£3.7m fund for creatives offers interest cuts for more impact
Nesta, the global innovation foundation, has launched a £3.7m fund to help creative organisations in England boost their impact and resilience.
The Cultural Impact Development Fund will provide “risk-taking, ambitious organisations” in the arts, culture and creative industries sector with between £25,000 and £150,000 in repayable finance and support to articulate, monitor and evaluate their social impact.
It will also pioneer the use of financial incentives to help organisations in the investment portfolio achieve their social impact targets. Organisations will be able to get a reduction in the headline interest rate for loans with terms between two and five years by successfully evidencing they have achieved their social impact goals.
The programme is managed by Nesta and funded by Access – The Foundation for Social Investment, with finance being provided by its partners Big Lottery Fund and Big Society Capital.
The new fund builds on the experience of Nesta’s Arts Impact Fund – a £7m fund backed by Bank of America Merrill Lynch, Esmée Fairbairn Foundation, Nesta, Arts Council England and the Calouste Gulbenkian Foundation – which has made 22 unsecured loans of £150,000-£600,000 over the past three years.
The Arts Impact Fund has supported a range of organisations across England to increase their ability to generate positive social impact. It is helping The Old Courts arts centre in Wigan to create a new arts hub, which will provide dedicated working space for artists and early-stage entrepreneurs in the digital creative industries, and give local residents a new performance venue to enjoy. Another example includes supporting social enterprise Project INC to open new learning centres in the North West for young people who are struggling to engage with education. These will be based in existing arts and heritage organisations, and aim to improve attendance and educational outcomes as well as personal and social skills through creative learning.
The investment committee for the new Cultural Impact Development Fund includes Marcel Baettig, Chief Executive Officer at Bow Arts Trust, Kieron Boyle, CEO at Guy’s and St Thomas’ Charity (Chair), Helen Goulden, Chief Executive Officer at The Young Foundation, and Fran Sanderson, Director of Arts & Culture Investments and Programmes at Nesta.
A recent (March 2018) survey of 1,068 arts and cultural organisations, commissioned by Nesta, highlighted the demand for repayable finance to support the sector. It revealed that organisations are set to seek an aggregated £309m over the next five years. Demand for small-scale finance was especially strong, with 41 per cent of respondents indicating that they would be looking for less than £150,000.
We believe fervently in the power of arts, culture and creativity to engage and empower even the most marginalised in society
Investment committee member Fran Sanderson said: “We are really excited to have this opportunity to partner with Access to address the gap in the market for smaller loans that we could clearly see whilst managing the Arts Impact Fund.
“We hope we’ll be able to help smaller organisations all over the country use this patient capital to drive revenue generation and compound their impact – we believe fervently in the power of arts, culture and creativity to engage and empower even the most marginalised in society, and the passion of organisations working in the sector to drive positive change for individuals, communities and wider society.”
Andrew Gnaneswaran, from Access, said the foundation’s Growth Fund was “already showing the power of blended finance to meet the finance needs of smaller charities and social enterprises, with average investments of £66,000 into over 160 borrowers, with a median turnover of £250,000.”
The fund will have a three year deployment period commencing this month (October 2018), with the final loans expected to be repaid by July 2026.
To apply to the Cultural Impact Development Fund or find out more information, please visit: www.artsculturefinance.org