5 top tips for social investment application success
As a social investor in the arts and cultural sector, Arts & Culture Finance takes seriously its duty to invest in arts and cultural organisations that contribute to positive social impact on people and communities.
To ensure that we invest in impactful organisations and help us understand their projected impact over the lifetime of our investment, we undertake a social impact assessment of your impact model, or the way that your organisation contributes to positive social impact, in the course of due diligence. This assessment is presented as part of your investment application to the relevant investment committee and forms part of the overall consideration in their investment decision.
Our approach to social impact assessment aims to provide an understanding of your projected impact over the lifetime of your investment by looking at the balance of social impact returns and social impact risks. The framework below explains each of our assessment criteria and how we will work with you to make this assessment. Our approach to assessment is iterative, and we aim to ensure that our assessment is appropriate and proportionate to the nature of your impact model.
More information on the due diligence process can be found on the how to apply page. A more in-depth look at how we assess an organisation’s finances and governance can be found in the resources section.
We define social impact returns as the difference that your organisation aims to help bring about in individuals, groups, communities, organisations, or systems. In our assessment of your organisation’s social impact returns, we are specifically interested in the outcomes that are within your accountability line—that is, the outcomes that your organisation aims to influence directly and holds itself accountable for—as opposed to the longer-term outcomes and impact that depend on a wide variety of conditions and factors that are beyond your accountability or control.
We assess your organisation’s projected social impact returns through a review of your documents and evidence relating to your organisation’s social impact aims, such as your Theory of Change, programming plans, and internal and external evidence of need.
The assessment takes into account three different dimensions:
Who is the target group? What is the gap in provision for them? What barrier does this present to the desired impact?
What we mean by this: In order to address this dimension, we begin by developing an understanding of your intervention’s target group. Need is the measure of the gap between the current conditions for your intervention’s target group and the desired impact. This includes consideration of the nature of the challenges experienced by the target group and the extent to which this presents a barrier to the desired impact. We also consider the level of demand for your organisation’s impact model, the availability of other provision to meet this demand, and the accessibility of this other provision to the target group. We assess the need for your intervention based on the measure of the gap in provision and the extent to which it presents a barrier to the desired impact.
What outcomes will be experienced by the target group, and what is the depth of these outcomes?
What we mean by this: We define depth as the level of outcomes experienced by the target group, or the measurable or observable changes in attitudes, behaviours, knowledge, skills, or circumstances that your organisation aims to help bring about in individuals, families, communities, organisations, or systems. These may be either hard outcomes, which are clearly definable and measurable (e.g. increased employment, lower crime rates, reduced hospital visits), or soft outcomes, which are more difficult to define and measure (e.g. increased self-confidence, improved communication skills, greater sense of purpose). We assess the depth of your intervention based on how fully the projected outcomes address the needs of the target group—that is, to what extent they help close the gap between their current conditions and the desired conditions.
How many users will be reached in each year of the investment period who meet your organisation’s and the fund’s target group criteria?
What we mean by this: We define scale as the number of users reached in each year of the investment period who meet both your organisation’s and the fund’s target group criteria. While we recognise that your reach may extend beyond the immediate target group, if your impact model aims to reach a particular target group, or if you are seeking investment from a fund with specific eligibility criteria around the users reached, we focus on the number of users who meet the target group criteria, regardless of the number of users reached overall.
We define social impact risks as the factors, both internal and external to your organisation, that affect how confident we are that your organisation will be able to achieve your projected social impact returns.
We assess your social impact risks against three areas:
Is your impact model appropriate to the needs of the target group? Is it likely to contribute to the projected outcomes? Are these outcomes likely to contribute to the desired impact?
What we mean by this: Your impact model is the way that your organisation aims to contribute to positive social impact, such as by providing impactful products or services, reaching underserved people or communities, or employing people who experience barriers to work. We look for organisations whose impact model is appropriate to the needs of the target group and likely to contribute to the projected outcomes and the desired impact. This means that the impact model provides an appropriate type, amount, and frequency of activities to support the target group toward the projected outcomes, including appropriate opportunities to develop, consolidate, and progress the attitudes, behaviours, knowledge, skills, relationships, or circumstances within your organisation’s accountability line. Additionally, we look for evidence that these outcomes will contribute to the desired impact.
How we assess this: We review your impact model against available evidence about how appropriate it is to the needs of the target group and how it might lead to the desired outcomes and impact. This may include evidence generated by your organisation itself (e.g. consultation reports, evaluation reports, social impact reports), as well as evidence from comparable interventions using a similar impact model with a similar target group and working toward similar outcomes and impact (e.g. academic publications, government reports, evaluation reports from other organisations). In reviewing the evidence, we consider both the effectiveness of the impact model itself, and the extent to which your organisation’s implementation of that model meets the requirements, thresholds, or critical success factors identified in the evidence as necessary for the desired outcomes and impact.
Does your organisation have the appropriate resources, frameworks, and experience to deliver the impact model to a high standard? To what extent are the necessary conditions for successful delivery of your impact model within your control?
What we mean by this: We are interested in your organisation’s capacity to deliver your impact model at the proposed scale to a high standard and in a way that contributes toward the projected outcomes and desired impact. This includes consideration of internal factors such your organisation’s ability to:
It also includes consideration of the extent to which the necessary conditions for successful delivery of your impact model are within your control, such as:
How we assess this: We make this assessment using information collected through a variety of methods. This typically begins with a review of internal documents that you use to support your approach to delivery, such as programme plans, recruitment and engagement strategies, risk registers, quality assurance frameworks and procedures, and your safeguarding policy and procedures. We may also ask for evidence of your capacity to deliver your impact model, such as job descriptions, CVs, and MOUs or partnership agreements with key delivery partners.
In addition to this document review, we may conduct a site visit to meet with key management and delivery staff, inspect the physical environment and equipment used in the course of delivery, and observe the intervention first-hand. We may also request to interview key stakeholders such as delivery partners, commissioners, or users (where appropriate) for their views on the quality and effectiveness of the intervention.
Does your organisation have the appropriate frameworks, processes, and capacity to measure and manage the outcomes within its accountability line?
What we mean by this: We believe that impact measurement and management are important practices for ensuring that your organisation is contributing to positive social change and continually improving the quality and effectiveness of your work. As such, we look to invest in organisations that are committed to measuring and managing their outcomes and impact. This means that we are interested in your organisation’s capacity to plan its approach to impact, collect and analyse data to measure your performance, and review and learn from this data to validate your Theory of Change and improve your impact model.
How we assess this: We review a variety of evidence to assess your commitment to impact measurement and management. This may include the frameworks that you use to measure and manage your impact (e.g. Theory of Change, evaluation framework, data collection tools, data protection policy); your processes for implementing these frameworks (e.g. data collection systems, reflection and learning mechanisms); and your capacity to implement these processes, as evidenced by the attitudes, behaviours, knowledge, skills, professional experience, and lived experience of staff involved in impact measurement and management.
While you do not necessarily need to have all of these in place at the time of your investment application, we want to see evidence of your willingness to commit to developing an impact culture over the lifetime of your investment. Cultural Impact Development Fund investees will receive dedicated support on developing and improving their impact management practice.