The Arts Impact Fund is a £7 million initiative set up to demonstrate the potential for impact investment in arts. The fund provides repayable finance to arts organisations with ambitions to grow, achieve great artistic quality and have a further positive impact on society.
We believe the arts play an essential role in our everyday lives, our cultural identity and our economy. They inspire, challenge and educate us.
As a business sector, the arts create economic growth, job opportunities and valuable income for our communities. And there are shining examples of how arts organisations can touch the lives of people and help tackle some of the most entrenched social problems.
We want to invest for artistic, social and financial return. We focus on both artistic and other social outcomes in order to promote the wider positive impact art has on society and support more organisations to benefit individuals and communities through their work.
By investing in the arts, we want to support more organisations to become enterprising and resilient. We want arts organisations to see impact investment as another route to sustainability and achieving their goals. By demonstrating how ambitious organisations can grow and have greater impact using unsecured loans, we want to attract more impact capital to the arts to benefit the wider sector.
Depending on what your organisation’s needs are, we can provide finance between £150,000 and £600,000.
Your funding needs may vary. You may want to purchase or refurbish a building, buy equipment or perhaps pay for specific services to help generate future income. We want to understand your plans and how our funds could help you scale your ambition and build on what you already do.
In most cases, the funding is structured as an unsecured loan repayable with interest, so you will need to demonstrate how your organisation can repay the loan over time. Interest rates and repayment periods will vary, depending on a number of factors, including how much you want to borrow, what you plan to use it for, and the current financial position of your organisation.
The Arts Impact Fund is a collaboration of public, private and charitable partners and supporters who share a commitment to supporting the arts and a belief in their importance to society.
They are: Arts Council England, Bank of America Merrill Lynch, Nesta and Esmée Fairbairn Foundation, with additional funding from Calouste Gulbenkian Foundation.
Following a successful investment decision-making session at the end of September, we are pleased to announce that we will be holding a further meeting with our investment committee in February 2018.
Ahead of the meeting, we would love to hear from arts and culture organisations interested in taking on social investment to fund new or ongoing projects. Whether you are looking for cashflow support, finance to acquire a new asset or invest in your organisational development to become more resilient, or are planning a new venture that you hope will generate revenue for your organisation, we want to hear from you!
In other news...
We hope to announce the outcome of our most recent investment committee meeting in the coming months. In the meantime, why not read about our third cohort of investees which we announced over the summer. Our Fund Manager Seva Phillips and Fran Sanderson, who oversees all fund activity as Head of Arts Investment and Programmes at Nesta, shared the news.
We have embarked on a series of blogs about our insights from the second year of the Arts Impact Fund. Read the first part here.
Watch the video below to find out more about the aims and ambitions of the Arts Impact Fund.
The arts and cultural sectors are vital contributors to employment and the country’s economic growth. Over £850million* annual spending by tourists in the UK is directly attributed to the arts and culture industry. Overall the arts contribute 0.4 per cent to the UK’s total GPD.
But as businesses, arts organisations are not immune to economic challenges and changes in the funding environment. In response, many organisations are exploring new and enterprising ways to increase their sustainability and in doing so, often play a crucial role in the welfare and cohesion of their local communities.
Eligible organisations will work primarily in the arts, defined as: theatre, dance, literature, music, combined arts and visual arts.
Or culture: museums, art galleries, theatres and non-venue based / seasonal including festivals, and touring programmes. Digital and creative media.
Your organisation must be a registered charity or community interest company (CIC). Other incorporated entities with evidence of embedded social mission may be eligible, but will be assessed on the strength of their social mission. We will not make loans to individuals, sole traders, partnerships or unincorporated bodies (unless their partners/members are exclusively corporate bodies).
Organisations must be registered in England and primarily benefiting communities in England.
Applicant organisations should demonstrate a track record (or future plans) to work with beneficiary groups in at least one of the following priority areas: Citizen and Community, Health and Wellbeing, Youth and Educational Attainment.
Please read our Eligibility Criteria for more details.
Restrictions on funding from some partners mean the Arts Impact Fund can only lend to organisations registered in, and operating primarily in, England. There are other funds available for arts organisations, providing both grant and non-grant finance, which can fund organisations outside England, including other programmes run by the partners on the Arts Impact Fund. Please see FAQ on ‘What other sources of funding or support are available?’
Following the submission of your application, your submission will be assessed against the basic eligibility criteria for the fund. If you are unsuccessful, we’ll notify you via email. Should your application go through to the next stage, we’ll be in touch for further information, including your most recent audited accounts. If you would like to discuss your application further, you can get in touch with us at firstname.lastname@example.org.
The fund is open to receive applications until early 2017 and you may apply to the fund at any time between now and then.
