Nesta calls for arts funding shake-up

Arts funders need to do more to support research and development (R&D) and bring the sector in line with the rest of the UK economy, according to a new report by Nesta. The research charity is calling on Arts Council England (ACE) to allocate at least 1% of its budget (£6m a year) towards R&D funding, to help organisations explore new operating models, audience engagement schemes, and ways of creating cultural value. The report predicts that this, along with a £10m a year pool for piloting venture funds, accelerators and supporting crowdfunding, could result in up to £72m in additional funding for the arts over three years.

Pointing out that the income profile of the UK’s main subsidised arts organisations – 40% funding, 50% earned income and 10% contributions – is little changed since the outset of the recession, the report claims that the arts funding system is no longer “adequate or sufficiently sustainable”. More needs to be done to “make public money work harder”, and capitalise on the arts’ ability to develop outputs with “substantial commercial potential” and engage investors “who want to combine financial, social and artistic impact”.

The UK spends 1% of its gross output on scientific and technological R&D and Nesta is calling on the arts sector to bring itself in line with this. Other recommendations include the establishment of an accelerator programme for the arts, to “develop the most promising ideas into new ventures”, and an impact fund, “to provide capital for the stage which comes after”. It also suggests that, in certain cases, public funding should be turned into investment, be it on a profit-share bases, or conversion into loans or equity, so that “some of the revenues can flow back into new grants”. To capitalise on the approximately £360m raised through crowdfunding in the UK last year, Nesta is calling on arts-funding bodies to pilot different models of matched–funded crowdfunding. However, it acknowledges that more research is needed in this area, to ensure adopted models do not unfairly favour particular groups, such as those with wealthy or technologically savvy networks.

In response to the report ACE Chief Executive Alan Davey pointed out that ACE is “already investing over £6m in R&D projects”, although this figure includes £5m given to the Digital R&D Fund, which is now closed. He added that ACE anticipates the launch of “a social investment programme to support arts activities which generate social impacts and outcomes” and is “exploring options for crowdfunding”, beyond its support for the National Funding Scheme.

The publication coincides with the launch of ACCELERATOR, a commission-free crowdfunding platform for creatives, run by IdeasTap. The charity will reward the “strongest” two projects – those that display “original ideas and strong pitches, backed up by a viable business model” – every month with a £500 grant.