The UK’s growing Black, Asian and minority ethnic population* inevitably means that the racial funding gap** in the arts will widen over time. To close it we either need to double down on cuts to large London cultural institutions or come together as a sector to argue for a significant increase in government funding to the arts.

In November, Arts Council England (ACE) announced a significant increase in the proportion of its NPO budget going to racially diverse organisations, from 2.4% to 8.4%. As a result, from next year ACE will distribute its funding more closely in line with the size of the Black, Asian and minority ethnic population, which at the start of the spending review was c.14%.

But by the time ACE announced its spending plans, updated census data put the UK’s ethnically diverse population at 18.3%, and in London 63.2% of the population identified as being from an ethnic minority. This demographic shift means ACE needs to more than double its investment in ethnically diverse organisations to achieve racial equity.

To pay for this increase, the difficult decisions ACE made to make cuts to major London-based institutions like English National Opera (ENO) and the Royal Opera House would need to be consolidated and further cuts implemented.

Can we close the racial funding gap and continue to fund incumbent institutions? 

ACE has left the door open to future funding of organisations whose grants were reduced or cut in the last spending review. As CEO Darren Henley CBE said,

“We’d like to work with ENO so they are in a strong position to reapply for NPO next time, from outside of London with Coliseum as a key part of their provision.”

Reinstating funding to the likes of ENO while continuing to meet its commitment to racially equitable funding would require a significant increase in ACE’s current budget to c.£2.1bn. This is how it breaks down per annum:

• The amount required to bridge the racial funding gap in NPO funding from 2023 – £44.1m pa
• The projected increase in the racial funding gap at the next spending review (2026-30) due to continuing growth of the Black, Asian and ethnically diverse population – £4.92m pa
• The reinstatement of funding to London organisations – c.£22.4m pa
• Inflation, estimated conservatively at 5% – £22.3m pa

Total: £93.72m p/a

This represents a 21% increase in ACE’s current budget, from the current level of £446m to c.£540m per annum. So, across the next four-year funding period from 2026-30, ACE’s budget would need to exceed £2.1bn. 

A 21% increase in ACE’s budget is ambitious given the economic climate and can only be achieved if the arts stand together in their call for more money. Achieving the funding needed to close the racial funding gap and maintain the financial support to large incumbent arts institutions will not be possible if there is infighting between ethnic groups and/or artforms.

We are all in this together?

There are three years until the next spending review. Unless the arts sector – black and white, classical and non-classical, London and regional – come together to fight for increased funding, we won’t be able to achieve racial equity without further cuts to incumbent organisations.

Within any such collective action, the onus of achieving an additional £93.72m per annum must be shared, and those with most power and influence should shoulder more responsibility.

The recent Department for Digital, Culture, Media and Sport (DCMS) Select Committee meeting scrutinising ACE’s spending review demonstrates the power of the large classical music organisations. Through their lobbying, they were able to haul ACE executives in front of a committee of MPs to explain spending cuts to organisations like the ENO and the Welsh National Opera.

No such scrutiny has ever been undertaken regarding the racial funding gap, something which has led to excellent organisations being cut or, worse, excellent new initiatives never seeing the light of day.

In the lead up to the last spending review, large incumbent arts organisations had little if any interest in actively supporting racial equity beyond their walls. They must now lend their political heft to the campaign for racially equitable funding in the arts sector more broadly, while lobbying for increased overall funding.

Given the scale of the ask we must be clear about our priorities. Any increase to ACE’s budget must first be spent on closing the racial funding gap.

Why the racial funding gap needs to be top priority 

As the UK continues to become an ever more multi-racial society, our leaders will inevitably become more diverse. How we give all leaders the funding to build the future charities, social enterprises and businesses they aspire to – and the UK needs – becomes an increasingly pressing question.

Reversing recent cuts to major arts organisations without first achieving racially equitable funding would be to prioritise incumbent classical music institutions – who already receive 80% of ACE’s music budget – over racial equity.

We cannot sweeten the pill or minimise the implications for those who argue for exceptionalism over racial equity. Exceptionalism – sometimes coded as ‘excellence’ – is an outdated device for the exercise of power and privilege. If we are genuinely all in this together then it’s incumbent on large institutions to share limited resources equitably.

So, I call on leaders of the major arts institutions to support the campaign for racially equitable funding in the lead up to ACE’s next spending review. It is their responsibility not only to campaign for the preservation of their own organisations but also to struggle for the right of all communities to reimagine and build the arts organisations of the future.

We have a once-in-a-generation opportunity to close the racial funding gap in the arts. Our shared belief must be that in doing so we will fully harness the UK’s leadership potential, drive an even more excellent, inclusive, culturally relevant and robust sector.

Now is the time for the major arts institutions to demonstrate that we really are all in this together, by fighting for increased funding, or accepting with equanimity any cuts needed so that resources can be shared fairly. It is this second condition that is important in demonstrating the togetherness or not of the sector.

Accepting cuts is necessary; to close the racial equity gap in the arts is the ultimate sign of unity. Anything else would represent division and an arts sector divided against itself cannot stand.

*We recognise the diversity of individual identities and lived experiences and understand that various terms used in this piece to describe ethnicity are imperfect and do not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

** The racial funding gap is the difference between what a funder distributes to ethnically diverse communities and what this funding would be were it in proportion to the UK Black, Asian and minority ethnic population.

This article was first published in Arts Professional on 19 January 2023 as part of a series of articles that promote a more equitable and representative sector.

It appears Arts Council England (ACE) has achieved a significant improvement in the proportion of its funding going to Black- and Brown-led* organisations. We need to support them in going still further to achieve racially equitable funding in the arts.

In ACE’s announcement of its 2023-26 National Portfolio investment, it said 8.4% has been allocated to Black- and Brown-led organisations, up from c.2.4% in the previous round. If true, this represents a far larger leap than I ever expected, especially considering the circumstances in which it was achieved.

DCMS handed ACE a poisoned chalice to deliver on the government’s levelling-up agenda, instructing it to cut funding for London by £24m – a reduction of 15% – and to reallocate an additional £43.5m to the regions.

That left ACE in the invidious position of having to increase funding outside London while also meeting its commitment to increase funding to Black- and Brown-led organisations; most – and the largest – of which are based in London. Given these constraints, ACE has pulled off what looked like an almost impossible task and significantly increased both geographical and racial equity.

But even before the ink has dried on the funding announcements, there is a threat of a forced U-turn by ACE, which is under attack from the classical music fraternity in London.

Power at play

ACE’s funding decisions and the response to it starkly expose power at play. The speed at which major institutions have mobilised media and political engagement comes as no surprise.

The English National Opera (ENO), axed from the portfolio (albeit with parachute funding of £17m), is to appeal its settlement and has the ear of the Culture Secretary: “Chief Executive Stuart Murphy met Culture Secretary Michelle Donelan and told her in no uncertain terms that her numbers don’t add up. That meeting has been described by ENO insiders as ‘constructive’ and another is in the diary for a fortnight’s time while a campaign to back their cause has taken off online after being launched by singer Sir Bryn Terfel.”

