Participants in an HLF-funded project in Bolton, where residents researched the role local soldiers played in the Battle of Gallipoli

Sector warned to get to grips with measuring social impact

Rebecca Atkinson, 15.07.2014
UK heritage too reliant on grants
The heritage sector needs to get to grips with measuring social impact if it wants to access non-grant finance from social investors, according to a report by New Philanthropy Capital (NPC).

Its research, which was commissioned by the Heritage Lottery Fund (HLF), has revealed that the majority of heritage organisations continue to rely on grants as their biggest source of income.

Only 12% of heritage organisations are sourcing non grant-based investment, according to the research. In contrast, 21% rely on government grants to fund projects and 39% on grants from other organisations despite £500m of cuts to public subsidy for heritage organisations since 2010.

The NPC also found that less than half of the organisations surveyed said they were interested in non-grant finance such as crowdfunding, philanthropy or community investment, including social impact bonds and community shares. Although larger organisations with higher income streams were the most interested in non-grant finance, overall there was low take-up of non-grant income.

NPC also consulted with social investors to get their view on the heritage sector. Dan Corry, the chief executive officer of the NPC, said that although there is an appetite to invest in heritage, organisations need to get to grips with measuring social impact.”

“Our research showed there is an immediate need to look at ways for them to better access and understand finance and rely much less on outside funding as sources dry up,” Corry said.

“To that end, heritage organisations need to see the importance of measuring and proving the impact of their work which is crucial to unlocking financial rewards beyond grants.”

Most organisations surveyed said they were good at measuring social impact but lacked the resources to carry it out.

Jenny Abramsky, the chairwoman of the HLF, said: “HLF has always valued enterprising ways of making heritage more financially secure and the importance of measuring impact, but this NPC research shows that many heritage organisations are struggling with the skills needed to secure finance in new ways.”

The research was launched at the Heritage Exchange conference on 14 and 15 July in London, which explored the challenges facing the heritage and cultural sectors in the current economic environment.