Arts and Culture Loan Fund Program Evaluation

Background

In 2009, in response to tremendous financial pressures facing arts and culture grantees, we launched the Arts and Culture Loan Fund (ACLF). The ACLF is an innovative, collaborative program designed to supplement traditional grantmaking tools with access to financial management training, capacity building services, technical assistance, and access to lines of credit from IFF and Fifth Third Bank to provide otherwise difficult to access working capital for arts and culture organizations in Chicago. This evaluation is a follow-up to the initial evaluation, published in 2016.

The ACLF program is built on internal and external collaborations to achieve impact. Internally, our Impact Investments team works with the Chicago Commitment team to support the ACLF program. External partners include:

• Intermediatory grantors, including the Prince Charitable Trust and the Richard H. Driehaus Foundation, at the time of the evaluation period, and beginning in 2023, the Field Foundation through a regranting partnership called A Road Together (ART);
• IFF, formerly known as Illinois Facilities Fund, which is a community development finance institution that manages the program;
• BDO, a subcontractor of IFF, which is an accounting, tax, consulting, and business advisory firm that provides technical assistance; and
• Lending institutions, including IFF and Fifth Third Bank, a commercial bank.

What We Evaluated

The core objective of the ACLF is to address the short-term cash flow needs of small- and medium-sized arts and culture organizations by offering access to working capital loans not readily available elsewhere. The program also aims to enhance financial management skills by improving the understanding of budget cycles and cash management. In addition, it helps organizations build credit history through borrowing relationships with lending institutions.

What We Learned

The findings of the evaluation highlight that small- to medium-sized arts and culture organizations are under intense financial and operational pressure. It found:

• The ACLF serves as a pressure release for participating organizations, opening up access to working capital as well as training to support longer term financial planning.
• The ACLF is an innovative model for supporting financial resiliency in the arts and culture sector.
• The program’s over 15-year history provides a powerful demonstration that these working capital loans are not inherently at a greater risk of default than other commercial loans.
• The ACLF model is replicable across other geographies and sectors.

The ACLF has maintained steady engagement levels since its inception, with organizations participating selectively based on individual needs. Of the 64 organizations participating in the program during the evaluation period:

• 64 percent (41 grantees) engaged in financial capacity building and technical assistance offerings, with the financial management training being the most popular;
• 58 percent (38 grantees) opened and maintained a line of credit; and
• 31 percent (20 grantees) engaged in both the line of credit and capacity building/technical assistance services.

View the Executive Summary 

Investing in Arts and Culture Organizations’ Financial Resiliency 

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