The Royal Opera House (ROH) seems set to do the same or at least have backroom negotiations to improve their settlement. ROH said: “We will be discussing the details of our NPO funding arrangement with ACE over the coming months, before a final settlement is agreed early next year,” indicating there will be some pushback.

The fightback from London’s cultural institutions has started in earnest and there is every chance it could be successful in reversing what has been achieved in geographical and racial equity in arts funding.

These large institutions shout from the rooftops about their audiences’ diversity but don’t seem concerned about the overall diversity in the sector of which they are a part. When push comes to shove, their self-interest blinds them to our collective gain. They push for self-preservation under the guise of preserving cultural and artistic excellence. But this is a dangerous path to tread.

Exceptionalism

In the last National Portfolio funding round ENO received a sum that would fund the current top 25 Black- and Brown-led organisations including the Young Vic, Chineke! Foundation, Akram Khan Dance Company, South Asian Arts, Punch Records, UD, Tomorrow’s Warriors and the Centre for Chinese Contemporary Art.

As I write, the campaign to reinstate ENO’s funding has – depressingly – reached 50,000 signatories. What’s disheartening is that at least 50,000 people haven’t thought through the wider implications of continuing to fund ENO at current levels. Either that or they believe that ENO delivers more value to the UK’s creative economy, reaches greater audiences (of any ethnicity) and delivers more outreach to young people than the best 25 Black and Brown-led funded organisations.

Clearly statistics against any of these measures would never bear this out, so what they are in effect claiming is that the exceptionalism of the artform itself is worth more – and adds more – to the overall cultural fabric of the UK, than the 25 Black and Brown-led organisations in the National Portfolio combined.

This is even though there is no lack of opera or classical provision in the UK. In ACE 2018-22 investment round, classical music (including opera) received 88.8% of all music funding. The correction made in this new investment round represents a 9% reduction, which still leaves classical music and opera with c.80% of all music funding.

Another interpretation could be that the ENO leadership and supporters think the cuts should have been spread equally across opera and classical artforms. But what they forget – or may not know – is that when ACE previously tried to implement wide-ranging cuts the backlash was so great that they were forced into an embarrassing climbdown.

This time, any reversal by ACE – or more likely DCMS – would send a chilling message not only to our sector but to society at large. That Black and Brown arts and culture don’t matter. We cannot build an equitable society on the basis that some think they are so exceptional they deserve a disproportionate share of limited resources by right. There is one arts sector with finite resources which we all must share. No one artform has a right to more than another.

On any rational measure – be it the outputs of ENO v 25 Black- and Brown-led organisations, or the level of funding for classical and opera – a reversal of ACE’s decision makes no sense. It only makes sense if you think opera and classical artforms are exceptional.

Who are we and what do we stand for?

Exceptionalism was the original seed of racism. It was the rationale that allowed wealth to be transferred (or stolen) and kept by those with power. Such entrenched inequity (as any reversal would be) is the embodiment of systemic racism which poses such an existential threat to our society. Access to culturally relevant art is a human right; access to a fair proportion of our tax pound which goes to support the arts is our democratic right.

ACE must not only maintain the cuts to the major arts institutions – including classical music and opera – but also continue to reallocate funds more equitably, given the huge inequity which remains. Not to continue this redistribution it has started would be to undermine the principles we champion as a country, as a democracy and as basic human rights.

Those who oppose the cuts talk of cultural vandalism but any reinstatement of funding to classical music and opera and other traditional artforms, given the make-up of today’s society compared to 75 years ago when ACE was founded, would be social vandalism. It would constitute reinstatement of the increasingly deep fractures in our society.

We are calling on all of those who believe in a more racially and geographically equitable funding system to make our voices heard by signing this petition. Now is the time to show who we are and what we stand for as a sector and a country. If we fail now, we risk losing the gains that ACE have given us and lose the opportunity – for at least another generation -to achieve a fair funding system in the UK.

*We recognise the diversity of individual identities and lived experiences and understand that Black and Brown are imperfect terms that do not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

This article was first published in Arts Professional.

Through almost monthly blogs, articles and talks on social media over the last two years, I have sought to highlight how Arts Council England (ACE) has consistently failed to achieve racial equity in its distribution of funding. This might be considered slightly obsessive, or as a personal attack based on acrimony. But that isn’t the case.

ACE is an organisation which fascinates me. It seems to be continuously on the brink of transformation around inclusivity, but it never quite makes the leap. From the side lines, I’ve been willing it to make the changes necessary for it to continue to be relevant in the 21st century.

But as they say, ‘it’s the hope that kills you’. But it is ‘hope’. And that doesn’t come from animosity but from a place of relationship. I have a strong, but complex bond with ACE.

A strange relationship

Having initially funded my first project Tribal Tree, they then withdrew funding 7 years later despite the project’s obvious successes. The funding was reallocated to support the redevelopment of the Roundhouse, located just across the road from our building.

I was crushed and unsure what my next career move would be. But it was ACE again, a year later, that sponsored my place on the Clore Leadership Programme. That led to my next project MeWe360 that ACE helped launch with an initial investment of £1m. And eight years later came Create Equity, whose early development ACE also funded.

Having been the cause of an existential trauma, ACE was then a key part of my recovery and growth as a social entrepreneur. But it was also part of my growth as an activist. While at Clore, I carried out research on race, power and identity. That research – a personal enquiry – drives my current thinking on structural inequalities and my motivation to do something about it.

ACE has created this beast that hounds them and continues (at least for now) to fund my projects. It’s a strange relationship: with one hand I gratefully receive its support while with the other I write regular critiques on its inability to fund in a racially equitable way. 

Why do I seemingly bite the hand that feeds me? Why not just take the money and be quiet?

Silence, power and racism

My silence would be tantamount to being racist; endorsing a system I know to be racially inequitable for my own benefit.

ACE is the largest funder of the arts in the UK by a long way, with more funding than the other major arts funders combined. Its dominant position means that as well as distributing its own budget (c.£943m in21/22) it exerts considerable influence on how other funders distribute their grants as they regularly support organisations in receipt of ACE funding.

ACE’s scale and ‘financial pull’ means that were it to distribute its funding equitably, a likely outcome would be that all arts funding would become more racially equitable. But the major block is that currently ACE is not able to distribute funding in a racially equitable way. After fulfilling its obligation to fund the major museums, galleries and theatres, it has insufficient money left to do so.

90% of ACE funding is allocated to incumbent institutions. Even if the remaining 10% were diverted to BAME-led organisations, ACE would still not achieve racially equitable funding. This is what I call ‘incumbency bias’ and is not necessarily a problem in itself. My challenge is that ACE remains silent on incumbency bias.

Ibram X. Kendi’s work on anti-racism provides a frame on which to position such organisational silence. To be an anti-racist organisation you must act when faced with processes and procedures that deliver inequitable outcomes. According to Kendi, the act of naming systemic inequalities – simply talking about them – is in itself an anti-racist act.

Silence, he says, is the opposite. ACE’s silence makes it complicit in maintaining a racist system. My almost singular focus on ACE over the last two years is not because they are the only holders of silence, but because they are by far the most powerful. 

