The Voluntary Sector

Comparative Perspectives in the UK

Jeremy Kendall

• Publisher: Routledge
• Year: 2004
• Print ISBN: 9780415309745
• eBook ISBN: 9781134391264
• Topic: Business
• Subtopic: Business General
• Index: Business

Serving as an introduction to the UK's voluntary sector, this book builds on the foundations lain in an earlier book by Kendall and Dahrendorf. Using a comparative approach to place the UK voluntary sector in perspective, this book considers the scope, scale, structure, and impact of the voluntary sector's activities on society.

Based on both qualitative and quantitative evidence, this informative book includes statistical mapping of the sector, as well as semi-structured interviews conducted with voluntary sector policy actors. A much-needed addition to the current literature, The Voluntary Sector provides a theoretical framework and in-depth analysis of an increasingly important area.

1 Introduction

• The voluntary sector in Britain currently commands more attention from policy makers than at any time since the heyday of Victorian charity and mutuality.
• The voluntary sector’s contributions can be examined from a comparative perspective by asking: What resources does each sector command in economic life in Britain and abroad? What is distinctive about its involvement in the policy process?
• A further key question is: What are the ‘impacts’ of voluntary sector activity?

1.1 High visibility, high expectations

In 2003, the voluntary, third or nonprofit sector occupies centre-stage in public policy discussions in the UK. Not since the late nineteenth century, when voluntary action was integral to contemporary concepts of citizenship, and the associated institutional infrastructure of charities and mutuals were the cause of considerable national pride, have organizations occupying the space between the market and the state commanded so much attention. The two largest political parties now give the sector high visibility in their aspirations, reflected in 2001, for example, by manifesto commitments of nurture and support.

The current New Labour administration’s ongoing interest in this sector is demonstrated by its completion, as this book is finalized, of two major reviews from sources close to the centre of political power. The Strategy Unit, a policy development body servicing the Cabinet Office, has undertaken an assessment of the sector’s policy situation, with an emphasis on legal structures and frameworks (Strategy Unit, 2002); while the Treasury has simultaneously reviewed ‘the relationship between the voluntary sector and the government in service delivery, taking account of the key role the sector can play in strengthening civil society and building capacity in local communities’ (HM Treasury, 2002a: 35). Think tanks of all political persuasions, who had previously conceptualized public policy approaches almost exclusively with reference to the market and the state – separately or in combination – have increasingly also reflected on the role of not-for-profits in their diagnoses of, and prescriptions for, an array of contemporary social problems. Theoretical and practical rationales for this line of thinking are discussed in detail in the pages that follow, but some of the factors which have fed into a more general aspiration to look beyond the two sector model include:

• Disillusionment with private market solutions, which often seem to engender a raft of difficulties and failings, particularly in social welfare and environmental policy domains. These include obvious limits to their capacity to meet the needs of citizens not endowed with economic resources; chronic vulnerability to the erratic movements of the economic cycle and financial markets; and, for some, psychological and philosophical objections to the sheer ubiquity of capitalist markets as a mechanism for allocating resources in modern developed societies (Hirshmann, 1986; Ware and Goodin, 1990; Ehrenberg, 1999).
• Mounting distrust in politician-dominated approaches, and scepticism from both Left and Right concerning the capacity of apparently overloaded, contradiction-riven, cash-starved, state-centred institutions to deliver public services able to match spiralling user expectations and increasingly diverse citizen aspirations (Klein, 1977; Offe, 1984; Olsen, 1982).¹
• A positive endorsement of the actual and potential contribution of these organizations to the ‘good society’. This is not just by offering choice and responsiveness in services (Knapp et al., 1990), but through providing opportunities for the generation of trust, civic virtue and ‘social capital’ via participation in community and public life (Putnam, 2000). This is increasingly seen not only as of intrinsic value in its own right, but as being deeply connected with local, national and international economic success, and – controversially – as even constituting a core ingredient of a ‘third way’ in the political domain (Blair, 1998; Giddens, 1998: 78–86).

In the mass media, coverage of the world of voluntarism has increased markedly, while specialist magazines, such as Third Sector, have witnessed considerable increases in circulation amongst practitioners and others with a stake in such organizations. In academia, a small body of specialist scholarship, with origins particularly in the late 1970s and 1980s, had already provided much of the impetus for new specialist academic journals founded and new degree courses at the start of the 1990s in Europe and the US. Most recently, traditional disciplinary journals from across the social sciences, spurred by a new wave of interest in civil society and social capital, have increasingly put these organizations on their analytic agenda.