Interest rates and terms for loans will vary but you can broadly expect interest rates to range from 4-7 per cent pa and the loan duration to be between three and five years. The terms and conditions will be negotiated with individual applicant organisations and can include interest and capital payment holidays.
We can provide loans alongside funding from other parties (be it in the form of loan, equity or grant). Finance from the Arts Impact Fund is unsecured which means we don’t take a charge against your assets (e.g. building) as security against the loan.
Organisations applying to the fund will be supported through a process of due diligence to ensure their plans are sufficiently robust to repay the loan finance. If problems arise, we will work with organisations to renegotiate repayment plans and will always seek to recover funds.
Social Investment is the use of repayable finance to achieve a social as well as financial return. There’s lots of information available on how social investment works. Here are a few helpful links:
Big Society Capital
There are four partners and supporters in the Arts Impact Fund: the Arts Council England, the Esmée Fairbairn Foundation, Nesta and Bank of America Merrill Lynch.
Esmée Fairbairn Foundation, Nesta and Bank of America Merrill Lynch are represented on the Investment Committee. The Investment Committee meets quarterly to assess applications to the fund, monitor the financial, artistic and social performance of existing investee organisations and ensure the fund achieves its strategic aims. The Committee will also be responsible for deciding any changes to the fund’s priorities or eligibility criteria. Any changes will be advertised on the website.
If your application reaches the investment proposal stage, you’ll be expected to provide further information and meet with the Arts Impact Fund team.
There are a number of possible outcomes from decisions made by the Investment Commitment: Approval (with/without conditions); rejection or invitation to re-apply pending amendments. If your organisation receives funding from us, we’ll be monitoring your organisation on the financial, social and artistic objectives we agree. We are also keen to understand how our funds help you achieve your plans. Our monitoring will include requesting regular information, calls and possible face-to-face meetings.
Last year a group of funders, advisers and arts organisations gathered to explore the challenges and opportunities facing arts organisations and changes to the funding environment. These included the social investment intermediary Investing for Good, Rayne Foundation, Esmée Fairbairn Foundation, Calouste Gulbenkian Foundation, Nesta, the Cabinet Office and Arts Council England.
Exploratory work included a series of interviews with arts organisations about their plans and finance needs and an arts themed call-out on the Government’s Investment and Contract-Readiness Fund. The group’s research identified that very few arts organisations are familiar with social investment and many boards are wary about taking on debt.
They often lack the knowledge, resources or skills needed to make effective use of social investment. In other words, they are not ‘investment ready’. Measurement of the social impact of arts activities is also underdeveloped. It is hoped that the fund and its associated activities will support development of investment-readiness and understanding impact within the wider arts sector.
The Arts Impact Fund partners and supporters would like to congratulate all those who have played a part in bringing social investment into the arts sector. Key players included Jim Bierne (Chief Executive of Live Theatre), Margaret Bolton and Clare Cooper (authors of an important early paper, ‘Capital Matters’), Geoff Burnand (Chief Executive of Investing for Good), Danyal Sattar (Big Society Capital) and Tim Joss (formerly Director of the Rayne Foundation and now Chief Executive of AESOP Arts Enterprise with a Social Purpose).
There are shining examples of arts organisations helping individuals and communities. But to date, evidencing social impact has been a relatively under-developed capability in the arts. By supporting organisations to show the important economic, social and artistic contribution they make, the Arts Impact Fund hopes to attract more social investors to the arts and for arts organisations to see social investment as another route to sustainability and achieving their ambitions.
The priority social outcome areas are Health and Wellbeing, Youth and Educational Attainment and Citizen and Community. These have been chosen as areas of social need where arts organisations have a long history of working, but not necessarily of demonstrating their impact. Your organisation may well already be working in these areas.
We want to work with organisations to both demonstrate their existing impact and provide finance so they can help more people and communities who are important to them.
By people or communities, we mean those groups your organisation has identified as important to you and why. These could include geographical communities or neighbourhoods, groups defined by age, ethnicity or sexual orientation or by disadvantage(s). For example, deprived inner city or rural areas; older people who are isolated at home; children with disabilities; or adults living with a mental illness. We want to understand how and why your organisation works with the community and what impact you want to have.
For the benefit of arts organisations and their beneficiaries, we are keen to ensure our lending for social outcomes is aligned with other funders. Therefore the fund will adopt commonly understood outcomes and metrics, for example those used by Big Society Capital outcomes matrix. To understand the kind of outcomes we’ll be looking for in your work (under Youth and Educational Attainment; Health and Wellbeing; and Citizen and Community) please see www.bigsocietycapital.com/outcomes-matrix
Depending on what your organisation is looking for, there are a variety of other sources of funding or support. A few are listed below. You should also look at the websites of Esmée Fairbairn Foundation, Nesta and Arts Council England for information on their other programmes or sources of funding.