The rise of the impact economy and what it means for fundraising

Following the creation of a new Office for Impact Economy  within the Cabinet Office towards the end of 2025, Charlotte Sherman, Policy Manager, outlines what this could mean for philanthropy now, and in the future.  

In response to the findings of the Social Impact Advisory Group (SIIAG), published in November 2025, the government has established a new Office for the Impact Economy in the Cabinet Office.

This will act in partnership with, and in parallel to, the impact economy team within the Department for Culture, Media and Sport which currently oversees the development of initiatives to grow giving, including the much-anticipated place-based local philanthropy strategy.  

The new unit will act as a central hub in the heart of government to unleash the full potential of the impact economy. It has a very broad remit that includes working across the civil service to embed the principles of the impact economy into all government departments, as well as building and maintaining relationships with investors, philanthropists, businesses and civil society. 

Against this backdrop, we are taking a refreshed look at the role charities and philanthropy play in bolstering the impact economy and exploring how we can ensure this new team introduces policies that allows fundraising and the wider charity operating environment to flourish.  

What is the impact economy?  

The impact economy movement is dedicated to creating parity between profit and impact. Bringing together the collective resources of government, businesses, investors, charities and philanthropists, it aims to tackle social problems at scale by unlocking additional funding, fostering cross-sector collaboration, and accelerating systemic change.  

On the face of it this can seem quite complex, so perhaps the easiest way to think of it is as an umbrella term for any organisation or initiative aimed at creating inclusive economic growth. 

What role do charities and philanthropists play within the impact economy? 

When their knowledge and resources are used to their full potential, charities and philanthropists are essential to enabling, strengthening and accelerating the impact economy.  

As the experts in social impact, charities are critical partners to government and social investors looking to make a positive difference. Without their infrastructure and knowledge of what interventions work for different demographics, many successful social outcome partnerships (a form of social investment where funders are repaid based on project outcomes) would have never generated the necessary returns for investors.  

But their value extends beyond delivering services. Amidst questions on how social investors and government can best quantify impact, charities can provide strategic advice on how to establish clear usable metrics that improve transparency and accountability.  

Similarly, major donors and foundations will often provide the initial funding for pilot projects, research and community programmes before they are commercially viable for social investment. For example, Growing Minds - a now much valued service supported by both donors and social investors -  was initially started by the Oxford Community Foundation.  

What does the creation of a new Office for the Impact Economy mean for fundraisers? 

Whilst not every initiative this new team will take on will directly affect fundraisers, the SIIAG has called for several measures that could strengthen charities’ relationships with other stakeholders and lower barriers to giving, including:  

• Creating an annual Civil Society and Impact Economy Summit event to explore further opportunities for the sector to partner with government;  
• Integrate match-funding into more government initiatives; 
• Instruct the FCA to make philanthropy training compulsory for professional advisors.  

What’s next for the Chartered Institute? 

We warmly welcome the interventions outlined above and think they will be pivotal in creating a growing, impactful and sustainable philanthropic market. However, we are conscious that such initiatives can only be successful if carried out in full consultation with the charities. As such, we will continue to act as an intermediary between key players shaping the impact economy to champion our members’ views. Some activities we have planned for this year include:  

• Taking part in the newly-created National Philanthropy Strategy working group; 
• Continuing to be a member of the Civil Society Group; 
• Exploring additional interventions that will shape government priorities through our research project Philanthropy 2035.  

Should you have any questions about the impact economy or our policy work, please email policy@ciof.org.uk.  

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