The third sector at a crossroads - looming crisis and ideas for positive action
25 October 2017
In this, the fifth in a series of commissioned opinion pieces, Robin Wilson argues that the VCSE sector hereis in crisis due to marketisation and that a realignment with members/users is require. Read on to find out more
There is no doubt that the third sector in Northern Ireland faces a crisis. If that were not self-evident it has become very clear through the consultations which the Building Change Trust has organised with sector representatives during 2017. The interim report by the facilitators of these engagements across the region paints a stark picture. Organisations are struggling to survive from day to day under austerity-constrained funding, in the context of a political vacuum at Stormont and the huge associated budget uncertainties—and all this with the dark shadow of Brexit looming over the island of Ireland as a whole.
The consultations have thrown up an accumulation of longstanding challenges, which are confining voluntary organisations and the sector as a whole to a low road, despite much good endeavour, of short-termism, limited influence and poor morale—engendering frustration at all the unrealised potential practitioners know is there. And yet, perhaps because of the immediacy of such pressures, a dearth of radical visions of how third-sector organisations can engender the best outcomes for their users has also been identified.
While it is very difficult to raise one’s head in such circumstances, this paper suggests the sector, and individual organisations within it, should seek to set a clear path for where it aims to go and then win the public—ultimately political—battles needed to make that possible. Doing so means looking around on the widest horizon for more viable and defensible models on which to draw, for practice and advocacy, before charting a way out of the crisis. Paralleling the engagements on where the sector currently stands in Northern Ireland, , this paper is thus more of a ‘thinkpiece’ indicating what a scan through the international literature reveals by way of pointers to the future.
A sector in crisis
The most obvious challenge facing voluntary organisations is funding, as austerity has ground ever harder since 2010. The latest Northern Ireland Council for Voluntary Action (NICVA) State of the Sector shows a significant drop between 2013-14 and 2015-16 in the proportion of organisations with an annual income above £250,000—from 19.9 per cent of those surveyed to 12.3 per cent. In February this year, a NICVA survey found that 9 per cent of organisations had already confirmed funding cuts in 2017-18 and 88 per cent said they had received no confirmation of their funding after March 2017 in the wake of the collapse of the Stormont executive in January. Looking ahead further, Brexit obviously imperils funding for the sector from the European Union, which amounted to £10.5 million in 2014-15.
Yet the absolute level of funding for the sector is only a part of the crisis. While there has been a small drop in the proportion of organisations reporting earned income, according to the latest State of the Sector—from 58 per cent in 2009-10 to 52.8 per cent in 2013-14—the 2012 report commented: ‘Voluntary and community organisations face a range of challenges stemming not only from the economic downturn, cuts in public sector funding, reduction in donations, but also [their] increasing role in public service delivery, increasing demands of competition, tendering, collaboration and coping with late payment for services.’
Under Tony Blair’s ‘New’ Labour regime, and following the Deakin commission which addressed worries about an emerging ‘contract culture’, this was mitigated by the third sector being conceived of as a partner in service delivery (Rees and Mullins, 2016a: 21). A ‘compact’ with the sector followed in England and the newly devolved jurisdictions and Northern Ireland’s ‘concordat’ and joint forum between government and the voluntary sector remain—devolution, however, is for the moment at least no more and the failure to reconvene the Civic Forum after its renewal in 2007 symbolised the weakness of wider civil-society influence (Wilson and Nolan, 2017). ‘New’ Labour’s approach has had more sustained battery life in (Labour-governed) Wales, because of the third sector scheme and the associated Third Sector Partnership Council, which is a statutory mandate stemming from the 1998 devolution act—and, according to the Welsh Council for Voluntary Action chief executive, is ‘very much alive’. The Scottish Community Empowerment Act 2015 has also given a shot in the arm to locally-rooted voluntary action there.
Even in 2009, however, research commissioned by the Carnegie UK Trust Inquiry into the Future of Civil Society in the UK and Ireland found ‘a rather embattled sector attempting to promote the values of social justice’. Under the Conservative-dominated governments which have followed since 2010 civil-society organisations have found themselves under even more pressure.
