Each year, increasing volumes of global capital flow toward mission-driven, public outcomes. However, fragmented terminology, such as “non-profit”, “development organisation”, or “impact investor”, continues to obscure the domains’ coherence and global impact.
Without shared language, the domain operates without shared infrastructure, without coordination incentives, and without consistent institutional recognition. Subsequently, performance is constrained: promising practices diffuse slowly, evidence remains localised, and collective effectiveness is weakened.
This essay argues that the For Purpose domain functions as a distinct mode of economic activity but is constrained by underinvestment in meso-level infrastructure, and cannot be resolved without changing underlying mental models.
What is the For Purpose domain?
Modern economies are typically framed through two coordinating systems: markets and states. Yet a mission-driven, for-purpose system has been operating and growing alongside them, defined strictly by its economic logic: mission primacy, hybrid financing, and structurally diffuse value capture.
This is differentiated from the internationally recognised framework of the Social and Solidarity Economy (SSE). While the two concepts overlap in their commitment to mission primacy and to serving the collective interest, the SSE framework places greater emphasis on sociopolitical mechanisms, including mandating democratic governance, voluntary cooperation, and specific organisational forms such as cooperatives and mutual societies. In contrast, the “For Purpose” domain is defined purely by its economic logic, encompassing any structure that relies on hybrid financing to deliver diffuse public value, regardless of its internal structure.
The diagram below illustrates the potential activities within the domain.
The chronic value creation and capture mismatch
The domain exhibits a fundamental value-creation mismatch: it generates substantial positive spillovers, but only a fraction of that value is captured as investable surplus. This creates a reliance on hybrid financing, combining philanthropic, public, and commercial capital to support mission-driven activities.
A powerful illustration of this value-creation mismatch is the Australian mental health system. The Australian Productivity Commission estimates the economic cost of mental ill-health at up to $220 billion annually. While empirical evidence indicates that early intervention, often delivered by For-Purpose organisations, yields a return on investment of $1 to $10.50 for each dollar spent, structural fragmentation traps capital in downstream, acute state-run responses. This dynamic shows why coordinated mental health early intervention remains chronically underfunded and why the For-Purpose domain must rely on hybrid financing to sustain its mission-driven activities.
However, hybrid financing exposes these organisations to the acute risk of “mission drift“, the gradual prioritisation of commercial goals and financial survival over the foundational social mission. Because these organisations face competing accountability demands from diverse stakeholders, such as financial investors and social beneficiaries, commercial demands can easily eclipse social purpose.
To prevent this, specific governance safeguards must be implemented. For example, the Benefit Corporation (B Corp) legal framework expands directors’ fiduciary duty to require balancing financial returns with stakeholder and environmental interests, while Steward-Ownership models lock in mission primacy by decoupling voting rights from dividend rights.
An example: Donkey Wheel House, Melbourne
Donkey Wheel House in Melbourne functions as a tangible example of this; operating as a "living commons for changemakers," it provides space and support to 12 tenant organisations, demonstrating how public value is generated and shared structurally through networks rather than captured privately.
Read more
Fragmentation as a systemic outcome
With limited incentives for coordination, fragmentation emerges as a rational systemic outcome. Because the societal benefits generated by these organisations are diffuse, individual entities bear the costs of coordination while the benefits accrue broadly, making free-riding structurally embedded.
This cycle of fragmentation is further perpetuated by information asymmetry, a severe lack of shared data, common standards, and reporting mechanisms across jurisdictions. In the absence of this shared information and infrastructure, collective legitimacy is weakened, and decision-making power remains firmly entrenched within traditional markets and state governments.
Sizing the opportunity
To validate the scale of this economic engine, advocates have historically relied on Gross Domestic Product (GDP). One recent UK study estimated the “Impact Economy” contributes £428 billion, or 15% of GDP in the United Kingdom. Another study estimated that social enterprises alone generate $2 trillion in revenue and support nearly 200 million jobs globally.
However, relying on GDP fundamentally undercuts the true nature of this domain. GDP is an accounting measure of financial flows that fails to capture what is missing: invisible and unpaid labour (such as within the care economy), the depletion of assets like natural resources, and unpriced social costs.
To accurately capture the scale of this engine, the domain must embrace multidimensional “Beyond GDP” accounting frameworks. While continuing to quantify macro-level contributions supports policy prioritisation and investment attraction, these metrics must complement, not displace, qualitative and relational forms of value that resist simple monetisation, such as Social Return on Investment (SROI).
How to break the cycle
Breaking this cycle of fragmentation requires the deliberate construction of meso-level institutions. As Douglass North established, institutions exist precisely to overcome the uncertainties of human interaction and lower the specific transaction and transformation costs involved in complex exchanges. Mature sectors rely on these meso-level institutions, like standards bodies and research networks, to reduce transaction costs and align incentives.
Yet, structural investment alone is not the answer. Systemic fragmentation cannot be resolved without changing underlying mental models. We must shift the implicit, deeply held assumptions and power dynamics that sustain the current fragmented ecosystem. If the underlying mental models of stakeholders do not genuinely prioritise the social mission, even explicitly designed hybrid legal forms will experience mission drift when new formal rules inevitably clash with an internalised profit-first logic. To break the cycle of fragmentation, the For Purpose domain must actively shape its own narrative and promote an alternative mental model that normalises altruism, shared purpose, and a proactive commitment to collective well-being, turning the inherent “pull to do good” into a powerful coordinating force.
Crucially, this demands shifting power dynamics by refining the role of government into that of the “Entrepreneurial State“. Rather than merely fixing market failures, the state must act as a lead risk-taker and market-shaper, providing the visionary, high-risk “patient capital” required to overcome the pioneer gap that private markets avoid.
The UK Office for the Impact Economy, established in November 2025, empirically illustrates this by acting as a central orchestrator that aligns capital, policy, and market infrastructure to catalyse system-level coordination without absorbing direct delivery.
Another example: UK Office for the Impact Economy
The Office for the Impact Economy demonstrates how governments can support coordination in the For Purpose domain. Established by the UK Government in November 2025, it acts as a central function to align capital, policy, and market infrastructure for impact. By convening stakeholders across finance, philanthropy, and enterprise, it reduces fragmentation and supports standard-setting, data development, and capital mobilisation. This approach enables government to catalyse system-level coordination without direct delivery, strengthening market formation and improving the allocation of capital toward measurable social and environmental outcomes.
Read more
Starting the ignition
The For Purpose domain is a massive, multi-trillion-dollar economic engine that remains chronically underutilised due to structural fragmentation and a mismatch between value creation and capture. By distinguishing its economic logic from traditional markets and the sociopolitical focus of the SSE, we can better understand the unique hybrid financing and governance mechanisms required to protect its mission.
Unleashing this domain’s full potential requires moving beyond GDP to accurately value its contributions, investing in meso-level coordination infrastructure, and embracing the proactive role of the Entrepreneurial State. Only through these combined structural and cognitive shifts can we harness this distinct mode of economic activity to deliver public value at scale.