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Interview: Tim Maycock, Acting CEO & Finance and Planning Director, Birmingham Hippodrome

Tim Maycock’s career spans both cultural sector finance, but also big business. He’s currently Head of Finance at Birmingham Hippodrome, with an annual turnover of £25m. Prior to working at the Hippodrome, Tim was the personal wealth manager for one of the richest men in the UK.

We caught up with him to see what insights he could share about cultural financial planning and what transferrable lessons he learnt from his time in big business.

Hippodrome location

How did you get to where you are in your career now, what have you learnt about finance along the way?

Before moving to the Hippodrome, I was the wealth manager for one of the richest men in the UK. It was an interesting role, but my boss wanted me to move full time to London. I was less keen – my wife and family are settled in Birmingham, and it’s an amazing city with so much going for it.

Parallel to that I saw the role at the Hippodrome.

Hippodrome interior

The Hippodrome is a very special place for me. When I was growing up in Birmingham, my dad was a journalist. He’d get free press tickets to shows at the Hippodrome. Those visits were so special. And now as an adult I can appreciate that the Hippodrome is really unique in the region. Our primary method of making money is through selling tickets to great shows, and we recycle that cash into a wide range of activities that deliver real value to the region. For example, we have a dedicated team that works with 36 schools on a weekly basis. It’s a really positive way of making money – through shows we know our audience are going to love. I’m proud of what we do and how we do it.

From your background in private finance, what have you observed is different about finance models in performing arts?

There are differing models across the sector from the purely commercial to the fully subsidised. The key for me is identifying the value that the organisation is providing. When the link to the value provided is clear, whether that is value to paying customers or value to funders, the money and sustainability follows.

In normal times, the Birmingham Hippodrome generates almost all of our income from our main stage shows, however the pandemic has meant we have had to access other sources of funding, which we have been very grateful to receive. One thing that has struck me is the amount of time and resource it takes to put together good applications. For smaller organisations requiring grant funding, dedicating so much time to the application process might not be possible, which is why the focus on value, or should I say, aligned values is so important.

Birmingham Hippodrome (exterior)

What’s your perspective on the cultural sector generally and its approach to trading and entrepreneurship… with an “outsider’s eye”, what tricks are we missing? 

I felt pretty useless when I first turned up, and asked a lot of daft questions. But by questioning everything, and asking ‘why’ a lot, we have been able to increase our gross margin and decrease our delivery costs, which means there is more cash to be able to support the public benefit activities.

There has also been a great deal of focus on linking activity with the strategic objectives, and while we are not there yet, saying ‘no’ to those projects that don’t fit or that we can’t do justice to leads to further efficiency.

It’s interesting hearing about how you’ve been able to carve out more operating budgets. Are there any transferable lessons from how you’ve been able to do that for smaller organisations with less resources?

My perspective is very focussed on the Midlands. I don’t have much experience beyond that in the cultural sector. But, within the area, I feel like more collaboration would yield greater efficiency . To some extent that’s the responsibility of bigger organisations, like the Hippodrome, doing more to help our smaller up and coming organisations.

One thing we have rolled out is called the Creatives Card, which means that anybody who self-identifies as an artist can come in and use the building during the day, including during rehearsals, to sit in the cafe, with no obligation to buy things, use the free WiFi. It’s a scheme that won’t cost us much but will hopefully help those looking for a welcoming space to meet and rehearse.

From your perspective as a cultural leader, what do you see as the main barriers to change and growth for the sector at the moment – particularly thinking about the long term effects of COVID and BREXIT?

The lack of certainty.

When every day is just crisis management, which is where we are at the moment, we get absolutely no time to think strategically about the long term. Most of the time the battle is just keeping the doors open and the lights on.

Everyone felt pretty confident in the autumn – we were running alongside the Delta variant – but it felt manageable. With Omicron, I was convinced we’d be shut down straight after Christmas; if not back to a full lockdown, like those imposed Wales and Scotland. I’ve got friends in similar roles in Cardiff and Edinburgh; they’re shut. Incredibly, we’re still open. A huge amount of time went in over Christmas planning for another shut down. It’s that constant uncertainty that’s the challenge. You can’t blame anyone for it, we’re all at the mercy of the virus.