If I were to remain silent (or inactive) in the face of ACE’s inability or refusal to fund equitably, I would also be complicit. Such silence, according to Kendi, would also be a racist act. Uncomfortable as it is, and I sit far from comfortably when writing these articles, there is no hiding place for ACE, or for me, when it comes to taking an anti-racist position.

Champions of a better system

I am a product – at least in part – of ACE’s various funding programmes over the last 25 years. I could reasonably be considered its poster child; one of its too few racial diversity success stories. But to remain silent would be to abandon all the learning and leadership that ACE has enabled over the past 25 years; it would be to waste the money they have invested in me.

Racial inequity cannot be allowed to stand simply through our complicity or silence. It must be challenged. In this sense, we who call for a fair distribution of ACE funds, who point to its policies and practices that prevent it, who suggest possible solutions, should be seen not as ‘haters’ of ACE but as champions of a better funding ecosystem, of which ACE is a major part.

In the upcoming outcomes of its spending review (October 26th), ACE has another chance to reimagine what great arts organisations of the future might look like. And, just as importantly, who will get to build them.

ACE is on the brink of another opportunity to transform itself. My hope springs eternal – that this time it will distribute at least 7% of its NPO funding to racially diverse organisations and publicly commit to racially equitable funding (14.4%) by 2031. And if it genuinely can’t, then it should take responsibility, as the dominant arts funder in the UK, to say so and to cede some of its overwhelming power to others who can.

This article was first published in Arts Professional

Reading Arts Council England’s latest Equality, Diversity and Inclusion data report 2020-21, it appears ACE sees diversity primarily as the number of people who either work for or visit arts institutions like the Royal Opera House.

ACE’s diversity strategy of investing in a portfolio of mainly White-led institutions and then, under threat of sanction, requiring them to drive more diverse staff and audiences through their doors, has not delivered the racial diversity we need. 

ACE must prioritise the funding of more diverse-led organisations, rather than simply acting as the diversity monitor of White-led ones.

It’s the economics that matter most. If ACE were to fund Black Asian and Minority Ethnic* organisations equitably, there would be an automatic improvement in the diversity of the sector’s audiences and workforce. Yet this – and previous reports over the last five years – fail to identify the distribution of over 70% of its funds, instead focusing narrowly on either project funding or Covid recovery funding applications.

Excluding such a large proportion of the funds it manages from its reports allows ACE to paint a rosier picture on diversity than is the reality. It skews the data towards workforce and audience demographics, where some improvements can be seen, but away from a comprehensive analysis of where its investments end up, where results are deeply inequitable.  

Glaring omission in the presentation of data

ACE has this diversity data at its disposal – indeed it makes available to the public where all the funds it distributes go. But it fails to cut and present the data in such a way that would clearly show how inequitable the distribution is. This is either a lost opportunity or a glaring omission – depending on your standpoint.

Looked at close up, while ACE does include data on how its project funding programmes – worth £97.3m p/a – are distributed, that glaring omission on the percentage of NPO funding that goes to  ethnically diverse organisations fundamentally undermines the report.

Just over 70% of ACE’s funding goes to NPOs, yet for the last five years ACE has not reported on how its largest funding programme – worth £407m p/a – is distributed in terms of diversity. 

As well as offering larger grants, NPO funding is longer term and more stable, minimally four years but often upwards of eight years, than project funding, which is often a much shorter term 1-3 years. 

But only 2.4% * of NPO funding goes to ethnically diverse-led organisations whereas 18%** of ACE’s project funding went to them. This raises the question: does ACE regard diversity of the NPO workforce, and of applications to its short-term funding schemes, as more important than providing long-term core funding to Black, Asian and Minority Ethnic-led organisations through its flagship NPO programme? 

ACE must not bury bad news

To make fundamental and rapid improvements on diversity, ACE must address how all its money is distributed, including its NPO funds. For its reports to be trusted, ACE cannot bury or omit ‘bad news’; or omit the most important measure of racial equity in terms of ACE’s core activity – the distribution of the public funds it manages.  

ACE has the NPO data needed readily to hand. We call on them to publish it along with the source data and to commit to increase NPO funding of ethnically diverse-led organisations to a minimum of 7% of total budget in the upcoming spending review. And then to go further by committing to racially equitable funding by 2031 and reporting on progress against this in upcoming annual diversity reports.  

To achieve racially equitable funding, ACE must start by reallocating funding currently given to major White-led institutions to improve their performance on diversity to invest in the long-term growth of Black- and Brown-led arts organisations.

The primary driver of diversity cannot be equality in terms of workforce and audience numbers. This presupposes that Black and Brown communities want to work for major arts institutions or participate in their programmes.  Rather let’s focus on equitable funding. With this we would create new ethnically diverse organisations, and develop existing ones, and in turn provide greater autonomy for Black and Brown communities to choose where they work and which art to consume.  

*2.4% is an average of NPO funding to BAME organisations for the period 2010-20, using data from ACE’s website and analysed by LEK Consultants for Create Equity. The average % of NPO grants going to BAME organisations over the decade 2010-2020.
Whilst we use the abbreviation BAME, we recognise the diversity of individual identities and lived experiences, and understand that BAME is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

** Arts Council England’s Equality, Diversity and Creative Case – A Data Report 2019-20 diversity.

This article was first published in Arts Professional on 11th July 2022.

How will Arts Council England square the circle of delivering increased funding to regions outside London while also meeting its commitment to increase funding to Black-led* organisations? 

This commitment was made in the wake of COVID and Black Lives Matter. And to date, there have been no answers to the question. Two years on, as life moves to a post-COVID norm and memories of the killing of George Floyd fade, ACE’s commitment to increased racial equity is being severely tested. 

While its budget for the next spending round (2023-26) will increase by 2%, the DCMS has instructed that all of it – some £43.5m – must be spent on delivering the government’s levelling up agenda. That is, redistributing funding outside London, where possible specifically targeting 109 prescribed ‘levelling up for culture places’ across the country. 

In addition, to further redress the funding balance between London and the regions, London’s National Portfolio Organisations (NPOs) will receive £24m less, a reduction of 15% over the next four years.

So, to meet its commitment to racially equitable funding, ACE has to balance the government’s geographical priorities with the demographic reality. The two things are in tension because the places identified have fewer Black communities compared to major cities, especially London. 

Geographic versus racial equity 

London’s population is 40% greater than the combined population of England’s next ten largest cities. It also has the highest proportion of BAME* people, home to 80% of England’s most ethnically diverse local authorities. Moreover, London hosts more than 40% of the UK’s creative industries. 

Together, these statistics suggest that the vast majority of BAME creative organisations are in the capital. To make meaningful steps to racially equitable funding therefore requires a significant increase in the funding of London based Black-led organisations.

This is not to argue against levelling up on geographical grounds, but simply to point out that if the policy is applied simplistically there will be unintended consequences on competing priorities such as racial equity. This is a zero-sum game scenario: if London’s budget is redirected to the regions, funding for BAME-led businesses in the capital suffers. 

A potential solution would be to reduce funding to White-led organisations in London. ACE needs to be transparent about how it intends to manage this conundrum, not least so it can manage the expectations of the ‘losers’ and promote the opportunity to potential ‘winners’. 

