Building one impact economy

The transition to an impact economy is gaining real momentum. More people, organisations and institutions are coming together around a shared idea: that we can use money, policy and practical action to create positive change at a much bigger scale.

This is not business as usual.

This is not business as usual. It feels like a once-in-a-generation opportunity to shape how the British economy works for years to come. If we get this right, we can unlock more capital, build stronger partnerships, and help more organisations deliver for people, communities, and the environment.

So, the big question is: how do we make the most of this moment? To do that, we need a shared approach, one that helps people speak the same language, understand where the gaps are, and work together to fill them.

Over the last few months, we at NPC have been bringing together ideas, questions and evidence to help move this conversation forward. What we are sharing here is not a finished answer or a set of rules. It is a starting point, an invitation to test, challenge and improve a framework that could help the impact economy grow in a more joined-up way.

This builds on NPC’s earlier work in Impact UK, which showed the scale of the impact economy in a new way. By focusing on organisations that aim to create positive impact, it identified £428 billion in gross value added, around 15% of UK GDP. That is a huge social and economic contribution, and it raises an important question: are we doing enough to help organisations do even more?

A simple way to think about the challenge

If we want more money to flow to impact, we need a clearer picture of who is in this market and what kinds of funding or finance they can realistically use. Without that clarity, it is much harder to design the right support, build the right partnerships, and grow the market in a way that works for everyone.

Our starting point is simple. The following two questions can help us understand what different organisations need and how they fit into the wider picture, whilst recognising that some organisations may sit in more than one place, depending on the role they are playing.

1. What rules govern profit distribution and where any surplus can flow?
2. Where does the organisation sit in the flow of money and investment?

When we apply those questions, we can see the impact economy  as made up of different segments. Each has different funding and financing needs, different barriers to accessing capital, and different market infrastructure requirements. But together they form one broader system.

Together they form one broader system.

Seeing these different segments as part of one connected system gives us a better chance of building a market that works. It helps us respect the differences between organisations while also spotting which funding and financing approaches are appropriate to them, and where shared tools, a common language and better coordination could make a real difference.

The six parts of the impact economy

Why this matters

This framework is not about ranking organisations or suggesting that one model is better than another. It is about matching the right kind of money to the right kind of organisation, so more people can succeed in creating impact.  Not every organisation should be expected to become investable. Different organisations solve different problems and require different forms of support.

It is about matching the right kind of money to the right kind of organisation.

For funders, it is a reminder that grants and donations remain essential. If we want a healthy impact economy, we need to value all forms of support, not just investment. Match funding partnerships with government, where well designed, can mobilise substantial capital, but only when the additionality conditions, donor typology, and coordination infrastructure are present.

For investors, it offers a clearer view of where different kinds of finance can help, where extra support is needed, and where existing tools do not yet fit. It enables us to see when subsidies are needed in different segments and what they unlock.

For policy makers, it is a practical way to think about where government can help unlock progress and build better partnerships across the system. It is a way of approaching co-designing solutions by beginning with the challenges faced by each segment.

For practitioners, it is a starting point for a bigger conversation about what needs to change, what needs to be built, and how we can do that together.

What happens next

Behind this framework sits a more developed design architecture covering the different segments, the interconnections between them, and the barriers organisations face in getting the funding and finance they need to deliver change.

The framework is not intended as a finished answer. It is a starting point for discussion and further development. Over the coming months, we want to test this thinking with people across the impact economy.

We want to know whether it helps people make sense of the landscape, spot what is missing, and build better ways of funding and financing impact.  We are particularly interested in where the segment boundaries work or do not work in practice, what infrastructure gaps exist, and where greater coordination could help unlock progress.

Together, we have a real opportunity to build an impact economy that works for all

There are moments when a field shifts for good. This feels like one of them. With political interest growing, more cross-sector collaboration, and a stronger appetite for action, we have a rare chance to help shape the economy to deliver positive social and environmental outcomes. No single organisation can do that alone. But together, we have a real opportunity to build an impact economy that works for all.

We will be sharing more over the coming weeks, so stay with us as this work develops and sign up to our newsletter to be updated.