Third Sector

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Third Sector

• Chairman Orlando Fraser

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The value of the third sector, especially in
fighting poverty

• The third sector as a whole plays a huge part in
  community cohesion and building up vital social
  capital across the UK
• In particular, around the country there are
  countless examples of serious social problems
  being successfully tackled by the third sector
• Third sector organisations (TSOs) succeed because
  of their values of innovation, commitment,
  flexibility and independence

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The value of the third sector, especially in
fighting poverty

• They excel in providing second chances to
  Britains most vulnerable citizens
• In these circumstances, promoting the maximum use
  of the third sector to help the vulnerable is a
  necessity, not an optional extra

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Government acknowledges this in principle

• Gordon Browns Treasury TSOs are of higher
  quality, more efficient, more equitable, and more
  personalised..than either public or private
  delivery
• Ed Miliband the charitable sector has the
  ability to reach out to many groups and
  individuals the Government cannot reach
• Hilary Armstrong charitable and voluntary
  groups can fulfil the specific public policy
  objectives of reaching out much better than
  publicly-run services

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Interim report Public needs more prompting to
support third sector

• Growth in charitable giving has stalled
• Giving equates to just 0.9 of GDP compared to
  over 2 in the USA
• Rates of corporate giving represent less than 1
  of pre-tax profits
• Poverty fighting lags far behind sexier causes
• Rates of volunteering remain low
• Research suggests that only 19 of the adult
  population is volunteering at present. Rates in
  poverty-fighting TSOs appear particularly low

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Interim Report Government rhetoric not matched
by reality

• The Government is under-using and under-funding
  the third sector in the fight against poverty
• Government has failed to trust the sector to
  innovate, instead dictating government-funded
  TSOs in how they do their work, losing key TSO
  value

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Interim Report Government unfairness to the
third sector

• Government has also failed to fund the sector
  fairly
• Almost ten years on the Compact is regarded by
  many as not worth the paper its written on
• On full cost recovery, 80 of TSO chief
  executives think the situation has got worse or
  stayed the same since 2002

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Interim Report Smaller local charities
struggling to survive

• Polarisation of the third sector continues
• Over 70 of total income is generated by just 2
  of the sector
• 18 mega-charities, each with an annual income
  in excess of 100m, attract one-eighth of the
  sectors income
• Increasing sums are being concentrated on a few
  larger charities

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YouGov polling

• 71 think there should be more incentives to
  encourage giving to poverty-fighting charities
• 75 think there should be incentives to
  volunteer. 72 believe this will encourage
  volunteering from disadvantaged areas
• 61 agree that charities fighting poverty should
  get more support from the government
• 74 believe that local people in are in a better
  position than govt to judge which charities
  should get statutory funding

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The objectives of policy

• Increase levels of volunteering and charitable
  giving, especially in fighting poverty
• Increase government spending on the third sector,
  with a greater proportion of government money
  spent tackling poverty directed through the third
  sector
• Strengthen charities delivering public services
  and those that are not

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The objectives of policy

• Make government funding fairer and simpler
• Democratise government funding of the third
  sector
• Strengthen the independence and vibrancy of the
  third sector

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Policy charitable giving

• Gift Aid should be made easier to claim
• A major percentage, perhaps 80 or more, of all
  individual donations should be assumed to come
  from qualifying taxpayers without an opt in
  requirement
• This would reduce paperwork and generate a
  sizeable increase in innovation-friendly
  fundraising revenue for many charities

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Policy charitable giving

• Launch an independent trustmarking website to
  validate and promote the work of smaller
  poverty-fighting TSO
• Donations through the site would attract
  Enhanced Gift Aid from a fixed fund of 50m,
  potentially generating 150m plus for 2,500 TSOs
  over 5 years

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Policy charitable giving

• Introduce Charitable Remainder Trusts
• CRTs should be introduced as tax-efficient
  vehicles for giving, enabling asset-rich but
  cash-poor Middle Britain to donate assets whilst
  receiving tax benefits
• Boost Corporate Social Bonds
• CSBs raise funds from companies who forego
  capital growth and interest income, but are
  guaranteed their investment back after 5 years
• The Bonds would generate funds for specific
  social problems