To achieve a step change in racially equitable funding, incumbent, Black-led organisations must be actively encouraged to apply for funding and the number of new Black-led NPOs needs to rise.

Moral and ethical leadership vs self interest 

ACE’s executive team and board will need to take bold decisions (as signalled in their briefings) imposing cuts on larger white-led NPOs. And in turn, these White-led institutions must take a moral stand, acting for the benefit of the arts’ ecology rather than the short-term self-interest of their organisation. 

Ethically, these organisations cannot continue to consume a disproportionate amount of the sector’s finite financial resources at the expense of both those outside the capital and those from Black communities.

While regional leaders from all communities and regional Arts Council bodies should rightly argue for their fair share of funding, they must be wary of inadvertently pitching against racial diversity. London-based organisations cannot all be treated the same as this ignores the historical legacy which has led to Black communities being clustered in the major cities, especially the capital. Regional leaders need to hold a position for both geographic and demographic equity.

London remains the hub for Black communities and the creative industries, and it follows, for Black creative founders. If London-based, Black-led enterprises are pitted against both organisations outside London and White-led institutions in London, they will inevitably continue to be underfunded and underdeveloped – perhaps even more so than now. 

We don’t have to choose between geographical and racial equity. We can level up in two dimensions. All that’s required is organisational and moral leadership. 

Need for transparent monitoring of racial diversity 

ACE has begun to outline how it will balance the levelling up agenda with the diversity agenda in London. They intend to fund new organisations and give an uplift to some existing ones. They say they will “use the London NPO budget to make the portfolio more representative of London in terms of the diversity of its leadership and its geographic distribution”. 

But they ask that London organisations set their expectations in line with expected cuts. 

Some ‘good organisations’ might be lost in the process. With both the number and proportion of Black organisations being funded currently below equitable levels, presumably these won’t be ‘good’ Black-led organisations.  Black-led organisations need ACE to be more specific and transparent on the implications of the settlement for them.  

From public briefings and documents, the intention to deliver on racial diversity appears genuine. But without specific explanation and targets to back these up, it’s not possible to assess whether there will be any improvement in racially equitable funding, or to judge if this is sufficient, or to measure if it has been achieved. 

To date there has been little accountability on racial diversity. As a result, investment has remained at c.2.4% or less for over a decade, despite promises and initiatives for change. Just as DCMS has seen it fit to set financial targets, and name places and dates for delivering geographic equity, so should it do the same for racial equity. 

If DCMS doesn’t do it, then ACE should set out its own targets as a measure of its commitment to achieving racial equity including:

• How much it intends to increase funding to BAME applicants from its current level of c.2.4%.
• A timeframe to achieve equitable distribution in proportion to the size of the BAME population – currently 14%.
• An explanation of how equitable funding will be achieved, including the source of the funding.
• Reports on the number of applicants and the value of funding to BAME-led organisations.

With these in mind, ACE needs to accurately monitor the number of BAME-led applications, the number who meet eligibility criteria, and the number who are successful so that any racial bias in the process is transparent. Targets allow full transparency, and in turn drive accountability. 

We must all take responsibility

While ACE has final say over which organisations get funded, it has been hamstrung by the DCMS’s instructions to increase spending outside of London and to reduce London’s budget. This cannot be an excuse for them not driving meaningful change in racial equity. 

As a sector we can no longer accept de-prioritisation of racial equity and a reversion to pre-Black Lives Matter funding inequalities. Instead, we should hold ACE to account to meet its promise of a ‘new normal’ and greater racial equity.

It would be the ultimate irony if the new normal turns out to be worse for Black creatives than COVID and Black Lives Matter combined. Avoiding this will require strong and principled leadership by all. ACE must be accountable, but large White-led institutions must also be responsible for helping to make the drastic step change needed towards racial equity. 

This change is possible and must start in the next spending round so we can achieve racially equitable funding within our lifetimes.

*We have used the term Black. We recognise the diversity of individual identities and lived experiences and understand that Black is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

We have also used the term BAME. Our usage here reflects terminology used at the time in data collection, and to help standardisation for comparison to external data sources. It is not intended to reflect personal or community identity.

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Not every business owner in the UK is in the same position today. If you’re a white entrepreneur your access to finance is varied and includes venture capital, equity and debt.

If you’re Black*, you’re much more likely to have to borrow from family or friends and you won’t have anything like the same chance of persuading a funder to inject the big risky capital into your business that could support you to scale.

This is as true of socially purposeful capital as it is for conventional finance. Philanthropy, impact investment and social investment aren’t doing any better, and we shouldn’t pretend that they are. Black communities face persistent and extreme wealth and investment gaps**.

That gap must be bridged, and impact investment should be at the forefront of building that bridge because of its pivotal position. It is the central point between pure social investment – into charities, for little or no financial return, with longer time horizons – and conventional finance, that takes greater risks in pursuit of a quick exit and large profit.

What is impact investment? 

Social impact investing is:

Investment in the shares or loan capital of companies and enterprises that not only measure and report their wider impact on society, but also hold themselves accountable for delivering and increasing positive impact. 

Impact investment is heralded as the driver not only of future business but future society. It’s an investment revolution with the potential to deliver financial returns to investors, measurable social and environmental benefits, scalable social enterprises, and financial rewards for the most innovative entrepreneurs.

The total value of impact investment in the UK is currently £6.4bn – nearly 800% more than 2011 and set to double by 2025.

Broadly there are 2 types of impact investors: commercial impact investors – private equity and venture capital companies who make up 57% of the market; and charitable impact investors such as Trusts and Foundations who make up the remaining 43%.

How can it address historic inequity?

Impact investing could provide the resources to rebalance the historic legacy of exclusion from investment that Black communities face because it can:

• Mobilise large amounts of capital
• Be comfortable with wealth gains to individual entrepreneurs
• Manage risk and reward in a portfolio rather than through individual projects
• Set social targets that include uplifting excluded groups

Social (charitable) investment can’t do this as it has far less capital, struggles to accept individual wealth gain and has little ability to balance financial risk against reward.

Commercial impact investment seems a better bet, but it needs to be more flexible on timescale. The legacy of intergenerational underinvestment can’t be resolved in three years. So, impact investors need to adapt to longer term thinking on a grander scale than current short-term individual entrepreneurial wins.

Who decides what matters?

The potential for impact investing to deliver racially equitable funding is huge, but there is inherent inertia. To date no funding system in the UK has delivered racially equitable outcomes. For the potential to be realised, inequities in decision-making power must be addressed. Who makes decisions, what they define as important and how those definitions are interpreted must be on the table before we can develop funding systems which are racially equitable.

This is true in the arts, education and even in health where, over several hundred years, the wealthiest charities have invested in the most privileged, in those who are predominantly white. In the case of NGOs like Save the Children or institutions like the World Bank, the beneficiaries of the funds may be more racially diverse but the issues of power and decision making remain the same, albeit played out on a macro scale.

The funders of these global funding institutions are Western governments, the ones who ultimately decide priorities in the global South with majority Black populations.

