A fund that brings together public, private and charitable investment to support arts organisations has launched today (10 March 2015). This is the first of its kind to focus on the social, artistic and financial return created by arts-based organisations.
The £7million Arts Impact Fund was created and funded by Bank of America Merrill Lynch, Esmée Fairbairn Foundation and Nesta, supported by Arts Council England and with additional funding from Calouste Gulbenkian Foundation. It was convened with the help of the Cabinet Office, to demonstrate the significant social value created by arts organisations and support their work through loan finance.
The initiative uses a three-way funding model – called comingling. It has been developed after Cabinet Office research suggested there is an investment demand of £28million from arts-based organisations.1
As a demonstration fund, it combines the expert knowledge and networks of the arts industry with charitable foundations, investors and social impact specialists and will:
The Arts Impact Fund offers an alternative to a commercial loan and grant funding. The advantages of this model include: working with experienced arts investors, sharing risk and providing the opportunity to secure finance for core costs and accelerate development plans.
Arts organisations interested in applying will need to show a need for the finance, explain what the social impact of the investment will be and demonstrate how they will repay the loan. The impact of the arts organisation should be in at least one of the following areas: Youth and Educational Attainment, Community and Citizen, Health and Wellbeing.
Organisations will be able to apply via the website – www.artsimpactfund.org - from Wednesday 15th April for an unsecured loan ranging from £150,000 - £600,000 and with an interest rate of between 4 and 7%. All applications will be considered by the Fund investments team before being presented to the investments committee. Successful applicants will be announced every six months over a two year period with their performance and social impact measurements published.
Rob Wilson MP, the Minister for Civil Society, said: “The UK’s social investment market is world-leading and contributes to economic growth, tackling social problems and supporting public service reform. As part of this Government’s long term plan for the economy, social investment plays an important role by unlocking finance to help charities and social enterprises do more. We believe that the Arts Impact Fund and this pioneering new model is just the start and we want to see it scaled up and replicated in other sectors to address a range of social challenges.”
Andrea Sullivan, head of Corporate Social Responsibility for EMEA at Bank of America Merrill Lynch, added: “Bank of America Merrill Lynch is a recognised leader in supporting the arts around the world. Maintaining a vibrant arts sector is critical to the social and economic development of our communities, and with traditional funding sources constrained, the Arts Impact Fund is a timely and innovative financial solution with tremendous potential for scale. We are delighted to be able to offer not only financial support but also our proven experience of global impact investing to help create sustainable change in our communities.”
Helen Goulden, executive director at Nesta, and on behalf of the Fund, commented: “It has never been more important to think imaginatively about how to increase access to finance for arts organisations. The Arts Impact Fund not only opens up opportunities for social investment for the whole sector, but brings together public, charitable and private finance in support of that mission. These first two years will be critical to understanding the long-term potential of impact funds of this kind to support the arts.”
For more information about the Fund and how to apply visit: www.artsimpactfund.org
The pilot will determine whether there is a demand for a longer term, larger fund with the model potentially also being applied to a variety of other sectors of the UK economy.
Additional comments are available on request.
For all media enquiries please contact Laura Scarrott in Nesta’s press office: email@example.com / 0207 438 2697
Arts Impact Fund: The £7million Arts Impact Fund is a collaboration that brings together private, public and philanthropic investment and provides unsecured loan finance to arts organisations in England that can show social impact. The contributors to the Fund all share a commitment to supporting the arts and include: Bank of America Merrill Lynch, Esmée Fairbairn Foundation and Nesta, with support from Arts Council England and additional funding from the Calouste Gulbenkian Foundation and the Cabinet Office.
The Fund was convened with the help of the Cabinet Office and would like to acknowledge all those involved in bringing social investment into the arts sector. They include: Jim Bierne (Chief Executive of Live Theatre), Margaret Bolton and Clare Cooper (authors of ‘Capital Matters’), Geoff Burnand (Chief Executive of Investing for Good), Danyal Sattar (Big Society Capital) and Tim Joss (AESOP).
For more information please visit www.artsimpactfund.org.
About Bank of America Merrill Lynch: Bank of America Merrill Lynch Corporate Social Responsibility Developing solutions for social and economic challenges is at the core of Bank of America Merrill Lynch’s responsibility platform. In more than 90 countries around the world, we partner with employees, clients and stakeholders to help make financial lives better. The firm focuses on responsible business practices, environmental sustainability, advancing opportunity in local communities through education and employability programmes and investing in global leadership development. We realise the power of our people and value our differences, recognising that our diversity makes us a stronger firm and allows us to better service our stakeholders. By harnessing our intellectual resources, sharing knowledge and connecting capital with need, we are providing opportunities that effect positive change. Learn more at www.bankofamerica.com/about and follow us on Twitter @BofAML. www.bankofamerica.com
About Esmée Fairbairn Foundation: Esmée Fairbairn Foundation aims to improve the quality of life for people and communities throughout the UK both now and in the future. We do this by funding the charitable work of organisations with the ideas and ability to achieve positive change. The Foundation is one of the largest independent grant-makers in the UK. We make grants of £30 - £35 million annually towards a wide range of work within the arts, children and young people, the environment and social change. We also operate a £26 million Finance Fund which invests in organisations that aim to deliver both a financial return and a social benefit. www.esmeefairbairn.org.uk
About Nesta: (www.nesta.org.uk) is the UK's innovation foundation. We help people and organisations bring great ideas to life. We do this by providing investments and grants and mobilising research, networks and skills. We are an independent charity and our work is enabled by an endowment from the National Lottery.
About Arts Council England: Arts Council England champions, develops and invests in artistic and cultural experiences that enrich people’s lives. We support a range of activities across the arts, museums and libraries – from theatre to digital art, reading to dance, music to literature, and crafts to collections. Great art and culture inspires us, brings us together and teaches us about ourselves and the world around us. In short, it makes life better. Between 2011 and 2015, we will invest £1.4 billion of public money from government and an estimated £1 billion from the National Lottery to help create these experiences for as many people as possible across the country.
About Calouste Gulbenkien Foundation: The Calouste Gulbenkian Foundation is an international charitable foundation with cultural, educational, social and scientific interests. Based in Lisbon with branches in London and Paris, the Foundation is in a privileged position to support national and transnational work tackling contemporary issues. The purpose of the UK Branch, based in London, is to bring about long-term improvements in well-being particularly for the most vulnerable, by creating connections across boundaries (national borders, communities, disciplines and sectors) which deliver social, cultural and environmental value.