|Date/time session||Thursday May 12, 2017
|Session type||Panel Session|
|Moderator name||Mr. Robert Mwapembwa, Media and Marketing Manager, East African Art Biennale|
|Rapporteur name||Kido Jasper Sabuni, journalist|
|Session Title||Making a case for an impact capital vehicle for supporting the creative economy ecosystem in East Africa
|Session Topic|| To establish a partnership between East African governments, creative businesses and donor partners to pool resources and work together towards a common goal of enhancing productive in the creativity
To invest in the necessary infrastructure, policy environment and access to knowledge to create an efficient, well-functioning creative value chain.
Speaker: Faisal Kiwewa, Director, Bayimba Foundation
Speaker : George Gachara, Executive Director, The Nest Collective
Speaker : Ayeta Anne Wangusa, Executive Director, CDEA
|1. Description of the session (max. 500 words or 1 page) – generic information including the nature of the speakers career work, discussion in the session, main points made by each speaker and the key action points|
|This plenary session was moderated by Mr. Robert Mwapembwa, Chairperson of the Tanzania Visual Arts Association (TAVA), which aimed at making a case for an impact capital vehicle for supporting the creative economy ecosystem in East Africa. The speakers of the session were: Faisal Kiwewa, Director, Bayimba Foundation, George Gachara, co-founder and member, The Nest Collective and Ayeta Anne Wangusa, Executive Director, CDEA.
In summary, the session discussed how the three organizations as principles have decided to establish an endowment fund to ensure the sustainability of their programmes. The three organizations are open to welcoming other arts organizations in East African, to join the initiative as co-principles.
Making a case for the endowment fund.
Faisal Kiwewa: We cannot survive the next 10 years if we keep fundraising only traditional donors, since most donors do not cover all our needs. We are thus putting measures in place to diversify our funding sources.
We came up with a regional strategy that will sustain the legacy we are building. We want to be a position whereby if one of us cannot sustain certain % of my budget, he others organizations can help.
We have decided to set up an endowment fund, which will also be used to invest in the creative sector in the coming years.
The endowment fund will be operated from a fixed account that will not utilize but use only the interest arising over a period of 1 year. We intend to raise $1m.
George Gachara: The Nest Collective is interested in the Endowment Fund because it focuses on supporting artistic financing and financing of arts institutions.
Arts programmes have been predominately financed by donor funding from Europe and the America. However, due to change in the geo-politics their priorities have changed and they dropped funding for the arts. As responsible managers of arts of programmes, we need to think of our sustainability. We decided that every year we will need to save $10,000 and continue to fundraise individually for the endowment fund.
We want to create a facility that understands the dynamics of the creative industry. This does not mean we are going to displace the traditional funders.
Ayeta Anne Wangusa. The discussion of mutual collaboration began when The Nest and CDEA met at a meeting organized by CKU and we discovered we both had plans to establish an investment fund. We decided to co-opt the Bayimba Foundation to discuss the idea of our sustainability and this how the idea of formulating an endowment fund started.
While our focus is to establish an endowment fund, we also should consider structuring ourselves to be that vehicle to attract investment funding to the East African region We could use the model of the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) Investment Blueprint, an example of vehicle of mobilizing resources for the creative sector from government and the private sector.
|2. What are the Speakers perspectives on the issue of impact investment for the creative economy in East Africa? (max. 250 words or ½ page)|
The correlation between the endowment fund and the impact investment, is that there is a percentage of the savings from endowment of the will go to investing in the creative industries initiatives.
|3. Examples of impact investment vehicles in East Africa (provided by speakers or the audience)|
The Southern Agricultural Corridor of Tanzania (SAGCOT) is currently raising capital for the agriculture sector. This narrow geographic and sector focus created detailed market awareness and push concentrated capital into this challenging region with a high potential for impact ( GIIN, 2015. P.27)
|4. Challenges or obstacles for establishing an impact investment for the creative economy in East Africa identified by speakers or the audience (max. 5 points)|
1. The creative product is a unique product and very few investors or financial institutions understand its business dynamics
|5. Examples of opportunities for establishing an impact investment vehicle for the creative economy in East Africa identified by speakers or the audience (max. 5 points)|
|1. Creative entrepreneurs themselves becoming Angel investors because they understand the dynamics of the industry
2. Mobilizing local philanthropy to invest in the creative economy
3. Mobilizing a vehicle to channel funding from foundations and donor funding to the East Africa e,g. Heva Fund
4. Using savings from an East African endowment fund to invest in selected arts organization initiatives
|6. Recommendations for action required for establishing an endowment fund for arts organizations in East Africa (max 5 points in priority order)|
|Focus will be on finalizing legal process of setting up the fund in Nairobi and selecting a fund manager.
|Restrictive Endowment fund
|“There seems to be a feeling that traditional funders are leaving the cultural sector… we would like to say that is not the case….British Council is still here. Yes there are new dynamics like Brexit, the migration issue in Europe…which means we are leaving the old ways of working but not leaving the sector completely…” Rocca Gutteridge , British Council East Africa.
