Culture Shots, a Manchester initiative that is supported by the Esmée Fairbairn Foundation, one of the backers of the new fund. Health and wellbeing is one area of work the Arts Impact Fund will cover.

Partnership unveils arts investment fund

Gary Noakes, 11.03.2015
Five organisations back £7m initiative
A new fund claiming to be the first of its kind to focus on the social, artistic and financial return from arts organisations has been established with a £7m purse.

The Arts Impact Fund is backed by five partners; Bank of America Merrill Lynch, the Esmée Fairbairn Foundation, Nesta, the UK’s innovation fund (which has a National Lottery endowment) plus Arts Council England and the Calouste Gulbenkian Foundation, a Lisbon-based charity with a London office.

The fund, convened with the help of the Cabinet Office, will provide loans using a three-way funding model known in investment circles as comingling, aiming to be an alternative to the commercial loan system and grant funding. The contribution from each of the backers has not been revealed.

Organisations must show a need for finance, explain what the social impact of the investment will be and demonstrate how they will repay it. The recipient’s impact must affect one of three areas: youth and educational attainment; community and citizens; or health and wellbeing.

Applications can be made from 15 April for loans of £150,000-£600,000 with an interest rate of 4-7%.

Successful applicants will be announced every six months for two years and performance and social impact measurements will be published.

The pilot scheme may be applied to other sectors of the economy if successful. A Nesta spokeswoman said there was no estimate as to how many applications would be received.

“As a demonstrator fund we are opening this up to see what appetite there is. It is an experiment,” she said.

Rob Wilson, the minister for civil society, said: “As part of this government’s long-term plan for the economy, social investment plays an important role by unlocking finance to help charities and social enterprises do more. 

"We believe that the Arts Impact Fund and this pioneering new model is just the start and we want to see it scaled up and replicated in other sectors to address a range of social challenges.”