Baillie Gifford is in crisis talks with the British festivals it supports after the end of its sponsorship deals with two flagship events in response to threatened boycotts that have left the UK’s literary scene in turmoil.
The decisions by Hay Festival and Edinburgh International Book Festival this month to split with the Edinburgh-based asset manager have sent shockwaves across the sector, leaving organisers fearing for their own events’ futures.
Baillie Gifford, which manages £225bn in assets, has come under fire from activist group Fossil Free Books for its purported links to Israel and the fossil-fuel industry through investments it holds.
Organisers of both Hay and the Edinburgh book festival, which take place in May and August, respectively, said staff were being targeted on social media and accused of complicity in genocide.
Jenny Niven, chief executive of the Edinburgh International Book Festival, said the pressure on her team and their colleagues at Baillie Gifford had “simply become intolerable”.
The asset manager is now in talks with seven other UK literary festivals that it supports to work out whether it is viable to continue their relationships, according to several people familiar with the discussions.
“My suspicion is that they’ll withdraw from the sector because the game’s not worth the candle,” said one person involved in talks.
Literary festivals have emerged as a staple of the cultural calendar in the UK and Ireland over the past four decades, growing in number from a handful to roughly 400. Over the past 20 years, Baillie Gifford has become a leading sponsor of the some of the most high-profile events, as well as backing an annual £50,000 prize for non-fiction.
But the events’ economic model is precarious: they rely on a combination of ticket sales and state support as well as private and corporate sponsorship. One director estimated that many literary festivals were “just a couple of grand away from bankruptcy”.
The industry has also been reeling from the pandemic, the cost of living crisis and a decade of cuts to arts funding.
“We’re all worried about this for ourselves and sad for our colleagues at Edinburgh and Hay,” said Adrian Turpin, director of Wigtown Book Festival in south-west Scotland, which is sponsored by Baillie Gifford.
“The danger is that we’ll see a huge flood of money out of the arts from reasonable and ethical companies because the purity test has been set so high. It’s hard to see a situation where any multinational company is able to justify being pure enough to give money,” he added.
Fossil Free Books said on Friday “the arts can’t continue to be so
dependent on philanthropy and corporate partnerships . . . We need much greater public funding for the arts”.
Literary festivals sit within the broader arts sector, where sponsorship has become a fraught subject. The Louvre museum in Paris and the National Portrait Gallery in London were in 2019 among the first to refuse donations from the Sackler family or to remove their name from buildings, following outcry over their ownership of the company at the heart of the deadly US opioid epidemic.
The British Museum’s decision last year to renew its partnership with oil major BP, in a £50mn sponsorship deal, was criticised by environmental groups and activists.
Musicians have dropped out of Latitude Festival in July and the Great Escape Festival this month over Barclays involvement in the events. The bank has been accused of investing in arms companies that supply Israel. Barclays has denied the claim, pointing out that the bank does not invest on its own behalf.
The furore around Baillie Gifford’s literary patronage began last year ahead of Edinburgh International Book Festival, when climate activist Greta Thunberg cancelled her appearance, accusing the company of using its support of the arts to “greenwash” its reputation.
An open letter this month from Fossil Free Books, which comprises people working across the books industry, restarted the row ahead of this year’s event in August. It called on Baillie Gifford to divest from any fossil fuel industry investments or companies active in the occupied Palestinian territories.
“Financial institutions are our target . . . Baillie Gifford is an institution over which we have leverage, as the events of the last several days have shown,” the group said on Friday.
The investment manager has said repeatedly that only 2 per cent of its clients’ money is invested in companies with some business related to fossil fuels, compared with the market average of 11 per cent.
It said the assertion that it had significant amounts of money in the occupied Palestinian territories was “offensively misleading.”
The asset manager is in talks with festivals in Cambridge, Stratford, Henley, Cheltenham and Wimbledon in England, and Wigtown and the Borders in Scotland, over its sponsorship, people familiar with the matter said.
One person close to Baillie Gifford said it was “not throwing in the towel on supporting culture . . . But if as a sponsor your involvement causes more harm than good then it becomes a problem.”
For Allan Little, a veteran war correspondent who is chair of the Edinburgh International Book Festival, the disruption is a far cry from the origins and aims of the Edinburgh International Festival, the umbrella event.
The inaugural gathering was held in 1947 in the aftermath of the second world war. Its first director, opera impresario Rudolf Bing, was an Austrian Jew who came to the UK as a refugee in the 1930s after fleeing the Nazis.
On the festival’s final evening, Berlin-born conductor Bruno Walter led members of the Vienna Philharmonic Orchestra, who had been separated by the war, in an interpretation of Gustav Mahler’s Das Lied von der Erde, — The Song of the Earth — at the city’s Usher Hall.
“The organisers wanted to discover a shared cultural heritage for Europe,” said Little. “The guiding idea of the Edinburgh festival tradition is a repudiation of war.”