October 15, 2014
Third Sector Impact project leaders met with stakeholders working at EU level in Brussels to present TSI’s research objectives and to hear stakeholders’ expert views on third sector impacts and the barriers it faces at the EU policy level. A first conclusion reached is that there is a need for a clear conceptualization of the third sector in Europe in order to strengthen the impact spelled out during discussions. A second clear conclusion is that the most important impact of the Third Sector at EU level appears to be the fostering of a broader culture of participation.
The EU stakeholder meeting started with a short introduction to Third Sector Impact (TSI) by project coordinator Bernard Enjolras (Institute for Social Research (ISF), Oslo, Norway). He outlined the overall objectives of the project: developing a common conceptualization of the third sector in Europe; measuring its socioeconomic impact across the continent; the identification of barriers and solutions for the development of the third sector in Europe; and ongoing exchange with stakeholders to inform the research process.
Conceptualizing the Third Sector in Europe
Because measurement cannot proceed without conceptual clarity, the first task of the project has been to identify a core conceptual definition of the Third Sector in Europe. TSI consortium member Lester Salamon (Johns Hopkins University SAIS Bologna Centre) outlined the challenges such conceptualization faces – and the progress the TSI project has made so far in overcoming them. These challenges arise from the conceptual ambiguity that surrounds the concept of the third sector in Europe, the multiple terms and concepts in use, and the diverse legal treatments and varied histories and cultural traditions that shape notions of the third sector in Europe.
Striving for conceptual clarity, TSI has to date identified at least four clusters of third sector entities in Europe: associations & foundations (non-profit institutions), cooperatives and mutuals; social enterprises or social ventures; and individual activity without pay (volunteering, the public sphere, or civil society). The problem is that not all of the entities in these different clusters fit within a common understanding of the third sector in various parts of Europe. The task of the project has therefore been to identify the broadest “common core” of such entities that fit within a consensus conceptualization of the third sector in Europe while acknowledging the different third sector manifestations and definitions that exist in different countries and regions.
Dr. Salamon outlined the work done so far on defining a “common core” of a conceptualization while retaining national component identities. TSI began by agreeing that its conceptualization of the third sector would have to have sufficient breadth, clarity, comparability, operationalizability, and institutionalizability to capture the diversity of this sector while differentiating the third sector from other types of institutions and behaviors so that valid data could be developed on it both by researchers and government statistical agencies. It then launched a bottom-up process with the aid of its partners to identify the different components of the third sector that exist in different European countries and regions.
Under the conceptualization tentatively formulated by the project, European third sector entities embrace organizations, both formal and informal, that are institutionally separate from government, self-governing, engaging people without compulsion, and totally or significantly limited from distributing profit. Salamon acknowledged that the specification of the “profit-distributing limitation” was the hardest part of the conceptualization work since many large financial cooperatives and mutual as well as social enterprises are hard to distinguish operationally from for-profit enterprises. But project participants agreed that a profit distributing organization can be counted within the third sector if it has clear, objectively identifiable features that limit its distribution of profits to members, investors, or others, such as a legally binding social mission, a 50 % limit on the share of profit that can be distributed, a legally binding capital lock, meaning the assets of the organization are preserved for the social purpose, or a requirement to employ or serve a minimum proportion of persons with special needs, tentatively set at 30 percent of employees or beneficiaries .
TSI defines individual third sector activity as activities on a voluntary basis for the benefit of others over a meaningful period of time without pay. Wether the definition should include only voluntary work carried out for persons outside one’s household triggered some questioning among stakeholders, who also referred to caring for older or disabled family members within the household as voluntary action. The distinction between benefit for others and themselves was equally contested, as “most volunteers do not see this as something different. For them it is important to contribute to a joint project.”
Regarding individual activity considered to be “in-scope” of the third sector, TSI partners embraced the definition of “volunteer work” recently adopted by the International Labor Organization, which defines individual third sector activity as activities carried out on a voluntary basis for the benefit of persons outside the volunteer’s household over a meaningful period of time without pay. Whether the definition should include only activities for persons outside one’s household triggered some questioning among stakeholders, who also referred to caring for elderly or disabled family members as voluntary action. The distinction between benefit for others and themselves was equally contested, as “most volunteers do not see this as something different. For them it is important to contribute to a joint project.”
Salamon finished his presentation with a short description of TSIs goals in terms of conceptualization of the third sector: to create a permanent capability to generate reliable data on the size, scope and financing of the third sector in Europe by formulating a coherent conceptualization of the Third Sector and working with statistical agencies and third sector stakeholders to implement this conceptualization into official statistical procedures and reporting.
