Traditional corporate giving isn't broken - it's just not enough. That’s why many UK firms are turning to deploying social impact investments: repayable, catalytic capital that can be recycled, scaled, and combined with both commercial investments and grants to create lasting change.
For decades, corporate philanthropy has meant grants and donations, often with structured opportunities for volunteering and fundraising for employees to engage. The corporate philanthropy sector is rethinking that approach and looking to expand into philanthropy adjacent giving models.
With public funding stretched and increasing pressures on systems of support, many corporates and charities are finding traditional one-off methods of giving are no longer always keeping pace with the scale of today's challenges. So, they’re devoting a bigger share of their philanthropic time and money to social impact investing, where repayable capital is used to achieve measurable social outcomes and build a more sustainable social sector.
The new report, Driving impact: unlocking the opportunity for corporate social impact investment in the UK, captures this changed landscape and reveals how, by deploying repayable, catalytic capital, corporates are helping social purpose organisations scale and attract mainstream investment.
The difference between social impact investing and traditional philanthropy lies in how the capital works. Instead of grants that are spent once, corporates (or social sector intermediaries funded by corporates) deploy repayable, risk-tolerant capital. This capital can be recycled, scaled, and combined with both commercial investments and grants to achieve longer-term change.
An example of this approach in action is the Macquarie Group Foundation’s social impact investments in the UK. The Macquarie Group Foundation invested catalytic capital, alongside a global law firm and another global investment bank, into the Growth Impact Fund – enabling access to capital for social purpose organisations led by people from marginalised communities.
In both cases, philanthropic capital was deployed strategically to unlock broader commercial investor participation and demonstrate that social impact can be both sustainable and investable.
The report indicates that UK corporate philanthropy is bringing a new perspective to traditional philanthropic approaches. As more firms recognise that grants alone can’t shift systemic issues, investment is emerging as a powerful additional tool of modern corporate citizenship: in all its flexible, blended and catalytic forms.
Image supplied by the Growth Impact Fund (UnLtd, Big Issue Invest and Shift) and photographer Diana Hagues.
The report maps how the UK’s financial and professional services (FRPS) sector is approaching social impact investment, as well as what’s holding it back. Drawing on more than 25 in-depth interviews and extensive secondary research, it paints a picture of a market that’s curious and motivated but, ultimately, still finding its feet.
Increasingly, corporates see that grants alone can’t solve systemic issues like inequality, access to education or financial resilience. Social impact investment lets them fund larger, longer-term solutions through capital that can be recycled, leveraged and scaled.
So far, those who have taken the plunge into social impact investing tend to follow a pattern. Funding is often drawn from philanthropic or corporate social responsibility (CSR) budgets and used to provide catalytic capital. This is early, risk-tolerant financing that can help social purpose organisations prove their model and subsequently attract mainstream investment.
At the same time, employees contribute specialist expertise through pro bono or low bono support from structuring deals and assessing risk to providing strategic advice.
The research shows that, although a handful of corporates are already active investors, most organisations are “interested but cautious”, constrained by a mix of internal and systemic barriers.
Many lack a clear understanding of how social investment differs from traditional philanthropy, while others lack the internal processes, governance and leadership support needed to act.
While this combination of capital and capability is exactly what creates a huge opportunity for corporate social investment, the report also identifies a knowledge gap: namely, a lack of shared language, case studies and peer learning across the sector.
Without this, many corporates struggle to move from good intentions to deployable capital.
The good news, according to the report, is that most barriers identified also have clear routes through them - though some require a level of cultural change.
The report sets out a practical roadmap, based around education, collaboration and experimentation, that will allow corporates ready to move from interest to action:
Together, these steps could help FRPS corporates become active participants in the UK’s social investment ecosystem - bringing corporate capital and expertise to complement the ambition of social purpose organisations at scale. You can read more in the report.
Looking ahead, the report finds that corporate social impact investment in the UK FRPS sector is at a pivotal moment. Hybrid models that blend traditional philanthropy with social impact investment are gaining momentum, offering new ways to address complex challenges. While significant barriers and knowledge gaps remain, more companies are beginning to explore these approaches as an additional tool – rather than a replacement – for responsible business in the decade ahead.
Read the full report, Driving impact: unlocking the opportunity for corporate social impact investment in the UK, to explore the findings, case studies and practical pathways in detail.
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