This has stemmed from the three Ms of marketisation, monitoring and managerialism, drawing previously grant-supported organisations into contractual relationships with public authorities, replacing accountability downwards to users and outwards to local stakeholders with accountability upward to government—focusing on quantitative measures of performance, at the expense of the quality of interventions, staff motivation or the contribution of volunteers. This deters collaboration among voluntary organisations, as they are placed in competitive relationships. It favours organisations seen as being financially sound and having a business reputation, rather than those with local service experience and expertise. And it even can reduce voluntary organisations to sub-contractors to predatory, generalist corporations, which have been able to take over contracted-out services with the most basic, one-size-fits-all offer—their interests aligned with their shareholders rather than those of diverse, vulnerable users requiring flexible and responsive provision (Milbourne, 2013).
Voluntary organisations can thus suffer from ‘mission drift’, losing sight of the original need they set out to address and the purpose which motivated their establishment. And they risk abandoning a third-sector ethos by which they lose their independence (Ketola and Hughes, 2016)—including because contracts will not fund advocacy work and organisations may be wary of biting the official hand that feeds them—in favour of an ‘isomorphism’ which makes them seem more like the public agencies which monitor them or the private contractors with whom they may compete (Rees and Mullins, 2016a: 24; Buckingham and Rees, 2016: 57). Moreover, they are facing a less sympathetic public opinion, as media stories of some high chief-executive salaries (albeit much lower than in the private sector) have eroded trust (Murray et al, 2016: 11).
It seems as if the third sector in Northern Ireland, operating in a taken-for-granted UK context and with even less autonomy for the region if direct rule endures, is facing into a long dark tunnel. But perhaps some light can be shed by looking elsewhere.
The wider Europe
The late Ulrich Beck (2005) argued that politics in today’s world can be understood in terms of a struggle for control of the state between corporations and NGOs. This provides a useful heuristic to understand the trajectory of the third sector in particular states.
In Beck’s Germany, Bismarck famously sought to solve the ‘workers question’ in the late 19th century by establishing a conservative, state-regulated social-insurance system for employees. There is little tradition in this context of third-sector organisations playing an independent, activist-based advocacy role. While civic engagement has come into fashion, the English word ‘engagement’ had to be appropriated to refer to it (Bundesnetzwerk Bürgerschaftliches Engagement) (Zimmer et al, 2009).
France has a constitutional set-up dominated by the state and historically suspicious of civil-society associations coming between the state and the individual citizen. But since the 1960s the state has engaged increasingly in partnerships with third-sector organisations in the delivery of social services and, to a lesser extent, health and education (Fraisse, 2009). Although in the wake of the financial crisis funding for associations has been reduced or replaced by competitive tendering—following the UK example—a 2014 law embedded the notion of ‘the social and solidarity-based economy’ (l’économie sociale et solidaire), which has favoured a renewal of subsidies and partnerships, and the insertion of social clauses into public tenders (Archambault, 2017).
The Netherlands has a huge third sector, yet there is no Dutch translation of the phrase ‘civil society’. Holland emerged in modern times as a religiously ‘pillarised’ society, with third-sector organisations carrying out major public-service functions in the different pillars, though these have gradually dissolved. That meant they were vertically integrated into the state, but it also meant they tended to lose their distinctiveness. And in particular it came at the expense of the horizontal networks among NGOs and activists that make for a vibrant civil society (Brandsen and van de Donk, 2009). Today the latter is fragmented and thus lacks a shared identity. The erosion of welfare entitlements has seen public daycare for elderly and disabled individuals replaced by voluntary provision, which can be experienced as demeaning by users (Grootegoed and Tonkens, 2017).
The Nordic model
On the broader European canvas, the Nordic countries provide the richest historical seam of third-sector vitality. Despite national specificities, in essence the Nordic model has fundamentally aimed to ‘liberate the individual from all forms of subordination and dependency within the family and in civil society; the poor from charity, the workers from their employers, wives from their husbands, children from their parents’ (Trägårdh, 2011: 317). Nordic civil society is thus ‘characterised by voice-bearing, voluntary, democratically organized and membership-based associations’, whereas ‘faith-based institutions, charities, and non-political, service-producing non-profit organizations predominate elsewhere’ (ibid: 329).
Sweden’s third sector stands out with its history of membership-based activism and, as a subordinate element, its social enterprises. Influenced by the country’s social-democratic political culture, which has constrained capital through a strong state and strong civil society, this has been described as the ‘popular mass movements’ (folkrörelser) tradition (Olsson et al, 2009). The ‘movements’ refer to the traditional labour movement, which played a formative role in the emergence of Sweden’s post-war, universal welfare system, and the ‘new’ social movements of the 60s—the women’s, environmental and peace movements—as well as consumer co-operatives, sporting and educational bodies. Key aspects have been open and active memberships, transparency in the operation of the huge associations, a high degree of formal internal democracy and fairness, and generous access to public policy-making as well as funding (Wiikström, 2004: 11).