In terms of planning further forward, there’s a reticence from those taking commercial risk to push the boundaries, especially if it could get cancelled last minute. I’m hugely grateful that artistic producers continue to tour productions in the current environment; because they are putting up a lot of the risk upfront: there’s no such thing as cancellation insurance because of COVID.

Really?

Yes, early in the pandemic I was part of a working group set up by UK Theatre who were lobbying the government for an insurance mechanism whereby producers could get cancellation insurance, much like what happened in the TV industry.

But in the end, it was just too big a number. A national closure of theatres would lead to a huge insurance claim that would be too big, even for the government. So I’m very, very happy that the industry has found a way to carry on anyway, and put things back out on tour, albeit at a higher level of risk.

And now the government is saying lateral flow tests are no longer going to be free, because COVID’s going to be with us for the foreseeable future, and they can’t keep paying for the testing kits indefinitely. There’s a sense that this level of uncertainty is going to be the way things are for some time – how do you normalise that in financial forecasting, can you?

Unfortunately, I think we just have to sit tight and see how things look in March. I guess the one thing that would certainly help is assurance from the government that national lockdowns would go hand in hand with furlough. We survived 534 days of shutdown because of furlough. And knowing that – either for certain industries or as part of a wider principle – that if there is a national lockdown, there is going to be a further scheme, would be really helpful.

Sadly, we did have to go through a redundancy programme earlier in the pandemic, which was driven by the fact that furlough was originally going to come to an end in October 2020. So we had to insure ourselves for a period when it didn’t exist. We were 129 and we dropped to 75. We’re now back up to 100. Making those longer term commitments to staffing levels, in the face of uncertainty, is really, really hard.

Are there any case studies that come to mind of effective entrepreneurial endeavours in the cultural sector?

The case studies that give me hope are those where organisations are taking traditional artforms and finding inventive ways of reaching diverse new audiences. The CBSO are doing great work: they started playing in Hockley Social Club to crowds that wouldn’t regularly fill the Symphony Hall. And they’re able to access it in a way that suits them, in a way that will mean something to them.

CBSO at Hockley Social Club

There is also some great work going on with the social impact investors – loans are made to organisations that wouldn’t be able to access traditional sources of finance, which place a value on more than just financial return. But as these are loans there is a focus up front on financial sustainability, which requires the value proposition to be clear from the start.

Repurposing a deconsecrated Church into a thriving arts and community space

x-church, Gainsborough, Lincolnshire

Former church of St. John the Divine, interior
Declared redundant in 2002. Now x-church, an arts and youth project.
This very large church was intended to be much larger. It was designed by Somers Clerke and Micklethwaite in 1881. LinkExternal link
   © Copyright Jonathan Thacker and licensed for reuse under this Creative Commons Licence.

In 2005 Marcus Hammond saw an advert for sale of the deconsecrated Church of St. John the Divine in his local newspaper. He bought it for £75,000, using funds left after his father died. Hammond’s father was a church architect, and before his passing he surveyed and drew up plans for the CofE to approve the purchase.

Today, the space is known as x-church, run by the not-for-profit Slumgothic. It’s a thriving community center and arts and music space, and rooted in the needs of young people in the immediate area. This is the story of how Hammond developed and financed the project

A year after Marcus bought the church, he founded the not-for-profit Slumgothic, which today runs the former Church as a social enterprise. Many of these activities, such as sports classes held in x-church, and the cafe, raise revenue.

Funding

The Church building has a smaller space (the school room) which adjoins the vast main hall. In 2013 it needed refurbishment. Slumgothic saw potential in the space for additional groups from the community, particularly older people, and to provide a warm, busy counterpoint to the majestic austerity of the main building.

In 2013-14 Slumgothic received £40,000 from the Community Lincs’s Community Assets Fund (CAF) as a mixture of grant and loan funding to refurbish the schoolroom.

