The growing role of charities in society must be embraced

The third sector is undervalued and underused. Not in some small, minor way. The problem is deeply ingrained within the ways we shape policy, the economy and society.

Charities, social enterprises and community and voluntary organisations should be at the heart of economic growth. They should be woven into plans for building a better society in the same way as the private and public sectors. Economic growth over the next decade relies on all three sectors “firing on all cylinders and working effectively together.”

Those are the headline findings from a major piece of research involving experts from all fields, investigating how the third sector should be viewed and used to maximise its potential in the modern world.

The Law Family Commission on Civil Society was established over two years ago to investigate the third sector’s role in the UK today.

Commission Chair Lord O’Donnell, a former Cabinet Secretary, said: “One of the most striking findings to emerge from this tidal wave of collaboration and consultation is the level of consensus which exists on this topic.

“There is almost absolute agreement that civil society has a vital triple role to play in the UK – campaigning to improve our lives and our environment, building and bolstering our communities, and providing services to those who need them.

Yet there is also a clearly shared view that major improvements are needed to enhance how civil society works. And there is a wealth of ideas as to how to achieve those improvements, and an abundance of goodwill to ensure the necessary changes can be made.”

Report

For the past two years, the Commission on Civil Society has been researching how the third sector can be maximised to get the most out of it.

This research is not just about how community and voluntary organisations can change, it is also about changing how the sector is viewed and treated by others.

Last month, the Commission – which is funded by the Law Family Charitable Foundation and run by Pro Bono Economics – published its central report, Unleashing the power of civil society.

The report calls for “strategic investment from funders, this government and the next, in the productivity of the social sector, the data available to and about it, and in the changes needed to unlock philanthropy” alongside “a dramatic acceleration in the partnership between civil society and business, and a reset of the relationship between civil society and government.”

The report goes on: “If funders and government were to invest in the social sector’s productivity – such as through the generation of better evidence of what works in the sector by a new Civil Society Evidence Organisation (CSEVO), and if those learnings were distributed by a healthy, thriving local support infrastructure – the sector would operate more effectively, making better use of the resources it has to make more of a difference in people’s lives.

“If better data was generated from, for and about the social sector – beginning with a game-changing civil society satellite account – the sector would be able to make better decisions about policies, funding and prioritisation across a huge range of issues, with gains for both beneficiaries and taxpayers.”

One point the report is keen to make over and over again is the level of support behind creating a bigger, bolder and better-appreciated third sector – which works in stronger partnerships with both the private sector and the state.

These ideas are already popular. And, although it could be better planned (and better appreciated), this transformation is not entirely something new. It would reflect changes that are already happening.

State of the sector

Per the report: “As spending on numerous public services and local authority budgets declined at the start of the 2010s, charities, community groups and voluntary organisations found that their funding models changed and people turned to them for help in growing numbers, in new ways.

“To meet this challenge, civil society organisations changed and grew too. Jobs in civil society have been increasing at almost twice the rate of the rest of the economy, with the workforce recently reaching a record level of almost 1 million employees.

“In the charity sector, almost one in five organisations now provide social services such as domestic violence shelters or services for disabled people, the elderly and disadvantaged young people.

“The ever-accelerating importance of civil society to the UK’s social and economic fabric has not yet, however, been matched by recognition at national level. Since the days of the New Labour Compact and then the ‘Big Society’ under David Cameron, there has been little sense of a strategic vision for civil society’s role and its relationship with either government or business…

“Instead, political debate continues to focus tightly on the balance between state intervention and market freedom, overlooking the importance of a sector which operates across both and provides the underlying civic foundation for any political vision. The time is now ripe for this to change.”

Future

What now?

The answer, surely, is not one single thing. It is lots of things.

An explicit acknowledgement of the sector’s size, reach and importance would be great but this is not about giving credit where credit’s due, because it’s not about the past. This concerns the future, and building the best-possible society that allows people everywhere to thrive.

The Commission set out a total of 26 recommendations, which themselves fall under six key themes:

Building productivity and organisational effectiveness – with a “radical shift” in approach from funders away from short-term and restrictive funding and towards support for core costs and investment in people, processes and organisational development

Creating timely, accessible data and robust evidence about the sector – the sector and the government must work together to build on the progress secured over the course of the Commission’s activity in relation to data collection, analysis and availability.

Improving the scale, distribution and impact of funding for the sector – the UK government should appoint a full-time public official as its “Philanthropy Champion” and start a drive across Whitehall to leverage philantrophy. It is also calling on the Financial Conduct Authority (FCA) to require financial advisors to receive training on philanthropy and impact investing.

Bringing businesses and civil society together – the Commission stresses the need for “deep and genuine partnerships between charities and businesses” but says that too often relationships between the two sectors are “not sufficiently widespread” and “do not operate optimally for either side”. It is calling on business and charity membership bodies to urgently form a partnership focused on raising awareness of the benefits of links among both businesses and charities, and creating opportunities for both sectors to come together.

Strengthening relationships with policymakers - Charities and governments (both the UK government and devolved administrations) should create more opportunities for civil servants and charities to work together.

Unleashing potential at local and regional level – Policymakers and civil society leaders locally and regionally should move away from fragmented individual relationships, often focused on procurement or funding, and create more strategic relationships with the social sector as a whole.

Lord O’Donnell said: “Successive governments have neglected charities for too long, and our country is the worse for it. That must change in order to achieve the national renewal and better future that the UK desperately needs, because charities are a key part of the solution to every challenge we face.

“Whether it is making our communities safer, greener, healthier, more prosperous or more equal, charities must be at the decision-making table and operating at their optimum level if we are truly to achieve the change we need.”