Investing in enterprise

At Access we work to support charities and social enterprises to achieve greater financial resilience so that they can sustain or grow their social impact. To be resilient implies the ability to withstand challenges, and in practice, this most often requires an organisation to have a range of income sources.

We are particularly interested in finding out which business models prove to be successful, and whether others can adapt these models to their own context

We are not naïve to the reality that this is difficult to achieve and maintain, and for many arts organisations, the challenge may be particularly acute. With cuts in local authority arts budgets and competition for grants increasing, there are no easy answers. In this context, discussing social investment – repayable finance – may feel counterintuitive.

However, we believe that most organisations could benefit from support in considering their options for enterprise, and that may end in an organisation developing a case for taking on investment.

Taking on investment

To be enterprising will be expressed in different ways, according to context. It may take the form of establishing and growing a commercial trading activity, developing a more effective local fundraising function, improving marketing and communications, or some elements of all of the above. Out of such efforts, a case for taking on investment to grow may then develop.

In order to better understand what enterprise looks like for arts organisations, we have contributed, along with the Arts Marketing Association (AMA), the Centre for Business in Society at Coventry University, the Esmée Fairbairn Foundation and Arts Council England, to Creative United’s Prosper programme.

It is a business support programme, comprising a combination of one-to-one advice, masterclasses, workshops and webinars to help organisations explore their options for enterprise and resilience. As well as providing direct support to 70 organisations taking part in the programme, we will be looking to learn from their experience to increase knowledge about what works. We are particularly interested in finding out which business models prove to be successful, and whether others can adapt these models to their own context.

The stories, experiences and outcomes of organisations supported by Prosper will soon be shared on the AMA’s CultureHive website, where you can already find useful resources and toolkits, along with links to other business support offers.

Arts Impact Fund

We already have examples of business models that can be supported by investment. The Arts Impact Fund (AIF) has in the past two years provided over £5m in repayable finance to a range of enterprising arts organisations.

Walk the Plank, a Salford-based outdoor arts organisation, has been delivering high-quality performances and commissions since 1992. That has been made possible through a variety of grant funding as well as income from its commercial subsidiary, Walk the Plank Fireworks. It has taken on a £170,000 loan from AIF towards the development cost of Cobden Works, a new centre for excellence in outdoor arts.

This makes business sense, as it will bring its team together in one location, making its work more efficient and effective, as it will for the first time have a home with all the facilities it needs.

In the case of Village Underground, AIF’s involvement has helped it to clarify the social element of its ambitions. Building on its success in running a successful arts venue in Shoreditch in London, the organisation is taking on the challenge of rejuvenating a disused art deco cinema and theatre complex to create a new 2,500 capacity multi-arts venue, the Hackney Arts Centre. Seeking to raise a total of £2m, AIF agreed to lend £600,000 on the condition that its offer to the local community was clear.

Village Underground was already working with Community Music, a youth charity that works with children and young people, particularly those who are socially excluded or disengaged from education, and wanted this work to continue. AIF asked Village Underground to formalise this arrangement as a condition of the loan, with a specific commitment that at least 250 disadvantaged young people would benefit from the new facilities every year for the first five years.

Clearly, the burgeoning centre may support and house other social programmes as it grows, and the ambition for all involved is that the way in which the commercial and social aspects of the new facility’s business model have been woven together will provide an example of how financial resilience can be combined with achieving demonstrable social impact.

These examples demonstrate the potential for the arts and culture sector to benefit from applying creativity and energy to the challenge of enterprise. At Access we exist to support social organisations to take this journey, and work through others to share the learning from all of this collective experience. In doing so, we hope to make the journey progressively smoother and more clear, as the opportunities and challenges along the way are better established and understood.

Access Points

We are pleased that AIF is one of 18 social investors that have now registered as ‘Access Points’ on our Reach Fund grants programme. This initiative allows social investors to refer potential investees to apply for a grant of around £10,000 to complete additional work so that the organisation is then ready to take on investment.

The Reach Fund is just the beginning for us, and in the coming months we will be sharing details about our plans for enterprise support for the next five years. As we implement these plans, we’ll be looking with interest at the progress of the Prosper programme’s cohort of 70 organisations.

Developing forms of enterprise in the arts which generate both financial returns and social impact is no mean feat, but Access, Creative United and the other partners supporting Prosper are confident that it is possible. We look forward to seeing how the creative and tenacious professionals in this sector apply themselves to the task to better understand how and where social investment can help them on their way.

Ed Anderton is Strategy and Policy Manager at Access.
access-socialinvestment.org.uk

Sign up to the Access newsletter or follow us on Twitter. For more general information about social investment visit Good Finance, and to find out how to apply for a Reach Fund grant go to the Reach Fund website.

This article, contributed and sponsored by Creative United, is one of a series on making business support work for the arts and culture.