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Home Personal giving Resources for effective giving A step in the right direction: Government progress on the impact economy
24 February 2026

A step in the right direction: Government progress on the impact economy

Vicki Butler Vicki Butler Head of Policy and Public Affairs

Last year, we shared a blog making the case for a national strategy for philanthropy and charitable giving, which also outlined some of the policy changes that would help grow philanthropic giving and amplify impact, from match funding to wealth advice.

Since then, the Government has made a series of announcements relevant to philanthropy as part of its renewed focus on the impact economy (consisting of philanthropy, purpose-driven business and social and impact investing), which we explore below: 

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Impact Economy experts outline recommendations for Treasury

In November 2025 the independent, Treasury-appointed, Social Impact Investment Advisory Group (SIIAG) published its final report, ‘Mobilising the impact economy as partners in national renewal’, setting out a series of recommendations to the Government. Neil Heslop, CAF’s Chief Executive, was a member of the group and made the case for the role of philanthropy to decision-makers at the heart of government.

The report recognised the importance and value of the impact economy and set out recommendations for how government could work more effectively with the sector. These included a call to establish an Office for the Impact Economy to drive this work, greater use of match funding and improvements to wealth advice to boost philanthropy.

 

An Office for the Impact Economy

Just seven days later, the Government announced the setting up of an Office for the Impact Economy, housed in the Cabinet Office. Chief Secretary to the Prime Minister, Rt Hon Darren Jones MP was named as its ministerial lead.

The Office aims to drive a cross-government strategy on the impact economy, act as a ‘front door’ for engagement with the sector, build capacity and identify and support partnership development. 

Government explores new partnerships

Building on this, early examples of partnership with the impact economy have begun to take shape across government, including:

  • The £500m Better Futures Fund, announced in July 2025, which aims to help 200,000 vulnerable children and young people.
  • The Department for Education, which is working with the impact economy to co-design early years initiatives with philanthropy, impact investors, purpose-driven businesses, academics and charities.
  • Pride in Place, a UK community regeneration programme launched by the Government in September 2025 and run by the Ministry of Housing, Communities and Local Government. The Government has committed to work with external partners – including philanthropists, social investors and socially-minded business – to crowd in additional funding and activity to support these communities.
  • The Local Covenant Partnerships Fund, launched by the Department for Culture, Media and Sport, which will deploy £11.59 million over three years to help civil society organisations and local authorities work together to deliver support in areas including mental health, adult social care, women’s refuges and child poverty.

 

What next?

This activity represents a step in the right direction and we particularly welcome the establishment of the Office for the Impact Economy, which we hope will play a key role in embedding partnerships with philanthropy across Government.

As time goes on, it will be important to see how government can translate this signal of commitment into more streamlined connections with philanthropists and smoother ways of working that make it easier for us all to drive forward purpose-driven change.

We will also be watching closely to see how government can bring initiatives from different departments together – co-ordination across different localities and policy areas will be essential.

We will continue to share our insights with government, advocating for the policies we believe would create a step change in philanthropy and giving across the UK. 

Please get in touch if you would like to know more. 

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