Monday, July 10, 2006

What's in a name?

What’s in a name? This question has been asked by The Institute for Philanthropy.

The name of the sector still causes problems. Many minds have gone to work to come up with a good name but none has met with general acceptance. Here is a list of some that have been tried: voluntary sector, charity sector, public benefit sector, third sector, independent sector, community and voluntary sector.The Cabinet Office Strategy Report, Private Action, Public Benefit, published in September 2002, tackled this issue in its Introduction, Section 2.1: 'What's in a name.' The report itself settled for 'charities and the wider not-for-profit sector.' Some people have suggested 'Third Sector' makes us seem like the poor cousins of the public and private sector.

Whether or not the term, ‘Third Sector’, is the most appropriate description is just part of the question.

Increasingly, there is a need for a more detailed description of the organisations that make-up the sector that may in due course lead to the need for a range of definitions.

For example, globally there are various NGO’s who operate on a scale that is virtually on a par with small countries. In turn, the aspirations of some foundations such as the Bill and Melinda Gates Foundation, is positioned to work alongside organisations such as international aid agencies.

If we adopt a tiered approach to definitions, sitting just below say, NGO’s, there are those charities that enjoy the bulk of UK voluntary revenue. According to Cass Business School, some 3,800 organisations receive two thirds of the total income of a sector with revenues in excess of £26 billion. As these organisations are also those who are at the forefront of establishing partnerships for the delivery of public services, perhaps a more accurate term for these organisations would be the ‘Fourth Sector’? eg charities with business-like processes and behaviours that supplement the public sector.

Of the 180,000+ registered charities, 56% have revenue of less than £10,000 (source: Cass and NCVO) which probably by definition equates more to the ‘Voluntary and Community’ or ‘Volcom’ sector, especially as there may be a higher proportion of these organisations that are entirely managed and run by volunteers.

That still leaves over 75,000 organisations, that could be described as the ‘Voluntary Sector’ or the ‘Third Sector’.

Whatever it is called, has the time arrived to adopt a more structured approach to how we describe the not-for profit sector? If only so that when looking at their funding needs, there is less of an uneven playing field and greater opportunites for all – especially if funders recognise the differences in scale between all these organisations.


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