Relatively speaking, in the Nordic model, and here Denmark is as good an example as Sweden, voluntary organisations working in welfare provision—such as social care—have played a minor role, because of the commitment to the welfare state. And the paid third-sector workforce has remained relatively small, because of the strong commitment to voluntary action (Henriksen and Bundesen, 2004: 621). The tradition of the third sector in Denmark and Sweden, unlike the philanthropic UK version, is of a civic commitment to equality and democracy, and an allied co-operative movement (Defourny and Pestoff, 2008: 3-4). The Swedish word for ‘charity’ (välgörenhet) acquired a negative connotation during the 20th century, with welfare coming to be understood as a matter of civil or social rights. In Denmark, voluntary organisations have indeed been promoted by the state, partly as places for learning basic democratic skills (Kaspersen and Ottesen, 2006: 118).
In Sweden, citizens are on average members of around three associations (Grassman and Svedberg, 2007: 134) and the country has a particularly strong co-operative heritage (Olsson et al, 2009: 167). Moreover, Swedish associations have historically operated on the premise of the active member. Around half the population between 16 and 74 years volunteers and, of those, seven out of ten are also members of the organisation concerned (Olsson et al, 2009: 163).
This is not to say that everything is rosy for the Swedish third sector. Membership activism, though still high in comparative terms, has fallen since the 1990s (Wiikström, 2004: 16), indicative of an erosion of older organisations and the emergence of new bodies to which members may merely pay for services or make donations (Trägårdh, 2007b: 268). There has also been a trend towards a ‘contract culture’ in Sweden (Wiikström, 2004: 27) with as elsewhere private contractors the biggest beneficiaries of competition and contracting out (Pestoff, 2011a: 117).
While Denmark has exhibited a marked growth of voluntary activism in recent decades, there are trends there too towards a more instrumental relationship between members and associations (Defourny and Pestoff, 2008: 14; Trägårdh, 2007b: 268). And Norway has seen a drift towards ‘thin’ membership, in which volunteering is associated less with being part of an organisation and more with personal development; correspondingly, the proportion of Norwegian households (merely) donating money to voluntary organisations rose from half in 1997 to three quarters in 2009 (Steen-Johnsen and Enjolras, 2011).
In Sweden a sense of participation and having a stake is promoted by involving the institutions of civil society in policy-making. The mechanism is provided by governmental commissions (statliga utredningar) focused on a particular issue, including with a view to preparing legislation. Civil-society organisations are not only consulted in the work of the commissions but can provide experts, both internal (sakkunniga) and external (experter), for their deliberations. This not only allows ministries to have very small permanent staff. It also provides the institutional linchpin in a system of democratic governance involving a mix of civil servants, politicians, academics, experts and representatives of relevant civil-society organizations (Trägårdh, 2007b). On top of the commissions, whose historical dominance has faded, there are specific avenues for influence which allow the ethos of the third sector to permeate the state, through close collaboration between the ‘popular movement organisations’ and a friendly state apparatus (Hysing and Lundberg, 2016).
There has been a gradual dilution of the popular-movement model across the Nordic countries, however, in recent years. This has been described as a shift ‘from voice to service’, as civil-society organisations have moved into service delivery, and, relatedly, ‘from member to volunteer’. And as ‘business’ talk has increased, the normative drive of civil society has diminished (Wiikström and Zimmer, 2011; Wiikström, 2011), while the consumer co-ops have become more isomorphic with the private sector (Pestoff, 2011b). Nevertheless, there are enduring features of these societies, based on this ethos of individual autonomy maximisation, which mean to speak of a Nordic civil-society model still makes sense.
Lessons for Northern Ireland
The Nordic model, even if less distinctive than before, provides much food for thought for the third sector in Northern Ireland, in terms of both its aims and its activities. It implies a renewed emphasis on the membership base of organisations and a recognition of the huge resource that that offers for volunteering and active campaigning in times of financial stringency. Not all organisations can, should or will reinvent themselves as ‘popular movements’ but there are elements of the model which they can appropriate.
