Why social impact investment?
Social impact investment is the use of repayable finance to achieve social outcomes as well as financial returns. Whilst not a replacement for grant support, social impact investment can help funding for arts and culture go further since the money that is repaid to investors can be recycled to support more organisations, helping to achieve a greater total impact.
There can be benefits to using social impact investment to finance your ambitions. While it has to be repaid, this type of finance is more flexible with regard to how funds are spent, giving organisations greater control over their finances. There are a host of other advantages too.
Understanding you and what you stand for
Impact investors, especially those working in specific sectors, often have a better understanding of enterprises’ business models and are better able to assess the risks of investing in them. This can often result in making investments in organisations that are unable to secure finance from mainstream sources. Aside from sharing risk, impact investors have experience of working with organisations like yours – they want to support the outcomes that are important to you.
Impact investors often take an engaged approach with organisations they lend to, for example, providing additional expertise or introductions to new business opportunities. They can also offer networks, insights and experience that a commercial lender or bank could not provide.
Arts and cultural organisations have a long history of working in different social impact areas but many have room to improve how they demonstrate the change they create. By focusing explicitly on the impact of organisations, this type of investment can help improve the standards of evidence they collect and enhance their impact measurement capabilities. Investors achieve this by introducing organisations to a range of tools, such as Theory of change, and by creating a framework for monitoring social impact once an investment has been made.
Read about our approach to making investments and working with applicant organisations >