A £3.7 million fund providing small-scale repayable finance to socially-driven arts and cultural organisations. Cultural Impact Development Fund will pioneer the use of financial incentives to drive the achievement of social impact targets in its investment portfolio, making it one of the few impact investment funds with a clear trade-off of financial return for the attainment of social outcomes. The Fund is 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.
September 2018 to August 2021
£25,000 to £150, 000
12 to 60 months
5.5% to 8.5%
1% completion fee 2% per annum, pro rata holding fee (minimum holding period is 6 months) No early repayment fee
Cultural Impact Development Fund is administered by Arts & Culture Finance on behalf of Cultural Impact Development Loans Limited, a company registered in England and Wales with company number 11388464.
Enable risk-taking, ambitious organisations in the arts and cultural sector to take on small-scale repayable finance in order to achieve social outcomes;
Increase the capability of arts and cultural organisations to articulate, achieve, monitor and evaluate their intended social impact.
Cultural Impact Development Fund offers unsecured loans (and revenue participation agreements, where appropriate) between £25,000 and £150,000 with repayment term of one to five years and interest rates ranging between 5.5% and 8.5%.
Cultural Impact Development Fund will pioneer the use of financial incentives to drive the achievement of social impact targets in its investment portfolio, making it one of the few impact investment funds with a clear trade-off of financial return for the attainment of social outcomes. The financial incentive takes the form of a reduction to the headline interest on a given loan in cases where the total loan term is 36 months or more.
To be eligible, your organisation has to demonstrate that it has a clear social mission. This includes asset-lock and a restriction of the personal gain derived from its work. Charities, community interest companies and community benefit societies with a recognised charitable purpose are eligible for investment. Other incorporated entities, such as companies limited by shares, will be considered based on the strength of their social mission and whether the majority of their profit will be reinvested into that mission.
To be eligible, your organisation should work with people and communities who fall within our scope of approved beneficiaries. This means that you must be able to demonstrate your commitment to reaching and supporting the needs of these beneficiaries, although your offer may have a wider remit beyond these groups. If your organisation’s beneficiaries do not fit within the list below but you think your organisation may still be eligible for investment, please get in touch and speak to a member of our team, who will be able to advise you.
People experiencing long-term unemployment
People living in poverty and/or financial exclusion
People with addiction issues
People with long-term health conditions/life-threatening or terminal illness
People with learning disabilities
People with mental health needs
People with physical disabilities or sensory impairments
Vulnerable children (including looked-after children)
Individuals, sole traders, and unregistered partnerships
Organisations that promote party political or religious beliefs
Organisations that seek to substitute services already funded by Exchequer expenditure
Organisations whose governing document does not allow it to carry out the proposed project or to take on investment
Organisations that are unable to evidence a source of repayment for the investment
Organisations that are insolvent
Organisations that have already received £150,000 investment from another Growth Fund, unless a portion of that investment has already been repaid
Organisations that are seeking a total investment of more than £150,000 for a single project, even if the excess above £150,000 is funded by a third-party funder
Organisations that would be in breach of State Aid requirements as a result of the investment
If you are not sure whether any of these exclusions apply to your organisation, please get in touch and speak with a member of our team, who will be able to advise you.
As part of the Fund’s criteria for investment, Cultural Impact Development Fund’s Impact Manager will work with applicant organisations in the course of due diligence to improve their social impact management capacity.
In advance of investment being approved, we will support organisations to create the following:
a summary of the evidence base for the socially focused activities being undertaken by the organisation;
a Theory of Change with specific outcomes to be achieved as a result of the activities;
a framework for impact measurement and evaluation; and
a Development Plan that will specify how, over the lifetime of the investment, impact management policies and processes will be strengthened, in addition to setting clear performance indicators and outcomes targets.
In addition, we will monitor successful organisations’ social impact performance through (at minimum) quarterly reporting, signposting them to further tools and resources.
We ask all CIDF investees to report to us on a quarterly basis to help us monitor progress toward their financial, operating, and social impact goals. Each reporting meeting is an opportunity to discuss progress as well as challenges, and to draw on support from the CIDF team to help manage the investment and its impact.
Reporting meetings may take place either over the phone or in person, and each reporting meeting is expected to last approximately one hour. At each quarterly reporting interval, investees may be asked to provide the following documentation (as relevant):
Financial reporting: management accounts, balance sheet, cash flow statement, business development pipeline or fundraising pipeline
Operational reporting: annual review, business and strategy documents, recent board reports, CVs for new staff members, updates to the organogram, updates to partnership agreements, updates to the governing documents
Social impact report: updates to the Theory of Change, evidence base, monitoring and evaluation framework, or data collection tools; evaluation outputs such as data tables, blog posts, videos, presentations, and reports
Additionally, we ask investees to provide the following social impact reporting on an annual basis:
Social impact narrative report
Development Plan report against output, outcome, and impact management targets
Service users equalities report
More detailed guidance about our reporting requirements is provided directly to investees at the start of their investment.