For many third-sector organisations, membership is something of a formality and the annual general meeting a necessary evil for senior management—with the professionals left to run the organisation, with little scrutiny from their boards, from day to day. It is then unclear, however, how those professionals add value to what the same individuals would do in a statutory agency and the distinctiveness of the third sector becomes blurred. Amid the daily scramble for enough resources to keep the organisation afloat, it is easy to lose sight of the potential of investment in an active membership. In the face of declining trust in the sector, evidence shows that those who are users of, or volunteers with, charities, have a more positive image of them (Murray et al, 2016: 18).
There is a risk of activism being reduced to mere ‘clicktivism’ in a world suffused by the internet. But if Oscar Wilde supposedly quipped that the problem with socialism was that it took up too many evenings, the scope today for widescale online engagement in genuine deliberation does make membership-driven organisation less of a collective-action dilemma than before. This won’t happen automatically, as the Norwegian experience shows (Steen-Johnsen and Emjolras, 2011). Voluntary organisations have tended to see their digital activity as distinct and focused on fundraising and communications, rather than as a ‘horizontal’ commitment to cohering their communities of interest (Murray et al, 2017).
It is also interesting that the second, subordinate element of the Nordic model , beyond the ‘popular movements’ tradition, comprises social enterprises rather than merely grant-funded charities. And the dying consumer co-operative tradition in Sweden is being revamped in arenas of social care, for instance in parent- (as well as worker-) controlled nurseries (Pestoff, 2011b). Amid a tightening financial screw, if voluntary organisations can behave more like social enterprises this can provide independent revenue streams and so enhance the autonomy and responsiveness to users that make such organisations perform at their best.
The way ahead
There is one way to distil all the challenges facing the third sector, sketched in the introduction, and the answers to them and it is this: marketisation is driving voluntary organisations to align themselves with the demands of the state and to become more ‘managerial’ and competitive, when what they really need to do is to align themselves with their members and users and become more independent and collaborative. This has a number of interconnected implications (Murray et al, 2017) as the third sector tries to set a new horizon.
The first is a focus on outcomes: the long-term mission must drive the organisation, mobilise volunteers and motivate staff (NPC, 2017: 34)—not the next potential contract. Interestingly, a survey by New Philanthropy Capital of voluntary-sector leaders found that 63 per cent of those whose organisations did deliver public-sector contracts reported having refused contracts that were off-mission, while 53 per cent of those whose organisations did not accept such contracts said that this was because they were not relevant to their mission (Murray et al, 2017: 31).
The board must be the custodian of the mission and keep staff focused on it. Voluntary organisations with large staffs can easily become dominated by their senior management team and a robust, diverse board plays an essential challenge function. Building on the Code of Good Governance, NICVA provides effective assistance with the training of trustees. It is the achievement of those outcomes, as distinct from outputs, which must be regularly evaluated, including by qualitative assessments as well as quantitative measures as appropriate.
To sustain that mission focus, Scope has taken the radical decision to no longer be a ‘sub-contractor for the state’ and instead become a ‘platform that allows disabled people, through Scope, to achieve change’, empowering staff and volunteers (NPC, 2017: 8-11). This is not necessarily to abjure contracts, however. An alternative strategy is to make the organisation so indispensable that no other organisation (or consortium of them), never mind public agency, could run the programme in anything like the same way—or, better, to design the programme in the first place and then to demand it be supported, having shown the unmet need and how it can be tackled. In today’s complex and individualised societies governments can be neither omniscient nor omnicompetent and they can be driven to recognise the unique advantages offered by voluntary organisations—‘their closeness to beneficiaries with specialist needs and communities more generally, their flexibility and ability to innovate and the values base and sense of mission that permeate their work’ (Rees and Mullins, 2016a: 24).
This is of course how Women’s Aid emerged on the scene and acquired public funding, having established the refuges and raised public awareness of intimate-partner violence from the 1970s. However much that funding may now be under pressure, no one would suggest the organisation should compete with the likes of G4S to do its work. In that context, the relationship between a voluntary organisation and government can be one of ‘communication, realism and authenticity’ (Milbourne, 2013: 99)—where reporting comprises a narrative and not just the figures—from which both parties can hopefully learn over time in terms of programme design. The Scottish government has in this context developed the notion of ‘public social partnerships’, in which voluntary organisations are involved in the design and possibly piloting of a service before it is subjective to a competitive tender.