“I feel that this room is sensitive on the nationality of money. Today we are sensitive about the exit of our partners and now there is the idea of looking East. However, there is also the idea of looking internally. We have a challenge to start to recruit local philanthropy…” George Gachara, The Nest Collective.
“We want to create relief for our donors… we want to say to British Council, you gave me $20,000 last year, so this year give me $10,000 because we are getting it from our savings. We are building a case of building sustainable institutions, so even the donors can have a best practice to share,” Faisal Kiwewa, Bayimba Foundation.
|9. Any other comments from the audience and response from Speaker/Moderator?|
Audience views and panel responses
Daniel Maginga, Investment Executive, Grofin. The idea of establishing an endowment fund is good, but the best way to go about it is to have a restrictive endowment fund. Since you are in different countries we need to think about the profit margins. In which, country would you get the best profit margins. The other issue to think about is the governance of the fund. You need to have clear separate governance structure from your programme work.
Moderator. What is a restrictive endowment fund?
Daniel Maginga. A restrictive endowment fund a is fund where you have access to the interest and not the capital.
Rocca Gutteridge (British Council East Africa): There seems to be a feeling that traditional funders are leaving the cultural sector, we would like to say that is not the case….British Council is still here. Yes there are new dynamics like Brexit, the migration issue in Europe…which means we are leaving the old ways of working but not leaving the sector completely. We from here from British Council …the Lambert Foundation, Doen are all eager to learn and find new ways working.
Faisal Kiwewa: Yes, we shall have a Restrictive Endowment Fund and then we will decide how much we shall invest in other creative programmes. We want to create relief for our the donors… we want to say to British Council, you gave me $20,000 last year, so this year give me $10,000 because we are getting it from our savings. We building a case of building sustainable institutions, so even the donors can have a best practice to share. We want to invest in our on spaces, because donors don’t want to invest in infrastructure development. We need to think about financing our business projects.
George Gachara: I feel that this room is sensitive on the nationality of money. Today we sensitive about the exit of our partners and now there is the idea of looking East. However, there is also the idea of looking internally. We have a challenge to start to recruit local philanthropy. We need to change our thinking and begin investing in the creative sector. In the next conversation of the Mashariki Conference, can we have case studies of local mobilization. For instance, The Next Collective decided that their first salary would go into to the Heva Fund. That is how we started the fund. Locally, we need to think of making ourselves sustainable.
Nanjala Nyabola: I think the creative sector needs to design products that make can make people invest in them. For example, the government of Kenya got Kenyan to buy government bonds via Mpesa. The bonds were as cheap as Ksh3000 and you get a return on investment in 3 months. How can we translate this idea to the creative sector, taking into account that the return on investment is not the same as investing in the oil and gas sector?
George Gachara: There are some products in the creative sector that are more income potential than others. For example, visual arts auction, music and fashion have great potential. The reason we have not seen great stories is because there has not been much investment.
Nanjala Nyabola: What are the risks associated to investing in the creative sector?
Stephen Gugu: There is a limited understanding of the business environment, no marketing skills so an approach would be to market the artists as a collective. In terms of accountant, need to get an accountant. A research done on Incubators in Africa, found that only two incubators is only two have sustainability model e.g. through co-working space and consultancies. Most of the others were reliant on donor funding that is being put in ICT projects. So even as you establish an endowment fund, there is need to have a business model to ensure you are sustainable and not just making a profit from the endowment savings.
Ayeta Wangusa: Just to add that CDEA has a sustainability plan. We are registering our business arm, SanaaBiz Investments Limited that will contribute to our sustainability.
Faisal Kiwewa: We do not want to mislead want the audience that we can be sustainable through the endowment fund. However, the savings could contribute to the running costs, so that I can then focus on funding for programmes. For the past 6 years Bayimba Foundation has invested in treasurer bonds, we have a studio and have a restaurant. Glad to know that CDEA has also started a business, SanaaBiz Investments Limited. We are yet to finalize the details of what % of the interest accrued will go to running costs, acquisition of assets and investing in other arts organization initiatives.
George Gachara: The correlation between the endowment fund and the impact investment is that there is a percentage of the savings from endowment of the will go to the investing in the creative industries. The idea of the endowment is of the three principle institutions… we have opened conversation for other arts organizations or associations that want to fund, they can approach the 3 principles and can be conjoined as co-principles. In Kenya, they can approach The Nest Collective, in Uganda they can approach Bayimba Foundation and in Tanzania, they can approach CDEA.