£7m fund to bring social investment to the arts launches in the UK
A new £7m fund, created and funded by Bank of America Merrill Lynch, Esmée Fairbairn Foundation and Nesta, has been launched to support arts organisations in the UK.
The Arts Impact Fund, which has been convened with the help of the Cabinet Office and the Arts Council England, will offer eligible organisations unsecured loans ranging from £150,000 to £600,000, with an interest rate of between 4% and 7%.
Helen Goulden, executive director in Nesta’s Innovation Lab, said: “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.”
The fund offers an alternative to a commercial loan or grant funding and gives successful applicants the opportunity to work with experienced arts investors, reducing the risks involved in the investment.
Arts organisations interested in applying for the fund will have to prove that they need the finance, that there will be a social impact as a result of the investment and that they can repay the loan. The social impact must fit in at least one of three specific social outcome areas: youth and educational attainment, community and citizen, or health and wellbeing.
A Nesta spokesperson told Pioneers Post that they are not making the criteria any more specific than this because they want to "encourage applications from a wide range of organisations".
Chair of Arts Council England Sir Peter Bazalgette said: “We know that arts and culture delivers social impact. We hope that this new fund helps arts organisations to explore the untapped potential of social investment and helps to diversify revenue streams to help support the creation of artistically excellent work, which also helps deliver wider social benefit.”
Cabinet Office research into investment readiness revealed that there is a demand of £28m from arts-based organisations in the UK. The Arts Impact Fund is being seen as a pilot to determine whether there is demand for a longer term, larger fund of the same model in other sectors of the UK economy, as well as from arts organisations.
Goulden said: “These first two years will be critical to understanding the long-term potential of impact funds of this kind to support the arts.”
The fund sits alongside numerous other social investment announcements being made in the weeks leading up to the UK's general election. Minister for civil society Rob Wilson said: “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.”
Organisations will be able to apply for the Fund from Wednesday 15 April.
Photo credit: Mathias D