This is also a firm basis for those organisations which do provide services to become, wholly or in part, social enterprises—whether by generating a surplus while creating a social impact or by ploughing back into their principal activity the surplus from a service not directed at their beneficiaries (Murray et al, 2016: 17). Bryson House, one of the largest social enterprises in the UK, shows how this can go beyond ‘niche’ activity to providing major services which are otherwise not being furnished (household recycling) or are not being supplied with the same driving ethos (social care). The comparative advantages of social enterprises are that they have an ‘asset lock’ (Pearce, 2009: 24), in that a surplus is reinvested rather than leaking out to private shareholders; they internalise the positive social value they add, which to a private company would be a mere ‘externality’ (Mendell, 2009: 182); and they can motivate staff in intrinsic as well as extrinsic ways, whereas capitalist firms are more confined to cash incentives (Borzaga and Depedri, 2009: 87). They can also consider establishing themselves as co-operatives, on which Co-operative Alternatives can advise, and availing themselves of finance via the issuing of community shares or loans with support for that from the likes of Charity Bank and the Ulster Community Investment Trust.
User engagement must be part and parcel of any independent voluntary organisation worth its salt. The best are distinct from conventional public services in their flexibility and responsiveness to the user group on which they focus, with whom they establish trust and from whom they accumulate a wealth of tacit knowledge, including via user representation on their boards. It is only on this basis that they are capable of ‘voicing diverse views, challenging consensus and providing alternative service approaches’ (Milbourne, 2013: 205). Indeed, organisations can go beyond user engagement to ‘co-production’ of services, which not only add value in a way experienced as empowering by users but can also influence service design and wider public policy (Murray et al, 2016: 15). A Department for Communities consultation document on future funding of the sector in Northern Ireland, published in September 2016 before devolution collapsed, linked funding to realisation of Programme for Government outcomes but it did acknowledge the value of co-design of public services.
Voluntary organisations need also to be networked with other NGOs and sources of expertise (Murray, 2016: 26). Their charitable, as distinct from commercial, objects mean that they can reasonably expect others working for the public good, such as academic experts, to make available their knowledge and research, to complement the lessons of experience. Nor need they hoard information in the manner of a company anxious about competition but rather can seek out economies of scope through collaboration with complementary providers—particularly where this allows them to straddle the departmental silos of public services, which often leave users with complex needs left feeling they are shifted ‘from pillar to post’. Such networks can also allow valuable information about good practice to be shared between similar providers, spreading innovation through economies of scale. Organisations like NICVA and CO3 can be, and are, repositories of collective knowledge for organisations and their leaders in these regards.
In that sense, voluntary organisations can strive to be active agents rather than passive victims of current policy trends, however adverse these may be. Through tough, prolonged campaigning, the disability movement has successfully foregrounded personalisation as a key requirement of public services which treat individuals with disabilities with human dignity. And online organisation of members/supporters, allied to crowdsourcing, can allow at least some income to be generated in a way which befits independent and activist organisations in the internet age (Rees and Mullins, 2016b).
Joining the political dots
More broadly, the third sector should perhaps raise its head sufficiently to see how, working with trade unions and wider social movements, it can model a good society of an outward-looking Northern Ireland. This especially in a context where Brexit is turning the UK’s back on Europe, with obviously polarising effects on the region and damaging impacts on Ireland-wide civil-society interconnections.
The Nordic societies achieve such beneficent combinations of economic prosperity and relative social equality because they are better at releasing the talents of every individual in a secular environment, engendering in the process much higher levels of social trust and trust in public authorities, with the state seen as the ally of the citizen (Trägårdh, 2011). Yet the ascriptive identity constraints of family, religion and ‘community’ from which the Nordic model holds out emancipation remain taken for granted in Northern Ireland—never linked to its poor social and economic performance, its sectarian polarisation or its episodic state failure. This tarnishes the voluntary sector too, including via the privileging of certain organisations through political clientelism and the reinvention of paramilitaries as ‘community workers’.
Maybe the third sector can begin to join the dots and change the narrative—in its own interests, as well as those of the region as a whole.
- Robin Wilson is an independent researcher, with long experience—both theoretical and practical—of work on and with the third sector and voluntary organisations, in Northern Ireland and internationally.
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 A sensible definition is that they are ‘formal, non-profit distributing, constitutionally independent of the state, self-governing and benefiting from voluntarism’ (cited in Rees and Mullins, 2016a: 20).
 Interview with Ruth Marks, late 2015.