Motivations for mapping Third Sector organisations in the UK

We are not the first team to attempt the construction of a UK-wide database on the third sector, and it is worth reflecting on why we are doing this and the ways in which our work will – we hope – build on some previous efforts to do so.

The voluntary sector contains very large numbers of organisations that make substantial contributions to well-being and social cohesion in the UK. The sector encompasses charities, social enterprises, mutuals, cooperatives, and many less formal voluntary and community organisations. There is a substantial gap in the availability of high-quality data about voluntary organisations, and it is argued that better-quality information and evidence would lead to the contribution of those organisations being properly recognised, leading in turn to higher levels of public and voluntary support for them. But what are they supporting here, and why is evidence about this field of activity required?

In broadly accepted international usage, attention focusses on institutions which are: non-profit; do not distribute surpluses to external stakeholders; private; independent of government; and have a significant element of voluntary action in their governance and activities. They may encompass charities, social enterprises, mutuals, cooperatives, and many less formal voluntary and community organisations. Researchers and commentators use a range of terms - the “third sector”, “civil society”, the “voluntary sector”, “social enterprise” are examples - for this population of entities, or subsets thereof. These organisations come into being, and are valued, for a number of reasons and carry out a very large range of activities.

With such a range of entities, definitions and purposes involved, characterisations of the field as a “loose and baggy monster” (Kendall and Knapp, 1994) come as no surprise. The landscape of these entities is not easily charted. The field has been referred to as a “lost continent” of social and economic life” (Salamon et al., 2000). Scholars have for many years argued that voluntary organisations are invisible in national accounting systems, that as a result the contribution of such entities is not routinely reported, and that therefore these organisations are undervalued (Salamon and Sokolowski, 2016). Demarcating its boundaries (what criteria distinguish this field from public or market actors?), determining its constituent parts (what sorts of organisations qualify for membership?), and plotting its contours (how much activity is evident in particular communities?) continues to provoke conceptual and empirical discussions (Enjolras et al., 2018; Pennestorfer and Rutherford, 2018).

The most common organisational form in the UK is that of a registered charity, of which there are around 200,000. Estimates of the total numbers of organisations operating in the wider civil society sphere vary depending on definitions, but there are tens of thousands of non-profit companies such as Companies Limited by Guarantee and Community Interest Companies (the most common form for social enterprises). Far less is known in a systematic way about these organisations; closing these and other gaps, and producing more granular analyses by linkage with other sources, is a key aim of our project.

UK government initiatives to measure this field date from Central Statistical Office surveys in the early 1990s (Osborne and Hems, 1995) with estimates of the contribution of nonprofit institutions serving households (NPISH) being incorporated into national accounts (Howe, 2014). At the time, the sampling frame used was the recently-digitised register of charities, for England and Wales, and the Inland Revenue for Scotland. In parallel, international efforts were getting under way in the form of the Johns Hopkins Comparative Nonprofit Sector Project, led by Lester Salamon and associates, which sought to render the voluntary sector visible across the globe. These efforts were based on samples of the accounts of charities, and the wider nonprofit sector remained off-limits. The National Council for Voluntary Organisations (NCVO) built on this initial work, through its annual Almanac, with other efforts being made to capture subsets of the organisational population, such as the Charities’ Aid Foundation (CAF)-led work on large fundraising charities, generating the annual series, Charity Trends. A social enterprise, Guidestar Data Services, was established with government backing in the early 2000s. It sought to capture data from the accounts of the wider population of nonprofit organisations but went into administration in 2010.

Other survey-based efforts have gone beyond the collection of economic data to study questions about the roles and relationships of voluntary organisations and their perceptions of the operating environment. On a national scale there were two substantial surveys (with over 40 000 respondents) of the third sector in 2008 and 2010. There have been large numbers of subsequent local surveys, such as the long-running Third Sector Trends study in northern England, and national measures such as the voluntary sector ‘barometer’. However, these are limited by their small size and their lack of representativeness, though they do provide insight into the challenges faced by respondents.

There are advantages and disadvantages to these various approaches to assembling an evidence base. Key concerns are representativeness and timeliness. Surveys often generate responses from small and unrepresentative sets of organisations; capturing data from charity accounts takes time and is reliant on the speed with which those accounts are made public.

In this project we favour the use of administrative data on charities and companies. Such data are becoming available in accessible formats and are usually timely – the register of the Charity Commission for England and Wales is updated daily. Regular and automated updating of databases is therefore feasible. Substantial longitudinal data are now available too – we have assembled versions of financial headline data from that register covering the past 25 years, for upwards of 150 000 organisations each year. Charities are now also asked to report in more detail information about their sources of income than has previously been the case. Data on companies is moving in the same direction.

Our intention is therefore to build a dataset from a range of relevant regulators of third sector organisations, de-duplicate it, and link it to datasets held by the Office for National Statistics that provide information on turnover and employment. The aim will be to allow measurement of the scale and distribution of the various organisational components of the third sector in a more granular way, with disaggregation by type of organisation, location, and field of activity. In turn this will allow researchers to explore issues like the complementarity of different types of organisation and the relationship between trends in the growth and distribution of different types of entity over time.

A longer-term aim is to cross-reference these datasets against data on the transactions (contracts and grants) in which they are engaged, utilizing publicly-available data on public procurement and on open grants data published by funders. No such resource exists and it is the ambition of this project to begin to establish it. The result, we hope, will be an easy-to-use public resource that will open up considerable volumes of data for research purposes in a way not previously possible in the UK.