"The festival is always one of the best festivals for music and theatre and art in the world, we punch above our weight in everything we do. I'm super proud of it."
Wesley Enoch, the outgoing director of Sydney Festival, said the "real joy" of Mr Freedman's donation is that it is to the festival itself, as opposed to a specific project.
"It could mean a whole range of things, it could mean commissions, it could mean works of scale, and more of them, but ultimately it will mean more work for artists," he said.
Balancing act of funding
Mr Enoch said philanthropy for the festival had grown in the past 12 months, but noted that government funds are equally important.
"Sometimes government says we'll take the money away from you because you're getting so much money from private philanthropists, but this is an opportunity to say we build the festival to be even bigger," he said.
He said public funding and private philanthropy "go hand in hand".
"You don't get private philanthropy unless you have public funds. We should always think of philanthropy as the wonderful icing on the cake rather than thinking it's instead of having public funds. I hope that we see how that balancing works going forward," he said.
Mr Freedman, who famously splashed $9 million on Kurt Cobain's guitar last year, said while there are many Australians who give a lot, Australia lacks a culture of philanthropy.
"That has to change," he said, adding that he plans to add further to the $5 million donation in the future.
David Kirk, the chairman of the Sydney Festival board, said the festival has been steadily building its philanthropy arm over the years to complement government funding.
"It's getting harder and harder for charitable organisations, the arts in particular, to attract corporate sponsorship," he said.
"This [donation] moves us into a whole new category of support from philanthropic supporters. It's a wonderful gift to the arts and NSW."
Mr Kirk said that during the pandemic the philanthropic community really stood up to help the arts community.
"We saw some wonderful donors understand the arts was going through a difficult period and made one-off contributions to help us through the period. When you're giving to the festival, you're really giving to artists so they can create for the festival," he said.