Conceptual challenges at EU level
Feedback from the audience of third sector and EU stakeholders was appreciative of the goal of developing a common concept of the third sector in Europe. As Tony Venables, independent expert and founder of the European Citizen Action Service pointed out, there are two fields of discussion at European level: on European foundations and social economy and on civil society. He underlined the need to bring the concepts of social economy and civil society together to give the sector more visibility.
One challenge in the same vein put forward by Emmanuelle Faure (European Foundation Centre) is the fact that the term “third sector” is not used widely in the European legislation, but the concept of “civil society” or “non-profit institutions” is. She was pleased to hear about the TSI’s inclusion of social businesses and non-profit organizations, pointing out that the European Commission has so far failed in providing common ground. Bernard Enjolras (ISF) underlined that this is why it is so important to find a common definition, while reminding the audience of the complexity of different national definitions that will force TSI to make some choices that might not please all.
Discussion mirrored the need for a common conceptualization of the European third sector, as acknowledged in the EU FP7 programme work area on inclusive growth: “In many parts of Europe, this is reinforced by activities of the third sector, which often address unmet social needs. However, the social and economic impacts of these activities are very difficult to quantify, and reliable data scarce. …. it is at times difficult to identify what can be considered as a third-sector activity, to study this activity and assess its impact in and on society.” We also need to know about impact because it legitimizes the work of the third sector. If you can show what impact you create, you have a good justification for your work.
Identifying impact indicators
Before impact can be assessed there must be clarity on impact indicators, as TSI researcher Karl-Henrik Sivesind (ISF) explained in his presentation. He referred to a first TSI report on previous research on third sector impact. The results are that it is a very mixed, complex and fragmented field. There is a need to prioritise which aspects of actual and potential impact to focus upon, with the help of third sector stakeholders. Previous research suggests certain outcomes produced by the third (employment, income from different sources, volunteering etc.) that affect all sectors (market, state, community and the third sector itself). But outcomes should not be confused with impact, which can be cultural, economic and social and concern other parts of society than the third sector itself.
TSI decided to focus on certain impact areas: wellbeing and quality of life; innovation; civic engagement, advocacy; economic impact, local community development, and human resources (i.e. gaining access to networks, self-realization, skills for CVs). The unique stakeholder approach of TSI is to collect feedback and input from third sector practitioners and stakeholders on what underlying impacts research should focus within those areas, to measure impact on society and individuals, to assess the innovative potential of the third sector, and to identify positive and negative impacts (i.e. voluntary work as a threat to paid labour).
Brainstorming impact – fostering a culture of participation
Participants of the meeting were then encouraged to brainstorm on the most important fields of third sector impact especially at European level and how to make them visible. Discussion between representatives of European networks and TSI researchers generated two very important results that will inform TSI’s work:
Third sector impact is building a culture of participation.
EU stakeholders spontaneously added social inclusion, the promotion of human rights and responsible consumption, the environment, mental and physical health and skills to the list of impacts. Manuela Capraro (World Organization of the Scouts Movement WOSM) proposed linking impact to the actual needs and concerns of the European population and suggested well-being in an ageing society and impact on economic development as important factors. Cecile Le Clercq (Directorate General for Communication) confirmed the need to build a culture of participation, which Niccolo Milanese (European Alternatives) picked up with his reference to European civil society influencing national organizations, especially when they are membership-based. But the ensuing discussion increasingly focused on “building a culture of solidarity and participation” as most important identifiable impact.
Drawing a map of impacts
Gabriel Rissola (Telecenter Europe) very helpfully proposed a map rather than a list that highlights different impact indicators and the relationships between them, an image that was repeatedly picked up on later in the day. Goran Forbici (ENNA) eloquently pleaded to produce measures of the mainstream effects. In order to catch the attention and respect of the general public and of the institutions, indicators that can show tangible outputs relevant to everyday life are needed. Milanese recommended to invert the perspective: to make the impact visible, imagine society without the third sector.
The TSI researchers picked up the challenge. Jeremy Kendall (University of Kent) suggested using a matrix with two dimensions in order to sieve down to the most promising impacts on which to work in order to recommend new and unified impact indicators to statistical bodies in Europe:
- The first dimension are impacts that speak to the mainstream concerns but that are frequently overlooked as impacts of the third sector. They fall heavily into the area of the role of the third sector as a contributor to employment and an economic engine, both directly and indirectly. Here third sector impacts can often be quantified and hence compared directly with the market and state and be put to immediate use.
- The other dimension of the matrix should register the impacts that reflect the truly distinctive contributions of the third sector. These fall heavily into the area of engaging citizens, promoting participation, building solidarity and are perhaps less readily captured by quantitative metrics impacts. They are important because the lives of people and of the communities would be poorer – or at least very different, if these were missing.
