Arts Council England has published a new report into private philanthropy, donations from trusts and foundations and sponsorship in the arts and culture sector.

According to the survey, cash sponsorship is the most important form of partnership between arts and culture organisations and businesses, accounting for 54 per cent of business investment in 2014/15.

The other categories identified are In kind-sponsorship, accounting for 19% of all business investment, Corporate Donations (16%) and Corporate Membership (11%).

The survey shows the sector received £480 million worth of private investment in 2014/15, with around half of this (£245 million) coming from individual giving. Overall, private investment grew by 21%, primarily driven by high-value individual donations to larger organisations.

Private investment accounted for 18% of arts and culture organisations' total income in 2014/15, and for those with a total income of less than £100,000, it was even more important, accounting for 29% of total income.

London-based organisations account for 66% of total private investment, which is broadly in line with their share of total income, and visual arts organisations have done disproportionately well, accounting for 32% of total private investment.

However, although the survey shows the importance of private investment, 63% of respondents felt that they didn't have the capacity to make the most of their fundraising.

The Arts Council says it is already responding to these issues with initiatives such as Catalyst Evolve, which supports organisations to develop successful and sustainable fundraising models by improving their capacity. There is a need for continued investment to maintain the growth of private investment, especially for smaller organisations and those outside London.

Clare Titley, Director of Philanthropy, Arts Council England, said: "It's encouraging to see that private investment has grown over the last three years, especially as it is evident from the data that this is an important source of income for smaller companies, as well as the larger more nationally recognisable organisations.

"The findings in this report will help to support the sector in their strategic planning at a time when there is increased need for organisations of all sizes to diversify their funding and strengthen resilience and it will also support our policy development and the scoping of future strategic investment in this area".

In his speech to the Creative Industries Federation last month, Sir Peter Bazalgette celebrated the ingenuity and business acumen of arts and cultural organisations whilst pointing out that this success is built on the bedrock of public funding. The millions of pounds generated through private investment and commercial activities add immense value to the public funds invested, he said.