This is what happens when arts funding is outsourced

Culture Secretary Jeremy Hunt wants to bring US-style arts philanthropy to Britain. If New York is anything to go by it would be a disaster, says Clemency Burton-Hill

It's a baking hot afternoon in New York and I'm standing in line at TKTS, commonly known as "the half-price ticket booth" in Times Square, crossing my fingers that the theatre ticket I am after will be a) available and b) offered at a price that is at least vaguely near the half-price mark. TKTS hovers close to the trading-on-false-pretences boundary, as its discounts are usually more like 20 per cent, but a discount is a discount, and I have guiltily taken the afternoon off in order to wait here, patiently, among the tourists and the flashing neon lights, for a few hours.

If I told you that I'd already seen the play in question – Red, by John Logan – three times in London, would you think I was mad? You might if I told you that the combined ticket price of those three trips (£78) still wouldn't quite add up to how much a single ticket for its Broadway incarnation – same play, same cast – costs ($126 and a $4.50 fee, or £82).

But I loved the play and am curious to see it again in New York, the city in which it is set, and in which I currently live. Eventually, I reach the front of the queue and am offered a mid-range seat for $95 – more than my weekly household grocery budget. Biting the bullet and banishing the sickening thought that the top-price seat at London's Donmar Warehouse, where the play originated, cost £26, I hand over the money and head for the Golden Theater on 45th Street.

Welcome to New York, one of the cultural capitals of the world; a culture funded overwhelmingly by philanthropy and private sponsorship and presumably, therefore, the sort of model Jeremy Hunt had in mind when he recently announced his intention to slash the UK culture budget by up to 50 per cent, asking the arts world to lean more on individual and corporate donors. Supposing this were possible, what would this new funding model really mean for Britain's culture? New York is the ideal city from which to explore the question of what happens to the arts when private money runs the show.

In New York there are 36 Broadway theatres, 370 non-profit theatres, 95 orchestras, 330 dance companies, and 1,000-odd galleries and museums, although it's hard to keep exact track. As with so many other things in the city, whatever you're seeking you can probably find it, but you have to be able to pay for it.

Art here is eye-wateringly, and often prohibitively, expensive. In London this summer you can see the finest musicians in the world for £5 at the Proms; plays that will end up on Broadway for £10 at the National Theatre; an opera at Covent Garden for the same; and your pick of world-class museums and galleries for free.

In New York, the average Broadway ticket is $120; a trip to the Metropolitan Opera will realistically set you back between $100 and $250 unless you can afford to take time off work to queue for a "rush" ticket; most museums and galleries, even those extravagantly endowed by beneficent individuals, will charge you an admission fee of $20.

When Lee Hall's The Pitmen Painters opens in New York later this year, a pair of premium seats will cost more than the weekly wages of some of the staff at Newcastle's Live Theatre, where the play was first staged in 2007.

It's not just Broadway that has to raise its ticket costs: off-Broadway plays and the equivalents in music, dance and jazz are all depressingly pricey – and therefore have a nasty air of exclusivity about them that runs counter to the spirit of the art being produced.

This is an inevitable consequence of the cross-sector non-public funding model. "We're not eligible for government funding, so 100 per cent of our business is ticket sales," explains Scott Morfee, a producer at the Barrow Street Theatre, one of New York's many small independent non-profit theatres producing stellar work and whose equivalent in the UK would invariably be supported by the Arts Council. That business model is all very well when people are happy to pay for such tickets, but what happens when times are tough? "When the recession hit, it felt insurmountable," Morfee admits.

The downturn was felt across the industry, with numerous "bellweather" productions and arts institutions

forced to close and many mourning the passing of a glorious, diverse age in New York's non-profit cultural community. "This has been a difficult time," says Ken Davenport, a producer known as the "PT Barnum of off-Broadway". "When a flood hits a town, it hits the villagers first, not the house on the hill."

His counterpart Todd Haimes, the artistic director of Roundabout, one of New York's most successful independent theatre companies, chooses another metaphor, but the implication is the same. "It was literally like falling off a cliff," he says. "Nobody saw the depression coming, we couldn't prepare for it. The government has largely been out of the funding business for many years, which leaves corporate and institutional giving. But that has almost dried to extinction. In the 1980s, it was considered almost a necessity for corporations to give philanthropic dollars ... now subscriptions are down and our endowments have plummeted 40 to 50 per cent."

Such circumstances require grimly pragmatic responses. "We've cut staff, we've cut salaries, we've chosen not to cut content; spiritually, that would have been cutting off our nose to spite our face," he explains. "But we make smaller shows, and we have to cut things like health and pension contributions."

New York is no longer a city in the grip of recession; yet alarmingly, especially in a society in which cultural philanthropy is a long-established tradition – unlike the UK – the upswing has not yet made itself felt in renewed arts contributions. "In the short term at least, it does not seem people's mindsets are changing, philanthropically," Haimes says. "Even the businesses that are picking up, like Goldman Sachs, are not yet coming back to philanthropy."

If the non-profits are most vulnerable in these circumstances, even the "houses on the hill" remain exposed. Peter Gelb, the general manager of the Metropolitan Opera, one of the best-endowed arts institutions in the world, quips: "We are living in a post-September 15th world." Evidently, after Lehman Brothers collapsed, New York's philanthropic scene took a drastic turn for the worse. "All companies with limited endowments live hand-to-mouth, always," Gelb says, "but right now very few people or corporations are interested in giving money to the arts."

If you were running a company, wouldn't you be grateful if they did? Wouldn't you do whatever they asked? The inevitable artistic compromises that this dependency on the private model entails may go some way to explaining why New York ends up inviting so many shows first staged in UK-subsidised theatres to its shores.