Arguments from both the foundational literature and the more recent academic debate are drawn on extensively in this volume as and when conceptual and theoretical guidance is needed. We use these approaches to shed light on the sector’s policy situation and on actors’ beliefs about the voluntary sector and its strengths and weaknesses. But to give the reader an early taste of the most enduring theorizing in the field, Box 1.1 summarizes some of the key concepts from the foundational literature.

Box 1.1 Key approaches in international nonprofit sector theory

Prior to the ‘rediscovery’ of associations and the voluntary sector by civil society and social capital theorists, seven theoretical approaches had dominated scholarly debate on the role of voluntary organizations:

• Weisbrod (1975) portrayed the sector as a response to demands for public goods supplied by neither the market nor the state. The market ‘fails’ because of the free rider problem (resulting particularly from the market’s undersupply of goods where nonpayers cannot be excluded); and the state ‘fails’ in the sense that electoral considerations are assumed to limit it to meeting the demands of the typical (median) voter.
• James (1987) argued that Weisbrod fails to take into account the supply side. She posited that the sector’s capacity to deliver services will depend on the availability of religious, ideological and political entrepreneurship, as well as on the demands presented. The prototypical supplier is then a religious body or political or social movement, engaged in welfare services to shape the values of those it serves.
• Hansmann (1980) focused on the problem of meeting demand for goods when information is asymmetric, so that the potential consumer is vulnerable to supplier exploitation of superior knowledge about the service. He suggested that the voluntary sector’s nondistribution constraint – preventing those in control of the organisation from benefiting from its activities – acts as a signal of trustworthiness. It provides assurance that the user will not be ‘ripped off’.
• Ben-Ner and Van Hoomissen (1993) attempted a synthesis of the aforementioned theories, modelling voluntary sector suppliers as coalitions of demand-side stakeholders. Control over output quality is effectively said to be achieved by the integration within the organization of demand and supply: and because suppliers are also demanders, they lack incentives to skimp on quality.
• Salamon (1987) portrayed voluntary organizations as pioneers preceding state action in social domains, and therefore with ‘first mover advantages’ by virtue of sunk costs and acquired skills. Nevertheless, because they are prone to their own voluntary failures – different from state ‘failures’ – they often work closely with State agencies to get the ‘best of both worlds’.

These accounts tend to portray the voluntary sector in a positive light. They see it as a response to the failures of other sectors, or as a collaborator with the State to overcome the failures of each. Two more politically sanguine approaches have also been developed:

• In regime theory, the voluntary sector’s role in services as a response to political manoeuvring amongst class interests. Differences in state–voluntary sector relations between countries are said to reflect strategic constitutional settlements. Large voluntary sectors tend to emerge because this is in keeping with the ideology and interests of middle-class or landed political elites; while large public sectors tend to reflect a balance of power in favour of labour movements and allied forces (Salamon and Anheier, 1998, 2001).
• The voluntary sector is treated more straightforwardly as the instrument of capital in all liberal democratic countries in Marxist theory. Forms of welfare, whereby the state collaborates with the voluntary sector, are necessarily treated as an expression of social control (Wolch, 1990).

1.2 In the spotlight: some puzzling facts

An earlier study completed in 1995 charting the social, political and economic contribution of this sector, characterized this set of institutions as then beginning to move ‘out of the shadows’. That study was the first to demonstrate the UK voluntary sector’s overall scope and scale, and link that systematically to ongoing policy and research debates (Kendall and Knapp, 1996). Just 7 years after that research was completed, it can reasonably be argued that these organizations have not only consolidated their place on the public stage, but find themselves under a spotlight of unprecedented intensity. A position of relatively low policy visibility has been replaced by one of sustained scrutiny. This book aims to contribute to our understanding of this process and the challenges and opportunities that it raises.

The situation this book seeks to make sense of is certainly a complex one, and seems to involve a number of peculiarities or even contradictions:

