By Bonnie Chiu, Managing Director, The Social Investment Consultancy

In the last blog, I asked whether the voluntary sector is still “voluntary” at its core. If volunteering is declining and professionalisation rising, questions of legitimacy inevitably follow.

But legitimacy is not only shaped by participation. It is also shaped by definition.

For decades, civil society in the UK has signalled its legitimacy largely through legal form. Charitable status, CIO incorporation, regulatory oversight, asset locks, trustee governance; these have functioned as shorthand for public benefit, independence and moral purpose. To be a registered charity was to be recognisably part of civil society.

Legal form became a proxy for civic virtue.

But that proxy is now under pressure.

When legal form no longer settles the question

The landscape of organisational forms is expanding. Alongside traditional charities and CIOs sit Community Interest Companies, cooperatives, trade unions, community benefit societies, hybrid entities and for-profits claiming social purpose. Informal mutual aid networks operate without incorporation at all.

This diversification is not accidental. In many cases, organisations are choosing non-charitable forms deliberately.

Some want the flexibility to remunerate directors or committee members for governance work, recognising that unpaid trustee models can privilege those with economic security and exclude others. Some want greater freedom to campaign politically. Some want to build community wealth rather than rely indefinitely on grant funding. Some – particularly in racial justice movements – explicitly reject the historical baggage of charity’s deficit-based framing.

Non-traditional legal forms are not necessarily deviations from civic legitimacy. In some cases, they are strategies for redistributing power.

That destabilises a long-standing assumption: that charitable status is the default moral benchmark.

If legal form no longer reliably signals civic purpose, then civil society faces a deeper question. On what basis do we recognise ourselves?

The second legitimacy filter: the impact economy

Layered onto this is another force reshaping the terrain: the rise of the “impact economy”.

Impact frameworks promise alignment between capital, innovation and social purpose. But they also introduce a new filter. Increasingly, civil society organisations are assessed not only by their public benefit status, but by their investment-readiness, revenue model, scalability and capacity to mobilise capital.

The implications are subtle but significant. Some organisations appear in national impact studies and capital flows; others do not. Some are legible because they can structure financial returns or blended finance models; others, whose primary work is organising, advocacy or membership-based power-building, sit uneasily within investor logics.

We therefore have two parallel legitimacy signals emerging:

• traditional regulatory legitimacy (are you a recognised charitable form?)
• market legitimacy (are you investable and impact-measurable?)

Not all civil society organisations can, or should, satisfy both.

This creates tension. And it creates fragmentation.

Is this a crisis of definition?

At one level, it might appear that civil society has a definitional problem.

If the boundaries of the sector are no longer clear, if legal forms proliferate, if some actors are counted within “impact” narratives and others are not, then the coherence of civil society looks fragile.

But perhaps the problem is not that civil society lacks a definition. Perhaps it is that it has relied too heavily on inherited definitions that no longer match reality.

If we define civil society primarily as a regulatory category, charities and closely related forms, then diversification feels like dilution. If we define it through capital mobilisation and impact metrics, then associational and membership-based organisations risk marginalisation.

Both approaches reduce civil society to something narrower than its civic function.

Reasserting purpose beyond form

There is another way to read this moment.

Rather than a crisis of definition, this could be a leadership moment.

Civil society has always been more than a legal classification. At its strongest, it is the institutional space where people organise collectively outside the state and the market; where power is negotiated, where solidarity is built, where accountability is exercised, where belonging is forged.

Legal forms matter. Regulatory standards matter. Capital matters. But none of these alone defines civil society.

What defines it is its relationship to power.

Does it enable collective agency?
Does it build durable forms of belonging?
Does it hold power to account?
Does it expand democratic participation?

If the answer is yes, then civil society’s endurance does not depend on a single legal structure or funding model.

The risk, however, is that we allow legitimacy to drift either toward regulatory formalism or toward financial scalability. In both cases, we narrow the civic imagination.

Fragmentation, or evolution?

Fragmentation is a real risk. When different parts of civil society are validated through different logics, charity law in one space and impact finance in another, coherence can weaken. Organisations may begin to see themselves less as part of a shared civic ecosystem and more as distinct regulatory or financial classes.

But fragmentation can also signal evolution.

Moments of definitional strain often precede renewal. When inherited categories no longer hold, sectors are forced to articulate their underlying principles more clearly.

The question, then, is not simply whether civil society has a definitional problem. It is whether it is willing to redefine itself in a way that is robust enough to endure diversification, financialisation and political pressure.

If we retreat into narrower boundaries, fragmentation will deepen.
If we reduce impact to investability, financial logics will dominate.
But if we reassert civil society’s core purpose: collective agency beyond state and market, then legal pluralism becomes a strength rather than a threat.

The challenge is not to defend one organisational form over another. It is to clarify the principles that make them part of a shared civic project.

In the next blog, I will step back further and explore three possible futures for civil society: a financialised trajectory, a fragmented landscape, and a re-mutualised renewal. The choices we make now about legitimacy, form and impact will determine which path becomes dominant.

The question is not whether civil society is changing. It is whether we are prepared to shape that change, rather than simply inherit it.