Well-informed decisions require reliable data. This applies not only to our advisory work, but also to the question of how public funding for the arts can be used effectively. The 2026 federal culture budget has reached a record level of 2.5 billion euros. But how can we ensure that this investment goes where it is needed? A look at the latest figures and the rationale behind cultural funding.
The 2026 figures at a glance
For the year 2026, the federal culture budget allocates around 2.5 billion euros for cultural funding, which represents an increase of approximately 225 million euros compared with the previous year.1 This figure is primarily the result of a reallocation of funding. Film funding has seen a particularly sharp increase, rising to 250 million euros (almost double the previous amount), whilst the ‘Kulturinvest’ fund has risen to 250.7 million euros (+120 million euros). Meanwhile, funding has been cut in other areas, such as the grant to Deutsche Welle or the construction of the Neue Nationalgalerie. In addition, a new overall reduction in expenditure of 33 million euros has been established. The 2026 federal culture budget reflects not so much general growth as a reorientation in favour of film and infrastructure.2 At the same time, the situation is becoming more severe at state and local authority level.
In 2025, the deficit of local authorities totalled just over 30 billion euros. Rising social security and staff costs are significantly restricting their financial leeway. As a result, discretionary services in particular – such as local authority funding for the arts – are coming under pressure.3 In Berlin, far-reaching cuts in 2025 led to the resignation of the then Senator for Culture. In Stuttgart, the city council decided to reduce the culture budget by six per cent for 2026/2027, resulting in the budgets for some festivals being halved.4 Federal investment accounts for only a fraction of cultural funding in Germany. The federal government primarily supports institutions of supra-regional significance, memorial sites, film and flagship projects.
Who is responsible for what?
Basic cultural provision is the responsibility of the federal states and local authorities. Municipal theatres, music schools, local cultural centres and most clubs are not funded from the federal budget. When such organisations run into difficulties, this is due, for example, to rising operating and energy costs and increasing staff costs resulting from collective agreements.
Furthermore, the local authorities and municipalities responsible for funding are coming under increasing pressure. Rising social security and staff costs are increasingly restricting the scope for manoeuvre in local authority budgets. Consequently, discretionary services such as cultural funding are being curtailed. The fact that the local authority share of public cultural expenditure has fallen from 88 per cent to 76 per cent since 2005 is due less to absolute cuts than to the fact that the federal government has increased its expenditure significantly more during this period.5 In recent years, however, the situation has worsened: In Dresden, for example, a cut of at least ten per cent to cultural funding is under discussion for 2026.6 Thus, the federal and state governments are managing to increase their discretionary contributions, whilst local authorities are forced to scale back. For many cultural institutions, this means that, despite record figures at federal level, local funding is becoming more precarious.
From an input-based approach to impact
At the same time, there is a growing focus on how cultural funding can be used effectively. In future, cultural funding will be assessed more on the basis of its social impact rather than primarily on how much money is spent. Funding bodies are increasingly asking what an organisation actually achieves with the money. Does it reach new target groups? Does it strengthen social cohesion? Does it contribute to education or social participation? Does it attract visitors from outside the area, thereby boosting the local economy and tourism? Organisations that clearly articulate their objectives, understand their target audiences and can demonstrate their contribution to society have structural advantages, even in times of tight local authority budgets. This applies not only to the allocation of funds, but also when it comes to publicly justifying funding.
What does this mean for cultural organisations?
At a time when public funds are tight, it is more important than ever for cultural organisations to diversify and increase their income in order to reduce their dependence on funding, at least to some extent. Nevertheless, public funding will remain indispensable: it is therefore also crucial to demonstrate their impact and social relevance in a more transparent manner. Through our consultancy work, we support cultural organisations in refining their strategic focus, tapping into revenue potential, clearly articulating causal relationships and working on a data-driven basis.
Sources:
1) https://kulturstaatsminister.de/kultur-und-medienetat-auf-rekordniveau;
2) https://www.bundestag.de/presse/hib/kurzmeldungen-1126844
3) https://www.staedtetag.de/themen/kommunalfinanzen
4) https://www.rbb24.de/politik/beitrag/2025/05/berlin-kultur-senator-joe-chialo-ruecktritt.html;
6) Dresden: Grüne fordern Rücknahme der Kürzungen im Kulturhaushalt
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A contribution by Lisa-Marie Burkhard, Consultant