Impact investment in the creative economy: our new guide
The cultural and creative sectors have long operated within a familiar funding paradigm: a delicate balance of public grants, philanthropic donations, and earned income. Yet as public funding tightens across many jurisdictions and demand for philanthropic support intensifies, cultural organisations worldwide find themselves trapped in cycles of financial precarity that limit their ability to innovate, scale, and truly serve their communities.
This structural challenge demands fresh thinking about how we support cultural enterprise – which is why we’ve developed Setting the Stage, a comprehensive guide to creating impact investment initiatives in the cultural and creative sectors. Drawing from a decade of pioneering experience, it offers practical frameworks for those ready to explore this transformative approach.
Beyond grants and donations
Impact investment – capital deployed with the intention of generating both financial returns and positive social outcomes – offers a compelling answer to the sector’s funding challenges. For cultural organisations, this approach provides access to repayable finance that can support growth, encourage innovation, and build long-term sustainability without the restrictions typically associated with grant funding.
The transformation is already beginning. Figurative’s experience managing three impact investment funds has demonstrated that cultural organisations can successfully absorb and repay investment capital whilst delivering measurable social impact. From supporting Pinc College’s innovative creative education programmes for neurodivergent young people to enabling organisations to invest in essential infrastructure, impact investment is proving its worth as a complementary funding mechanism.
What makes this approach particularly powerful is its potential to attract new capital to the sector by offering financial returns alongside social impact. This “additionality” means cultural organisations can access resources that would otherwise be unavailable, whilst investors can align their financial objectives with their values.
All the world’s a stage…
Whilst the UK has pioneered cultural impact investment through initiatives like our Arts Impact Fund – the world’s first to bring together public, private, and philanthropic capital on a repayable basis for arts organisations – similar opportunities exist worldwide. Each jurisdiction brings its own regulatory environment and cultural ecosystem, but the fundamental principles remain applicable.
The challenge lies not in whether cultural impact investment can work, but in how to design initiatives that honour the sector’s essential values whilst providing the stability and growth capital needed to expand cultural organisations’ reach and influence.
Lessons from a Decade of Practice
Setting the Stage distils our experience from the £7 million Arts Impact Fund pilot launched in 2015 to today’s £18 million Arts & Culture Impact Fund. We’ve learned what works—and what doesn’t—when bridging the worlds of culture and capital.
The guide offers practical frameworks for stakeholders considering this approach: how to build coalitions of willing partners, structure blended finance vehicles, establish governance frameworks, and navigate regulatory complexities. Most importantly, it addresses the mindset shifts required—from funders learning to see cultural organisations as capable investment partners to arts leaders recognising repayable finance as a strategic opportunity rather than a burden.
Success stories are emerging internationally. Canada’s exploration through the Metcalf Foundation demonstrates growing global interest, whilst initiatives in the US, Australia, and elsewhere suggest this approach is gaining momentum worldwide.
The Path Forward
This isn’t about replacing grants with loans or forcing cultural organisations into inappropriate commercial models. Rather, it’s about expanding the funding ecosystem to include patient, flexible capital that recognises both the social value cultural organisations create and their capacity to manage repayable finance responsibly.
The opportunity before us is significant. By thoughtful design, patient implementation, and genuine commitment to both financial discipline and cultural values, we can create funding models that strengthen the sector whilst generating meaningful returns for investors.
The transformation from precarity to sustainability, from dependency to agency, represents the ultimate goal. For cultural leaders, funders, and policymakers ready to explore this potential, Setting the Stage provides the roadmap to begin.