So key challenges for impact investing must include identifying what matters, what counts as ‘impact’ and who decides.

Commercial impact investors – and indeed social investment and grant-making bodies – have typically taken a narrow view of what constitutes impact. It’s usually about reducing hardship and creating positive change in the lives of individual people***. The more direct that causal link created by the organisation funded to deliver the intervention, the happier funders and capital providers tend to be. Racially equitable funding needs to take a different, and less linear, approach that looks beyond the narrow bookkeeping of too much impact management and embraces the transfer of capital for a range of ends including wealth creation in minoritised communities.

Black communities merely recipients of white largesse?

Inequalities are invariably caused by imbalances in decision making power, and power inequalities tend to be driven by income and wealth disparities.

A contemporary funder seeking long-term change – rather than merely mitigation of the worst excesses of our system – must not only work to alleviate hardship, but also be accountable for their organisational processes that perpetuate power and wealth gaps in that same society.

If impact investment doesn’t change its own structures, in 20 years we will end up with what will simply be an evolution of our current charity system: producing worthy outcomes without changing the position of Black people.

Black communities will remain recipients of white largesse (money), being at best programme ‘delivery agents’ rather than key partners in directing flows of capital.

Social ‘necessity’ of race equity 

To unlock the vast resources of the commercial market, we need to move commercial investors from an attitude of indifference – or at best seeing racial equity in terms of reputational risk – to having a deeper concern and maturity about race equity.

This will need to be combined with building a sufficient confidence in the strength of racial equity as a specific market within social investment. In other words, we need to drive up the social ‘necessity’ and long term financial ‘advantages’ of racially equitable investing.

This is where social investors and philanthropists have a key role to play. As more mature partners, with a track record of achieving scale, patiently, for social businesses, they can lead by example.

Here we suggest three key actions to unlock the potential of impact investment:

1. With early market development support – such as providing guarantees and taking first loss positions – charitable impact investors could catalyse commercial impact investment. This would allow us to increase the profile of racial equity impact investing and test the demand by individual investors and learn about any barriers to growth. Such a fund would build evidence of reasonable returns that could then influence the industry for wider change, attracting in more money.
2. Provide evidence on patience and flexibility. Commercial impact investors must learn to be patient, following the lead of social investors who work to a different model of investing for the long term.
3. Develop Black impact investors as well as funding Black investees. Structural change will only be delivered with equity at every level of the impact investment system.

Good intentions are not enough

For impact investment to be the revolution it’s heralded to be, its leaders must mobilise the vast resources at their disposal, over a long-time horizon and at scale.

Just as importantly, the leaders of the impact revolution need to have the courage and self-reflection to closely heed how this is done – through greater inclusion and power sharing. Doing ‘with’ rather than ‘for’ Black communities.

Impact investors have won hearts with a display of social conscience, but these good intentions alone are not enough to deliver racially equitable outcomes. To do this they now need to dare to change the bones of investment itself.

*We have used the term Black. We recognise the diversity of individual identities and lived experiences and understand that Black is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

**Only 1.7% of venture capital investments, 2.4% of public grants and 2.6% of impact investment go to Black-led organisations. This would be 14% if investments were distributed in proportion to the Black population. Were this the case, £896m would be mobilised to support the development of Black-led enterprises.

***In general, commercial Impact investors focus on environmental issues e.g. wind and solar farms where decent returns can be generated in the mid to long term; and charitable impact investors on social issues like poverty alleviation and education where financial returns are smaller and less certain, though there is some crossover.

Why we need to build mature partnerships between Black-led organisations and funders.

There are written rules when applying for arts funding: set criteria which outline the funder’s priorities, the activities it supports, who is eligible to apply and the amount of any potential grant.  

In theory, these criteria determine what does or doesn’t get funded. But there are also unwritten constraints which play a part, such as the funder’s attitude to risk, the preferences of its founders and the culture of the organisation. 

As the majority of funders significantly underfund Black organisations, it is clear that either the criteria they use or the constraints under which they operate work against supporting Black-led projects. 

To break this persistent under investment, a different type of relationship is required, where Funders work in constructive partnership with Black-led organisations; one in which they are trusted with information about the limits of the funder to support their project.  However, the funder’s inability to develop these relationships, through greater transparency, is often itself a constraint. As a result, inequity becomes self-perpetuating.

In my work with MeWe360 (MeWe) and Create Equity I am looking at ways to break the cycle. I aim to drive more mature and trusted partnerships with funders; that do away with the current approach of ‘you tell us what you want to do, we’ll tell you if we’ll fund it’. 

This work is very much in its infancy, but here are some initial observations on how this might be achieved.

1.Balance managerial and entrepreneurial approaches

I lead (and am the founder of) two organisations with broad remits. MeWe develops and champions Black creative entrepreneurs and leaders; and Create Equity’s mission is to make the distribution of funding in the arts, social-enterprise and business equitable.

While I have clear ideas about how to achieve these missions, I am at heart a pragmatist and open to any approaches that might work. As an entrepreneur (rather than a ‘manager’) my focus is on outcomes. To achieve a more equitable and inclusive sector, I believe effective ends should be prioritised over the means – where possible. In the case of grant funding, the means – funding criteria and organisational constraints – take precedence; this then limits the available approaches and leads to the same racially inequitable outcomes. Funders need to better balance the entrepreneurial and managerial cultures within their organisations. 

2. Share uncomfortable truths

Funding criteria, though open to interpretation, are explicit; with the right experience, applicants can tick these boxes. Constraints on the other hand remain mostly undeclared. Held within funding institutions, they can only be accessed by insider knowledge or through open and honest dialogue with applicants. 

As an example, if we know that 90% of Arts Council funding will effectively be (p)re-allocated to existing organisations, and that there will be no Black-led funded organisations in its highest funding band, we can make better judgements about whether to apply and at what level. 

It’s never been made explicit in any criteria that Black-led organisations need not apply for funding above £1m p/a but, with a zero success rate in ACE’s current portfolio, there is an obvious need for the possibility of Black-led organisations to have a frank and open conversation with ACE about future prospects of success. 

The uncomfortable truth is that this ‘incumbency bias’, where those who have received funding previously are much more likely to get further funding, effectively ‘locking out’ or preventing the growth of Black-led organisations, is common amongst all funders, but rarely ever spoken about. 

3. Re-game the system

Informing people about what’s possible and helping organisations shape projects within existing criteria and constraints is considered by most funders to be gaming the system.  Yet this sharing of information does sometimes happen, and when it does, those privy to this information can navigate the funding process through strategic decision-making rather than through guesswork. 

The people ‘in the know’ are predominantly white-led institutions employing professional fundraisers who have – or can get – the inside track on the unwritten constraints of a funder. This privileged access is key to what keeps racial equity locked in. 

Working with Black leaders to develop projects that fit within existing constraints doesn’t undermine the integrity of the funding process, it re-balances it. The focus should be on an equitable and inclusive outcome (re-gaming the system) rather than maintaining a process which rewards those with access to inside knowledge.

Summary 

If funders continue to see greater transparency as a corruption of the application process, rather than the opportunity to improve outcomes, inequity will remain baked into our funding system.

