European third sector stakeholders provide valuable input to TSI research agenda

Third Sector Impact project leaders met with stakeholders working at EU level 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. Participants of the meeting were then encouraged to brainstorm on the most important fields of third sector impact and barriers at EU policy level and provided valuable recommendations to TSI researchers.

Brussels, October 15th, 2015. The meeting outlined the overall objectives of the project: developing a common conceptualization of the third sector in Europe; measuring its socio-economic impact across the continent; the identification of barriers and solutions for the development of the third sector in Europe; and on-going exchange with stakeholders to inform the research process. Participants from third sector organizations working at EU level and from EU agencies generated several important conclusions:

  • There is a need for a clear conceptualization of the third sector in Europe in order to strengthen the impact and recognition of the sector.
  • Among the multi-fold aspects of impact of the third sector, measuring the impact of citizen participation should of special concern.
  • In order to recommend new and unified impact indicators to statistical bodies in Europe we should think about a matrix with two dimensions, speaking to the mainstream concerns as well as capturing impacts that reflect the truly distinctive contributions of the third sector.

 Why is conceptualization important?

There are two fields of discussion at European level. The first encompasses European foundations and the social economy, the second focuses on civil society. Stakeholders underlined the need to bring the concepts of social economy and civil society together to give the sector more visibility and legitimacy, as the European Commission has so far failed in providing common ground. European legislation does not usually refer to the “third sector” but to the concepts of “civil society” or “non-profit institutions” is. The EU FP7 programme work area on inclusive growth acknowledges that activities of the third sector often address unmet social needs. “However, the social and economic impacts of these activities are very difficult to quantify, and reliable data scarce.”

TSI’s working definition of the third sector in Europe

After an introduction to the challenges of conceptualization that 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, TSI consortium member Lester Salamon (Johns Hopkins University SAIS Bologna Centre) presented the clusters of entities that form the third sector, agreed by the TSI consortium: associations and foundations (non-profit institutions), cooperatives and mutuals; social enterprises or social ventures; and individual activity without pay (volunteering, the public sphere, or civil society.

A conceptualization of the third sector must allow the development of valid data on it both by researchers and government statistical agencies. The TSI working definition of the third sector in Europe so far includes: 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.

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, or a requirement to employ or serve a minimum proportion of persons with special needs.

Measuring what impact?

Identifying impacts can show what makes the sector unique in its contribution. TSI researcher Karl-Henrik Sivesind explained that there must be clarity on impact indicators before impact can be assessed. Within TSI third sector stakeholders are invited to help prioritize impacts that the project should focus on (areas identified so far are wellbeing and quality of life; innovation; civic engagement, advocacy; economic impact, local community development, and human resources). He reminded of the importance not to confuse outcomes produced by the third sector (employment, income from different sources, volunteering etc.) with impact, which can be cultural, economic and social and concern other parts of society than the third sector itself.

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. They 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. Most importantly, there was wide agreement that the third sector can nurture a culture of participation across the continent, as European civil society influences national organizations, especially when they are membership-based.

Two types of third sector impact

In order to show third sector impact appropriately stakeholders suggested a map rather than a list that highlights different impact indicators, including measures of the mainstream effects. 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:

  1. The first dimension refers to 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.
  1. 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.

Current barriers at EU policy level

The final presentation and brainstorming session of the day focused on reciprocal impacts in relation with policy. The EU policy environment has favourable and unfavourable impacts on the development of the third sector. There is also a difference between the design of European policy and its actual implementation.

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.
  • 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. As a matter of fact, there is no impact assessment of the European policy environment on the third sector to this day, underlining once more the need for a commonly accepted conceptualization of the third sector as a special entity.
  • Loss of political momentum. According to participants citizen consultations at EU level 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 and there is an impression of EU institutions shrinking away from the European public sphere.

TSI will continue the conversation with stakeholders 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.

For a more detailed report of the Brussels meeting refer to the TSI Events section. If you wish to interview a TSI consortium member contact

Read the full report and browse through the list of participants and the organisations they represent.