Raising funds (Rule 18)
A long tradition of government concern for archaeology and archaeological projects suggests that the financing issue is only to be solved through public funding, whether in the form of institutional funding or subsidies. Force of habit is in this case a powerful factor, and, while for instance the cultural industries operate under market constraints and therefore reason more or less in terms of profit margins and capital outlay, archaeology has a tendency to think of itself as different; so different, that it would be compelled to use other than the normal, well-known channels followed by all enterprises. Of course archaeology has its specific features. It is far from certain, however, that archaeological projects are as specific as is generally believed. In view of the comparative diminishing of dedicated public funding, the involvement of the business and financial world in cultural life, in the form of sponsoring, takes ever greater importance.
There are various types of funding and sources. A range of them can be considered to support an underwater archaeological project. Eligibility to apply for them will depend, for example, on the project team’s institutional character: the kind of legal persona that is financially accountable for the project; the kind of legal persona that is applying for funding.
Structure of a funding request
Structure of a funding request
Project description including:
- description of planned activities, timetable, methods and specialists involved
- discussion of preliminary studies and significance of site and proposed project
- expected results and deliverables
- expected spin-off
Description of competence and qualifications including:
- reference to previous successful projects of the research director
- CVs of key staff
- copies of appropriate publications, videos, press-clippings, etc.
Funding plan including:
- detailed, balanced budget estimates, signed and dated by the legal representative of the project
Administrative information including:
- Letter by research director explaining funding scheme, the amount of assistance requested and its specific purpose
- Name, address, e-mail and telephone of registered office of the organization promoting the project
- legal status and statutes
- names, addresses and positions of those in charge of the project
- a balance sheet for the past year of the body promoting the project
- bank references
- signed references of the other financial partners who have already agreed to participate
A golden rule for all projects is never to leave out the technical parts of the dossier, i.e. the details of the administrative and financial aspects.
Types of funding
- Institutional funding
Institutions like government archaeological services may have an annual budget to perform their duties. Such a budget may have entries for fieldwork, staff and other functions that can be used to implement projects. Such budgets are always limited and are best reserved for foreseeing the ‘unforeseen’. For larger and long-term operations, integral project management as advocated here is highly compatible with budgets allotted in a budgetary cycle. The annual budget is then treated as a source for subsidy and more projects can be developed.
For many project leaders subsidies are the first and most evident source of funding of cultural projects. They may come from local, regional, national or international sources related to governments. The most important sources are the public authorities responsible for the protection of culture. Other sources may be intergovernmental or similar organizations, operating, for instance, under the United Nations and the EU. Subsidies may include aids for research on preservation and dissemination of underwater cultural heritage, marine research subsidies, job creation subsidies and company creation grants. In particular, there may be opportunities arising from regional or urban tourism, or infrastructure development strategies that may involve considerable financial resources.
Some subsidies may be conditional, i.e. subject to the involvement of other partners in the project (other public authorities or private partners under a 'matching contribution' system). Subsidies may be one-off or renewable. Regular subsidies towards operating costs usually entail a form of contractual agreement between donor and recipient. Subsidies may be in cash but may also - like patronage and sponsorship - be in kind (making premises available, provision of equipment, secondment of staff, technical assistance, etc.).
The presupposition that numerous archaeological activities are chronically underfunded often leads to overlooking the fact that receipts are an increasingly important source of funding. This is attenuated, however, by the fact that financial benefits, also those in receipts, may flow to other administrative units than those directly involved in determining the cost of a project. Nevertheless, receipts could make up a larger proportion of the budget than they generally do.
Receipts can stem from the production of publications, films, picture rights, conferences, seminars, exhibitions and diving concessions on the visit of protected underwater sites. A drawback is that these types of receipts are mostly received only after the completion of the project. And – as in all cultural activities – receipts are certainly not the only benefits that are produced. Their increment should also not conflict with other interests. Nonetheless, they can be accounted for in the initial funding plan, and be used to fund additional dissemination activities or integrated in the funding of an activity that follows the first phase. Receipts can be a decisive factor since they are taken into account by financial backers in assessing the economic feasibility of a project and show that it is geared to demand.
- Patronage and sponsoring
Institutional patronage and sponsorship derives usually from three possible sources: firms, semi-public bodies and national or international foundations. Though certain countries have a long tradition of patronage (particularly in the English speaking world), nearly all States are today seeking to encourage more private support for conservation and archaeology, for instance, by offering tax incentives.
Private patronage by individuals is another option. Unless there is a particularly rich patron or group of patrons, private patronage is an option for projects likely to strongly appeal to a specific segment of the population. This is for instance the case when a strong historical bond exists between a population and a site, as for the excavation of the Mary Rose. In this situation , calls for donations and internet collection tools can raise considerable funds.
Another, often overlooked, possibility is the use of donations and bequests, which in the United States, for example, account for the major part of endowment funds.
