The state of the sector: dazed and confused...

Passionate, caring and independent - that's how charities see themselves. But our survey, carried out with think tank nfpSynergy, also reveals an identity crisis.

Third Sector survey
Third Sector survey

When ministers wanted to christen the successor to the Active Communities Directorate, they settled on the Office of the Third Sector. But according to the State of the Voluntary Sector 2007 survey, the appellation 'third sector' commands the allegiance of only 14 per cent of people working in it, the masthead of a certain magazine notwithstanding.

In fact, those working at the coalface can come to no firm opinion about how they would like to be known collectively, with 'not-for-profit sector', 'voluntary and community sector', 'voluntary sector' and 'charity sector' all garnering respectable numbers of votes. There are also some less flattering suggestions, such as 'the confused sector' and 'the pick up the pieces of a failed government sector'.

But such dissensus over titles also translates into a wider identity crisis about the sector's modern role and relationship to government. Seventy-one per cent of respondents agree that what it means to be a charity is 'increasingly blurred', and 54 per cent worry that the Government exerts too much control over the sector (25 per cent disagree). Ninety-two per cent think the public doesn't understand how modern charities work; there seems to be scant certainty within the sector itself. A third of respondents describe the sector as 'helpful', but 19 per cent describe it as 'bureaucratic'. Sixteen per cent say it's 'ambitious', but 9 per cent think it is 'timid'. The famous 'loose and baggy monster' seems to lack any discernible shape at all.

According to Nick Seddon, research fellow at the think tank Civitas and author of Who Cares?, a controversial book on state funding of charities, the sector's confusion about its identity is deepening. "There are so many different organisations doing so many different things, but no distinction between any of them in formal terms," he says. "This leaves many unsure about how they are to situate themselves. 'Do we belong in civil society? Are we becoming an arm of government? If all that matters is that we do good works, what does that mean?'"

Sukhvinder Stubbs, chief executive of grant provider the Barrow Cadbury Trust, believes the sector's lack of self-awareness stems from the contentious debate about whether to accept government money to deliver public services. "Traditionally, the work of charities and that of government was separated by a very distinct line," she says. "Now that non-profit organisations act as informal contractors to fulfil needs of government, it is little wonder that we lack a common understanding of what role charities should play. Their function as advocates and agents of change is easily overlooked."

The issue of public service delivery reveals a sector split down the middle. Forty-five per cent want more public service delivery by charities, but an equally large proportion don't. Less than half (49 per cent) have as much faith in the sector's public service abilities as the Government appears to. The majority are either agnostic or dispute the contention that charities are better able to deliver public services than the state. Nineteen per cent say user perspective is in short supply in their organisations. There is consensus only that the issue of public services will still be very important in 10 years' time.

Cathy Pharoah, director of research consultancy Third Sector Prospect, sees the sector's ambiguity on public services as a source of concern and part of the explanation for the feeling that the Government exerts too much control over charities. "This will continue to be the case until the sector clarifies its position, is clear about what it brings to the table in service delivery and is confident in its role as a service provider," she says. "The sector is sitting on the fence on this issue."

Steven Burkeman, co-author of Building Blocks, a recent report on infrastructure support to front-line voluntary organisations in London, ascribes the sector's ambivalence about public services to an awareness that its own provision is patchy. "There is a belief in government that the sector can deliver services more cheaply, sensitively and responsively than government can," he says. "My dealings with voluntary organisations led me to think that things vary considerably. This is all to do with reducing the size of the civil service, and charities are tending to collude. It's hard to blame them."

But some regard the probing of sector views on public services as little more than navel-gazing. According to Stephen Bubb, boss of chief executives organisation Acevo, charities that don't want to get involved in public services should not challenge the right of others to do so. "Where is the value in statistics showing what non-service-delivering organisations think of sector service delivery?" he asks. "Armchair philosophising about the identity of the sector is interesting if you like that sort of thing, but chief executives have a serious job to do."

Intriguingly for a sector that seems to fear the dead hand of government, there is a pervasive lack of awareness of government initiatives aimed at voluntary bodies. Gift Aid is welcomed by 74 per cent of the sector and increasing ministerial interest in the sector is noted approvingly by 53 per cent. But other government-sponsored schemes have fallen on stony ground. Only 22 per cent think the Compact has had a beneficial effect, and 70 per cent think ChangeUp has had no impact or don't know what its impact has been. The doomed hubs have made little headway: at least a third of respondents have never heard of any of them. The most effective of an ineffective bunch has been the Governance Hub, with 19 per cent saying it has had a positive impact.

But the spate of initiatives from the Blair government seems to have engendered some political recognition for Labour. It has an 11-point lead over the Lib Dems when it comes to the question of which party has the best policies for the sector. The Tories' courting of the sector seems to have achieved very little, with just 8 per cent endorsing them. A substantial 41 per cent don't venture an opinion.

According to Ben Wittenberg, head of policy and research at the Directory of Social Change, lack of awareness about what the Government is trying to do for the sector should not be a cause for concern. "There is an agenda, partly driven by the Government, about a need to define the sector," he says. "There is a need for decision makers and policy makers to describe and understand what the sector is, because it's part of their plans. The voluntary sector is varied, but that doesn't matter until you get to a point where you need to put it in a box."

But if the sector remains defiantly unclassifiable, it doesn't help the public, which seems bemused by what a charity is supposed to be. Ninety-two per cent of respondents agree that members of the public don't understand how charities work - but charities don't seem to be investing in means to enlighten them. Only 12 per cent of respondents say their organisations work extremely well with the media. Marketing is the skill identified as being in shortest supply in charities; web media skills are not much more in evidence.

Mirella von Lindenfels, managing director of sector specialist media agency Communications Inc and former head of communications at Amnesty International, says charity media departments are "underfunded and treated as bolt-on functions, instead of being seen as central to the work and strategic thinking of organisations".

This is a false economy because it contributes to a general lack of understanding, she says. "The sector hates investing in anything that doesn't represent a direct-line delivery against its mission, even when failing to do so damages that delivery," she adds.

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