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Understanding social investment
More and more arts organisations are turning towards a newer form of repayable finance – social investment – to support their projects. Seva Phillips, Head of Arts and Culture Finance at Nesta explains more.
It can be challenging to raise finance for cultural projects. Applying for grant funding is a long, uncertain and increasingly competitive process. And raising repayable finance from high street banks – typically in the form of loans – can be equally tricky: commercial lenders don’t always understand the business models involved in the arts and may charge prohibitively high rates of interest with inflexible terms.
More and more however, arts organisations including museums, are turning towards a newer form of repayable finance – social investment – to support their projects. What makes social investors different to traditional lenders is that they’re interested in both financial and social returns on their money. They want to see how people – especially those that come from underserved communities – can benefit from funded projects, in addition to getting their loans back.
This might sound like a lot, but it often aligns with borrowers’ aims and visions, particularly in the arts and cultural sector where so many organisations already do invaluable work in their communities.
At Nesta – the UK’s innovation agency for social good – we want to make social investment accessible to the arts and cultural sector. Since 2015, our Arts and Culture Finance team has supported over 40 organisations across the UK with repayable finance drawn from public, private and philanthropic sources. The projects we’ve backed are diverse – not only in terms of creative practice but in how they’ve used the money too. We’ve provided cashflow support for day-to-day activities, helped organisations expand their offer, and financed property purchases and refurbishments that renew cultural spaces for generations to come.
Several museums have benefited from our social investment. The Story Museum, which celebrates great stories and engages young people in literature, took on a £400,000 loan from Arts and Culture Finance to enable it to complete extensive renovations on its premises in central Oxford, to be repaid from capital fundraising. The project has enabled The Story Museum to add new learning spaces and galleries to the site and upgrade its existing facilities.
The Migration Museum, based in south-east London, used a £42,000 loan to grow its income generating capabilities. Having successfully run a gift shop at its Lewisham site, the team wanted to launch its online counterpart, as well as engaging the services of a reputable e-commerce social media agency to raise its profile. This new income will be used to repay the loan and subsidise the museum’s charitable work.
The first step in accessing social investment from our funds is to speak to us! We’d be happy to have a brief initial call to learn a little bit about your work and answer any questions you might have. We’d also love to meet you in-person at our stand at this year’s AIM Conference in Port Sunlight in June.
For more information visit www.artsculturefinance.org or email firstname.lastname@example.org