The UK government of Keir Starmer is considering a proposal by MP Sir Stephen Timms to establish an Office for the Impact Economy, a joint Treasury-Business and Trade unit that would work to align socially motivated capital and business and “harness the ability of philanthropists, social and impact investors, and businesses” to support the Labour party’s ambitions.​

Timms, the former chief secretary to the Treasury, writes, “We need a new partnership between government and the impact economy, putting shared values into practice to build a more prosperous, equitable and sustainable future for all.” He considers private philanthropy as central to the office’s efforts that would bring together the business community, traditional and impact investors, nonprofits and social enterprises, adding that “we could significantly amplify the resources to tackle our most pressing challenges through innovative use of public funding to crowd in philanthropic giving.”

Can an Office for the Impact Economy happen in the US? American attorney Marc J. Lane makes a strong case in favor, writing in a recent article that “there’s no reason the nation as a whole shouldn’t systematically pursue the same multi-sectoral impact agenda” as put forward in the UK.

Attorney Marc Lane

Mr. Lane, a Chicago-based social impact attorney and the founding president of the Chicago chapter of the Social Enterprise Alliance – now, Social Enterprise Chicago – has led numerous regional initiatives, where government has successfully catalyzed the collaboration of key stakeholders to drive positive social change. These include the Cook County Commission on Social Innovation, which, among other things, has enacted a procurement preference for social enterprises seeking to sell goods or services to the County and a Good Food Purchasing Initiative that advances a racially and socially equitable food system for the County. As Chair of the Illinois Task Force on Social Innovation, Entrepreneurship and Enterprise, he has put forward social policy recommendations and actions for the Governor, state agencies and departments, and the General Assembly, including the state’s first Pay For Success program.

Why a US government office for the Impact Economy?

Mr. Lane writes that public sector leadership is critical to creating the unified vision, policy and legal framework, and systematic support to build on and amplify current successful regional efforts. When acting alone or siloed, efforts between the philanthropic and private sectors likely lack the strategic direction, administrative resources and expertise, and centralized accountability needed to make meaningful and enduring positive impact. “The scale and complexity of the most pressing issues facing the country demand the authority, resources, and strategic oversight that only the public sector can provide.”

Even while the government is outwardly hostile to any initiative that focuses on equitable social change, forward-thinking members of Congress could begin now to incubate early steps that, one hopes, would be taken up seriously in the not-to-distant future.

The fundamental role of the Office for the Impact Economy would be to act as the country’s nerve center or centralized hub for social innovation to connect the philanthropic/social sectors and the private sector. It would advocate for increased acceptance and growth of the impact economy by centralizing social impact agendas and by championing the creation of pathways to identify needs and opportunities and to increase access to resources, as well as helping facilitate the efficient allocation of capital. It would support interventions and work to scale most promising solutions, guided by clear and consistent methodologies and metrics to track, measure, and analyze accurate and appropriate data.

Overcoming obstacles

The Office would work to overcome real and perceived obstacles by helping bridge the silos between the social and private sectors and by raising awareness about both successes and failures. A goal would be to build broad public acceptance that positive social change does not preclude or eliminate the potential to generate profits or return on investment and, similarly, that generating financial returns doesn’t preclude or eliminate the pursuit of opportunities for positive social change. For the private sector, this could lead to increased acceptance of shared value as a competitive advantage.

Facilitating the co-creation process with workshops and seminars, the Office would incentivize cross-sector partnerships to align mission-driven activities with a variety of financial investment mechanisms, from competitive grant-making and award programs to market-based, pay-for-success strategies that drive positive social change. These activities would have a multiplier effect to help drive organic growth of the Office and the impact economy.

What would a US Office for the Impact Economy look like?

The Office would pull talent and resources from Commerce, benefiting from its mission to create the conditions for economic growth, job creation, and sustainable development in partnership with businesses, academia, communities, and the nation’s workforce. It would establish and advance enabling financial, economic and tax policy informed by Treasury’s role as the steward of the United States’ economic and financial systems. It also would rely on the increasingly aligned interests and commitments of the private sector and nonprofit community.

Marc Lane (left) holds a fireside chat with former Illinois Governor Pat Quinn

The Office would have its own dedicated leadership team, established as a unit of an existing executive department or as its own department. Leadership would have substantial and relevant experience in the public sector and meaningful experience in both the private and philanthropic sectors. Stakeholders from the private sector would not simply be CEOs, but would represent a variety of backgrounds and expertise. There would be catalytic roles for lawyers, engineers, data scientists, statisticians, social scientists, journalists, union leaders, and consultants.

Nonprofit organizations, private foundations, and philanthropic and socially conscious investors that have blended successfully private investment and philanthropic funding would provide the insight necessary to structure investments and partnerships in a manner that satisfies a variety of social and financial interests.   The threshold qualification for any leadership role would ultimately be dedication to the power of socially motivated human and financial capital to tackle society’s greatest challenges.

Reality check: Is this the right time to advance such an office?

There is a long history of discussions and proposals led by Congress and the Executive Branch that have aimed to heighten government engagement with and support for civil society actors engaged in positive social reform. These efforts have helped increase and streamline funding, have promoted volunteerism and national service, and have provided capacity building resources through training, technical assistance, and infrastructure support. To date, they have not led to a comprehensive framework or centralized office or department for government-civil society engagement that could bring together all stakeholders.

The Office would help the traditional business and investment communities and allow “budget hawks” to see government doing more with less.

Still, these efforts could serve as precedents for a US Office for the Impact Economy, which could be promoted as a non-partisan initiative without regard to the political environment that exists at the time the idea is advanced. The pace of advancements in AI, FinTech, MedTech, quantum computing, among others, also creates innovative and disruptive opportunities, which the Office for the Impact Economy could lead in an objectively non-partisan manner. This would ostensibly be in keeping with the current Administration’s strong emphasis on utilizing the talent and knowledge of the private sector and advancing the nation’s global leadership.

Mr. Lane writes that while it clearly would resonate with progressives, the Office also would have many features attractive to those who espouse the conventional conservative ideology of limited government and reliance on free markets. The Office would help the traditional business and investment communities and allow “budget hawks” to see government doing more with less.

If not now, when?

The current political climate, with its immediate focus on cutting government spending and grant-making and shrinking the Federal government’s administrative role and capacities, certainly makes it difficult to envision advancing the Office for the Impact Economy. But even while the government is outwardly hostile to any initiative that focuses on equitable social change, forward-thinking members of Congress could begin now to incubate early steps that, one hopes, would be taken up seriously in the not-to-distant future. Now is the time to plant the seeds and to work collectively to ignite the political will to advance the US Office for The Impact Economy.