Is there any cause for optimism among social impact leaders? Demand is rising, funding remains tight, and community organisations are being asked to absorb more pressure than ever.
Yet alongside these challenges is a growing sense of connection. Organisations are collaborating more, sharing lessons more openly and rethinking the systems that support long-term wellbeing.
These themes came through clearly in a wide-ranging conversation with Hon Dr Andrew Leigh, Assistant Minister for Competition, Charities and Treasury.
Leigh has long paired data with thoughtful public leadership, and his reflections offer a grounded but optimistic view of where the sector is heading in 2026.
Watch our exclusive interview and scroll down to keep reading
Innovation and connection, even under pressure
Leigh sees a sector that is changing from the inside.
“I think there’s a huge amount of exciting innovation going on… The sector is more joined up than I’ve ever seen it before.”
He points to well-known examples, such as Canberra donut shop Krofne employing people with disability and Melbourne’s Streat Café which supports people transitioning out of addiction, homelessness or prison. These small stories signal something larger: a willingness for business to get involved in improving social outcomes.
At the same time, charities are carrying substantial weight. They now employ 10.5% of Australia’s workforce (ACNC) and often do so within short-term funding cycles that make long-term planning difficult.
“There’s never been more government money going into Australian charities than there is right now.”
Work is underway to improve indexation and extend contract terms, with the aim of creating more stability for staffing and planning. Leigh also notes a growing preference for funding consortia, which in turn encourages more intentional collaboration.
The trend is clear. The ecosystem is under strain, but it is also becoming more connected.
Wellbeing economics moves from idea to infrastructure
Two years on from the Measuring What Matters framework, many people still question whether wellbeing indicators are influencing policy decisions or simply reframing the language around them.
Leigh believes real progress is happening, and that data is the deciding factor.
For many years, core indicators of trust, community connection and volunteering were only updated every five years. Economic data, by comparison, arrived monthly. The imbalance meant government often had an incomplete view of social conditions.
“We’ve now got that general social survey happening on an annual basis… looking at questions around trust, democracy, volunteering and community engagement.”
For Leigh, the shift in frequency is important. It helps government understand what is happening within communities in near real time. He also points to declining social capital as one of the most significant issues of our era.
“The decline in social capital… is as serious as the rise in inequality.”
Better measurement will not solve the problem on its own, but it provides a stronger foundation for better policy.
A more purposeful view of productivity
Productivity has returned to public debate, although many people feel the disconnect between national productivity figures and their day-to-day reality. Leigh acknowledges this tension but maintains that productivity still drives long-term living standards.
He frames the challenge around three areas: investing in individuals, investing in infrastructure, and investing in institutions. This includes improvements across early childhood, schools, higher education, broadband and competition policy.
For charities, however, the definition of productivity shifts.
“In the case of charities, productivity is about doing more good with each dollar.”
It is a reminder that efficiency in the for-purpose sector is measured in outcomes, not margins.
Social enterprise: a high-impact opportunity hiding in plain sight
Leigh identifies social enterprise as one of the most promising opportunities, especially in employment.
Over the past six years, social enterprises have created more than 10,000 jobs for people facing barriers to work. Meanwhile, more than $1.1 billion in community spending has flowed to certified social enterprises.
Leigh argues the real strength of the model lies in the way it works, not just in the outcomes it delivers.
“What social enterprise has done better is to find employment opportunities for people who are more marginal… and work with them in really structured, creative ways.”
He returns to Street Café as an example, where participants gain their first job, build confidence and then transition to partner organisations. The model continually creates new openings.
Leigh sees strong interest in national social procurement and suggests there is much to learn from Victoria’s approach.
Three levers to strengthen the sector
Leigh offers three practical ideas he believes can help the sector build momentum and deepen its impact.
Enthusiasm
He emphasises the importance of bringing energy and optimism to the work. Even when challenges are complex, a positive, forward-looking tone helps mobilise people and keeps teams motivated.
Ease
He points to the need for simpler pathways to participate, especially in giving. Workplace giving, for instance, is available to half of Australia’s workforce but used by far fewer. Reducing friction could unlock meaningful new support.
Evidence
Leigh advocates for strong, reliable measurement and evaluation. He sees high-quality evidence as essential for understanding what works, improving programs, and strengthening the case for investment.
Together, these three elements — optimism, simplicity and rigour — create the conditions for organisations to demonstrate their impact with confidence and attract broader support.
A sector evolving and ready for alignment
Leigh’s reflections describe a sector that is stretched but progressing. Collaboration is deepening. Data is improving. Social enterprises are gaining recognition. Philanthropy is shifting towards longer-term thinking. Policymakers are drawing clearer links between civic health and economic outcomes.
The next phase will be about alignment: ensuring funding models, measurement frameworks and policy settings reflect the outcomes Australia says it values.
If the trajectory holds, 2026 may be the year Australia moves beyond patching pressure points and begins shaping a more coherent and modern social impact system.
What next?
Australia’s social impact ecosystem is evolving, and now is the moment to shape what comes next.
Join sector leaders, practitioners and policymakers at Social Impact Summit and be part of the national conversation.
And if you haven’t yet explored the data behind these shifts, download the State of Social Impact Report to understand the trends driving change.