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NO: Adrian Jackson, artistic director of Cardboard Citizens

I'm as perturbed by the prospect of spending cuts as anybody in the performing arts. An organisation like ours, which works with people on the margins, is an excellent investment, since the homeless people we employ and engage in our activities, keeping them off the streets and giving them the support they need to make changes in their lives, are likely to cost the state less in the long run. We exercise a social function with our art. But we also offer an excellent return on public funding. Show me an investment on the stock market that multiplies the initial outlay by six.

The Arts Council's core support – which we've been receiving for the last six years – amounts to only about 15 to 20% of our total turnover. But it's provided us with a solid base from which to apply for other grants. To be an RFO (Regularly Funded Organisation) is a mark of respect from the arts sector. It gives you credibility with other public- and private-granting bodies. If you shrink the core funding, you shrink the company.

We're preparing for a 10% cut in the coming year and 30% in years to come. Ten per cent would be a serious blow; but if we lose 20-30%, the whole structure will suffer. Suppose we lose 20% of our core funding – currently we only have three full-time staff (we rely on freelancers whom we pay on commission) – that's the equivalent of one person. In addition, we employ three project managers and four full-time members of staff dealing with different administrative tasks.

To have a dedicated funding director is not a luxury. It suits the current situation to say that a company like ours has a bloated administration. Yet it's the people involved in fundraising who make it possible for the company to be creative. The artists only make work because we're able to raise money for them to do so. The fact that we're successful at fundraising is what allows us to attract artists of good calibre.

Culture secretary Jeremy Hunt wants the sector to be more competitive and to adopt the American model by becoming more entrepreneurial. We are already doing this, to a large extent. We are a mixed economy; we seek support from the business sector; we mount high-profile fundraising events such as the charity auction hosted by our ambassador Kate Winslet or the standup comedy show in the West End featuring Stewart Lee. We're currently organising a three-day cycle ride to raise proceeds for Cardboard Citizens.

I'm trying not to be too pessimistic. The trouble is, it's not just the Arts Council that's cutting back on its spending. Our Lottery grant ends in 18 months' time, and this will coincide with the next round of cuts. Last year, the London Development Agency suppressed its grant scheme and we lost their support. Such contracts simply aren't going to be there in future. We'll survive because we have to, but it will really limit what we do.

YES: David Parrish, artistic producer of Creation Theatre

As the director of an Oxford-based theatre company that has... Finish Reading at www.guardian.co.uk