- In-kind contributions
Apart from financial contributions, the supply of non-financial contributions in terms of professional and expert personnel or specialist equipment is of particular relevance for underwater archaeology. Expertise can often be provided by arrangements of association with other institutions.
Inter-institutional collaboration is an essential factor in the reduction of costs occurring during archaeological research. Supportive activities that are essential for archaeological projects can for instance be integrated in the activities and work plan of government departments, whose objectives are tightly connected with the water, the sea, and the seabed. The ministries of defence, maritime affairs, internal affairs and public establishments, and port authorities, help and facilitate the work of archaeologists. Coastguard and specialist patrolling vessels are deployed in any case. They can carry out simple, but extremely crucial and beneficial interventions in the course of their everyday work. This includes the reporting of the discovery of new sites or of activities going on at known sites. Institutions concerned with oceanography, geology or biology, are another category. They also have a presence at sea and they can engage in joint projects with underwater archaeologists to reduce the respective costs of exploration. The biggest share in terms of collaboration with the archaeological team can be borne by the local community, which will, over the long-term, benefit from projects, and which should take an active part in them, irrespective of whether their help is material, logistic or financial. Coastal communities tend to closely associate with the sea.
Private sector sponsoring may also take the form of assistance in-kind, such as the loan of premises, equipment or personnel, technical assistance (project studies and expert advice) and the provision of services free of charge or at a reduced price (travel, technical supplies, equipment etc.).
Last but not least, the contribution of volunteers, amateur divers or NGOs, may represent a major contribution in-kind, with the added benefit of embedding the operation more within society. Encouraging the active participation of students, divers and youth in exploration, but also in other protection interventions or activities may even prove a long-term investment in the practical training of experts, who will in the future run similar projects themselves.
- Equity financing, advances and loans
Advances and loans are often a subject of discussion between the promoter of a project and funding agencies. Advances and loans may take various forms: cash advances (discounts on subsidies, permission to overdraw, etc.); short-, medium- or long-term loans; ordinary loans or loans with a State-subsidized interest rebate. Obtaining a loan is normally subject to guarantees (save in exceptional cases such as subordinated loans). It is therefore at this level that guarantee funds and mutual security funds (vocational or public) have a decisive role to play. Certain investment schemes give the right to special loans at a reduced rate of interest and many different financing sources should be contacted, if necessary via a broker. Public authorities may also, either directly or indirectly through specialized mechanisms, accord loans or advances against receipts that are repayable only if the project is a success.
Cash management is too often neglected, and no due advantage is taken of the numerous opportunities for short-term investment that offer remuneration for sums not at present being employed and 'lying idle' in a current account. Just as one pays interest on advances and loans, so it is possible to receive financial returns that can add up to a worthwhile sum. This applies both to the project organization and to a sponsor who makes committed funds available with a delay. It is an aspect that can play a decisive role in negotiations.
- Long-term financial mechanisms
Project managers can resort to long-term financial mechanisms to secure the completion of an archaeological project. This is all the more relevant for projects that are designed to run over many years and for which the financial stability is hard to foresee in total. Securing the project in a way that shows that the demands of Rule 17 can nevertheless be met is then all the more important. Rule 18 makes this point and suggests that one of the ways of doing so is by securing a bond. A bond is a debt security in form of a formal contract to repay borrowed money with interest at fixed intervals. It functions like a loan: the issuer is the borrower (debtor), the holder is the lender (creditor), and the coupon is the interest, with the difference that bonds are issued in the primary market (underwriting). Bonds are thus marketable and transferable. They provide the borrower with external funds to finance long-term investments backed by the borrower's specific assets as collateral. These can be sold by the bondholder in case of a default (secure form). Bondholders have a creditor stake in the issuing company and usually have a defined term, a so-called ‘maturity’, after which the bond is redeemed. An exception is a consol bond, which is in perpetuity (i.e. a bond with no maturity).
Regarding the possibility to issue bonds, the legal nature of the archaeological project team or its affiliated institution is of importance. In fact, in many cases it will block this option. Bonds can be issued by public authorities, credit institutions, companies and supranational institutions in the primary markets. A project director, the archaeologist leading the project, is usually not eligible to underwrite a bond, and thus the bond would have to be issued by the responsible institution.
Bonds are not the only way to secure a project and bank guarantees or guarantees by institutions or authorities may serve equally well to secure a project’s completion.
Sources of funding
There exists a wide range of funding sources: public or private, local to supranational; from private individuals to enterprises, public authorities, finance institutions, non-governmental organizations, international organizations, vocational or semi-vocational organizations, foundations, tourism offices and so forth. Multiple funding has become the general rule. Indeed, potential partners who can provide assistance themselves seek out and encourage - sometimes through coercive measures – the enlistment of other financial partners.
