Despite how crucial commercial and statutory income has become to the voluntary sector, the idea that it is ‘overwhelmed’ is wide of the mark, says Third Sector Research Centre in a research report published today.
In Is the third sector being overwhelmed by the state and the market? by Simon Teasdale, Heather Buckingham and James Rees, TSRC sets out to examine the effect that an increased reliance on the state and the market has had on the sector.
The authors of what is the latest paper from TSRC's Third Sector Futures Dialogues series state that much of the apparent commercialisation of the sector is driven by changing relationships with the State, and that while 55 per cent of total income comes from ‘commercial revenue’, over half of this comes directly from government.
The paper argues that, overall, the charitable sector is not being overly manipulated by “these forces”, saying that “many [voluntary sector organisations] are able to strategically engage in markets without eroding third sector identities”.
But it does offer some notes of caution. Specifically, the authors highlight specific implications for those organisations delivering government contracts, in terms of innovation, inter-organisational relationships and social mission.
Innovation and relationships under threat
Its research on both social enterprises and service delivery charities suggests that highly specified government contracts may adversely affect charities ability to innovate. And its research on homelessness charities concludes that competition within the public service market had a detrimental effect on relationships between charities.
Paper co-writer Simon Teasdale said: “Many concerns have been raised about the effect of contracting and marketisation on the sector, and considerable work still needs to be done to understand these processes. But we should wary of presenting the sector as ‘overwhelmed’.
“While commercial and statutory income has been growing, it is still only relevant to a minority of the sector. What is more, influence goes in both directions. Many of the services now being privatised were originally delivered by the third sector and scaled-up by government.
“More recent innovations such as co-production or campaigns for fairer tax could also be seen to have influenced the state and the market.”
The paper can be read in full on the Third Sector Research Centre’s website.
