As the arts and culture face at least another three years of financial uncertainty, Nesta, the lottery-funded innovation foundation, has come up with new funding models to help bring new money to the sector.
In its latest report, The new art of finance: making money work harder for the arts. Nesta calls on both public funders such as Arts Council England, the government and local authorities, and the private sector to come together to explore new models that could bring and extra £70m over three years.
Hitherto, the arts have relied on income from three sources of subsidy, earned income and business sponsorship/philanthropy, but Nesta’s research has come up with three new possible solutions.
Research and development: Arts organisations could expand audience reach and find new ways of income generation with investment in R&D, but there is little public funding aimed at this potentially lucrative area. Nesta wants at least 1% of arts organisations’ budgets committed to it matched by 1% from funders.
Venture funding: The arts could learn from social ventures in how to engage investors in packages that combine artistic, social and financial elements, and public support for new arts initiatives devised to develop new ideas, or accelerators, could attract private venture funding to attract new money.
Crowdfunding: Arts funders could follow the example of organisations such as the Art Fund in making grants conditional on their being matched by income from online platforms, or not-for-profit crowdfunding schemes.
Nesta calculates that £6m a year could be added to the overall arts budget if the Arts Council alone were to ring-fence 1% of its overall budget to R&D, and if public funders together committed £10m a year to venture funds, accelerators and crowdfunding it could be worth £70m over three years.
“The recent funding cuts in England will not be reversed any time soon,” said Hasan Bakshi, Nesta’s director of creative economy. “They reinforce the need to urgently explore new ways of supporting the arts. Now is the time to develop funding models which leverage in money from new sources.”
But the Arts Council’s chief executive Alan Davey said ACE was already committing more than £6m to research programmes, such as a venture fund for entrepreneurs and business support. He added that there were also plans for a social impact investment schemes for arts activities that have, for instance, beneficial health effects.
The report is available in PDF format here