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PRS announces new funding model for PRS Foundation, securing current levels of support

By | Published on Tuesday 17 January 2023

PRS Foundation

UK collecting society PRS has reversed its decision to cut funding to the PRS Foundation, saying that recent interest rate increases and a new model for financially supporting the talent development charity will enable it to continue providing current levels of support or higher.

PRS announced at its AGM last May that the funding it provides to the charity it set up in 2000 would be cut from the current £2.5 million a year to £1 million a year from 2024. This was because, it said, the specific income stream the Foundation’s funding has traditionally come from – basically interest earned on investments and royalties awaiting distribution – has been in decline in recent years.

That announcement was widely criticised by the music community, with many arguing that the Foundation’s work supporting grass roots and independent artists and songwriters was more important now than ever. More than 50 music industry organisations called for a rethink, with the Featured Artists Coalition in particular pointing out that PRS already donates considerably less to talent development initiatives than many of its European counterparts.

Explaining again its original decision to cut the Foundation’s funding, PRS said this morning: “The grants from PRS For Music to PRS Foundation have been funded through income generated separately from royalties paid out to our members, most notably from interest earned on royalties awaiting distribution. As interest rates have been below 1% for more than a decade and PRS For Music are paying out royalties more quickly, the available funds have decreased”.

However, it added, “the PRS Members’ Council has been reviewing the future funding of the Foundation and options to secure its ongoing activities. This review, alongside the increase in interest rates during 2022, has allowed for a new funding model to be agreed upon”.

That new model, it then explained, “will see funding determined annually, with the maximum funding which can made available growing year-on-year. Another key component of the new deal is that 10% of the funding provided by PRS For Music will be used to strengthen the Foundation’s reserves”.

Commenting on the new funding model for the Foundation, PRS CEO Andrea Czapary Martin says: “PRS Foundation makes an invaluable contribution to the global success of the UK’s music industry, working with PRS For Music to nurture and support emerging talent in the songwriter and composer community”.

“Over the last year”, she goes on, “we have worked very closely with them and representatives from across the industry to identify future funding models which provide both sustainability and growth, whilst maintaining the core principle of not arbitrarily deducting any such funding from royalties otherwise payable to writers or publishers”.

“The changes in interest rates over the last year have undoubtedly aided these considerations”, she confirms, “but the objective was always to secure a solution which protects the Foundation in the long term. The new funding agreement not only achieves these, giving them the better financial resilience in the future, but provides the opportunity for the Foundation to grow in the coming years”.

PRS Foundation CEO Joe Frankland adds: “We are delighted with the new multi-year funding agreement which allows the Foundation to sustain the level of grant support available to help thousands of music creators each year. The significant impact of our proactive and inclusive approach has been clearly demonstrated, and we thank PRS For Music for engaging with the sector to find suitable solutions”.

“At a time where music creators face complex barriers to progression”, he continues, “PRS For Music’s long-term commitment to talent development allows us to respond effectively and build upon years of success together”.

The new funding model has already been welcomed by the Featured Artists Coalition. Its CEO David Martin says: “The FAC is delighted to see PRS For Music and PRS Foundation reach a multi-year funding agreement, securing the Foundation’s future”.

“Over the last two years, the UK’s music sector has faced its most challenging period in a generation, with artists and other creators disproportionately bearing the brunt of the pain”, he adds. “Therefore, this news is incredibly welcome for the artist community. Music-makers across the country will be relieved that PRS Foundation will be able to continue its outstanding work developing UK talent, thanks to the support of PRS For Music”.