Greater transparency and fair process are not mutually exclusive. Funders can be explicit about funding criteria and share any institutional constraints without damaging the integrity of their application process. The process must be robust, but it also has to include sufficient dialogue with the applicant to inform as fair a decision as possible. 

A more progressive and equitable partnership would see funders being explicit about what they can and will fund, given their criteria and constraints, empowering black applicants to make critical decisions about their funding. There might even be room in such a partnership for a culture shift, for constraints being lifted.

If this isn’t possible, funders should acknowledge this as a limitation and be accountable for the impact this has on their outcomes, importantly on those around diversity and inclusion.

There is often an uncomfortable tension between doing things the right way (process) and getting things right (outcome). Greater trust and transparency between funders and black-led organisations would allow us to do both; we should act now, in genuine partnership, to deliver the equitable and more inclusive outcomes we all want to see. 

NB. We have used the term Black to mean Black, Asian and Minority Ethnic groups. We recognise the diversity of individual identities and lived experiences, and understand that Black is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

*Data points quoted in this document have been drawn from a variety of reputable and publicly-available sources. Create Equity is happy to provide detailed references upon request.

I recently watched Nick Broomfield’s documentary ‘Last Man Standing: Suge Knight and the Murders of Biggie and Tupac’. It left me pretty shook up. 

It made me question my purpose at Create Equity, campaigning for a racially equitable redistribution of wealth in the creative industries. The documentary forced me to ask to what end, if the social structures and economic systems we inhabit undermine our very humanity… if we live our lives according to myths around money and power.

Suge Knight, Tupac and Biggie – three Black men – each had talent most of us can only dream of and more money than anyone could reasonably spend in a lifetime. And yet, two of them ended up dead (at only 24 and 25) and the other (Suge Knight) in prison.

From watching the documentary, none of them could be described as inherently bad. But each was  shaped, negatively, by a culture of toxic masculinity, violence and power. Despite their wealth, they couldn’t escape their conditioning and its hold on them. Their treatment of women was particularly shocking. 

The documentary shows only too clearly how racial inequities, as experienced by these men, can lead to a distorted self-perception and give rise to inhumane behaviours. Behaviours which were exacerbated by wealth. Their life stories are an extreme example of how money can never be an end in itself for us, as Black people. 

So, to what end do I continue to campaign for equitable wealth redistribution? Equity can be an end in itself; in need of no justification.  But once achieved, what we Black communities choose to do with it, how we let it shape our humanity (or inhumanity), is ultimately down to us. 

It is with this realisation that, more than a week after watching the documentary, I am now able to sleep a little less disturbed by what I have seen.

NB. We have used the term Black. We recognise the diversity of individual identities and lived experiences, and understand that Black is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

There is a new belief that any debate about racial inequality – its causes, impacts and solution – should be driven by those with ‘lived experience’. Increasingly, funders are embedding this thinking into policy, making participation of people with ‘lived experience’ part of their funding criteria. And white leaders are using it to excuse themselves from race conversations – or at least to be less vocal. 

The intention is good; to increase the impact of social justice programmes and to empower those affected by giving them a say in the programme design and implementation. But it raises serious questions about the benefits of relying on lived experience in dealing with racial inequalities.

How do we decide which lived experiences matter most, given the ever-increasing fragmentation of identities and perspectives on solutions to racial inequity? And within current power structures, can white people ever be excluded from driving solutions on racial inequality? 

Activists versus Assimilationists

According to YouGov research, 84% of people from black communities say they have experienced racism to some extent and agree action needs to be taken to eradicate it. However, this belies the fact that although we share lived experiences of racism, we each process and cope with them differently. As a result, views vary widely on strategies for addressing the problem. 

Within my friendship group alone, opinions range from those who believe that racism is best challenged through social and political action (Activists), to those who think our energy is better spent ‘fitting in’ and becoming successful (Assimilationists). 

These strategies vary not only between socially defined racial categories but also within these categories (e.g. Black, East Asian, South Asian etc). And of course, different people balance these strategies in individual ways. Given the range of possible responses, how do we actually decide who to listen to when implementing solutions.  

Usually, the lived experience of the most vocal takes priority over those who are politically quieter. Activists shout louder than Assimilationists and hold sway when influencing the language used in communications (political correctness), publicly stated positions (PR) and policy on racial inequity. But rarely does this convert to real change in practice.

The money does not follow the strategy

Taking the arts sector – and the Arts Council in particular as illustration – all its major policy communications talk about creating a more inclusive sector with a greater diversity of arts output. But if we follow the money, it’s clear their policy on grants distribution is neither inclusive nor diverse.

Only 2.4% of ACE funding goes to Black-led institutions – this should be 14% if distributed in proportion to the BAME population. Compare that to 14% of ACE funding which goes to opera alone. Funding is heavily skewed to the major arts institutions and to assimilating (some would say encouraging) Black communities into accessing niche art forms produced and curated by white people. 

Given the weight of investment committed to the major institutions, ACE’s diversity strategy – and budget – have been directed at diversifying the boards, staff and content of the existing major opera houses, theatres and museums. It has not attempted to redistribute funding equitably to create a wider diversity of institutions and art forms. 

No matter how strong the voices are, no matter how much we bring lived experience to the centre of the decision-making process, these views are inevitably mediated by those in power, who are predominantly white. 

White leaders must not exclude themselves

This is what drives the struggle between the disparate parts of the Black communities to be heard. There is no monolithic lived experience. Yes, there are common lived experiences, but when seeking solutions to the problems we face, there are too many views and perspectives to be heard.

Ultimately someone decides on which lived experiences to privilege. To exclude white voices from the conversation makes no sense, and is not possible given current power structures. So it is important that white leaders do not exclude themselves, shielding behind the politically correct notion of empowering those with lived experience.

You are the power brokers and it’s important to be transparent; to acknowledge that in your decision making some voices get heard while others are silenced. The work, therefore, lies in more equitable funding which would enable a wider range of interventions from a more diverse range of lived experiences. 

The money is there. Your work is not to remove yourself from the conversation but to distribute it equitably.  

We are keen to keep the conversation going. To read more and share your thoughts on this or other articles, connect with me on LinkedIn. 

NB. We have used the term Black. We recognise the diversity of individual identities and lived experiences, and understand that Black is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

NB. Although we agree that equitable funding is important for all groups, we are talking specifically about racially equitable funding at this time.

The question of whether increased funding to Black-led organisations necessarily would mean less funding for White-led organisations is an important one. Is equitable funding a zero-sum game: a right or benefit won by one side is lost by the other?

The importance of the question is that it illustrates the scale of the problem to be fixed. It represents the extent to which White leaders and their organisations will need to sacrifice power and financial status to achieve equitable funding. It sheds light on the degree of inertia towards meaningful change and initiatives that work. 

Clearly, the higher the level of personal sacrifice and risk to lifestyle and livelihood, the more resistance there will be to making the change that is needed to achieve a fair funding system. By extension, if there is increased resistance, the answer also reveals the extent to which Black leaders will need to take the same personal risks to their status and financial security to challenge those who have control of, and benefit from, current resources, for a fair settlement.

