How would you spend £428 billion? Welcome to the impact economy

For £428 billion, you could pay universal basic income for more than 20 million people. You could buy two billion tickets to see Harry Styles. You could fund the entire NHS for two years. You could buy 25,000 original Fabergé eggs (bad luck – only 50 were made). 

In short: it’s a lot of money. A report in February 2026 from New Philanthropy Capital (NPC) puts the UK’s impact economy – purpose-driven businesses, charities, social investors – at that figure: £428bn, or 15% of GDP. Comparable in scale, the report notes, to the entire manufacturing sector.

The ecosystem is broader than you might think. It includes housing associations providing affordable homes to millions, 40,000-plus community interest companies, and social investors who have channelled more than £11bn into organisations tackling homelessness, mental health and fuel poverty since 2012. It includes B Corps – businesses that have met verified standards on social and environmental performance, and legally embedded that commitment into their structure.

There are now more than 2,600 B Corps in the UK, making it the largest such community in the world – and the Big Issue magazine is one of them. 

But the impact economy is not without its critics. The NPC report itself admits that inclusion is based on intention rather than outcomes. Meaning well, it turns out, is not always the highest bar. 

The category is broad enough to include universities that have faced sustained campaigns over fossil fuel investments, housing associations whose treatment of tenants has attracted serious criticism, and companies like Brewdog, which lost its B Corp status in 2022. So does the label really mean anything, or is it simply a flattering rebranding of capitalism doing what capitalism does? 

There is a difference, most would argue, between organisations where social purpose is the entire point and those where it’s a footnote to a profit motive. Big Issue Invest (BII), Big Issue Group’s social investment arm, sits firmly at the higher-impact end today: lending capital to charities and social enterprises at affordable rates, in places and to organisations that mainstream finance won’t touch. We asked BII’s managing director, Holger Westphely, what the true potential of the impact economy is. 

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What is the impact economy? 

HW: A great part of it is the organisations, the initiatives, even clubs and trusts, that are trying to address societal problems through their activity. Their activity might be direct interventions to address a problem – a typical charity model is ‘give me some money and I will do stuff that directly helps’ – or it might be an incidental impact, like training young people to become baristas and running a coffee shop.

The main business is running a good coffee shop, but there is a clear intention to give opportunities to young people who might struggle in the job market. That’s not the same as Costa happening to employ young people. Social impact has to be a goal. 

How does Big Issue Invest fit in the impact economy? What work do you do? 

We raise capital from government bodies, philanthropists, corporates, foundations and banks, and lend it to charities and social enterprises at affordable rates with flexible repayment terms. We’ve supported alcohol addiction and recovery services in the North East, community hubs in areas that aren’t hives of activity, and we work with combined authorities in regions like the West Midlands to bring more capital to the area. 

Read more:

• Impact investing and social impact investing: What’s the difference?
• What are social impact investment funds?
• Big Issue Invest takes Social Impact Investment to the House of Lords with pension and insurance providers

The impact economy has had its critics. Some say the definition outlined in the NPC report includes companies with questionable records. Is that a fair criticism? 

We haven’t got clear rules as to what organisations in the impact economy are allowed to invest in and what they’re not, and of course you’re going to have a massive variation – from the really high-impact social enterprise to something that’s maybe not that different from a mainstream corporation. 

To expect the entire impact economy to be hyper-focused on every issue just isn’t realistic, and it isn’t impact-maximising. Those criticisms will come from individuals focused on those specific topics, and it’s probably a good thing. Many organisations will go, ‘well actually, that’s true, maybe I haven’t paid enough attention to this’. I’d almost call it part of a well-functioning impact economy. 

The impact economy’s value in the UK is huge – £428 billion. Is it booming right now? 

The sector is quite resilient, because it doesn’t have the profit motive. It can find resources that purely commercial companies might not have access to or bother looking for. But is it booming right now? I would be hesitant to say yes. Everyone is struggling at the moment. Has it been booming over the last
decade? Yes, absolutely, for a lot of reasons. People have paid more attention to it. It’s developed. The millennial generation is seeking impact as part of their employment. There are new sources of capital. There’s been a lot of creativity. But this year specifically, things are tough. 

How significant is the government’s new Office for the Impact Economy? 

You always have to be sceptical about whether something will be a turning point. But there’s hope. We’ve had a few governments now that haven’t really pushed it. There was the Big Society agenda under David Cameron – although that came with a lot of funding cuts, so it was more of a gesture than a commitment. What’s smart about the current initiative is saying: we don’t have any money, but we could at least join the dots, be smarter within government and understand how to engage with the impact economy more effectively to facilitate its continued growth. I think that’s a positive trend. 

Whose responsibility is it to solve social problems: government or the market? 

The beauty of a free economy is you can set up an organisation to solve almost any problem you come across. That’s not something government is particularly good at. Government’s job is large-scale planning and coordinating, but you could argue it’s trying to solve too many problems through legislation and funding. I think they have to work together. The idea of government being more of a cheerleader for the social economy, providing support infrastructure rather than delivering directly, is a positive direction. 

If you could ask for one thing from government to support the impact economy, what would it be? 

Finding a way to blur the lines a little – some form of light-touch regulation that makes the impact economy more inclusive, while still addressing greenwashing and the problems that come with that. The NPC report was maybe criticised for widening the definition too far, but I’m very much of the opinion that you should widen it. You should find a way of recognising purpose-driven businesses alongside the more traditional regulated sector. Done carefully, that’s how you grow something. 

Do you have a story to tell or opinions to share about this? Get in touch and tell us more. 

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