• It is often claimed that the British voluntary sector is ‘unique’ or even a ‘beacon’ to other countries in Europe and in the world (for example, Home Office, 1993; Blair, 2002). Perhaps this assertion was accurate at the time of the Victorian heyday of philanthropy and mutualism (Prochaska, 1990; Morris, 1990). Yet as we shall see, at the end of the twentieth century, this sector turns out to be quantitatively smaller than in several other countries (and below the European average), and was also mobilizing fewer volunteers and members than many other countries (Gaskin and Davis Smith, 1995; Dekker and van den Broek, 1998).
• If there is a characteristic that sets the British voluntary sector clearly apart from equivalent organizations elsewhere, it is the sheer pace at which it has had to adapt to both a turbulent policy environment and an expanded economic role. Other countries have witnessed new interest in this sphere but few if any have experienced quite such a step change in their situations in the past 5 years (Anheier and Kendall, 2001).
• The political party which took the lead in the late 1990s in courting the voluntary sector as a ‘partner’ – the Labour Party – is the party which has traditionally been thought of as least sympathetic to these organizations. For example, charities were often equated by the political Left with social backwardness and class divisiveness (Kendall and Knapp, 1996). Even mutual associations – whose solidaristic goals and working-class origins would prima facie seem to situate them well ideologically – were not included in the 1940s British welfare state architecture, unlike their counterparts in some areas of continental Europe.
• Nationally, rhetorical support for the voluntary sector is now ubiquitous – and the 2002 Strategy Unit and Treasury reviews bear witness to the aspiration to act on supportive beliefs; yet converting intentions into practice turns out to be a difficult, uneven and highly complex process
• The significance of the voluntary sector’s presence compared with for-profit and government sector counterparts varies significantly by policy domain, having developed in distinctive ways at the level of individual fields such as those discussed in detail later in this volume – social housing, care for older people and environmental action.

Identifying how and why these situations have arisen, beginning to explore their consequences and attempting to reconcile these and a range of other apparently conflicting currents or trends are amongst the analytic challenges tackled during the course of this book. These explananda emerge in the process of pursuing the following objectives:

• Providing an up-to-date ‘map’ of the economic contribution of the voluntary sector, examining its resource base and identifying how and why some of its most important contours have changed over the past decade.
• Describing the voluntary sector’s involvement in the policy process, identifying why the terms of its engagement with the state have changed so significantly, and highlighting how new ideas and institutions characterize the sector’s policy environment at the start of the twenty-first century at both central and local government levels.
• Attempting to move beyond the examination of both the ‘inputs’ associated with the voluntary sector – the human and financial resources it mobilizes and deploys – and the institutional processes with which it is involved to focus also on the social consequences of these activities. The book therefore explores the sector’s multifarious ‘impacts’, both as a way of revealing the sector’s richness and variety, but also so as to be better able to compare it with the public and for-profit sectors.

1.3 Definitions and concepts

The ‘default’ definition of the voluntary sector used in this book is in keeping with the aforementioned study of Britain in international context (Kendall and Knapp, 1996). Included are organizations which are formal, nonprofit distributing, constitutionally independent of the state, self-governing and benefiting from voluntarism. These groups can be seen as comprising a ‘broad voluntary sector’ (BVS). At the same time, we also offer a ‘narrow voluntary sector’ (NVS) definition which is closer to what seems to be the typical, de facto understanding of what is, or should be, in scope in this country. Further details are provided in the next chapter. But for now the reader may be wondering why we have continued to adopt this unfashionable usage when other language – viz., voluntary and community sector, organized civil society, social economy, third sector or system, and so on – has apparently gained currency in recent years.² The Strategy Unit review further complicates matters by referring to a new construct, ‘charities and the wider not-for-profit sector’ (Strategy Unit, 2002).

First, these same definitions were used to conduct the statistical mapping in 1995 as in 1990, and to change the language while leaving the coverage unaltered would potentially cause confusion. Second, it seems that the shift in language has been largely an elite-led process, and has not really been adopted on the ground. Certainly in conducting fieldwork for this book, ‘voluntary sector’ was the single most commonly utilized collective noun, usually implicitly deploying our narrow definition. Third, it is worth underlining that, in using this as the default language for the particular purpose of this book, we are not making any claim that it should also be adopted by other studies with different intentions and priorities. For example, in examining how these organizations feature in European Union policies, the label ‘third sector’ seems to be an appropriate shorthand (Kendall and Anheier, 2001b); while if one is interested in accounting for informal, as well as formal, nonmarket and nonstate organizing processes across the world, the language of ‘global civil society’ is indispensable (Anheier et al., 2001).

While the BVS and NVS concepts dominate, we will nevertheless necessarily depart from them at two points. First, in order to provide the most up to date statistical coverage possible, we have had to sacrifice full consistency in our usage over time. In reporting evidence up to 2000, we will need to rely on two alternative definitions, which are close to, but not coincident with, the NVS definition to which we have refe...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Illustrations
• Foreword
• Acknowledgements
• 1. Introduction
• Part I: Voluntary Sector Inputs and Processes
• Part II: Voluntary Sector Impacts and Outcomes
• Part III: Summary and Conclusion
• Appendix 1: Quantitative Statistical Sources for Country Comparisons
• Appendix 2: Interviews and Focus Groups In Specific Fields
• Bibliography