The following two blogs by Helen Goulden and Caroline Mason were originally published on the Arts Impact Fund blog, and are great posts for this week's Blog Salon on Corporate Social Responsibility.

Advancing the Art of Finance Helen Goulden, Executive Director, Innovation Lab, Nesta

The Arts Impact Fund is a new £7million fund that brings together public, private, and charitable investment to support arts organizations in England and the first of its kind to focus on their social, artistic, and financial return. The fund was created and funded by Bank of America Merrill Lynch, Esmée Fairbairn Foundation and Nesta, supported by Arts Council England and with additional funding from Calouste Gulbenkian Foundation. It was convened with the help of the Cabinet Office, to demonstrate the significant social value created by arts organizations and support their work through loan finance.

It’s not news that the funding environment for arts and cultural organizations has been under pressure for some time now. We’ve seen public funding reductions at a national and local level and this has had serious consequences for arts organizations across the country.

The recently published Warwick Commission report makes a clear and compelling economic case for quelling any further reduction in public funding for the arts. As the report states, the workforce in the cultural and creative industries is growing over four times faster than the UK’s workforce as a whole and this sector is dependent upon talent development, R&D, networks and career opportunities that have been supported by public investment.

However, the need and appetite for other forms of finance in the arts has been growing for some time now. In January 2014, the Cabinet Office evidenced up to £28m investment demand from arts-based organizations. And when Nesta launched The New Art of Finance in July last year, it was clear that there was an ever increasing appetite for an expanded range of financial instruments and methods that could bring new money into the arts, and offer more opportunities for existing funding to work harder.

The Arts Impact Fund brings together commercial, philanthropic and lottery finance in a co-mingled fund and will be the first of its kind to focus on the social, artistic and financial return created by arts-based organizations.

Over the next few years, Nesta and funding partners Esmée Fairbairn Foundation and Bank of America Merrill Lynch, with support from Arts Council England, will be identifying a portfolio of artistically-excellent organizations seeking to expand and grow their impact.

We all want to test whether there’s real demand for a fund of this kind and build the case for how social investment can be used to increase financial resilience in arts based organizations.

The Art of Social Investing Caroline Mason, Chief Executive, Esmee Fairbairn Foundation

Why are we investing in the arts?

Quite simply, we believe that cultural expression is essential in a strong, healthy society. We also recognize the power of culture to give opportunity and visibility to people who may otherwise be marginalized, and of art to be an instrument for social change, community cohesion or participation.

A common thread through all our investments is to allow organizations and the sector to become more sustainable, with the purpose to ensure that the widest range of people can participate and access the arts.

How we are doing this?

Providing the funds for world class productions to transfer to the West End is a key part of what we do. The thought provoking production of Golem (1927 Productions) has just joined other successful transfers to the West End including Chimerica (Almeida Theatre Company) and A Doll’s House (The Young Vic Theatre) all helped by our Arts Transfer Facility.

We backed Punchdrunk to develop its model of immersive theatre and Cockpit Arts to nurture individual talent in the arts.

Live Theatre started a Gastropub and is a great example of how a social investment can allow organizations to become more resilient through creating an unrestricted income stream of their own.

For us, supporting organizations to become more financially sustainable and increasing artistic capacity is the art of social investing.

Our investment in the Arts Impact Fund is another step in recognizing the power of art and culture. We hope that this can help build artistic capital all whilst encouraging engagement, participation and innovation in the arts and creating a track record of successful social investments to entice further investment for what feel is a fundamental part of a healthy society.