Slumgothic is a fantastic example of turning a disused asset into something that benefits the community. The project has engaged and inspired hundreds of young people and has given them the ability to shape the development of x-church. The Community Assets Fund is looking to support community groups to establish and grow innovative projects like this that are focused on providing real, lasting value to their local communities.

Andrew Croft, Chair of the Community Assets Fund Investment Advisory Panel

Commenting on working with the Community Asset Fund (CAF) Marcus Hammond, Director of Slumgothic Ltd said:

The grant/loan mix is not a give-away but it is realistic and exactly what we have needed for some time. This work will make the world of difference to the scope of what we deliver.

Marcus Hammond, Director, x-church

Today the big income maker is fighting events – x-church hosts regular boxing matches and wrestling events, which brings in good money either through renting the space or ticketing.

The other big money-maker is the cafe – originally staffed by volunteers, during the pandemic the cafe was taken over by an external group who began using the space as a drop-in, providing mental health support, food parcels and free hot meals. The group rent the space from slumgothic.

The aspiration currently is to get the income to £15k a year and that will support the building and not-for-profit’s running costs.

Why this matters

Part of what is unusual and distinctive about the Slumgothic project is its commitment to being of the people and for the people. Since it’s conception it has focussed on the needs of young people, and those local young people are also represented on the not-for-profit board meetings, and – in some cases – have keys to the building.

This means that the activities and uses of x-church develop in conversation with the needs of the community groups who use it. This gives the Church a solid basis for funding and development, and demonstrates a grassroots, audience-first approach to project planning and business development.

Financial glossary

We’ve provided this working financial glossary as a resource to help elucidate different financial terms, and how they can be understood and applied fruitfully in the Arts and Cultural sector.

Asset-Based Community Development (ABCD): a methodology for how to mobilise self-organising community groups to achieve change and development by identifying often unrealised or under-utilised resources and strengths for the greater civic good. It’s often used in the context of community organisation, but certain financial consultants have applied it as a useful model for Arts and Cultural Organisational planning and development (for example Margaret Bolton’s Capital Matters p. 28ff).

Bond: a bond is a type of loan. The bond issuer is the recipient of the loan, and when you buy a bond you are providing that loan. Bonds specify what rate of interest will be paid and when the loan will be repaid in full. Bonds are often used by governments and corporations to borrow money to finance large capital projects. Margret Bolton and David Carrington explore how Arts and Cultural Organisations can use certain types of bonds to finance capital schemes that are likely to be revenue generating New and Alternative Financial Instruments p. 15 and 18).

Business angel/s: typically an individual providing independent capital to develop a business. Often a wealthy individual aiming to help the receiving business succeed through a combination of funds and through aiding the project with their advice, networks and/or mentorship. The term is often used in relation to start-ups, however there have been a number of case studies of its use to support commercial musicals and theatre productions in the West End. More information: New and Alternative Financial Instruments p.19

Cash sponsorship: cash sponsors pay fees in the form of money (as opposed to ‘in-kind sponsors; see below) who provide benefits to the receiving organisation in lieu of cash. Cash sponsors are typically used in events and not-for-profit fundraising. In 2015, it made up 54% of the total types of business investment in Arts and Cultural Organisations (Private Investment in Culture Survey 2016, p. 12)

Community Development Finance Institution (CDFI): a financial institution that provides credit and financial services to disadvantaged communities. There’s an example of how this sort of financing could be used by artists and crafts people setting up their own businesses on p.19 of New and Alternative Financial Instruments.

Community Interest Companies (CICs): These were set up in 2005 by the UK government. They’re designed as social enterprise companies that aim to create social good, rather than profit for shareholders. Bolton and Carrington explain how CICs can be used by not for profits as a way of allowing them to trade. (New and Alternative Financial Models p.25).

Development capital: the money that an organisation needs to invest in its future development (for example in research and development for new products and services). See also ‘Working capital’. Definition is taken from Capital Matters p.38.

