More than Money: How social finance can build resilience in the arts sector
IssueArts attendance & participation / Arts organization management
Noting that “social finance tools create opportunities for investors to finance projects that realize both financial and social returns”, this report outlines existing literature related to social finance and how it might be applied toward the arts.
A key theme of the report is that social finance activity, to date, has usually not considered the arts and culture. For example, “most literature about social finance does not intentionally focus on arts or culture as a possible investment category”. Existing social finance projects related to the non-profit arts sector have most commonly been repayable loans. Canadian examples and the United Kingdom’s experience with its Arts Impact Fund are highlighted in the report.
Despite the relative lack of social finance for the arts in Canada, the authors believe that it has promise as an innovative solution “to the enduring problem of financial resources”. The authors see five key opportunities for arts organizations:
- “Increasing revenues, or helping us to ‘grow the pie’”
- “Building financial and organizational capacity”
- “Building resilience”
- “Contributing to the case for the social benefits of the arts”
- “Strengthening ties with the wider non-profit/social impact sector”
In social finance, both the financial and social returns must be “measurable and tangible”. The report highlights this as a key challenge, since it “requires arts organizations to develop a robust facility for measuring impact and for making the case for the public good that arts and culture deliver”.
Despite the promise of social finance, the authors indicate that it “is not a magic solution to the financial struggles of the non-profit sector, nor is it a cure-all for society’s social issues”. Two of the report’s key conclusions are that:
- “Greater visibility of the arts as an ‘investable’ sector and greater coordination between various players will be key to developing impact investment as a source of funding for the arts in Canada”.
- “Impact investing presents an opportunity to apply the creativity the arts already possess in abundance to the financial and business structures that underpin artistic creation.”