| Economic sectors |
|---|
| Three-sector hypothesis |
| Primary sector: raw materials Secondary sector: manufacturing Tertiary sector: services |
| Theorists |
| Colin Clark · Jean Fourastié |
| Additional sectors |
| Quaternary sector · Quinary sector |
| Sectors by ownership |
| Business sector · Private sector · Public sector · Voluntary sector |
The voluntary sector or community sector (also non-profit sector) is the sphere of social activity undertaken by organizations that are for non-profit[1] and non-governmental. This sector is also called the third sector, in reference to the public sector and the private sector. Civic sector is another term for the sector, emphasizing the sector's relationship to civil society.
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Discourse on the "third sector" began in the 1970s in France as a result of the crisis in the welfare state.[2]
In Japan since the 1980s, the third sector (第三セクター daisan sekutā) refers to joint corporations invested both by the public sector and private sector.
The Cabinet Office of the British government until 2010 had an Office of the Third Sector that defined the "third sector" as "the place between State and (the) private sector."[3] The Conservative/Liberal Democratic Government renamed the department the Office for Civil Society. The term third sector has now been replaced in Government usage by the term Civil Society or more usually the term Big Society, which was devised by political advisers and which featured prominently in the Conservative Party's 2010 election campaign.
In India this sector is commonly called the "joint sector", and includes the industries run in partnership by the state and Private Sector. In a wider sense the initial investment is made by the state and later the handling is done by the private sector. But here the private sector is responsible to the state when it comes to handling.
In Israel this sector is commonly called the "Third Sector", ( in Hebrew: המגזר השלישי) and generally refers to non-profit organizations (NPO's) and non-governmental organizations (NGO's) with the line between the two quite fine. These organizations generally fill a gap in the existing government or municipal service provision. Examples include United Hatzalah for emergency medical first response, Yad Sarah for free loan of medical equipment and Akim for assistance the mentally handicapped.
The presence of a large non-profit sector is sometimes seen as an indicator of a healthy economy in local and national financial measurements.[4] With a growing number of non-profit organizations focused on social services, the environment, education and other unmet needs throughout society, the nonprofit sector is increasingly central to the health and well-being of society.[5] Peter Drucker suggests that the nonprofit sector provides an excellent outlet for a variety of society's labor and skills.[6]
In 1976, Daniel Bell predicted that the third sector would become the predominant sector in society, as the knowledge class overcame the effects of the private sector.[7] This presently holds true in a number of European countries. According to a recent study by Johns Hopkins University, the Netherlands has the largest third sector of 20 countries across Europe.[8] In Ireland the non-profit sector accounts for 8.8% of GDP.[9] In Sweden, the nonprofit sector is attributed with fostering a nationwide social change towards progressive economic, social and cultural policies,[10] while in Italy the third sector is increasingly viewed as a primary employment source for the entire country.[11]
In the United States approximately 10% of GDP is attributable to the third sector. Donating to private religious organizations remains the most popular American cause, and all religious organizations are entirely privately funded because the government is limited from establishing or prohibiting a religion under the First Amendment.[12]
There are considerable problems with terminology, however. Although the voluntary, community and not-for-personal profit sectors are frequently taken to comprise the "Third Sector" each of these sectors or sub-sectors have quite different characteristics. The community sector is assumed to comprise volunteers (unpaid) whilst the voluntary sector are considered (confusingly) to employ staff working for a social or community purpose.[13] In addition however, the not-for-personal-profit sector is also considered to include social firms (such as cooperatives and mutuals) and more recently governmental institutions (such as Housing Associations) that have been spun off from government, although still operating fundamentally as public service delivery organisations. These other types of institutions may be considered to be quasi-private or quasi-public sector rather than stemming from direct community benefit motivations.
There have been long-ranging arguments regarding the financial accountability of the nonprofit sector throughout Western society.[14] There is also ongoing concern whether the nonprofit sector will unequally draw retiring workers from the private sector as the currently large Baby Boomers age.[15] Development of the third sector, it is argued, is linked to restructuring of the welfare state and further globalization of that process through neo-liberal strategies of the Washington consensus.[16]
Examples: