Insights from the Second Year of Arts Impact Fund: How impactful are we?
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Insights from the Second Year of Arts Impact Fund: How impactful are we?

With the Arts Impact Fund's initial two-year investment period coming to an end, we have begun to think more about how to articulate the impact our investees have made to our stakeholders; this is part of our ongoing efforts to make the case for impact investment in arts and culture more compelling. We have talked about the different models and challenges for creating and measuring social impact for individual organisations before, so in this last piece from our Second Year Insight series, I wanted to look at how impactful we have been so far.

Year 1

Year 2

No of investments approved

7 (Jul 2015 – Sep 2016)

12 (Oct 16 – Sep 17)

Average social impact score



Highest vs lowest impact score



Average artistic impact score



Highest vs lowest impact score



One way of thinking about our impact at fund level is to look at the impact our portfolio organisations already had at the point of making an investment. As you can see from the table above, in our second year we approved more investments in absolute terms and they also tended to do better on our social impact scorecard. We calculate a subjective social impact score based on a combination of the scale of impact achieved (usually in terms of the number of people reached), the magnitude of effect on individual beneficiaries, and the level of their need or vulnerability. These scores help us place the impact of an investment proposal in relation to the existing portfolio (i.e. they are relative measures) and are considered in the context of the overall quality of the applicant’s monitoring and evaluation systems (the standard of evidence). As our portfolio matures in the coming years, we will re-assess the impact scores of our investees to get a sense of whether their impact has grown; if it has, a secondary question would be to what extent our investment contributed to this.

Having a single impact metric across different outcome areas has limitations - you can read more about the challenges this presents in a recent blog by my colleague Lucy Heady from Nesta Impact Investments. This is why, in addition, we are experimenting with other ways to look at impact in each of our priority areas (health and wellbeing, youth and education, and citizenship and community) so that the outcome is both meaningful and tells a compelling story about the power of arts and culture to bring about social good. To do this effectively, we need to make sure that the data we receive from our portfolio organisations is reliable and is reported in a way that allows us to compare its impact to that of other portfolio organisations pursuing similar social outcomes.

The challenge of aggregating social outcomes

Unlike social enterprises set up to address a particular social issue, sometimes arts and cultural organisations face specific challenges when it comes to measuring their impact, for instance:

a varying capacity to evidence the impact they claim to have - in our first-year report we pointed out that the standard of evidence used by the sector as a whole is low and this has continued to be a barrier to keeping track of impact.

many organisations run a lot of short-term, one-off projects with limited continuity in terms of beneficiary groups or social outcome objectives, making it harder to articulate impact on organisational level coherently.

We have also observed that many of our portfolio organisations deliver social impact programmes in more than one of our priority outcome areas. So far we have focused on one main area of social impact for each of our investee organisations to assess in detail. However, it would be exciting to see the full, multi-faceted picture of the impact our investee organisations have.

The challenge of attributing impact

Another issue for the Arts Impact Fund (as well as other social investors) is additionality: understanding how much we contribute to the impact of the organisations we invest in. The additionality of impact created by investors can be particularly hard to establish (and measure). Social investment is often used to acquire or improve an asset or develop a commercial venture to boost earned revenues and this, in theory, should lead to a greater capacity for work related to the social mission, for instance, through new facilities or simply more surpluses to reinvest into social impact delivery.

However, this may not be what the investment from the Arts Impact Fund was used for in reality - the objective might have been to make a socially impactful organisation more resilient to external pressures without any difference to the actual scale or magnitude of impact created as a result - and does not solve the puzzle of how much of that can realistically be said to be a consequence of our involvement.

Rather than come up with a crude way to estimate our contribution as impact investors, for now we have decided to focus our efforts on helping our portfolio organisations and the wider arts and cultural sector get better at understanding, achieving and articulating the impact they want to have. To do this, over the past year we have developed two key tools for helping organisations manage their impact on a more practical level - a specific theory of change template and a framework for thinking about monitoring and evaluation - the Impact Canvas (you can read more about it here), as well as continuing to offer informal support and advice as and when needed in order to help organisations build their capacity for impact management.


Svetlana Karadimova

Svetlana Karadimova

Svetlana Karadimova

Assistant Programme Manager for Arts Impact Fund

Svetlana was an Assistant Programme Manager for Arts Impact Fund, part of Nesta's Innovation Lab.

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