Research by think tank New Philanthropy Capital (NPC) has estimated that the wider “impact economy” contributes £428bn to the UK economy every year, which amounts to 15% of GDP.
Charities generate nearly £50bn of this, NPC’s report says, with an additional £13bn coming from housing associations and £5bn from community interest companies (CICs).
The bulk of the impact economy’s contribution (£323bn) comes from impact-led businesses that are not CICs, the report says.
NPC’s research follows the government’s recent creation of its Office for the Impact Economy, housed in the Cabinet Office and led by chief secretary to the prime minister Darren Jones.
Jonathan Simmons, chief executive of NPC, said: “By recognising the impact economy as a dynamic, significant part of our country, we are celebrating the charities, businesses and others bound together by an intention to make a positive difference.
“At a time when the challenges we face appear significant we wanted to highlight the people who choose to devote money, time and expertise to creating a positive impact, and invite others to join in.”
Civil society landscape ‘transformed’
In her foreword, NCVO chief executive Kate Lee said NPC’s research recognised that new forms of civil society organisations had developed “as a framework built in the Victorian era to help philanthropists demonstrate benevolent intent has struggled to remain sustainable”.
“Community interest companies, fluid and decentralised online movements, and the rapid rise of socially responsible businesses are transforming the landscape,” she said.
“As these models proliferate, the boundaries of ‘who delivers public good’ and the structures through which they do so have become increasingly blurred.”
Lee added: “Charities do, and always will, bring something vital to the impact economy: a moral compass rooted solely in public benefit; the ability to reach the hardest-to-reach communities and causes; and data, passion, knowledge, and experience built up since Victorian times.”
