Royal Shakespeare Company

The Organisation

The Royal Shakespeare Company (“RSC”) is a globally significant theatre company established in 1875, and committed to captivating diverse audiences through the performance of and engagement with Shakespeare’s work. In addition to programming in Stratford and London, and to delivering national tours, RSC has a strong record of commissioning ambitious new work such as the highly acclaimed Matilda and My Neighbour Totoro family musicals. Their notable global reach is achieved via extensive international touring. On top of this, they have been a leader in innovation around utilising new technologies through their digital projects, which include live streams of performances, online productions and creative use of immersive technologies.

Their flagship Associated Schools Programme includes partnerships with 250 schools serving areas of socio-economic disadvantage and 12 regional theatres across England. The programme aims to transform the lives of young people, their teachers and communities through vivid first encounters with Shakespeare’s work, and to improve literacy, language and social skills development, critical thinking and resilience. Studies by the University of Nottingham and the University of Warwick into the impact of the Associated Schools Programme have found strong indications of positive impact with regard to self-confidence, wellbeing, attitudes towards work, and examination results.

The Opportunity

The RSC team were keen to find new ways of generating income that could fund future learning and participation programmes. As part of this they wanted to explore how to unlock support from an emerging pool of more data-driven philanthropic donors who prioritise interventions with evidence of impact. Historically these donors have been less likely to donate to arts organisations, due to a perceived lack of data proving tangible socio-economic outcomes from engagement with the arts, compared to other sectors such as health or education.

RSC were keen to challenge this assumption and aimed to access these donors by trialling a different type of fundraising mechanism which fulfils the stringent data quality and outcome attribution demands that they require. The mechanism is referred to as pay-for-success, whereby donations are pledged in advance but only received once certain impact outcomes, outlined as part of a detailed impact framework, have been achieved. (We are also referring to this model as ‘Conditional Philanthropy’.)

At the same time, RSC were seeking to expand the Associated Schools Programme further from 250 to 350 schools, beginning in the 2023/24 academic year. Given the body of evidence to date and the type of intervention, RSC believed the programme was a good fit for the requirements of the trial. They approached Arts & Culture Finance, recognising not only that ACIF investment could provide upfront funding to cover the expansion costs prior to receipt of donations, but that the team’s independent involvement could provide additional rigour and guidance in the development of the impact framework, instilling further confidence in potential donors.

The Process

ACIF recognised the potential of this investment to generate useful evidence for pay-for-success models which could unlock new funding for the wider sector. Therefore, the ACIF team provided significant additional support for the trial by working with RSC to co-design an impact outcomes framework, alongside the typical due diligence process.

The aim of the framework was to structure impact data appropriately for a pay-for-success funding model. The framework detailed the target outcomes, output areas and measurable indicators for each element of the programme. If these outcome targets are achieved, RSC will be reimbursed by the set of donors who have committed via the pay-for success model. (At the time of writing, there are still opportunities available to join this pool of cutting-edge philanthropists.)

The ACIF team’s wraparound support involved co-leading development of the framework with RSC’s learning team, coordinating decision points between the learning and development teams, and supporting both the internal approval process at RSC and the shaping of the framework into a streamlined donor proposal. It is anticipated that ACIF will continue to be involved for the duration of the programme.

Through ongoing conversations with key management personnel and analysis of core financial documents, the financial risk rating for this opportunity was determined to be lower than other investments, given the RSC’s reserves levels and capacity to repay the loan even in the case where pay-for-success donation targets underperformed. The ACIF team also had strong confidence in the RSC’s management team and commercial expertise throughout the process. Their recent box office performance, for example, including hit West End transfers Totoro and Hamnet, demonstrated they could execute a commercially successful artistic programme in difficult macro conditions.

The Impact

Up to 100 more schools will access the Associate Schools Programme during the first two years of delivery, and trialling the pay-for-success model represents a powerful lever for RSC’s long-term financial resilience. If successful, it could capture donors and funding avenues for its learning and participation work that are otherwise inaccessible.

As arts organisations face precarious and changing demands from both public and private funders, the investment supports RSC to create a vital opportunity to experiment and innovate. The investment also illustrates the potential to develop a new additive fundraising model for application across the wider arts and culture sector, which complements existing forms of fundraising and widens the subset of donors for arts interventions. It serves the additional purpose of strengthening both impact practice in and the evidence base for the huge social benefits of the sector as a whole.

The investment has also been an important opportunity for the ACIF team to deepen their understanding of this philanthropic trend, which in turn will strengthen their capacity to support the financial resilience of the sector in future.