Inside the Serpentine world of arts fundraising

The grass patch in front of the Serpentine Gallery in Kensington Gardens is about to be dug up. Again.

It’s the 15th year that the 541 square metres of turf will be turned over by the diggers and a dazzling – usually a little crazy – new building will pop up.

Work starts any day now on this year’s Serpentine Pavilion, designed by the husband and wife team of Spanish architects Jose Selgas and Lucia Cano. If the drawings are anything to go by, the SelgasCano design looks as bold as its predecessors – it’s a brightly coloured floating chrysalis-type tent and will be ready for the public as an open-air cafe in June.

No wonder that winning the annual commission to design the temporary pavilion is one of the most sought after architectural awards on the planet: 300,000 people visited the fibreglass shell designed by the Chilean architect Smiljan Radic last year, while the cloud-like construct created by Sou Fujimoto the previous year was the most visited free architectural exhibition in the world.

What’s so smart is that the pavilions go on to have an after-life in the oddest of places after they are taken down. Once the summer is over, Julia Peyton-Jones, the co-director of the Serpentine who dreamt up the pavilion idea in 2000, sells the structures to the highest bidder: Frank Gehry’s pavilion is at Chateau La Coste in France while Radic’s fibreglass shell was bought by the Hauser & Wirth gallery and now sits in a Somerset field.

What’s more, Peyton-Jones reckons the Serpentine gets back about 40 per cent of the total project cost: money which goes into her not-for-profit art galleries. It’s clever business tricks like this that have turned the Serpentine into one of the top 10 most visited art galleries in the UK, attracting 1.2 million people, making it the world’s 66th most visited arts institution. Not a bad show for what was a tea-room built by the Royal Parks in 1934, which became a gallery in 1970.

Making art pay its way is also why the 63-year-old painter turned curator is on the short-list for the Veuve Clicquot Business Woman of the Year award. Fellow finalists are Katherine Garrett-Cox, the chief executive of Alliance Trust, currently fighting a bitter battle with activist shareholders, and Justine Roberts, the chief executive of Mumsnet, the parenting blog and website. The winner will be announced on 11 May.

We meet in Peyton-Jones’s box of an office above the bristling white Serpentine gallery that is currently showing the work of Leon Golub, the American figurative artist whose spine-chilling, enormous anti-war paintings stretch from the floor to the ceiling of the gallery.

All quite different from when she took over in 1991 when the roof was leaky, there was a huge list of repairs to be done, the gallery depended mainly on public money to survive, and turnover was barely £400,000. “From the beginning I knew that we had to have the best exhibitions and programmes and to make this one of the most important cultural centres; one of the first shows we put on was Man Ray and that set the tone. I went around begging and borrowing collections. One day I happened to visit someone in Queensgate and found a couple of Jeff Koons hanging on his walls as well as many other fantastic paintings so I asked if we could borrow them. He agreed.”

Today Peyton-Jones has two galleries to run – the Serpentine and the Serpentine Sackler, the old ammunition store that was renovated two years ago by the Pritzker-winning architect Zaha Hadid – who also designed the first pavilion.

Turnover for the two this year will be £8m. More than a third of income comes from individual benefactors, about 15 per cent from corporate sponsors and just under a third from commercial activities such as The Magazine café and merchandising with companies such as Cos, or the Serpentine perfume created by Comme des Garçons with a dash of design by Tracey Emin.

Only 15 per cent of total expenditure comes from the Arts Council. This, says Ms Peyton-Jones, is now one of the lowest ratios of public subsidies per visitor for any arts organisation in the UK: £6 is raised privately for every £1 of public funding; an astonishing feat at a time when public arts subsidies are falling. And entry for the public is free.

So how did she do it? “You know that question – how do you eat an elephant? Well, my answer is the same: bite by bite. You also have to be fearless, to never take no for an answer. Nor can you ever be overwhelmed by the challenge you set yourself.”

Saying no to Peyton-Jones is not something I imagine many dare to do; she is tall and slim, regal in manner and the eldest of six girls. “That maybe something to do with my persistence,” she says, laughing.

Michael Bloomberg, the billionaire former mayor of New York, was one who couldn’t resist. It was while sitting next to him at dinner many years ago that she took maybe her deepest of bites, persuading him to join the board. Bloomberg is now chairman of the galleries and has become one of its most generous of benefactors. “Michael has been incredible. He has a real appetite for the arts,” she says. “You know he has given £3bn of his own wealth to good causes. Isn’t that amazing? We need more US-style social responsibility and philanthropy in the UK. Look at the way they give 10 per cent, 5 per cent or even half a per cent of their income to charity as a matter of course. Having said that, philanthropy in the UK is improving but we still need to do more.”

The annual Summer Party is now one of the top spots in the capital’s social calendar and is big for fund-raising; guests and companies pay hundreds of pounds a ticket to mix with the stars – last year’s happy catch was Pharrell Williams.

Princess Diana was the one to set the seal on the Serpentine’s party: she was photographed arriving at the party on 29 June, 1994, wearing the “revenge dress” and shaking hands with Peyton-Jones as Prince Charles was telling all to Jonathan Dimbleby on TV. Having Diana as a patron for the gallery was a boost, she says, helping it to raise £4m to renovate the main gallery through gala dinners.

But her biggest bite to date was to take over the old gunpowder store and raise the £14.5m needed to create the Serpentine Sackler and Hadid’s new restaurant. Using American-style fundraising tactics, she brought in the Sacklers, the Wolfson Foundation, Carphone Warehouse’s co-founder David Ross and many others to back the enterprise; not a penny of public money was used until it opened.

“I had always worried that this gallery was a little small so when I saw an advert in the Standard five years ago that the old ammunition building was coming up for license I jumped at the chance. Then came raising the money. Not easy.

“The point about being entrepreneurial as a team is that you can be what you want to be; it’s the artists and programmes we put on that define us. Hans Ulrich Obrist, my co-director, and I like to think the unthinkable; take risks. If you get the programmes right, then the benefactors and patrons will follow. What I have learnt is that if you don’t like the system, you make your own system.”

Name: Julia Peyton-Jones OBE

Born: 18 February 18 1952

Education: 1975-78: Studied painting at the Royal College of Art, London.

Career: A painter in London – two of her works hang in the Bank of England – and lecturer in fine art at Edinburgh College of Art. Between 1978 and 1988 she was the curator in the exhibitions department at the Hayward Gallery.

In 1991 she became a director of the Serpentine Gallery, responsible for both commissioning and showcasing the groundbreaking exhibitions, education and public programmes.

Outside interests: Senior Fellow of the Royal College of Art; Honorary Fellow of the Royal Institute of British Architects; Professor of the University of the Arts London.

Favourite painting: Vermeer’s Woman in Blue Reading a Letter.

Favourite restaurant: Daquise, a Polish restaurant in South Kensington, where she takes visiting artists and patrons. People can play cards and they let you bring your dog.

Favourite pastime: Walking with her Jack Russell, Charlie.

I usually start the day at 6am with a walk with Charlie, my dog, who dawdles and won’t be rushed. At about 7am I speak to Hans Ulrich Obrist, my co-director, about the upcoming day and then scoop up my paperwork and head to the office, which is such a beautiful place to work. Some days I take Charlie with me and leave him in the buildings department. Then its back-to-back meetings on anything from finance to HR. I rarely go out to lunch, unless its to see an artist, architect or possible donor. There’s often a private view to see in the evening, which I go to with military precision. I get home late, take Charlie for another dawdle, and then exchange emails with the head of our Americas Foundation. At midnight I check the phone – now an iphone – and then bed.