During the Arts Impact Fund pilot we have had the opportunity to support a number of innovative ideas, business models and creative practices. Through our investment into renowned East London multi-arts venue Village Underground, we hope to demonstrate a new model for creating social impact through a mutually beneficial partnership between commercial and not-for-profit interests.
Founded in 2007, Village Underground is a landmark venue easily identified by the recycled Jubilee line underground train carriages parked on the roof of its Victorian warehouse in Shoreditch, which provide affordable studio space for artists and creative industry tenants. The business started life with an artist and community-led ethos, but economic realities meant that ticketed performing arts events - focused primarily on contemporary live and electronic music - took centre stage.
With an annual audience of 150,000 people across more than 500 performances featuring 1,500 artists, Village Underground is a venue of choice for spring-boarding the careers of up-and-coming artists. However, the existing site is also operating at capacity, which constrains the breadth of activities it can offer.
In 2016, an opportunity arose to take on the leases of a disused art-deco cinema and theatre complex in neighbouring Dalston for the purposes of converting it into a 2,500+ capacity multi-arts centre run by Village Underground – the Hackney Arts Centre. Lease acquisition and refurbishment of the site will cost in excess of £2m, with nearly a quarter of the funds coming from the businesses’ reserves, leaving approximately £1.7m to raise from other sources. Village Underground approached the Arts Impact Fund for a £600,000 loan to contribute to this; naturally, the first questions we asked ourselves as social investors was: ‘where’s the social impact?’. However, we were impressed that plans for Hackney Arts Centre included a detailed partnership with music education charity Community Music, which is also an Arts Council England National Portfolio Organisation. Community Music and Village Underground had a history of positive, opportunity-driven collaboration to this point, but through the Hackney Arts Centre, a deepening of the relationship will be possible.
Community Music has a 30-year track record in improving young people’s lives through music production and learning. It works with children and young people, particularly those who are socially excluded or disengaged from education, to develop their skills, creativity, qualifications, self-resilience and esteem; and, through this, creates routes to higher education, employment and further learning. Working with Village Underground at Hackney Arts Centre, Community Music will receive a number of benefits, including extensive access to performance space, equipment and technical support from venue staff, at no cost to the charity. In effect, this will give the young people that Community Music works with immediate access to professional, real-world experience.
The Arts Impact Fund was encouraged by these plans but had to ensure that intention would turn into commitment. As such, our investment proposal was conditional on a detailed memorandum being drawn up and signed by both parties, stipulating, amongst other things, the minimum number of days that Village Underground equipment and facilities would be accessible for Community Music, the roles and responsibilities of both parties and the minimum number of young people that will benefit across the charity’s different programmes; over the first five years, we expect at least 250 disadvantaged young people to benefit per year.
The Arts Impact Fund’s investment committee also took the unusual (but not unprecedented) step of meeting the Directors of both organisations in person prior to approving the investment, to get a concrete sense of the personal motivations and qualities of the individuals involved.
Our loan repayment will come from operating profits generated across both Hackney Arts Centre and the existing Village Underground site. Whilst there are inherent risks involved in opening a new performing arts venue, we are confident in management’s track record and how this has informed the financial planning for the new site. But what is really interesting here is the collaboration between Village Underground and Community Music, and the role the Arts Impact Fund has had in formalising this. If the project is a success, it will show that partnerships between the commercial and not-for-profit sectors can be harnessed to create more vibrant communities, confidently driving real benefits for those most at need.