The Arts Business Innovation Fund (ABIF) was established three years ago as an initiative of Arts Queensland, in partnership with Positive Solutions, Foresters Community Finance, and Creative Enterprise Australia. The investors in the Fund are the Queensland Government and the Tim Fairfax Family Foundation.
The idea behind setting up the Fund was two-fold. Firstly, ABIF was created to support arts organisations to do something innovative with their business structure and financial model, allowing them to build capacity for the future. This included improving the ability to earn additional income and grow new sources of revenue that were not pre-committed or tied to specific creative projects. This uncommitted income would provide each organisation a degree of flexibility in building a more resilient business and more freedom to invest in their work.
The second reason was to give organisations the opportunity to use debt financing (loans) for the first time as part of their financial model. The Fund is set up as a structure that gives support through a combined grant and zero interest loan up to a maximum of $100,000, whilst also requiring the organisation itself to invest in the change it is making. This model is underpinned by the idea that a key characteristic of a resilient organisation is the diversity of sources of funding and financing to which it has access.
There have been six investments made to date, with the following three organisations on track to achieve their targets and successfully re-pay their loans:
Silver Memories national roll out – 4MBS
In its attempt to address social isolation and depression in aged care, radio service Silver Memories has achieved 55 aged care home subscriptions and 50 installations to date. There is strong interest in the initiative, which provides education materials and tailored programs, and aims to reach 200 homes over three years. The innovation to the business model for 4MBS is the adoption of a subscription-based fee, which allows the service to reach regional and remote areas using a satellite service covering the whole of Australia.
Institute of Modern Art
The Institute of Modern Art (IMA) is looking to foster a future generation of art collectors through a novel approach to funding. By holding an online auction that coincides with events such as IMA's Annual Gala, it hopes to curate high-quality collectibles at an affordable price point for new buyers. Outcomes over the last 12 months includes increasing income from previous years' events from the annual gala and the related auction, as well as securing new donors and reaching new buyer markets with online bidding technologies.
A small investment for Umbrella Studios to support an online retail store has created significant opportunities for the organisation and local artists. It has enabled a greater percentage of sales income to go back to regional artists and increased their capacity to reach international markets. To date, the initiative has been very successful, having established a website, implemented a marketing plan, generated online sales, repaid the ABIF loan, and also shown indicators of growth in a number of other areas of the business (for example, venue hire).
Three recent investments include support to:
Metro Arts - to generate new income streams by refurbishing the ground floor and expanding its food/beverage and events service. This will capitalise on the laneway dining opportunities in the CBD, adding value to existing programming and allowing the organisation to reach new markets – it will also offer new employment opportunities for artists.
Anywhere Theatre Festival (ATF) - for an online and mobile application called Pocket Producer, which offers a unique way to match performers with locations and businesses in order to facilitate shows and events. This will generate ongoing revenue, supporting ATF and empowering independent artists via a subscription-based model.
Vulcana Women’s Circus - for a 27-month initiative that targets four key growth opportunities including offsite workshops for kids and teens, circus-for-purpose workshops, regional workshops and performance touring, and corporate and philanthropic investment. The anticipated outcomes for the project include positioning the organisation for long-term sustainability as a cultural enterprise and enabling them to to tap into new markets and create new income streams.
The success of these six initiatives demonstrates the need for investment in building the capacity and resilience of arts organisations and the reality that affordable debt financing can play a role in the future.
Over the next 12 months or so, Arts Queensland will continue to publish updates on these projects and other successful case studies online.
Author: Cathy Hunt, Director, Positive Solutions
Cathy Hunt is a cultural strategist and one of the founding Directors of Positive Solutions, a consultancy specialising in the cultural and non-profit sectors. Cathy is a consortium partner in the Arts Business Innovation Fund.