Nesta report calls for new funding models

R&D investment and crowdfunding identified as financing gaps
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Rebecca Atkinson
New funding models, including matched public support for crowdfunding, could bring in more than £70m of additional funding for the arts over the next three years, according to a new report.

The New Art of Finance: Making Money Work Harder for the Arts, published by the former non-departmental public body Nesta, concludes that funding is dependent on grants from public bodies, earned income and philanthropy, and therefore not sustainable.

The report identifies several financing gaps, including investment in research and development (R&D), venture funding and “arts accelerators”, which bring different parties to work on ideas until they reach a point where they can raise commercial investment.

It also proposes grants from public bodies to match crowdfunding investment from members of the public.

It proposes that if Arts Council England were to ringfence 1% of its overall budget on R&D funding (about £6m a year), and public funders collectively allocated £10m a year towards piloting venture funds, accelerators and crowdfunding, more than £70m of new funding could be generated after three years.

“We could reasonably expect at least £1 of additional money to be raised for each £1 allocated, with this rising over the next three years to at least £2,” the report states. 

Hasan Bakhshi, Nesta’s director of creative economy, said: “The recent funding cuts in England will not be reversed any time soon. They reinforce the need to urgently explore new ways of supporting the arts. Now is the time to develop funding models which leverage in money from new sources.”

Nesta says other sectors have a tradition of public funding to support risky R&D activities that generate socially valuable insights. It proposes that arts organisations and funders should allocate 1% of spending towards financing R&D in order to expand their audience reach and identify new ways of generating revenue.

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