The idea of enquiry through a specific/mainstreaming matrix was supported and further elaborated by Lester Salamon and Tony Venables, who voiced to this end the strongest of the indications from the meeting: among the multifold aspects of impact of the third sector, measuring the impact of citizen participation should of special concern.
What can TSI achieve as a research project?
Discussion then focused on the possible contributions of a research project to understanding and enhancing third sector impact. TSI project leaders suggested that identifying impacts can show what makes the sector unique in its contribution. In order to so, participants proposed mixing qualitative and quantitative research methods, i.e. using annual reports of membership organizations as well as case studies.
Monica Menapace (Directorate Generale for Research and Innovation) suggested there was need to get together with other research projects and stakeholders to strengthen joint input. As the European Union does not yet acknowledge the specificity of the third sector, identifying results is very important. “You have power as a research project”, as policy-making needs research. But this power is only harnessed, she suggested, by coming up with one joint, powerful policy brief to convince policy-makers of the uniqueness of the third sector.
The impact of EU policies on third sector impact
Ariane Rodert (European Economic and Social Committee EESC) joined the meeting for a short presentation on their definition of social economy, the mapping of social enterprises in EU member states and their work on social impact measurement. She underlined the openness for close cooperation between TSI and the committee, which will be a valuable resource for TSI research.
The final presentation and brainstorming session of the day focused on impact in relation with policy. As Dr. Kendall reminded the audience in his presentation, it is not only the third sector that has impact on policy-making. The policy environment has impact on the development of the third sector. Departing from impact dimensions identified so far throughout discussions – civic culture and participation, access to political decision-making, cross-sectoral impact (the third sector as a topic in its own right) – he explained that we must focus on the favourable and unfavourable aspects of the European policy environment and distinguish between the design of European policy and the actual implementation of European policy. TSI wants to describe the barriers and find answers how to address them – within EU institutions and between EU and national levels.
Stakeholders identified several impact barriers and possible remedies:
- Lack of coordination between EU institutions and EU and civil society. Stakeholders suggested that this results in part from the lack of a commonly accepted conceptualization of the third sector. They referred to the lack of transparency in policy processes and the lobbying and strategic behaviour that dominates all bodies: EU Council, Parliament and Commission. Third sector organizations find it harder to manoeuver corporatism due to their lack of resources.
- Lack of reference to the third sector in the EU policy environment, which makes its contributions hard to capture. One exception is the existing European Reform Treaty, because this acts as the critical focal point at EU level for the framing of policy possibilities and competences. However, stakeholders felt that the treaty has triggered little action on citizen participation by any Commission, except the European Social Business Initiative. Representatives of the Directorate Generale for Communication objected to this notion and referred to a new position paper the EC is working on, as well as budgetary cuts. They reminded the group that Article 11 of the 2007 Lisbon Treaty is enshrining existing legal practices.
- Lack of progress in some policy areas, e.g. the European Statute of Association that has been on the agenda for the past 20 years without much development. EU Competition Policy is based on the notion that all sectors should be treated equally, forcing social businesses to compete with normal businesses, which may pose challenges to their social missions. As a matter of fact, there is no impact assessment of the European policy environment on the third sector to this day. All points once more underline the need for a commonly accepted conceptualization of the third sector as a special entity.
- Loss of political momentum. According to one participant the European Council showed great interest in citizen participation a couple of years ago, but citizen consultations have become a mechanism for expert input, not for civil society participation, external voices are shut out by the Brussels lobby. Despite an increased demand by citizens for a having a say, there is no European politician taking a lead on this. “The performative aspect of being a political leader is spectacularly missing” in Europe (Milanese) and there is an impression of EU institutions shrinking away from the European public sphere.
Stakeholders agreed that they wish for higher levels of participation in policy-making and more recognition from European institutions. EU policy initiatives were mentioned that could be modified to better address third sector needs: the European Citizens Initiatives (ECI), Europe 2020, where stakeholder involvement is mentioned in relation to poverty, and Article 11 of the Lisbon Treaty. “The EU needs to demonstrate that it is receptive.” This is the biggest barrier for participation and third sector impact, that both third sector organisations and European Institutions must work on.
TSI will continue the conversation on different channels “that only scratched the surface” as Gabriella Civico of CEV reminded us, through individual feedback, consultations on the TSI website and the next EU stakeholder meeting in 2015, which will focus more strongly on possible solutions to perceived problems generated by the EU policy approach to the third sector. We very much thank all participants for their inspiring and thoughtful contributions.
You can find presentations, list of participants and agenda below.