In 2015, the Arts Impact Fund is founded to ‘provide repayable finance to arts organisations with ambitions to grow, achieve great artistic quality and have a further positive impact on society.’ Till date, the fund has provided £7 million to 22 organisations in England.
Compared to impact investments in other sectors (environmental issues such as food and water shortages, cleaning up of environmental pollution, and social issues including lack of adequate housing, social inequality), impact investing in the arts sector is quite unheard of. Yet, art is a crucial part of our cultural identity, and also serves as a platform to discuss difficult issues such as mental health, politics, marginalisation and discrimination.
Through traditional artforms and the recently popular interactive art installations, artists and the general public are able to give their own take on the social issues in their community, and even challenge existing social norms. Beyond the intangible impact on society, investing in the arts sector also increases employment for the community, and generates economic growth.
The Arts Impact Fund is started as a collaboration between Arts Council England, Bank of America Merrill Lynch, Nesta and Esmée Fairbairn Foundation, with additional funding from Calouste Gulbenkian Foundation. Depending on each organisation, the fund provides financing from £150,000 to £600,000 as an unsecured loan repayable with interest. However, a caveat is that organisations must be registered and operating primarily in England.
Some impact investments include:
- The Old Courts Art Center in Wigan: received £590,000 in financing to transform a derelict former hotel to an arts hub
- Resonance: received £300,000 in financing to create a contemporary music institute in Black Country, a sub-region of the West Midlands in England
- National Holocaust Center and Museum: received £200,000 in financing to use artificial intelligence and 3D imaging to expand on current exhibitions
Before awarding the investment, the organisations are thoroughly assessed in various aspects, as with other types of investments - their business model, the risks associated with the investment, market and profitability, as well as the team’s dedication and commitment to their cause.