Challenges for the third sector

Around six months ago we wrote a paper on the state of the third sector in Wales, drawing on the perspectives of leading figures to examine the considerable challenges it faced. Since then, with inputs from many of the same people and seminars drawing in representatives from 23 organisations, we’ve been looking at what the third sector can do to adapt itself to the challenges of the next decade. You can read our full report here.

It’s clear from what we’ve heard that the third sector will remain central to life in Wales – but it’s also clear that it needs to change to adapt to reduced funding and a shrinking state.

There is little doubt that the work of voluntary organisations and volunteers is integral to Welsh society.

Providing support to people in need, running hugely valued services from housing to care to sport, helping people get their voices heard, innovating and helping people enjoy themselves – all done by people working through voluntary organisations.  These various activities are central to the way our society works – as it is across the rest of the UK – and indeed they are so central that they are often taken for granted by us all, by the media, and by government at all levels. Nevertheless a mix of demographic changes  – with many people getting poorer and the population as a whole ageing – and the wider impacts of austerity require a refocused approach on what many third sector organisations are trying to achieve.

The first decade of devolution feels – in hindsight of course – like something of a Golden Age.

Generous funding and the Third Sector Scheme allowed the sector to both grow and become more influential in government. That has now gone – the recession and subsequent austerity have brought swingeing cuts ( estimated at 25% of total funding since 2008) , sharper scrutiny of third sector performance and the cold world of competitive tendering.

The new environment we’re in brings many challenges and some opportunities.

The huge range of services that are done outside the realms of the state will, for the most part continue. In other areas, as state capacity falls, the inventiveness and flexibility of the third sector at its best can provide new answers. And this is especially true as we face potentially radical public sector reform and restructure with a focus on citizen engagement in service design and delivery: the shape of public services and the voluntary sector’s relationship with them are far from settled with the impacts of the Wellbeing of Future Generations Bill and the Williams Commission still to play out.

But if greater public engagement is to be a priority who is better equipped than the third sector to help bring citizens and state together, especially among those groups who for too long have been excluded from decision making?

Meeting those challenges and seizing the opportunities requires new ways of thinking and working.

It requires making sure that critical voices are heard when necessary if citizen engagement is to have meaning (rather than simply keeping the funder happy). It will also mean looking at new forms of funding and it will mean using existing resources more efficiently. This will include working harder and smarter to show what works, collaborating more deeply with like-minded bodies and even being prepared to merge organisations where this would provide better outcomes for the people we purport to help: it is not the organisations themselves that are sacrosanct in this but the work they do and the difference it makes.

Even in tough times, people working and volunteering in third sector organisations can continue to contribute hugely to society in Wales but we need to recognise the challenges, organisation by organisation and as a sector as a whole if we are going to make that contribution as big and effective as possible.

Chris Johnes has held a number of senior positions in the voluntary sector, most recently as Director of Oxfam’s UK Poverty Programme. He is now a Director of Egino CIC.  Sarah Lloyd-Jones is Director of the People and Work Unit.