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Policy charitable giving

• School Giving Vouchers
• A one-off initiative Year 6 pupils to be issued
  5 giving voucher each term
• Excessive reserves
• The Charity Commission must issue clearer
  guidance in this area
• Consider compelling charities with reserves over
  a specific amount to transfer a percentage of
  these reserves to a social bank, accessible if
  required

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Policy volunteering

• Launch a V Card to boost volunteering
• Allowing young and socially excluded people to
  earn credits from volunteering, and record
  achievements that can be used to build a CV
• Promoting volunteering in poverty-fighting areas
• Government funding for agencies that promote
  volunteering should be targeted more on
  increasing rate of volunteering among
  poverty-fighting TSOs, and hard to reach
  communities themselves

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Policy volunteering

• Volunteering at school
• Year 9 pupils should design social action
  projects, vote on the most popular, and then
  execute it
• Risk aversion in volunteering
• Govt should promote ways to ensure affordable
  insurance can be purchased for all TSO activities

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Policy Greater third sector role in public
services

• Spending Reviews should set out how govt
  departments will maximise TSOs delivery of
  services
• Local Area Agreements should include strategies
  on maximising third sector delivery of services
• Specifically, greater role for third sector in
  Government poverty programmes set out by other
  Social Justice Working Groups

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Policy more innovative and fairer funding of
public service TSOs

• More innovative funding
• Govt funding should be less prescriptive in
  return for TSOs improving their outcomes data
• Fairer funding - Strengthen the Compact
• The Compacts principles should be enshrined in
  legislation
• Whitehalls Compact Champions should operate at
  a Grade 2 level
• Local Area Agreements must include evidence of
  progress towards Compact implementation

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Policy fairer VAT treatment of TSOs

• Review of burden of irrecoverable VAT Reviewing
  the effect on TSOs of differing types and sizes,
  and how changes might be phased in

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Policy democratise Govt funding of TSOs

• Introducing voucher schemes
• E.g. for people overcoming homelessness and
  addictions
• Increased asset transfer
• Legislation is needed to make it easier for TSOs
  to initiate transfer
• The Community Asset Fund should be doubled to 60m

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Policy promoting smaller community TSOs

• Explore introducing Community Growth Trusts
• Smaller TSOs with growth potential could apply
  for this new legal status, entitling them to
  deliver an increasing range of services
• Community Foundation challenge fund
• A 50m fund to boost grant-giving of small
  community TSOs through Community Foundations

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Policy recommendations promoting small community
TSOs

• More effective use of Lottery funds
• At least half of BIG funding should be allocated
  to lightly prescribed, demand-led programmes
• Significant resources should be made available
  for a new grassroots BIG funding stream, Fair
  Share Plus

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Policy faith based organisations

• Create a level playing field for faith based TSOs
• Legislation to ensure religious and non-religious
  TSOs compete for public funding on equal terms
• A faith standard should be promoted to help faith
  based TSOs ensure high standards of governance

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Policy strengthening third sectors independence

• Enhancing the sectors voice in Cabinet and
  Parliament
• Promote the Minister for the Third Sector to
  Cabinet rank
• Create a new Third Sector Select Committee
• Conducting a review of the impact on independence
  of TSOs by increased govt funding

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Policy strengthening third sectors independence

• Establish a third sector institute
• Govt should match fund half the costs of a third
  sector equivalent of Institute of Fiscal Studies
• Institute to map the economics of the sector,
  including a proper mapping exercise of the
  sectors statutory funding

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Policy other Social Justice Working Groups

• The 5 other working groups of the SJPG have
  recommended a central role for
• the third sector in their areas
• Family Key role for third sector in increased
  relationships and families programmes to be
  funded by Government
• Economic Dependency TSOs to take lead in
  providing Government-funded welfare to work
  programmes

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Policy other Social Justice Working Groups

• Education Increased funding for home-school
  support and remedial units provided by TSOs
• Addictions TSOs to take lead in
  Government-funded abstinenced based programmes,
  outside and inside prisons
• Debt Third sector credit unions and money
  education providers to receive greater Government
  support

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Conclusion

• The Social Justice Policy Group believe that its
  proposals will not only ensure that that
  Britains most vulnerable receive the help they
  need from the third sector, but also that the
  third sector itself will be freed to achieve its
  true potential

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Read the full report atwww.povertydebate.com