What is the Third Sector?
What is the Third Sector?
“For it is in giving that we receive.” – St. Francis of Assisi
The ‘third sector’ generally refers to organisations that are not in either the private or public sector. The term ‘third sector’ is often used interchangeably with ‘charity sector’, ‘voluntary sector’ and ‘not-for-profit sector’.
If we think of the private sector on a large scale as being all the banks, insurance companies, hotels & chain restaurants, supermarkets, national & international retailers. Plus thousands more independent shops, bars, cafes, local services & tradespeople.
The public sector includes the NHS, schools, local authorities & emergency services.
Then the third sector includes:
Charities
Voluntary & Community Organisations
Social enterprises
These types of organisations will usually share some common traits:
They were set up with social aims – in other words, they exist to make a positive impact on a specific issue.
They are not driven by profit – they can make a profit but they reinvest that profit back into the social aim the organisation was set up to tackle.
They are independent from and not governed by statutory services – however, they are often contracted or commissioned by the public sector to deliver services, for example community healthcare or housing.
They are guided by their mission and values – they have a strong ethical purpose and how they deliver on their mission is as important as what they deliver.
You might find the following free online courses useful:
Having worked in the third sector for most of my career, I have used many terms to describe it. For a long time I used the title, ‘Charity Consultant’ but came to realise that was slightly confusing because I worked with as many social enterprises as charities, as well as many grassroots voluntary groups that didn’t yet know the legal structure they would take.
If you’d like to learn more about setting up a not-for-profit including the different legal structures to choose from in the UK, you can find my training here.
Some examples of third sector organisations
Although we might immediately think of those national charities that are household names such as Oxfam, British Heart Foundation, Cancer Research UK, NSPCC & RSPCA there are (as of October 2022) 168,994 registered charities in the UK. There are also around 20,000 community interest companies (social enterprises).
Within the third sector there is often the feeling that it is undervalued, both in terms of its contribution to the economy and in the services it provides that many feel plug the gaps between what the private and public sector can offer.
The biggest challenge for third sector organisations is undoubtedly fundraising. Being neither ‘for-profit’ like the private sector nor sustained by the public purse like the statutory sector, third sector organisations are responsible for generating income from a wide range of sources including donations, grants, contracts and sales, in order to deliver on their mission and sustain the longevity of their organisation.
If you’re looking for an introduction to fundraising through grants, check out my mini course.
The third sector can be an amazing place to work; giving you that genuine balance between progressing your own career and using your time and skills to make a positive difference in the world.
Thanks for reading, Rachel x