Karl WildingHonorary Senior Visiting Fellow, Cass Business SchoolOctober 2007

Identifying and mapping the ‘third’ sector What are the set of entities we are talking about and how do we describe them?

Introduction

• Much public policy discourse, media coverage, and official statistics distinguish between public and private sectors

• However:– Significant growth in the number and economic

contribution of entities between market and state– Mainstreaming of the ‘voluntary sector’ in public

policy (Kendall), most recently creation of OTS

• Does public policy require a clear understanding of what we are dealing with?

From charities to civil society

• Charity sector• NGO sector (+ variants)• Voluntary sector• Voluntary and community (and faith) sector(s)• Nonprofit/not for profit sector• Social economy• Social enterprise sector (cf. social enterprises)

Third sector• The Independent Sector• Civil society

There are too many (insert here)...

• Charities?• Social enterprises?• FBOs?• NGOs?

• Current recession has reignited the debate about the glorious mess that is civil society

• ‘Tidying up’ as a future policy debate?

Third Sector: the OTS definition

Organisations in the sector share the common characteristics of being non-governmental organisations which are driven by their values and which principally reinvest any financial surpluses to further social, environmental or cultural objectives. It encompasses voluntary and community organisations, charities, social enterprises, cooperatives and mutuals both large and small.

Source: http://www.cabinetoffice.gov.uk/third_sector/about_us/

An operational map of third sector entities

Financial Services Authority

Friendly Societies

Bencom IPSs

Royal Charter

Exempt Charities

Housing Corporation

Excepted Charities

Charity Commission

Dept. of Trade and Industry

Companies House

Limited Liability

Partnerships (LLPs)

Companies Limited by

Shares (CLSs)

Companies Limited by Guarantee

Registered Charities

Community Interest

Companies

(Out of scope) Individual civil

action

Certification Office

Unregistered community organisations and social groups

Trade unions

Trusts

General Charities

Universities

Museums

Independent schools

Key: grey - registering body Green - legal form white - TSOs. The band shows the range of possible legal forms for organisations within this entity,

some of which it may have more than one form. Some legal forms / registration are optional, some obligatory. e.g. housing associations must register with the housing corporation, but may take other legal forms as well.

Armed forces

charities

Building socs

Bona Fide IPSs

Credit Unions

Bencom IPSs

Faith groups

Cooperatives

Housing associations

Other Mutual societies

N.B. Size of box is not related to anything

Rev. & Cust.

CASCs

Charitable Companies

This is not a statement on what entities the third sector encompasses

LLPs CLSs

Political Parties

Social Enterprises

Sports and social clubs

NDPBs

Scouts/ Girl Guides

Market/Private Sector Informal Sector(Individual/family relationships)

State Sector

Voluntary Sector

Deakin (1996), Meeting the challenge of change: voluntary action in to the 21st century. Adapted from A. Evers (1995)

Deakin’s triangle

The State(Public Agencies)

The Market(Private Firms)

The Community(Households,

Families)

Associations(Voluntary/non-

profit Organisations)

Non

-pro

fit

For-

pro

fit

Formal

Inform

al

Public

Private

T h i r d

S e c t o r

Key: Mixed Organisations/ Institutions: Source: Evers & Laville, 2004

Third Sector, the state and the market

Defining characteristics

Salamon: Structural-Operational Definition• Formal• Independent• Non-profit distributing• Self-governing• Voluntarism

Is there really a sector?

• Dominant theoretical perspective based upon a form of organisational ownership (Kramer)

• It stresses – distinctiveness (ie independence)– the organisation above the activity, values and people

• But:– Blurring of boundaries: privatisation, charity subsids,

hybrids– Dependence on government funding– Common principles of the new managerialism (Ferris &

Graddy)

Is there really a sector?

While sector may well continue to serve a ‘symbolic function’ in political language, in the mixed social economy the ‘sector is an artificial construct, not an institutional reality’ (Hall)

Ralph Kramer- Alternative paradigms for the mixed economy

So what? Does it really matter?

• Notion of a sector highlights policy issues of the day:– Independence– Distinctive value– Values– Social enterprise– Public service delivery– Public benefit

• It might also define our point of contact with the state

• Third Sector: Define or be defined (Alun Michael)