Unlocking the full potential of the impact economy

The impact economy has a collaboration opportunity hiding in plain sight. The question is: what will it take to unlock it? 

In a workshop session, participants joined one of four subgroups: charities; business and investment; philanthropy; and government. Each group explored what was needed to unlock the impact economy. 

What emerged is a chance to remove friction, align systems, and amplify the impact economy’s potential. 

The charity sector: the opportunity lies in collaboration 

For charities, the biggest opportunity is to shift from competition to collaboration, and unlock greater collective impact. 

Smaller charities, in particular, are deeply embedded in communities and deliver critical services. Many, however, are consumed by survival, facing funding cuts, rising demand, and limited capacity. 

How to seize this opportunity:

• End the competition for the same pots. Government and funders need mechanisms that reward collaboration, not rivalry for scarce resources. As one participant put it: “We need to feel confident that there are positive opportunities for collaboration.”  

• Create practical models for partnership. There is appetite to collaborate, but charities need clear, workable ways to do this effectively. 

• Lead from within civil society. Collaboration won’t happen by default, sector leaders must actively prioritise collective impact. 

• Educate philanthropists differently. Funders need to recognise the value of smaller organisations, beyond metrics that favour scale and capacity. 

Philanthropy and investment: the opportunity lies in transparency and alignment  

For philanthropy and investment, the biggest opportunity is to use transparency and shared understanding to scale impact. 

Capital has enormous potential to drive change, but it is often deployed without clarity about who makes decisions, what outcomes are prioritised, or how success is measured. 

How to seize this opportunity: 

• Increase transparency in capital deployment. Clearer decisions and shared outcomes help everyone understand where impact is happening.  

• Align profit with purpose. Flexible structures can combine financial returns with meaningful social impact.  

• Build a shared understanding of impact. Philanthropists, investors, and businesses benefit from a common language and evidence base.  

• Leverage independence to influence. Philanthropy can use its voice to advocate for better social and health outcomes. 

• Balance family priorities with intergenerational challenges. Private and family wealth must navigate the tension between personal priorities and the broader legacies and challenges that span generations. 

Government: the opportunity lies in system leadership 

For government, the biggest opportunity is to act as a true system leader, connecting what is currently fragmented and enabling lasting impact. 

Responsibility for social outcomes is spread across departments, often with little coordination. Short-term political cycles and unclear pathways from evidence to policy can limit effectiveness. 

How to seize this opportunity: 

• Envision an interconnected system. Government must see the whole picture and enable itself, and others, to work towards a shared vision. The launch of the Office for the Impact Economy is a great start! 

• Commit beyond political cycles. Keep it separate from party politics and maintain accountability for tracking progress. 

• Invest in evaluation and shared frameworks to understand what works. 

• Strengthen pathways from evidence to policy. Ensure what works on the ground informs decision-making.  

• Empower local government. Local authorities are critical conveners of community-led change.  

Business: the opportunity lies in purpose 

For business, the biggest opportunity is to embed purpose at the core and make impact integral to operations. 

Many organisations engage with social initiatives, but often as add-ons rather than integrated into their business strategy. 

How to seize this opportunity: 

• Embed purpose into core business models. Ensure social impact shapes strategy and decision-making.  

• Reduce friction between sectors. Simplify partnerships with charities and social enterprises, starting with simplifying mechanisms such as the Social Value Act.    

• Future-proof through community and supply chains. Businesses that invest in communities and ethical supply chains are building resilience, not just doing good.  

• Make giving easier and more effective. Tools like matched giving amplify contributions.  

• Support businesses at all stages. Tailor guidance so organisations can take meaningful next steps. 

The common thread: Collaboration unlocks potential 

Across the impact economy, the clearest opportunity is to work together. 

Intent is strong across charities, businesses, philanthropy, and government, but without aligned systems, incentives, and shared understanding, collaboration is hard to achieve. 

How to seize this opportunity: 

• Design systems that reward collaboration. Funding, policies, and incentives should encourage sectors to work together.  

• Increase transparency across actors. Clear visibility of capital flows, decision-making, and outcomes enables coordination.  

• Build shared frameworks and language. A common understanding of impact allows sectors to act in concert.  

The potential is already there. The opportunity now is to align around it and unlock the impact economy’s full potential.