Arts and culture remain mostly unexplored territory for social impact investors. But why? A growing body of work shows that cultural participation can have long-term benefits for quality of life. Culture can also catalyse and embed greater equity and inclusion. With this in mind, culture begins to look like a high-impact investment opportunity worth closer consideration.
During EVPA’s Impact Week we explored the state of investing in arts and culture and its impacts. What are success stories and barriers? What's needed to draw more investment into the cultural impact economy? This blog is a summary of the presentations and discussions that took place before, during and after the workshop that happened on 2 December 2022 in Brussels. Thank you for your contributions Idriss Nor (DOEN), Fran Sanderson (Arts & Culture Finance by Nesta), Bernd Fesel (EIT Culture & Creativity) and Farah Makki (MitOst)!
First, let’s break a few taboos:
- Many actors and operators in the cultural sector are wary or even hostile towards capital investments and investors. Money, capitalism, neoliberalism and its winners are not to be trusted; they actually present the root cause of many of our current crises and cannot be a possible part of the solution towards a better world.
- On the other side, investors are often not keen on investing in enterprises where it’s clear that there will not be a high or even any financial return. Many investors perceive artists as subsidised dreamers rather than potential scaling creative impact entrepreneurs. Making things more complicated, many creative producers, cultural entrepreneurs and institutions have products to sell (from tickets to artefacts), but for many others it’s not the user or beneficiary who pays the creator directly or there simply isn’t a clear product to charge for (from community workshops to public art).
- And maybe not a taboo, but definitely worth mentioning here: with any impact investment it’s difficult to prove how successful it was, but with investing in culture proof is even more difficult to find. How do you measure quality of life, integration or equity, especially if the process is not finished after a few years but changes manifest themselves after decades? Therefore, investing in culture can have a high normative value: you do it because you believe in it.
But why would you believe in it? What is it then that culture can do? What makes it a high-impact opportunity?
We’re collecting here a non-exhaustive, non-prioritised overview that we’ll be updating over time. Next to the topics below (vision, society and economy) culture of course can also contribute to many other areas: democracy, (non-formal) education, social cohesion, health and well-being. Please add yours by dropping us a line!
Culture and vision: we need radical imagination
We live in a world full of complex and interconnected challenges. Climate. Peace. Democracy. Equality. Inclusion. Diversity. Prosperity. Health. Ecology. In order to address all these issues, we need radical imagination. What future do we want for ourselves, next generations, our planet? How can we co-exist or even thrive while balancing so many different needs and expectations? When politicians and intellectuals are fighting for power by division and influence of the moment, it can be the artists, creatives and cultural actors, whether working solo, in collectives, or with communities, but most of all working with real people, with you and me. It’s artists and creatives that can help us imagine, dream and describe the utopias that humanity needs; they can help make collective futures possible and tenable, bringing them within reach and, on the way, bringing us closer together.
- The Next Renaissance initiative convenes transformative contributions of such change makers from the Cultural Creative Sectors across the globe, making this trend visible - read more at www.thenextrenaissance.eu
- The National Lottery Community Fund has created the Emerging Futures Fund to invest in the creativity of civil society and help amplify the voices of communities through stories, narratives and public imagination projects that can lead to new ideas, questions and visions of the future
- ‘If you win the popular imagination, you change the game’: why we need new stories on climate (Rebecca Solnit for The Guardian, 12 January 2023)
- The international Creativity, Culture & Capital partnership has gathered together 100 essays from contributors around the world using arts, culture and creativity to generate positive social change to inspire asset owners to believe and invest in this potential for impact
Culture and society: we need to change the systems
Culture is bigger than arts and artefacts: culture is about the way we live, what we value, how we want to be together as societies, as communities. Culture is at the heart of systems change. Culture can influence people to change their harmful behaviour, narrow mindsets and exclusionary norms; through culture we can actually realise those collective futures, co-creating mini-utopias, prototyping scalable formats for common development. Culture can be both a tool and a space for exploring, experimenting and developing ecosystems that benefit all. Specifically, intercultural collaboration can help pollinate approaches and solutions across national, sectoral and societal borders.
- Throughout the summer of 2022, more than a thousand trees ‘walked’ through the city of Leeuwarden. Artists, residents, enterprises and the municipality worked together in Bosk to change their view on humanity, nature and a common future.
- R84 in Mantova, Italy, is one of the original ‘multifactories’ in Italy. Artists, entrepreneurs and local residents operate from a common building that benefits themselves and the wider community. They’re organised in a decentralised and self-organised association, creating a mini-utopia.
Culture and economy: we need new solutions
Innovation is unpredictable and, next to hard work and persistence, often relies on serendipity. Many of today’s innovative solutions were brought into the world thanks to the hard work and wonderment of artists and creatives, whose minds and hands are trained and wired to see or use the world around us in different ways. Right now, the 3D-printer, Fairphone and photosynthetic lighting are disrupting and democratising industries. They were invented by or together with artists, then invested into by impact investors. Another dimension here is that the creative economy is already a thriving sector in Europe and elsewhere. And it can do more to contribute to social and environmental impact; investors should definitely not overlook this sector.
- The European Investment Bank published the latest study on the economic effects of a thriving arts and cultural sectors, generating in 2017 some €413 billion value added.
- Read more about creative economy cases like Fairphone on DOEN’s website.
OK, so where do we go from here? How can we deliver all that culture has to offer?
Key practical steps
- We need to work on mutual understanding, building trustful relationships and increasing capacities of both cultural organisations and investors to be able to collaborate better. This requires careful organising and efforts, but there are good examples of programmes and networks doing this already (e.g. EIF and Tandem).
- Next to the (maybe somewhat abstract) argumentation above, we need to collect and share more cases of HOW culture drives impact and WHAT types of investments work well. On one hand, we need to show more convincing evidence that culture indeed drives impact and has the power to transform our societies. On the other hand, we need to know better how this works: data, analyses and insights will allow further enhancing and scaling.
- We need to adapt existing impact measurement and management (IMM) frameworks and practices to truly reflect and capture the impact of culture. Because if we really want to be able to say what (or if) a cultural investment contributed, we need the theories and tools that can actually capture meaningful (proxy) indicators, focusing on capacities and context, rather than on meaningless numbers that further skew reality.
- We need to embed equality, diversity, and inclusion within the creative economy and impact investing more broadly. When we support ventures with a certain target, we need to do so with an intersectional lens, making sure that all parameters are set to contribute to systems change (and not solve one issue but do harm to a range of others).
- We need more funding for impact-focused innovation, either through existing funds or by pooling for new funds. There are some organisations and foundations already doing great work (e.g. DOEN), there are funds operational (e.g. Arts & Culture Impact Fund) and new instruments being set up (e.g. EIT Culture & Creativity). But if impact investing represents only a small portion of overall venture capital and philanthropy, investing in arts and culture is tiny, a drop in a large ocean. More impact requires more money going to the right places and the right people.
- Last but not least – probably even most important – we need more people! Transformation is people’s business, and right now the cultural investment scene is not only small, but also quite homogeneous. First we need to get more artists, creatives and other cultural actors and operators involved – all of us need to leave our silos! We need to get other geographies at the table, beyond the usual suspects (like US, UK and other Western regions). And we need to get the so-called beneficiaries, end-users or simply people involved. Nothing about them, without them.
Today, we want YOU to get involved: with EVPA we’re starting a community-of-practice (COP) with the goal to connect interested members, join forces and together unleash the transformational powers of culture. Please join the conversation (and action!) and get in touch with Martijn or Jotham.