Culture strives to keep patrons of the arts in the frame

The arts are under fire – and not only from Kim Howells' headline-grabbing comments on this year's Turner Prize finalists. As share prices tumble and companies scrutinise spending budgets, arts sponsorship is in for a rough ride.

In fact, it "could face the countdown to Armageddon" next year if share prices continue to plunge and the arts "fall off" the boardroom agendas of long-standing corporate backers. The warning comes from Colin Tweedy, chief executive of Arts & Business (A&B), on the eve of the organisation's glitzy annual awards ceremony at the Hayward Gallery in London, where tomorrow night company bosses and arts luvvies will mingle amid Douglas Gordon's spooky installations.

The writing may not be on the wall for arts sponsorship, but Mr Tweedy and supporters within corporate Britain are stealing themselves to fight for cash for the arts at a time when budgets are being squeezed and there are many takers out there for the money.

The figures are worrying. While sports sponsorship has shown consistent growth over the past decade – from £293m in 1992 to £422m last year – arts sponsorship fell to £114m in 2001, down from £150m the year before (although this was boosted by Millennium projects) and representing a five-year low. Lloyds TSB, for one, is no longer sponsoring art shows, choosing instead to invest in local-level rugby.

Budgets for projects reflecting corporate social responsibility (CSR), vociferously championed by the Government, are also sapping funds once earmarked for the arts. A&B is keen to support companies striking traditional sponsorship deals and is promoting arts-related projects as a tool for staff development. Employees are encouraged to take on a range of tasks, from vol- unteering to sit on an arts organisation board to working alongside arts professionals, dispensing corporate know-how.

A nationwide campaign to convince business of the positive impact the arts can have on young people was launched at Buckingham Palace this summer. The Prince of Wales' Arts & Kids Foundation kicked off with a £1m lottery grant and a £200,000 donation from Powergen. Placing itself comfortably on the corporate social responsibility agenda, Arts & Kids is, says Mr Tweedy, the "secret weapon" to tap into funds in danger of heading away.

Mr Tweedy would like to see Tony Blair and Gordon Brown making high-profile speeches on the potential of the arts to promote social inclusion and transform young lives. He is already recruiting advocates to act as shock troops within companies. The aim is to embed the arts spending ethos within corporate culture.

"If your share price is falling through the floor, anything that's not an integral part of the corporate strategy is vulnerable," explains Mr Tweedy. "We've got to get the message across that the arts are transforming – good for business, good for young people, and good for human resources."

Ernst & Young, which helped bankroll the Matisse–Picasso exhibition at Tate Modern this summer, has focused on sponsoring blockbuster art shows to raise its profile. The company has benefited, too, from the opportunity to arrange private views for its clients and employees. Ernst & Young is also sponsoring the Art Deco show at the Victoria & Albert Museum, which opens in March, and is lining up exhibitions as far ahead as 2006.

Sponsorship deals that work have nothing to do with pure altruism or even a box at the opera for the chief executive. As Nicky Major, head of sponsorship at Ernst & Young, says: "We don't pretend for one moment we're not doing it for business purposes."

BT has backed off from sponsoring a range of arts projects, from orchestras to dance and photography, to focus its arts spending on the Tate galleries. It currently sponsors Tate Online – giving access to the entire Tate Modern and Tate Britain collections – which now attracts two million virtual visitors a year.

Since 2000, BT has spent more than £1m in forging its relationship with the Tate. Paul Leonard, head of commercial sponsorship at BT, explains the payback from this sizeable, focused investment: "Time online and developing online solutions for companies is what we are about, it's what we do. This helps demonstrate our capabilities. We want to be seen as the first choice in the growing market of internet access."

Let's hope BT is getting the Turner Prize contenders online soon, even if the culture minister won't be downloading their work on his computer.