If equitable funding remains a zero-sum game, there are serious implications for Black and White leaders alike. At a time of heightened awareness of racial inequalities, Black leaders are less willing to tolerate the status quo. But in a zero-sum system, a fairer distribution to Black-led organisations would mean defunding incumbent institutions, which may create a backlash from a predominantly White-led sector. The moral case for doing this is strong, but the personal implications on the lifestyles and livelihoods of White leaders would make this hard for them to swallow.

An underinvestment of £126m per annum

It is vital that we change the current ‘win-lose’ situation by increasing overall funding into the arts and creative industries so that we avoid the inevitable resentment, division and conflict that comes with ‘losing’. There are several ways of achieving increased funding including government policy, corporate social responsibility and public sector investment. 

An estimated £1bn of public and private grants is spent on arts and culture each year. Of this, only an estimated £24m (2.4%) goes to Black-led organisations. This represents an underinvestment of £126m per annum. To achieve equitable funding within a decade would require an additional £1.26bn to Black-led organisations. Without significant extra cash, equitable funding in the arts inevitably becomes a contest between Black and White leaders over the finite pot of funding available.

This direct conflict of personal interest and aspiration between Black and White leaders is unlikely to be constructive, nor is it comfortable. It forces fundamental questions. What are we as Black leaders willing to risk in challenging those in power to achieve equity?  And what are we as White leaders willing to relinquish in terms of power and status – and perhaps even personal income – to achieve a fair distribution of funding? 

In a zero-sum scenario, I am committed to advocating and campaigning for racial equity, putting me in direct conflict with the personal interests of my White counterparts, some of whom I rely on to fund my projects. Such infighting is unlikely to end well for anyone and, given the structural power imbalances, least of all Black leaders.

Ways of achieving increased funding

To avoid counter-productive conflict, we must urgently explore ways to increase the funding pot. There are many options for doing this. 

1 – Government intervention through various means including:

• a racial equity recovery fund that matches the help given to established and mainly White-led cultural institutions to the tune of £2bn over 12 months;
• using some of the c.£2bn from Big Society Capital to fund Black organisations. This money came from dormant bank accounts including from Black communities;
• setting equitable quotas for Arts Council England and other public funders; and
• enforcing Charity Commission guidelines to fund equitably. It is a legal obligation, but not one they currently enforce.

2 – Reallocating some of the billions of pounds of endowments held by funders to deliver social impact, as suggested by Sir Ronald Cohen in his book ‘Impact’.

3 – A requirement for commercial businesses in receipt of tax benefits from a Comprehensive Spending Review to redistribute them equitably. 

4 – Impact investment in social enterprises with innovative ideas that can deliver social benefit and create scalable solutions. These can deliver financial returns to both investors and the social enterprise – and save government money in the long term. What Sir Ronald called a ‘win, win, win’ scenario. 

We must address the personal dimension head on

The political arguments for equitable funding are well understood. But in the end, as human beings, it is the personal dimension that prevents this from happening. To paraphrase the American feminist, Carol Hanisch, the political is inevitably personal. Without addressing the personal dimension head on we are unlikely to develop effective policies and initiatives to fix the problem. 

Our options are clear: continued inequitable funding, redistribution within existing budgets, or redistribution through increased budgets. The first option is untenable, the second unworkable and so we are left with the third, which is eminently achievable, and within a reasonable time frame. 

We should act now, Black and White leaders together, rather than in competition, so another decade isn’t allowed to pass without effective action.We are keen to keep the conversation going. To read more and share your thoughts on this or other articles, connect with me on LinkedIn.

NB. We have used the term Black. We recognise the diversity of individual identities and lived experiences, and understand that Black is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

I was optimistic about the possibility for change to the stark and urgent problem of only 2.4% of regular arts funding going to BAME* organisations when the BAME population is 14%. But as I plan to launch Create Equity’s campaign for arts funders to pledge to distribute their funding equitably within the next ten years, that optimism has waned.

Although I have many agreements in principle from initial conversations with funders, there has been no rush of firm, specific commitments, and it’s clear that I will face considerable inertia in achieving this. 

What are you waiting for?

Grouped as themes, there are four reasons for resistance to signing the Create Equity Pledge.

1. The tyranny of choice – While many are beating a drum for urgent change, funders are hesitant about which initiatives, if any, to sign up to. New projects being developed to track the distribution of arts funding are preferred by funders because, while they will analyse how funders distribute their grants, they will not commit funders to a set quota. This is more likely to have impact but is also higher risk.
2. All inequalities are equal – Some don’t want to commit to funding equitably on race before doing the same on the other eight excluded characteristics. They want to address all inequitable funding at the same time. In my experience, this means they often don’t commit to anything. Either that or, given finite time and funding, the race agenda gets diluted.
3. What does success look like? – Some want to negotiate what counts as part of the quota. For example, can they include organisations which are white-led but which aim to serve BAME communities? This may feel lower risk as it offers a wider field to address. But it will also likely dilute the impact and significantly slow things down as they work through how to implement more far-reaching policies. 
4. Leave us alone – Some want to make the change to equitable funding without a Pledge (and the monitoring and accountability that goes with it). They are comfortable with their current approaches to change and instinctively protective of reputational risk. So they are reluctant to commit publicly to a quota which, if they fail to meet it, could become a ‘hammer’ to hit them with.

I’ve reached the conclusion that funding inequalities are so extreme that to argue about these technical concerns is time wasted on making real progress. In the end, I can concede to all but one of them. Funders can sign a different pledge (instead of Create Equity’s) if it includes a quota; conflate all underinvested groups if they want; or draw the boundary of what counts as part of the quota as broadly as they like. But the need for a public pledge that is time limited, and that can be measured and monitored, with clear accountability, is a must. 

Why past efforts have failed 

Nothing less than a fundamental shift in the power relationship between funders and BAME communities can solve this problem. The numbers and conflicting policies which underpin funding inequalities speak for themselves. 

If Arts Council England (ACE) were to increase funding to BAME organisations at 2% above inflation in all future funding rounds, it would take 140 years to meet the Create Equity Pledge. Its ability to move faster is heavily constrained by resources, competing priorities and government influence.

Those currently funded by ACE are more likely to get funded again. Over the last two spending revues, some 90% of funds went to previously funded organisations. So only around 10% is available to new recipients at each spending review. Even if all of this were allocated to BAME organisations, ACE would not meet the target for equitable funding. 

Another issue is when policies conflict. The policy to drive a fairer percentage of grants to the regions inadvertently runs counter to racially equitable funding. A disproportionate number of BAME-led organisations are based in London and as a result, nearly half of ACE’s total funding for BAME-led organisations goes to those in London. So geographical redistribution inevitably reduces either the overall number of BAME organisations who get funded, or the level of grants these organisations receive. Without significantly increasing the money pot, one form of equity can negate others.

Equitable funding, by any means possible 

My initial optimism has turned to pragmatism for this reason. The Create Equity campaign is both a pledge and a research project. If funders cannot pledge we will make determined efforts to understand their reasons. And with funders who do sign up but don’t meet the pledge, we will also seek to understand why. 

