CONCEPT - Towards a common conceptualization of the third sector in Europe
We are pleased to announce a ‘common core’ definition of the third sector in Europe. A key objective of the TSI project is to address the lack of clarity about the types of entities that form the third sector, who belongs and who doesn’t. With our conceptualization we hope to contribute to a coherent overview of the third sector’s scope and impact and to strengthen the sector’s overall policy voice.
Please share your thoughts on this definition that represents a broad ‘common core’, taking into account different regional realities and the enormous diversity of the sector!
- Does it make sense to you?
- Does it reflect the third sector in your country?
- Any doubts if your organization is in or out?
Here are the main features in nutshell. For more detailed background reading please refer to the TSI policy brief and working paper on defining the third sector in Europe.
“The third sector consists of private associations and foundations; non-commercial cooperatives, mutuals, and social enterprises; and individual activities undertaken without pay or compulsion primarily to benefit society or persons outside of one’s household or next of kin.”
The third sector embraces both INSTITUTIONAL AND INDIVIDUAL components:
In-scope INSTITUTIONAL components of the third sector must be:
- Organizations, i.e., involve groups of people, whether legally constituted or not, who interact according to some understood procedures and pursue one or more common purposes for a meaningfully extended period;
- Private, e., institutionally separate from government and able to dissolve themselves on their own authority;
- Self-governing, i.e., in control of their basic mission and purpose formulated through their own internal governance procedures;
- Non-compulsory, e., engaging people without compulsion or coercion on the basis of free choice; and
- Totally or significantly limited from distributing any profits or surplus they may earn, e., either completely barred from distributing profits or under some legal or contractual obligation requiring them to limit this distribution in at least four of the following five ways:
- By adhering to an explicit social mission that frees them from the obligation to maximize profits;
- By limiting any distribution of profit to 50 percent of any surplus earned;
- By adhering to a “capital lock” on any retained assets;
- By employing or serving a significant share (e.g., at least 30 percent) of persons with special needs; and
- By adhering to a prohibition on the distribution of surplus on the basis of capital invested or fees paid.
In-scope INDIVIDUAL ACTIVITY components of the Third Sector must:
- Be undertaken without compulsion, e. on the basis of free will;
- Be unpaid, e., without compensation except for reimbursement of costs;
- Produce benefits for others or for society, and not primarily for the person doing them or for members of that person’s household or their next of kin (i.e., children and parents);
- Be carried on for a meaningful period of time, usually defined as at least an hour in a particular reference period.