Arts Impact Fund The loan will allow the organisation to grow…
Arts Impact Fund
The music venue has created a new multi-arts centre in Hackney and partnered with an arts charity to deliver social programmes.
The Arts Impact Fund pilot has allowed us to support a number of innovative ideas, business models and creative practices. Our investment into renowned East London multi-arts venue Village Underground to create its sister venue EartH, has allowed us to add partnership innovation to this list, as the new venue brings together commercial and not-for-profit interests in creating educational, aspirational opportunities in music for disadvantaged young people.
Founded in 2007, Village Underground is a landmark venue easily identified by the recycled Jubilee line underground train carriages parked on the roof of its Victorian warehouse in Shoreditch, which provide affordable studio space for artists and creative industry tenants. The business started life with an artist and community-led ethos, but economic realities meant that ticketed performing arts events – focused primarily on contemporary live and electronic music – took centre stage.
With an annual audience of 150,000 people across more than 500 performances, Village Underground is the venue of choice for spring-boarding the careers of up-and-coming artists. However, the existing site is also operating at capacity, which constrains the breadth of activities it can offer.
"Working with Village Underground at EartH, Community Music will receive a number of benefits, including extensive access to performance space, equipment and technical support from venue staff, at no cost to the charity."
In 2016, an opportunity arose to take on the leases of a disused art-deco cinema and theatre complex in neighbouring Dalston for the purposes of converting it into a 2,500+ capacity multi-arts centre run by the team behind Village Underground. Known as the Hackney Arts Centre during its development, the new venue would create a new mid-size performance space, providing artists with a platform for the next stage in their career development – a venue that’s not small, but not arena-size either – and something that’s been lacking for quite some time in East London.
Lease acquisition and refurbishment of the site cost in excess of £2m, with nearly a quarter of the funds coming from Village Underground’s reserves, leaving approximately £1.7m to raise from other sources. It approached the Arts Impact Fund for a £600,000 loan to contribute to this. After extensive due diligence (more on that later), we approved the loan in February 2017. Raising the rest of the finance was something of an adventure: a commercial co-investor pulled out at the 11th hour in June 2017 leave a £1m+ gap in the financing package. Fortunately, Big Issue Invest and Triodos Bank – both social lenders with a long track-record – stepped in over the summer to provide the balance of funds and by November 2017 we had a signed deal on our hands. From then on, refurbishment work begun at pace on the site, including clearing out pigeon muck, 30+ years of debris and a crazy-golf course, with the venue finally launching in September 2018 as EartH (Evolutionary Arts Hackney). Within the first six months of launching, bands and artists as diverse as Lianne La Havas, Johnny Marr and Vampire Weekend have performed at the venue and an on-site restaurant, EartH Kitchen, has opened too – a place for the community to meet, eat and be merry.
When the team behind Village Underground first approached us, the first question we asked ourselves as social investors was: ‘where’s the impact?’. However, we were impressed that plans for EartH included a detailed partnership with music education charity Community Music, which is also an Arts Council England National Portfolio Organisation. Community Music and Village Underground had a history of positive, opportunity-driven collaboration to this point, but through this new venue, a deepening of the relationship would be possible.
Community Music has a 30-year track record in improving young people’s lives through music production and learning. It works with children and young people, particularly those who are socially excluded or disengaged from education, to develop their skills, creativity, qualifications, self-resilience and esteem; and, through this, creates routes to higher education, employment and further learning. Working with Village Underground at EartH, Community Music will receive a number of benefits, including extensive access to performance space, equipment and technical support from venue staff, at no cost to the charity. In effect, this will give the young people that Community Music works with immediate access to professional, real-world experience.
The Arts Impact Fund was encouraged by these plans but had to ensure that intention would turn into commitment. As such, our investment proposal was conditional on a detailed memorandum being drawn up and signed by both parties, stipulating, amongst other things, the minimum number of days that EartH’s equipment and facilities would be accessible for Community Music, the roles and responsibilities of both parties and the minimum number of young people that will benefit across the charity’s different programmes; over the first five years, we expect at least 250 disadvantaged young people to benefit per year.
The Arts Impact Fund’s investment committee also took the unusual (but not unprecedented) step of meeting the Directors of both organisations in person prior to approving the investment, to get a concrete sense of the personal motivations and qualities of the individuals involved.
Our loan repayment will come from operating profits generated across both EartH and the existing Village Underground site. Whilst there are inherent risks involved in opening a new performing arts venue, we were confident in management’s track record and how this has informed the financial planning for the new site. But what is really interesting here is the collaboration between commercial entrepreneurs and Community Music, and the role the Arts Impact Fund has had in formalising this. If the project is a success, it will show that partnerships between the commercial and not-for-profit sectors can be harnessed to create more vibrant communities, confidently driving real benefits for those most at need.