To identify the appropriate funding source, projects should be distinguished in terms of scale and ambition: a weighty archaeological project or museum construction will have a better claim to national, or even international funding than a project with limited scope. In each case, the presentation of the project to the potential sponsor needs to be adapted, so as to address as closely as possible concerns and objectives of the potential backer.
- International and supranational organizations
International organizations may fund significant archaeological projects, but will give priority to multinational or at least regional projects, in particular those aimed at setting up international networks. Appropriate organizations that can be contacted are, for instance, UNESCO or the European Commission and its several subordinate bureaus. For projects seeking partnership arrangements with UNESCO, it is advisable to apply initially to the National Commission for UNESCO in the country of origin of the project. Similar other international or supranational organizations have their own procedures that should be respected for requesting funding or support.
In addition to financial assistance, the moral patronage of an international organization can also be of great advantage in approaching other funding sources.
- National authorities
Public authorities from the local to the national level may award a variety of financial aids that cover the full range of subsidies, from research or study grants to pre-purchase schemes. At the local level assistance may be in-kind, at higher levels it is usually in ready money. In almost all cases, it is necessary to approach the higher funding authorities through the local authorities.
One point deserves to be given particular emphasis: from the administrator's point of view, an archaeological project nearly always relates to several fields of competence. For example, a project might be eligible for aid on account of its archaeological, historic, and cultural nature, but also for its economic and tourism dimension, its marine dimension or its international dimension. Even where there exists a structure such as a ministry of culture, it is not uncommon to also obtain support from the ministries of tourism, education, marine affairs, research, science, or foreign affairs.
- Foundations and non-governmental organizations
Foundations pursue their own particular programmes of action, but many of them may be willing to help fund projects submitted to them. Assistance is usually financial, more rarely in kind. Some foundations are private, i.e. established by a single person or perhaps by a group of persons, others may have been set up by firms (small or medium enterprises or large multinational corporations). A distinction should be drawn between foundations with national and those with international aims. The former usually limit their activities to a particular geographical area, usually a country, but sometimes also a region or local district.
Non-governmental organizations (NGOs) are non-profit bodies created on private initiative. Many of them enjoy consultative status with an intergovernmental organization (such as the European Union or UNESCO). Some of them may give direct financial support to a cultural project. Due to their usually limited means, these are, however, not many. Nevertheless, they often serve as vital go-betweens through the information they are able to provide and above all through their influence and their role as moral guarantor in the eyes of potential backers. Sometimes, their services are indispensable to gain access to certain earmarked programmes. In other cases, NGOs may benefit from co-financing by International Organizations.The International Council on Monuments and Sites (ICOMOS) is a worldwide network of heritage professionals that closely monitors policies related to the UNESCO heritage conventions. It is therefore affiliated with UNESCO, just like ICOM, the International Council of Museums. ICOMOS has a specialist International Committee on the Underwater Cultural Heritage, ICOMOS-ICUCH. It does not fund projects, but it provides counsel and acts as a clearing house for professional ethics and quality. It tries to integrate professional members from as many countries as possible.
- Vocational and semi-vocational bodies
Vocational and semi-vocational bodies (tourism bodies, marine institutes, chambers of commerce, etc.) may provide considerable assistance, whose value, especially at the decisive stage of project design, is often underestimated. Such aid may be of three types: the provision of information that might save money or facilitate the search for financial backers, technical assistance in the form of advice, expert assistance or even training, and in exceptional cases, financial assistance.
- Financial institutions
Banks are normally the least receptive to cultural projects. However, a good project with an economic dimension (often tourism or regional development) may receive a favourable hearing. Certain banks, however, have come to specialise in associations or cooperatives, whereas others have taken an interest in the arts and archaeology. It is therefore essential to collect information in order to address requests to the appropriate institution. Moreover, there exist specialist funding agencies (companies specializing in venture capital, mutual-security schemes or regional development).
- The private sector
Private firms may assist archaeological projects through patronage and sponsorship, either directly by offering finances or by providing assistance in kind. Such opportunities are largely dependent on the tradition of a firm’s involvement in civil affairs, which may differ from country to country. The readiness of firms to sponsor archaeological projects also depends largely on the existence of tax incentives aimed at developing partnerships with business.
One of the main incentives for firms is their public reputation, i.e. advertisement advantages by connecting themselves to projects that are to public benefit. They will usually prefer projects that have a high visibility within the public.
Decisions, which project may obtain funding, are usually taken within the firm by the managing director, by the head of the communication department or – in larger firms – by the unit in charge of sponsorship.
Private individuals may contribute to the financing of an underwater archaeological project through the receipts they may generate in return for goods or services. Their contribution can also take the form of private patronage (gifts, bequests or donations). A public appeal to investors is still exceptional, save under innovative funding schemes that attract investment from close 'active sympathizers'. Private individuals may also provide substantial assistance in kind through the loan of equipment or through voluntary work.