Investing in the Creative Economy: 5 Questions With Upstart Co-Lab’s Laura Callanan
Artists and arts organizations, take note: a new initiative is transforming the way the creative economy is supported – and you can be a part of it.
Upstart Co-Lab is connecting impact investors with the creative economy. Investors who believe in the power of art, design, culture, heritage and creativity to drive positive social and environmental impact now have a way to align their investments with their values. They can back social purpose businesses in food, fashion, media and other creative industries plus affordable live and work space for artists and designers so the creative economy can thrive.
Impact investments are made with the intention to generate positive, measurable social and environmental impact along with financial return. $12 trillion in the United States — 24% of all assets under management — is invested for social responsibility and impact.
Upstart Co-Lab increases the visibility of the creative sector as a way for investors to achieve their social and environmental goals, with an emphasis on communities.
Now Upstart Co-Lab is launching a new phase – Upstart 2.0 -- to work with existing impact investors who love the arts, plus foundations that fund the arts and endowed cultural institutions interested in harnessing their investments to advance their missions. What does success look like? A stronger creative ecosystem that benefits us all.
NYSCA spoke with Upstart’s founding partner and the former senior deputy chair of the National Endowment for the Arts Laura Callanan about Upstart Co-Lab and impact investing – and what artists and cultural organizations should know.
Why is impact investing a focus for Upstart Co-Lab, and what inspired Upstart 2.0?
As senior deputy chair of the National Endowment for the Arts, I observed a big funding opportunity for the arts that was being missed. The NEA budget is $155 million. Philanthropy for the arts is about $21 billion each year. But socially responsible and impact capital in the US today is $12 trillion. That money is already focused on important issues like the environment, inclusion, women and girls, quality jobs and more.
But art, design, culture, heritage and creativity have been missing from the impact investing conversation. That’s a trillion dollar missed opportunity. People who care about the future of the arts should care about impact investing because - in the words of the great American bank robber Willie Sutton - that’s where the money is.
Upstart Co-Lab launched in 2016 to disrupt how creativity is funded by connecting impact investing to the $804 billion US creative economy. We spent three years doing research, hosting conversations, and piloting new investment vehicles like the Local Initiatives Support Corporation (LISC) NYC Inclusive Creative Economy Fund.
Now we are beginning the next phase of our work. Upstart 2.0 is a member community of pioneering impact investors who understand the power of art, design, culture, heritage and creativity to drive financial return and make social impact. They will learn together, demonstrate what’s possible by making investments -- and help spread the word to other art lovers, foundations that fund the arts, and endowed cultural institutions.
How has impact investing for creativity grown since Upstart Co-Lab’s founding?
Upstart Co-Lab has mobilized $10 million of impact capital for the creative economy in the past 3 years. And we are growing the impact investing pie by attracting new art lovers and arts organizations to impact investing for the first time.
We have also learned a lot. Our research showed that impact investors are already backing businesses and real estate projects related to the arts and creative industries.
The creative economy has been Hiding in Plain Sight for impact investing. Investors focused on the environment or quality jobs for low income people are investing in an ethical fashion company or a sustainable food brand without realizing that’s the creative economy at work.
When investors ask their wealth advisors for impact investments related to “art and culture”, the advisors say aren’t any. That’s just wrong. Upstart Co-Lab is naming and framing the investment landscape so people who care about art and culture can find the investment that fit their priorities.
Are there particular impact goals that Upstart Co-Lab focuses on?
All the impact goals investors already focus on can be realized by investing in the creative economy. That includes community building, quality jobs, financial inclusion, gender equity, social justice, environmental sustainability – and more.
How can arts and cultural organizations can work with Upstart 2.0?
Upstart 2.0 will work with endowed cultural organizations that want to live their mission and values through their investment portfolio. The Souls Grown Deep Foundation is already leading the way.
What are the three most important things for the cultural community to know about impact investing?
Foundations can pave the way for impact investing in the creative economy—as they already have done for the environment, community development, and other priorities—by being first-mover investors. There are a lot of foundations committed to impact investing that have the arts in their mission. Unfortunately none of them are including the creative economy as part of their impact investment strategy – yet.
Endowed cultural institutions can adopt an impact investment policy, and make the creative economy a pillar of their strategy. In particular the large museums, performing arts centers, libraries and schools under pressure to demonstrate their commitment to diversity can prioritize hiring investment management firms led by women and people of color, and investing in companies and funds that meet diversity and social justice standards. These same institutions can add a socially responsible investment option to their 401k plan so their employees have the chance to become impact investors as well.
Art collectors, art patrons and artists themselves can begin to align their money with their values. Anyone at any level of wealth can be an impact investor. If you only have a savings or checking account, consider working with a bank that is a certified B Corporation.
To learn more visit the Upstart Co-Lab website (www.upstartco-lab.org) or contact: Laura Callanan at [email protected].