Impact Investment & Sustainability: A Policy Panacea for the Third Sector?

Activity: Academic Talks or PresentationsOral presentationResearch


Across the globe, third sector marketisation as a method for driving sustainability, has been a key feature of policy in order to drive competition and create more potential providers of public and community services. This neoliberal policy agenda is embedded in new public management approaches, ideas of co-creation and co-production and a belief that the dual missions of third sector organisations (financial and social) makes them good deliverers of public services. This idea of the sustainable creation of social value is attractive to policy-makers, as it combined the logics of fiscal rectitude with the ethos of the public good and has led to the development of macro-ecosystems that seek to grow the size, impact and sustainability of the third sector. A central tenet of this policy paradigm is the applicability of impact investment in driving this sustainability, leading to the creation of policy mechanisms and programmes that seek to increase the investment readiness of third sector organisations (and ultimately deal-flow in the impact investment market). However, there remains a paucity of research that explores the ability of third sector organisations to secure or repay this investment, nor the suitability of the current marketplace for delivering impact investment products that can create social impact growth. This paper presents a mixed-methods research study that analysed organisational data from 928 organisations engaged in an investment-readiness development programme, supplemented by 55 semi-structured interviews with key impact investment stakeholders to understand third sector investment suitability and implications for future sustainability and the delivery of public services. The results reveal that impact investment products have low suitability for third sector organisations and a lack of alignment with their values and social mission focus, whilst also demonstrating a lack of investment-readiness in the sector. Further, the paper argues that this policy focus on impact investment and marketisation is not aligned with the requirements of the sector as a whole, many of whom do not want/need impact investment (or cannot secure it). Central to the paper’s thesis, is that impact investment is as unlikely to support sustainability as it is for the majority of private sector SMEs, and that this brings into question the applicability of current government policy to drive sustainability and engage third sector organisations in public service delivery. Given the pressure that Covid-19 has had on the global economy as a whole, as well as the third sector, this sustainability tension is likely to only be exacerbated in the post-pandemic world. Theoretically, the paper is embedded in a rejection of this global neoliberal policy, framed within a Kuhnian (1962) discourse centred on policy-paradigms (Hall, 1993) and third sector sustainability (Jenner, 2016).
Period22 Apr 2021
Event titleInternational Research Society for Public Management
Event typeConference
Degree of RecognitionInternational


  • Impact Investment
  • Social Investment
  • Policy