Equity investment: money that is invested in a company by buying shares buying shares in a company. Bolton and Carrington make a case for quasi equity investments as a way of financing new projects for Arts and Cultural Organisations, New and Alternative Financial Instruments, pp. 14ff.

Endowment: a donation of money or property to a not for profit, which the receiving organisation will use for a specific purpose – typically in order to provide it with an income. The Sage in Gateshead has established an endowment to help it meet its revenue costs. Bolton and Carrington outline a case study of using endowment financing to support work in a new centre long in the making on p.22 of New and Alternative Financial Instruments.

Full cost plus: (see also Full cost recovery) full cost plus adds a mark up on all costs specified on full cost pricing. The Bolton and Carrington argue that Arts and Cultural Organisations’ contracts and grants should not only “reflect the full cost of delivery, including a legitimate portion of over head costs – they should also allow a margin for re-investment in the organisation/service. This is important – voluntary organisations tend not to recognise that they can only maintain projects or programmes if they invest periodically in their capital and human resource base.” (New and Alternative Financial Instruments, p.26)

Full cost recovery: securing funding for the full cost of the project, including a portion of overheads.

In-kind sponsorship: (see also Cash sponsorship) in-kind sponsorship provides goods or services in lieu of cash to the organisation it is sponsoring, in exchange for agreed benefits such as publicising the business name, its products and services. In 2014/5 In-kind sponsorship made up 19% of business investment in Arts and Cultural Organisations. (Private Investment in Culture Report 2016, p.12)

Loan: the lending of money by one individual or organisation to another. The borrower incurs a debt, and typically interest on that debt, which must be repaid, along with the original sum. Bolton and Carrington outlined scenarios where Arts and Cultural Organisations might benefit from using loans (from pp.11ff in New and Alternative Financial Instruments).

Patient capital: also known as long term capital. Refers to an investment where the investor does not expect to make a quick profit – instead the investor is willing to forego short-term gains, in anticipation of long term returns. Bolton outlines some lenders that operate in the Arts and Cultural sector that work in this way (p.25 Capital Matters).

Quasi-equity: the funder takes a financial stake in a venture – for example, in return for providing the capital for the development of a new piece of software, the funder receives a percentage commission on each sale (i.e. the return the funder receives is linked to the financial success of the venture). (Definition from Capital Matters p. 39).

Subsidy: a benefit granted by the state or a public body to help an industry or business. Subsidies are typically given in order to overcome a certain kind of burden or to promote social good / the economy. In New and Alternative Financial Instruments pp.5ff Bolton and Carrington talk about the fact that grant-based subsidies to Arts and Cultural Organisations are declining and being spread ever more thinly (and so make a case for greater adoption of alternative financial instruments in the Arts and cultural sector).

Venture philanthropy: applying, or redirecting, the principles of venture capital (VC) investment to achieve philanthropic goals. One of a number of financial instruments discussed by Bolton and Carrington in New and Alternative Financial Instruments.

Working capital: (see also Development capital) “the sort of financial capital an organisation needs to meet day to day expenses and pay its bills when they come due.” Definition: Capital Matters p. 38.

Live Theatre’s deliberate strategy for financial growth and security

Live Theatre, Newcastle upon Tyne

Live Theatre, based in the historic quayside of Newcastle upon Tyne

The team at Live Theatre could see “the writing on the wall” in terms of the future direction of funding: year by year there is less and less of it.

Live worked with a specialist consultant to work out how best to diversify its income beyond funding streams.

Live was able to implement it’s base for future financial stability from a one-off £6 million loan from Newcastle City Council (as well as a £2.2 million grant from the North East European Regional Development Fund (ERDF) Programme). Taking on so much debt was a risk, but so was doing nothing in an environment of decreasing grant funding.

With this capital in the bank, Live strategically invested in a series of other enterprises: the Broad Chare pub, Live Works (young people’s writing centre and rented office space) and The Schoolhouse (a hub for creative and digital businesses).

