In face of COVID-19 shock, Nesta changes model of loan-based fund to include grant funding and support communities most in need
19 November 2020: Today Nesta, the innovation agency, announces changes to a fund which offers investment up to £150,000 for arts and culture organisations: the Cultural Impact Development Fund will now include grants up to 50 per cent of the total investment.
The £3.5m Fund has been restructured to make it more responsive to the economic shock of COVID-19 and aims to offer more flexible financial support to organisations as they adapt. The fund has been specifically designed to offer flexible finance to arts and culture organisations working with the people and communities in greatest need.
Since the Fund launched in 2018, £477,000 has been invested in arts and cultural organisations. A further £3.1m is available, comprising of up to £2.8m in loans and and £299,000 in grants, with the investment application window open until March 2023.
The restructuring of the Fund means the blended loan and grant financing will be available, in addition to the loan-only packages. Each investment offer will be bespoke and tailored to the circumstances of each organisation. The fund seeks to invest in organisations that aim to build sustainable business models, such as by using the investment to:
In April, the Cultural Impact Development Fund invested in Pop Up Projects, a non-profit children’s literature agency established in 2011, with a vision of a society where every child and young person can access and enjoy literature. It received investment of £150,000 to expand its programming, develop promotional materials and launch its 10th-anniversary fundraising campaign.
Franziska Liebig, company manager, Pop Up Projects CIC said:
"At Pop Up Projects CIC we are extremely grateful to the Cultural Impact Development Fund and Nesta for believing in and investing in us during a time in which so many organisations are fighting for survival. This loan enables us to make crucial and game-changing investments in our future we would never have been able to make otherwise, as they won't pay off immediately - for instance much needed senior leadership capacity and fitter-for-purpose marketing assets. Equally, the support offered by the wonderful Nesta specialists in taking our impact evaluation to the next level has already proven invaluable. As we prepare for our 10th birthday in 2021, this couldn't have come at a better time."
As part of Nesta’s commitment to social impact, the Fund incentivises the achievement of social impact targets, in the form of an annual reduction to the interest rate on the loan portion of an investment where the total repayment period is three years or more.
The Fund is managed by Nesta and supported by Access – The Foundation for Social Investment through the Growth Fund programme, with finance being provided by its partners, The National Lottery Community Fund and Big Society Capital. Nesta’s aArts and cCulture Ffinance team, which also manages the £23m Arts and Cultural Impact Fund, has provided loans of £9.3m to 31 organisations since 2015, with support from its partners.
Seva Phillips, Head of Arts & Culture Finance at Nesta, said:
“Arts & Culture Finance exists in order to provide creative arts, cultural and heritage social enterprises with innovative and flexible finance that enables them to achieve their financial, social and artistic objectives. The addition of grant funding to our Cultural Impact Development Fund offer comes at a crucial time for the sector, and we hope that many organisations take advantage of this opportunity.”
Andrew Gnaneswaran, programme manager at Access Foundation said:
“The crisis has already had a profound effect on many charities and social enterprises and is impacting in a number of different ways within the sector with increased uncertainty, changes to business models and surges in demand for services. For some organisations blended repayable finance could form part of the mix of the support they need, with the increased grant on offer alongside investment through Arts & Culture Finance looking to provide more flexibility for investees in this challenging environment.”
Nesta’s Arts & Culture Finance team will be hosting a series of webinars discussing the fund and how to apply, featuring interviews with some of the borrowers about how they used the finance. Participants will have an opportunity to ask any questions in relation to applying for a loan.
Notes to editor
Contact: Sonia Foday, Nesta
Seva Phillips, Head of Arts & Culture Finance, Nesta, is available for further comment.
Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society. We've spent over 20 years working out the best ways to make change happen through research and experimenting, and we've applied that to our work in innovation policy, health, education, government innovation and the creative economy and arts. Nesta is based in the UK and supported by a financial endowment. We work with partners around the globe to bring bold ideas to life to change the world for good.
Within Nesa, the arts and culture finance division manages three distinct impact investment funds for the arts and cultural sector: the £7m Arts Impact Fund, the £23m Arts & Culture Impact Fund and the £3.5m Cultural Impact Development Fund. The Arts Impact Fund is now closed to new investments.