Arts & Social Finance

Performing Arts

Strengthening Cultural Resilience in Canada

For decades, the Metcalf Foundation has supported artists, cultural organizations, and sector development initiatives while helping advance policy ideas and practical tools to improve long-term sustainability across the arts and culture sector. In recent years, this work has increasingly focused on how social finance might strengthen the resilience and adaptive capacity of Canada’s cultural nonprofit sector at a moment of growing structural pressure.

Arts & Social Finance emerged from that work. Developed through years of research, workshops, cross-country engagement, and dialogue with governments, investors, policymakers, and arts organizations, the initiative is designed as a practical response to deepening precarity across the cultural ecosystem. This work is being advanced in collaboration with Rally Assets, one of Canada’s leading impact investment firms with extensive experience building social finance infrastructure and mobilizing public and private capital through the Government of Canada’s Social Finance Fund. Together, Metcalf and Rally have examined how social finance operates across other public benefit sectors in Canada, as well as in cultural sectors internationally, asking whether similar tools could help strengthen Canada’s arts and cultural landscape.

At its core, Arts & Social Finance is a proposal to introduce affordable, repayable capital into Canada’s cultural nonprofit sector, supported by grant-based readiness and capacity-building programs. The initiative is designed to be additive — not a replacement for grants, but a resource designed to help organizations diversify revenue, strengthen fiscal capacity, build adaptive capability, and increase long-term resilience.

In May, we submitted a pre-budget recommendation to the federal government calling for a $50 million investment in Budget 2026 — a first-loss contribution that would help attract an additional $50 million from philanthropic and private-sector partners to fully capitalize the fund.

Arts & Social Finance is a proposed $100 million fund based on Arts and Culture Finance, a $60 million United Kingdom (UK) pilot that demonstrated the impacts of repayable capital and investment readiness on organizational resilience long-term.

Can Arts & Social Finance replace grants?

No, Arts & Social Finance is designed to work alongside public funding, not replace it. While we have examined the limits of granting and the risks of grant dependence, that is not because we want granting to go away, but because we want the sector to use its public funding more efficiently and effectively. Social finance can help us do that.

Why loans? Why not just fix the grant system?

Grants are essential, but they are not designed to build the responsive capacities organizations require in a rapidly changing world. The challenge is not only about money; it is about the conditions organizations operate in. More funding alone is unlikely to address the underlying challenges if the conditions that generate fragility remain unchanged.

Are cultural nonprofits ready to take on debt?

Many are not — which is why readiness is central to the initiative. Our aim is not to push loans into fragile organizations, but to provide adequate support for those that want to build new capacity, pursue new activities, and diversify revenue. ASF Build is designed with off-ramps at every stage so organizations can explore the option before ever taking on any debt.

What kinds of activities are eligible?

Generally, investable activities are those that generate revenue above expenses. Not all artistic activity can or should aim to do that. However, many organizations already engage in activities that could be strengthened through better business models and financing — from capital projects and bridge financing to education programs and intellectual property development.

Isn’t this going to make us more commercial?

Effective revenue diversification does not imply commercialization. In fact, it is often the very means by which arts organizations enable riskier creative explorations. Teaching programs, venue rentals, licensing arrangements, and education initiatives are often what support greater creative risks elsewhere.

What does “investment-ready” actually mean?

Investment readiness is not about perfection or scale; it is about clarity, testing, and capacity. Organizations need to understand their ideas, their audiences, and their operational realities well enough to de-risk transformative efforts and take on financial commitments responsibly. ASF Build is designed to help organizations reach that point.

Is this only for large or well-resourced organizations?

Current banking conditions in Canada mean large organizations are often the only ones able to access financing — which is part of the problem we aim to address. By investing in readiness and capacity-building, Arts & Social Finance aims to broaden access to financing, making it available to organizations that have been excluded by traditional financial institutions.

How is this different from past capacity-building programs?

Past capacity-building initiatives have sometimes lacked the accountability structures needed to ensure both funders and organizations follow through on meaningful organizational change. In a lending environment, the stakes are real for both parties — which creates stronger incentives to do the readiness work properly and follow through on it.

Why Metcalf?

Metcalf has spent decades working on structural questions in the arts and culture sector — supporting organizations, funding research, and helping advance the policy ideas and practical tools the sector needs to thrive. Arts & Social Finance builds on that experience. As a foundation, we have the perspective, flexibility, and responsibility to explore opportunities that others cannot.

Why can this feel so uncomfortable?

Arts & Social Finance asks the sector to think differently about risk, debt, and what sustainability actually requires. It challenges an instinct that prioritizes protecting what we have over building what we need — and that instinct is understandable, especially in a sector that has long operated under conditions of scarcity. Change is rarely comfortable, even when it is necessary.

Arts & Social Finance

Featured Publications

Setting the Stage

Designed primarily for funders, policymakers, and cultural sector leaders, Setting the Stage, by Figurative, is a comprehensive roadmap for establishing primarily debt focused impact investment funds and initiatives in the cultural and creative sectors.