How can innovation funds transform charitable impact?

Jim Clifford OBE and Kirsten Hopkins from Sonnet joined Firetail’s Henry Lane in our last webinar to explain how innovation funds bring value to charitable organisations.

You can download the slides here and keep an eye on upcoming webinars here.

Here’s a flavour of what we covered:

1. What is an innovation fund?

A type of investment mechanism designed to support and grow innovative ideas or solutions—especially those that aim for social impact. It draws on concepts from corporate venturing, university incubators, and systems change models.

The fund can be structured in various ways, such as:

Focusing on specific stages of innovation (early stage, growth, scale)
Supporting internal innovation (within the charity) or external innovation (third-party ventures)
Operating as a venture model (actively guiding and supporting investees) or a passive investor (minimal involvement)
Aiming for a financial return or being a patient investor with delayed return expectations

2. How does the innovation fund bring value?

Amplifies impact – by selecting businesses or projects with the potential to deliver social impact
Makes the funds go further - by gaining a return on investment and finding opportunities for donors to invest
Enables learning to contribute more value – innovating under good control and oversight. Fail quickly and learn, whilst reusing valuable intellectual property
Builds networks – around pipelines from innovation funds

3. What are some of the pitfalls to avoid?

Lack of a robust innovation pipeline, leading to underperformance
Unrealistic expectations about investment outcomes or impact. E.g. investing at too early a stage whilst expecting quick financial returns
Deploying too little funding, which limits scale or momentum

4. How can charities, foundations or corporates get started?

Think in terms of systems: understand the broader change you want to support, not just individual projects

Identify your potential partners: collaborate with other charities, foundations, or corporates to amplify resources and reach
Models to try: Charities – try an innovation fund model. Foundations – try a social investment model

Keen to learn more about how innovation funds can help your organisation?

Get in touch with Jim Clifford OBE, Director of Sonnet Advisory & Impact at j.clifford@sonnetimpact.co.uk

Stay tuned for more Firetail webinars.

Sign up to the Briefing to get details on our upcoming webinars. Starting again in September 2026.

If you’d like us to cover a particular topic in one of our webinars, let Henry know at henry@firetail.co.uk