Across the for‑purpose sector, strategy and impact have long been treated as separate disciplines. Strategy focused on organisational direction, growth and sustainability. Impact addressed measurement frameworks and reporting systems that often sat downstream from board and CEO level strategic decisions.
That separation is increasingly at odds with how organisations achieve impact. Leading organisations are recognising how crucial it is to embed impact directly in the strategic planning process at a board and CEO level.
Impact should be one of the primary frames in which strategic choices are made. Impact, alongside outcomes, should sit front and centre within the organisational strategic plan, shaping priorities, trade‑offs and strategic direction.
Rather than being confined to the program level, impact is becoming the logic and reasoning that shapes the organisation-wide strategy from the outset.
What’s prompting this change?
Several structural shifts are accelerating the convergence of strategy and impact across the Australian ecosystem.
Impact capital is maturing
Australia’s impact investing market reached $157 billion in 2025 — an almost eight-fold rise from $20 billion just five years earlier. This growth comes alongside broader shifts in how capital is being structured to deliver social outcomes, including the use of blended finance approaches and outcomes-based funding models, where funding is tied to achieving results.
Outcomes‑based funding is expanding
For more than a decade, governments have been developing outcomes‑based models such as Social Impact Bonds, Payment‑by‑Outcomes contracts and initiatives like the Early Intervention Investment Framework (EIIF), requiring organisations to define outcomes upfront. As a result, getting clear on where impact will be had and how it will occur is becoming a prerequisite for funding.
Expectations for evidence are rising
Funders and leading board directors are asking sharper questions: What difference are we making to people’s lives? For whom? Compared to what? Clarity around the impact an organisation has is becoming central to strategic credibility, shaping how funders and boards assess performance, allocate funding and compare competing priorities.
System challenges and limits on traditional funding
Complex challenges like mental health, healthcare, disability, aged care and housing cannot be addressed through isolated programs alone. Effective outcomes require collaboration across broader systems. For-purpose providers are competing for a limited pool of funding as traditional government funding reaches a ceiling and fails to meet demand for critical services.
The core problem: strategy separate from impact
Despite these shifts, many organisations still treat strategy and impact as separate.
Strategy is set by the board and CEO, typically focusing on overall direction, commercials and services growth — often without defining the impact those services need to achieve.
Impact is routinely introduced after the fact, with outcomes frameworks retrofitted to decisions already made, and commonly only at a program level.
As a result, the change the organisation exists to create in people’s lives and in the community is not clearly defined within the strategy.
Many organisations focus on being quality service providers, missing a clear view of the impact those services are meant to achieve.
Impact as the starting point of strategy
The shift required is not doubling down on Theory of Change or impact frameworks at a program level, but a reframing of strategy itself.
Impact‑led strategy begins with direct external and internal stakeholder input to inform the impact an organisation exists to create. Only then can the strategic choices required to generate that impact be defined. Strategy then consists of:
- A set of grounded Impact Principles that clearly outline the difference it will make, to guide the organisation’s overall strategic decision making.
- Defined strategic choices around where and how to have impact, including target cohorts, geography, scale and advocacy.
- A clear Purpose statement, grounded in these stakeholder-informed principles and choices, that defines why the organisation exists.
A relevant and meaningful set of strategic pillars can then be developed to enable this impact.
Instead of the traditional approach to strategy starting with Purpose and moving to strategic pillars, impact principles must drive strategic direction and decision making. If strategy is not impact-led, the organisation risks becoming just another well-intentioned provider in an overcrowded sector of activity-based service providers.
Impact can’t just be the proof or result of strategy — it needs to be its starting point.
When impact and strategy converge, trade‑offs become clearer, and resources are directed toward outcomes that matter for impact rather than legacy activity.
It’s time to lead with impact
The convergence of strategy and impact is not a passing trend; it’s a structural shift. Across the for-purpose sector, organisations that embed impact at the heart of their strategy are becoming more relevant to those they serve, more credible to funders and policy makers and more sustainable as an organisation. Funders are increasingly directing resources towards organisations that can demonstrate this evidence and coherence.
Intent alone is not enough. For-purpose organisations exist to create change. Leaders need to develop organisation-wide strategy with clear, measurable impact principles at its core. This is what drives long-term relevance and viability.
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Foundstone works with for-purpose leaders to develop Impact-led, Open Strategy – deliberately opening up the strategy process so that the organisation’s impact, strategic choices and funding opportunities are aligned from the outset, not retrofitted later.
Get in touch if you’d like to discuss the benefits of an impact-led strategy for your for-purpose organisation.
Read more about our Foundstone Strategy Methodology