FUNDING The lone arranger
The Arts Impact Fund could be a new way of financing arts organisations’ plans. Patrick Kelly has a look
The restoration of an art deco cinema, a dance company headquarters in the Olympic Park, a summer camp in the South of France for creatives, an outdoor arts hub in inner city Manchester – the initiatives backed by the Arts Impact Fund don’t lack ambition.
But then that’s the point. The fund, if it is successful, has the potential to transform much of the arts funding landscape.
Up to now arts funding has come in one of three ways: public subsidy, private philanthropy and straight- forward box of ce revenue. But loan finance, the fuel which powers most other business enterprises, has large- ly been absent from the cultural industries.
It was to fill this gap that social investment groups and arts funders like the Esmée Fairbairn Foundation, the Calouste Gulbenkian Foundation, Nesta and Arts Council England got together. Research had shown them that few arts organisations are familiar with the idea of social investment. Few organisations had a good way of measuring their social impact and arts trustees shied away from debt.
The Arts Impact Fund is designed to give arts organisations the knowledge, resources and skills they need to make use of social investment.
As this latest wave of loans show, some of them are getting the hang of the idea. Over £3m of the £7m fund has been shared among eight organisations (see panel).
So how does the scheme work? The Fund has three priority areas: Health and Wellbeing, Youth and Educational Attainment and Citizen and Community. Definitions cover geographical communities or neighbourhoods, groups de ned 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.
Arts organisations in England can apply under any of these categories for unsecured loans of between £150,000-£600,000 from the £7m fund, which is provided by the four partners in the Arts Impact Fund: Arts Council England, the Esmée Fairbairn Foundation, Nesta and Bank of America Merrill Lynch. Loans are at interest rates ranging from 4-7% per year and the loan duration between three and five years. The terms and conditions are negotiated with individual applicant organisations and can include interest and capital payment holidays.
Applications are assessed quarterly by an Investment Committee which also monitors existing loans, to ensure the fund achieves its strategic aims. Monitoring will include requesting regular information, calls and possible face-to-face meetings. 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, the fund can renegotiate repayment plans.
So far, the Arts Impact Fund has committed £5.4m to 16 organisations. But it hasn’t all been plain sailing. An evaluation of the first year’s operation of the scheme found that enquiries were initially dominated by London and the South East, so efforts had to be made to improve regional regional diversity. Most schemes related to young people and educational attainment, though there is now a small increase in numbers of health- related interventions. Theatre was the most prevalent art form of enquiring organisations, representing a quarter of all enquiries.
There was also a worry that as most proposals involved premises owned by applicant organisations, that other organisations might feel it wasn’t for them. And a few applications foundered because of unclear business plans or additional social impact. Trustees were also inclined to be too conservative in their forecasts and could find themselves underselling a great and potentially lucrative, idea.
But great projects are now well under way, thanks to the funding stream. They include Titchfield Festival Theatre’s £400,000 planned refurbishment and modernisation of its site, and Wayne McGregor’s newly opened studio, the first cultural organisation to settle in the Olympic Park. South East Dance’s plans for a new site in the heart of Brighton have recently been completed, meaning that its long awaited The Dance Space is on its way and Soho Theatre is now on its second run of stand-up comedy films designed to target new audiences outside London.
However, it’s not all about growing financially resilient organisations, the fund also aims to bolster and articulate the social value created by the arts, including the positive impact it can have on the welfare and cohesion of local communities. The organisations will document their artistic, social and financial impact quarterly for the duration of their loans, with the Fund sharing the findings from all the investees.
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 as a demonstration fund, there is potential for the model to be scaled or replicated in other sectors. Commenting on the latest round of funding, Jane Tarr, of Arts Council England said: “It’s great to see organisations in Salford, Bradford and Birmingham receiving investment, along with MeWe360 which will support BME creative practitioners and companies with a new hub in London. The breadth and scale of sector interest in the Arts Impact Fund has continued to grow, and the investment is starting to have a social and artistic impact on audiences and communities across the country.”
The next funding announcement is expected in January 2018.
Arts Impact Fund at work: how seven organisations are benefitting
Birmingham Royal Ballet (£215,000) - to help diversify income streams, its production of The Nutcracker (left) will be adapted for future arena and other large-scale venue tours.
Make it Sustainable (£300,000) - community studio and maker-space for artists and designers in Birmingham to invest in preserving an industrial heritage building, the Old Print Works; creating opportunities for creative community engagement in a deprived area of the city.
MeWe360 (£150,000) - to create a new, long-term workspace and mentoring development hub for Black, Asian, and minority ethnic creative entrepreneurs in Soho.
Studio Wayne McGregor (£500,000) - to complete the construction of a new studio space for the multi-award winning choreographer and his dance company, making it the rst cultural institution in the Olympic Park (above).
Walk the Plank (£170,000) - leading UK outdoor arts organisation to create, and relocate to, a new outdoor arts creative hub in Salford; contributing to regeneration of the local area and strengthening its cultural infrastructure.
Village Underground (£600,000) - iconic London music venue to acquire new, larger multi-arts venue in Hackney and partner with an arts charity, Community Music, to deliver social programmes.
V22 London (£300,000) - to acquire a listed heritage building in Orpington and create new affordable artist studios; refurbishing it for the benefit of creatives and local community.