Why this matters

What’s smart about this these enterprises draw and bolster Live’s brand and USP’s;

  • it’s reputation as one of only two new writing centres outside of London
  • the quality of its work and popular civic brand
  • prime physical location

Although taking on so much loan debt, that must be repayed, is a risk, Live sought the most reliable income streams for return on investment; property and commercial lets. Part of the reason it was able to gain this loan in the first place was because the Theatre positions itself well within the community.

What’s significant about this mindset is it not only makes the Theatre more financially secure, crucially how Live Theatre uses its income is fully under its control. Rather than living hand-to-mouth for specific project-specific pots of funding, Live now has regular income streams it can invest in, for example, new permanent staff roles, and/ or research and development budgets for new products and services.

Digital Co-ordinator post – ways to apply (if you don’t do downloads)

  • As mentioned in the Job Advert post – if you prefer to post your answers on the application form – please send audio or video files (or a link where we can download them) to board@creativeadvantagefund.co.uk.
  • Remember to keep your answers short – no more than 2 minutes on any answer. Be brief.
  • If you don’t want to download the form – Copy the questions set out below and answer them in an email to board@creativeadvantagefund.co.uk by noon on Monday 1st November.
  • Don’t forget that we also want to see samples of your work so remember to send those through to the email as well
  • Here are the questions from the form (to save that pesky downloads!)

Application form questions

Name
Telephone
E mail address
Address


Please confirm that you are registered as self-employed or will be contracted through a limited company

Please list the online platforms that you are active on together with an indication of the numbers of followers you have on those platforms.

Tell us briefly about two different campaigns that you have run, who they were for and what the outcomes were. What did you learn from each campaign? (Please limit this answer to a maximum
of 800 words)

How would you split your time in this role – what proportion of time would you spend doing what?(Please limit this answer to a maximum of 300 words)

How have you tracked outcomes on digital campaigns you have run? (Please limit this answer to a maximum of 500 words)

Please provide some links (up to 5) to examples of digital artwork you have created for online platforms or send screenshots of examples to board@creativeadvantagefund.co.uk.

Tell us about any experience or knowledge you have of working for campaigns related to arts and culture? (Please limit this answer to a maximum of 600 words)

Having read the brief – what would be the first things you would want to find out about or to know if appointed? (Please limit this answer to a maximum of 800 words)

Please provide us with the contact details of two relevant referees. We will only contact them if you are shortlisted and interviewed.

Any questions?

If you have any questions feel free to tweet our Chair Helga Henry @helgahenry and use the hashtag #MoneyMatters! with your queries. Send them through and we’ll also collate the questions and answers here on the website.

Or email us at (you’ve got it) board@creativevadvantagefund.co.uk.

Good luck! We are really looking forward to hearing from you.

Job advert: Digital Co-ordinator (Freelance) for the Money Matters! online January Campaign.

As part of the work for Money Matters! announced earlier this week, we are looking for a creative person with digital expertise to plan, prepare and deliver this online campaign. The target audience is leading arts organisations and venues. The project will be led by a lead consultant from Creative Advantage Fund (Helga Henry), and the Digital Co-ordinator will be supported by a project manager and research assistant who are already on board.

The role involves the following tasks:

  • Establish a campaign plan using the outcomes of the research phase; mapping best content to best platform and best time
  • Creating and translating research into appropriate content fit for the platforms (using simple, free tools like Canva or more sophisticated tools such as Adobe if you are comfortable to)
  • Co-ordinating the content and ensuring a high level of execution
  • Managing engagement of campaign including interaction and signalling to partner accounts
  • Working with amplifying partners and Arts Council to ensure messages is reaching desired target audience
  • Evolve the plan as needed with feedback from stakeholders
  • Monitor and report on analytics of engagement and campaign performance
  • Give stakeholders full visibility of the activity and its performance through regular updates and communications
  • Create online campaign archive and ensure this is distributed as the final phase of content sharing

The right person for the position will have experience of planning and delivering social media campaigns, creating visuals for digital content and a working knowledge of the arts world.

