Divisions are widening between charities that deliver public services and rely on contracting for income and those that rely on donations and volunteers, a Third Sector Research Centre report released today suggests.
Is the Third Sector Being Overwhelmed by the State and the Market?, written by Simon Teasdale, Heather Buckingham and James Rees, is the fourth of five discussion papers produced as part of the TSRC’s Future Dialogues programme, a series of reports and events designed to evaluate some of the main issues facing the sector.
It says that government funding and revenue from the sale of goods and services make up more than half the sector’s income. But this money goes to "a relatively small number of very large third sector organisations", while most of them receive little or no income from these sources.
The report says that "perhaps a split is emerging" between "some organisations increasingly relying on sales of goods and services to deliver activities specified by the state and a wider third sector which relies on the contribution of private donations and voluntary effort".
These divisions raise questions about whether the sector is a unified entity or "rather a fragmented collection or alliance of groups and organisations", it says.
The report says that the sector seemed able to maintain its independence even though some of its members delivered public services.
Organisations "often display considerable agency and creativity when negotiating tensions between social and economic objectives" and "they may be able to adapt to, or even shape, the unwritten rules of the game by positioning themselves as different entities to different stakeholders in order to access a wide range of resources", it says.
"Third sector organisations may be able to strategically deploy different combinations of resources such as social mission, trust, reputation, charitable income, commercial revenue and voluntary effort in order to engage in markets while avoiding erosion of third sector identities," says the report.