the UK. The arts are the lowest ranking 'cause' in the data provided by the Charities Aid Foundation and clearly venue-less organisations producing touring work are scraping the very bottom of the philanthropy barrel.

The really interesting aspect of revenue in The Gate's accounts for 2015 was actually their Operating Revenue. On the surface, this number does not look particularly remarkable (even seems healthy) and since The Gate celebrated their 35th birthday with a series of events and a marketing campaign centered around the special year, one would hope to see an uptick in Operating Revenue. However, box office ticket sales were actually down to £114,519 in 2015 from £157,653 in 2014. Sales of programmes, texts and merchandise also dropped from £5,436 in 2014 to £3,394 in 2015, which is far from the result you'd expect to see given the introduction of a new product range (branded merchandise). So how have The Gate managed that 35% increase in Operating Revenue?

They've managed it through Touring Income which rocketed from £21,597 in 2014 up to £117,769 in 2015. In terms of audience figures, The Gate state that 10,958 people came through their doors in 2015 and 9,338 people saw a Gate production across the UK and internationally (giving a total of 20,296 which is up from ~14,500 people in 2014). Since 4,963 of those audience members who saw a Gate production elsewhere witnessed the UK tour of Grounded and with that production also spending 4 weeks in Washington DC (98% capacity houses) and 2 weeks at Gothenburg English Speaking Theatre (96% capacity houses), it seems a good bet that Grounded is responsible for the jump in Touring Income. Coupled with ~£20,000 of income from 'Other Activities', that's how The Gate have managed to grow Operating Revenue by 35%. Not traditionally known for producing touring work, it will be very interesting to see if The Gate continue to diversify their producing model and can replicate Grounded's success with productions such as The Christians.