The work involves 24 days for a fee of £6,000 and will commence on 4th November the campaign is currently scheduled to be delivered over 10 days from January 10th.

More details available in the brief here.

Please download and complete the application form below and also send any supporting documentation to board@creativeadvantagefund.co.uk.

Deadline for applications Monday 1st November at noon.  Applications received after this time will not be considered.  We will acknowledge receipt of your application.

Interviews:  2nd or 4th November on Zoom – link to be provided if you are shortlisted. Interviews 2 and 4th November on Zoom please let us know if this platform does not work for you in relation to access and we will find another way to meet with you. 

We will let you know the questions 24 hours in advance of your interview. If you prefer to submit your answers by video or audio, please answer the questions in the form and send your media file (or link to download the file) to board@creativeadvantagefund.co.uk (See the Access blog post above)

We anticipate that this project will mostly be delivered remotely, some face to face meetings may be possible depending on your location and willingness to travel.

Thanks to Arts Council England for funding this project.

CAF consider “Money Matters” in an Arts Council funded campaign

CAF was the first specialist venture capital fund for the creative industries – established in 2001, jointly by the Arts Council England and Birmingham City Council, as a private sector led initiative.  It has made successful investments at a time when the sector had little or no recognition as significant contributor to jobs and wealth generation.  Having recouped its original fund with the successful exit of two companies, it made a second round of investments in companies which did not weather the financial crisis.  Following the recent exit of its final investee company, CAF is seeking to support the creative and cultural industries in a new way – promoting entrepreneurship and innovation with a number of initiatives.

Given our origins as a fund, spanning both cultural funding and enterprise support, we wish to continue our unique blend of expertise both in the arts and creative industries.

However, as pointed out in the recent report from Culture Central, “A toolkit for Smarter Cultural Investment in our Towns, Cities and Regions”, the need for new models of finance in the cultural sector becomes more and more acute:

“This has often been mooted in the sector but has yet to be achieved at scale. The key fundamentals of this approach – the need for a return on investment and for securitisation (asset leverage) – have continued to be elusive but might represent the biggest potential for wholesale shift in the sector in a generation, similar to that achieved when the Higher Education sector moved to a student fee/loan structure, or social housing being provided by third-party organisations rather than directly by local government. Clearly the technical mechanisms of change are different, but the impact could be on a similar scale.”[1] (our emphasis)

Research Questions

CAF has recently been funded by Arts Council England to carry out a small research project to establish how arts and cultural organisations might approach securitisation and asset leverage in a way that is congruent with their overall structure, governance and vision.  Using a mixture of desk research, interviews and case studies CAF would consider the following questions:

  • What are the legal, financial and, if necessary, regulatory structures and hurdles that need to be addressed and what are the practical steps for addressing them?  If suprable, how; if insuprable, what other models are available and suitable.
  • What are the governance implications for an arts organisation which wants to behave more entrepreneurially and specifically how, if at all, can it resolve the tension between public scrutiny and entrepreneurial risk in line with an artistic vision?
  • What are the skills, knowledge and attitudes required inside an arts organisation to facilitate an investment mindset?

The Money Matters! campaign

We will collate this research and create content to conduct a 5 – 10 day social media campaign with a working title of “Money Matters!” across a range of platforms to target NPO senior management.  Some of the content will be decided as a result of the research but at this stage we imagine that they may include:

  • Type of return in investment:  a short comparison/ explanation of the return in investment and possible case studies of successful forays by arts organisations.
  • Legal and regulatory structures:  A step-by-step toolkit or process map for arts organisations to follow.
  • Governance: Some checklists, essays or articles and possibly other resources for boards to use in their discussion of this issue
  • Skills, Knowledge and Attitudes:  some case studies, possibly some online quizzes or resources that will allow some form of diagnostic for staff and boards to assess their “investment readiness”.

 


[1] https://www.culturecentral.co.uk/wp-content/uploads/2019/11/GBSLEP-CULTURAL-REPORT.pdf