Bringing together a mix of public, private and philanthropic investors – Arts Council England, the National Lottery Heritage Fund, Big Society Capital, Bank of America, the Esmée Fairbairn Foundation and Nesta – the Arts & Culture Impact Fund is now the world’s biggest impact investment fund for the creative arts.
From now until spring 2023, the fund will be making affordable, flexible loans available to arts, culture and heritage organisations that have a positive social impact on people and the communities where they live.
Explainer: what is impact investment?
Impact investment is about providing organisations with capital for both a financial and social return. This form of funding is useful to social enterprises, and arts & culture organisations in particular, because conventional repayable finance may be too expensive or simply not available for them. This is because there’s often a perception that social sector organisations are too (financially) risky coupled with a poor understanding of the depth and breadth of their socially beneficial work by mainstream investors and wider society.
The Arts & Culture Impact Fund builds on Nesta’s earlier work in providing loan finance to arts and culture organisations that they often cannot find anywhere else.
Nesta launched the £7 million Arts Impact Fund in 2015 in partnership with Arts Council England, Bank of America and the Esmée Fairbairn Foundation, followed in 2018 by the £3.7 million Cultural Impact Development Fund, which was supported by Access – The Foundation for Social Investment, with finance being provided by its partners The National Lottery Community Fund and Big Society Capital. Across both of these funds, the organisation made 30 loans totalling £9.1 million.
- The capital on offer through the Arts & Culture Impact Fund can range from £150,000 to £1 million and is repayable over a period of up to 10 years
- Nesta will take a relationship-centred approach to making investments, working closely with applicants to understand their needs and structure the finance accordingly
- Many of the Arts & Culture Impact Fund loans will be unsecured – meaning that applicants do not need to have assets to serve as collateral in order to apply. This is important because, for the most part, arts & culture organisations do not have assets to act as security, which restricts what finance is available to them. For larger, property related deals, security will be sought where appropriate
- In all cases, applicants to the fund will have to clearly outline how their work positively affects the lives of individuals and their communities. For example, an arts festival in a public park may contribute to good physical health and community cohesion
Interested in applying?
- The Arts & Culture Impact Fund is now open for applications
- Aside from providing some basic information in our enquiry form, there’s no application to fill in – this is carried out by the Nesta investment team, who guide applicants through a process of due diligence