IEG SR projects sponsorship spending on art museums, symphony orchestras, performing arts venues and other arts and cultural attractions will total $838 million this year, up 1.3 percent from the $832 million spent in ’08.

The growth rate is notable in that it outpaces IEG’s projected 1.1 percent increase for the entire sponsorship industry, despite the fallout in the financial services and automobile categories, traditionally the two most active categories in arts sponsorship.

Arts organizations have been able to offset some of those losses in part by positioning themselves as marketing partners instead of as beneficiaries of philanthropic dollars, which has helped open up new sources of revenue.

Spending on arts properties also has been boosted by the growing number of organizations taking a strategic approach to sponsorship by providing value for sponsors’ investments. That includes strategies such as offering proprietary platforms that sponsors can ‘own’ to taking a less is more approach by offering prime benefits to a limited number of sponsors.

While the majority of spending is comprised mostly of a large amount of relatively small deals, it does include some partnerships of significance, most notably the Dallas Center for the Performing Arts concluding a multiyear partnership with AT&T Inc. to rename the venue the AT&T Performing Arts Center.

To get a sense of the current sales environment for arts properties, IEG SR spoke with Jon Holman, president of partnership marketing agency The Holman Group, whose clients include the Los Angeles County Museum of Art, Segerstrom Center for the Arts, Houston Grand Opera and Carnegie Hall.

Holman has had success in securing sponsorship from categories outside the usual arts partner categories, including aligning timepiece manufacturer Montres Breguet SA with the L.A. Philharmonic and securing a deal between SilverSea Cruises, Ltd. and the Los Angeles Opera, a tie the company leveraged with a European cruise for opera enthusiasts.

The agency also partnered Nissan North America, Inc.’s Infiniti with the San Francisco Symphony.

Below are edited excerpts from the conversation.

IEG SR: What trends are you seeing in the arts sponsorship space?

Holman: The current trend, which is really a reaction to the marketplace, is the embracing of a broader range of sponsor categories. There’s a movement toward partnering with consumer products and other types of companies, and less focus on financial services.

There also is more of a need to develop marketing partnerships that drive the business goals of the sponsor, rather than just meet philanthropic needs. Any company that commits to a partnership in this market has to affect positive change for their business. That’s a cultural shift.

IEG SR: As you mentioned, arts properties can no longer rely as heavily on financial services, traditionally the most active category in arts sponsorship. Specifically, what has been the impact on arts properties from all of the troubles financial services companies have been going through?

Holman: Arts organizations lost a great deal of funding from financial institutions due to the downturn in the economy. In addition, some of the institutions that took TARP funds have been very careful about how they are perceived in the market. They are under a microscope and that has impacted their spending in many cases.

Financial institutions that are still sponsoring are increasingly focusing on leveraging partnerships to support multiple business units and drive their business objectives. They also may still have philanthropic programs, but even those must have tangible benefits and affect change in the company’s business.

IEG SR: Can you share an example?

Holman: We’re working on a new partnership with a national bank on behalf of one of our clients. The partnership will support several of the bank’s business units; it also will serve as a philanthropic platform around which the bank will enhance the concert experience through pre-performance talks.

The message from the bank is: “We are doing something to enhance your appreciation of this art form.” In the past, that may have been the sole focus of the partnership. But now it also needs to drive both B2B and B2C business objectives, through client hospitality and other components that can achieve goals such as signing up customers for new accounts.

IEG SR: What else are arts organizations doing to deal with the realities of the marketplace?

Holman: We’re seeing more collaboration between development and marketing departments to provide tangible benefits for sponsors.

We’re also seeing more collaboration between individual giving and corporate sponsorship within development departments. That’s something we have to drive home with the properties we work with.

IEG SR: Can you elaborate?

Holman: We find sponsors want to reach our clients’ patrons directly to further their objectives. Working with the development and marketing departments on a cohesive strategy from the top down helps achieve these goals.

IEG SR: What advice do you have for others who are selling sponsorship to arts organizations?

Holman: Arts organizations often think singularly; they don’t put themselves in the place of a partner or potential partner–considering their objectives and challenges and how to address them.

It is a big mistake, especially in this economy, to look at corporations from only a philanthropic perspective; they are partnering with your organization to change their business. You need to understand their business and offer packages that meet their needs.

It also is important to keep sponsors engaged and successful so you can re-sign them to multi-year commitments. We encourage constant communication between the two parties and recommend monthly conference calls to touch base on where the relationship is, how things are going and how it can be tweaked.

That dialogue is important, because you can face situations where you develop what look to be great ideas at the beginning of the relationship, but they don’t resonate with audiences and other patrons. You need to quickly come up with new ideas that can effect positive change for the corporate partner.

You also have to look at anything new that may be happening with a partner: How are they reacting to the marketplace? Do they have any new product launches or marketing initiatives? We encourage our clients to be fluid in how they work with sponsors so that they can embrace their partners’ evolving needs.