We plan to produce a report outlining the constraints, suggesting solutions and, where necessary, we will develop projects to deliver these solutions. It’s only by understanding and evidencing the limits of our current system that we can make the case for something new and more equitable. 

Equitable funding is the mission of Create Equity, by any means possible.  

Join the conversation on Linkedin.

* We have used the abbreviation BAME. We recognise the diversity of individual identities and lived experiences and understand that BAME is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

Exploring The New Normal

Two weeks ago I produced an online event with MeWe360 ‘Funding BAME Creativity – Exploring The New Normal’. The aim of the event was to ‘dig deep’ into the systemic racial bias in UK arts funding.

Bringing together major funders in the sector, our panelists included Francis Runacres, Executive Director, Enterprise & Innovation, Arts Council England;  Dame Caroline Mason DBE, Chief Executive, Esmée Fairbairn Foundation; and Genevieve Maitland Hudson, Deputy CEO, Social Investment Business.

I was interested to hear their various perspectives on several issues, most importantly on the structures that have kept arts funding racially biased for decades. But in addition, I wanted to understand what they had learned from Covid and the Black Lives Matter movement about the need to fund equitably.

Looking forward, I wanted to understand their thinking on what a new, more equitable funding system could and should like. As people making the funding decisions, I felt it was important to hear their views.

The event was inspired by an Arts Council England funded research paper by myself and James Doeser on the impact of Covid and lockdown measures on BAME entrepreneurs. It highlighted the invisibility and underfunding of BAME entrepreneurs pre-Covid; how during Covid some BAME entrepreneurs experienced increased visibility and, in some cases, increased revenues due to the Black Lives Matter Movement.

As we start to emerge from Covid there is a real desire by BAME entrepreneurs for a new settlement. One in which we remain visible and are funded equitably.

An open, honest and free-flowing discussion

What follows is an open, honest and free-flowing discussion, expertly facilitated by Mohit Bakaya, Controller at Radio 4.

The panel of arts funders were joined by a sub-panel of sector experts who offered their insights from the perspective of grant recipients, BAME creative entrepreneurs, researchers and arts consultants.

Conversations on race are never easy. I was delighted we were able to explore difficult issues without embarrassment or guardedness, though inevitably there were one or two moments of vulnerability. I want to thank all panelists for their honesty and candidness in contributing to an illuminating conversation.

We are keen to keep the conversation going. Let me know what you think of the event and if you’d be interested in being part of a wider follow-up discussion, you can get in touch here.

1. The challenge

Setting up projects which develop BAME creative businesses – through which the founders can potentially generate significant financial reward – has been at the heart of my life’s work. To date I have supported thousands of artists and entrepreneurs, the four most successful of whom have an estimated combined net worth of £14m.

The bane of my career has been attempting to combine using public funding to drive the creative and entrepreneurial development of people from under-represented communities to commercial success. 

I still haven’t cracked it.

Development of ‘under-represented’ communities in the arts and creative industries is ‘in the public interest’ and therefore eligible for public funding. However, supporting under-represented artists and entrepreneurs to grow their businesses is a ‘private benefit’ and therefore less eligible for public funding, despite the wider public benefits of job creation and contribution to GDP. 

Covid-19 and the BLM movement are the most recent reminders of the deep racial inequalities in our society. They have strengthened my long-held conviction that public money supporting individuals from BAME communities to develop businesses is necessary.

2. Mazzucato on The Entrepreneurial State 

In her book – The Entrepreneurial State – Mariana Mazzucato argues that separation between the public and private sector is more myth than reality. There have always been points of cross fertilisation between the two; where public money is used to support early-stage development followed by commercialisation, again using public money, which also creates individual wealth. 

Examples include Google‘s algorithm and Apple’s touchscreen technologies – both developed with public funding and later commercialised. Government sometimes funds initial R&D in developing a new product, then encourages commercialisation by subsidising prices to make the new product affordable (e.g. development of the internet and solar panels). This is all justified as the public interest; but some people definitely got rich.

Some argue that in these projects the risks have been socialised and the rewards privatised – a long-standing ‘moral hazard’ debate in many industries. But the more relevant question here is why this is okay for the tech or environmental agendas, but not for racial equity: the need for public intervention is equally pressing and potential public benefit immense.

3. Using the entrepreneurial state to fund BAME creative entrepreneurs 

The private sector, left to its own devices, has persistently under-invested in BAME entrepreneurs: only 1.7% of venture capital goes to BAME communities vs. 14% of the population which is BAME. 

Government and philanthropic funders aim to redress this type of ‘market failure’. However, they significantly under-invest in BAME entrepreneurs. By value, only 2.4% of regular grant funding in the arts goes to BAME organisations. Funded BAME organisations also receive disproportionately small grants, at well under 50% of the overall average. 

Something completely new is now required in the arts. This has to tackle the question of personal gain head-on, even if distasteful to some philanthropic and public funders: the best-performing artists are successful both artistically and financially – that’s just how the industry works.

Philanthropic and public investment in ethnic minority entrepreneurialism in the arts is essential: like the climate crisis, racial justice is an existential issue, not just a desirable objective. Like access to the internet, diversity needs to be seen as a driver of innovation with major public benefits. The private sector, major trusts and various agencies of government need to commit fully to finding immediate large-scale solutions. 

4. Why start with culture when the whole system is broken? 

Art and cultural production are the UK’s shop window to the world through the world-class television, books, music, films, comedy, dance and poetry we produce. Think of the 2012 Olympics opening ceremony or the wedding of Prince Harry and Megan Markle: these events are packed with culture and broadcast to billions globally. 

The more routes we provide for people from all groups in our population to participate in production, then the richer the picture of contemporary Britain we show to the world. The more we provide access to distribution and ownership, ownership of commercial broadcast media, publishing and production, the more equitable and cohesive a society we create and the more we add to the UK’s creative output and reputation as a creative powerhouse. It is a matter of ethics and politics first, but the public economic and other benefits that flow from this are massive. 

To support long-term, sustainable development of BAME creative entrepreneurs, we must use the same mechanisms, institutions, agencies and policies that have been used to drive the tech and environmental agendas. This includes R&D to drive up the number and quality of BAME businesses; committing to artistic excellence and its commercialisation; encouraging long term private sector investment in BAME enterprises and allowing profits to flow to successful companies with wealth generated by BAME entrepreneurs and employees.

Early public sector interventions on the tech agenda have not capped wealth for the entrepreneurs at Google and Apple – why should they here? Future investment must not impose limits on BAME entrepreneurs in a sector in which the potential personal gains for privately funded white artists are so high. This would perpetuate exactly the inequality that philanthropic and public funding are intended to tackle. 

Developing the ‘social fabric’ is as important as developing the tech and green infrastructure needed for a more connected, prosperous and sustainable future. We must act now to apply the same solutions used for these other important agendas to fix systemic racial inequality, starting in the arts. 

Let me know what you think in the comments below or join the conversation on Linkedin

NB. We have used the abbreviation BAME. We recognise the diversity of individual identities and lived experiences, and understand that BAME is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.