New report reveals that community businesses are more confident, diverse, and optimistic than other third sector organisations

Community business in England and Wales: new findings from Third Sector Trends is the latest instalment in the Third Sector Trends study which has been running since 2008 in the North of England. It is published by Durham University in collaboration with Power to Change, Community Foundation Tyne & Wear and Northumberland, Barrow Cadbury Trust and Millfield House Foundation. You can read the rest of the 2022 series of reports here.

This year, the report is based on over 6,000 responses from third sector organisations across England and Wales. The key highlights from the report are that compared to other third sector organisations, community businesses.

– Are more confident about increasing their earnings, growing their business, and working collaboratively.
– Are more likely to support minority ethnic communities.  
– Have stronger engagement with and commitment to local social and public policy development, especially in more economically deprived places.  
– Have more informal, complimentary, or collaborative relationships   Have greater diversity of organisational leadership.  
– Are more optimistic about the future.  
– Are more likely to be investing in training, digital skills and staff development for staff and volunteers. 
– Achieve greater social impact by increasing employability, tackling poverty, improving access to basic services and empowering local communities.

Professor Tony Chapman, author of the report and Third Sector Trends said that one of the most positive aspects of the report findings is “the eagerness of community businesses to work with other organisations from within their own sector or with private firms and public bodies, in both structured partnerships and ‘complementary’ informal ways.”

He also reflected on community businesses strong investment in local policy and practice initiatives: “Most join in with stakeholder events or respond to stakeholder consultations and enter strategic debates which are orchestrated by local public and health sector agencies. And many community businesses do not just react to local initiatives, they also commit to initiating debate or action to tackle local issues.”

In May, the Community Foundation Tyne Wear and Northumberland launched the Third Sector Trends 2022 report at an event in London. Stephen Miller, Director of Delivery and Impact at Power to Change sat on the panel. Reflecting on the discussion at the event and the report findings, Stephen shared that “it was interesting and reassuring to see that a lot of third sector activity is correlated to levels of deprivation. We know from our own work that majority community businesses are also operating in the most deprived neighbourhoods.”  

Stephen also said, “as entrepreneurial organisations, community businesses are also good at raising and managing their own income, generating wealth locally, and helping to retain it in their own economy. Community businesses are better positioned than many other third sector organisations in terms of their long-term resilience and sustainability”.

The report is available here:

This is the third report in a series of reports on Third Sector Trends for community business. The previous report in this series based on the 2019 Third Sector Trends study which was published in 2020 revealed that community businesses were more financially independent, generated more income and were more invested in shaping social and public policy to improve their local area than other types of third sector organisations. You can also read the first report in the series published in 2018 and based on 2016 survey responses here.

West Yorkshire Partnership celebrates role of charities and the work of 14,000 organisations across the area

West Yorkshire Health and Care Partnership are celebrating the role of the Voluntary, Community and Social Enterprise sector (VCSE) ahead of the NHS 75th birthday on the 5 July 2023. This magnificent milestone is being celebrated by launching a new VCSE Yorkshire and Humber report, produced by Professor Tony Chapman and Dr Jonathan Wistow at Durham University, which demonstrates the tremendous work of the sector as well as the challenges faced.

The report highlights that the VCSE remain a valued NHS partner in the delivery of health and care services across the United Kingdom. 

In West Yorkshire there are an estimated:

• 13,930  VCSE sector organisations (registered and unregistered)
• 31,767  full time equivalent employees delivering 52.4 million working hours a year
• 132,214  volunteers giving at least 9.5 million hours of work valued at between £94 million and £132 million a year
• An economic value of £1.4 billon and estimated value of £5.18 billion when considering added and social value.

Local VCSE organisations, continue to provide a lifeline to people and communities at a grassroots level. Approximately a third of VCSE organisations deliver support in local neighbourhoods or villages with 70% working across their local authority area. 30% of VCSE groups and organisations work in the poorest areas of West Yorkshire – reaching people who may not be accessing other health and care services. They are connected and trusted yet remain financially challenged.

In 1948, when the NHS was established, charities received funding from hospital savings schemes and local authority grants etc. Hospitals were the focus for local charitable effort, run by leaders in local society and doctors’ wives.

Today, many continue to be self-financing through trading, fundraising, or receiving funding from local councils, national grants and/or NHS contracts.

In April, West Yorkshire Health Care Partnership allocated a further £2.8 million to support the vital work of voluntary, community and hospice care in West Yorkshire, on top of local funding routes.

Kim Shutler, Senior Responsible Officer for West Yorkshire Health Care Partnership’s Harnessing the Power of Communities Programme said: ‘This research highlights the great strength of the work of VCSE organisations in Yorkshire and Humber. The VCSE delivers huge impact and this comes from the diversity of our vibrant sector as well as the strength of partnership working. It is a challenging time for the sector but there is much to be proud of across our Partnership and we are working hard collectively to support the sustainability of the VCSE as well as ensuring that we continue to maximise the impact for our communities’.  

Nigel Harrison, CEO for Yorkshire Sport Foundation said: ‘We welcome this report that demonstrates the vital contribution that voluntary and community organisations make to people’s health across Yorkshire. We know that leading an active lifestyle leads to better health in a wide range of ways. Our sports clubs, other voluntary organisations and groups of people who come together to create opportunities for local people are trusted in their communities and are often the starting point for an active life for huge numbers of people.’

Professor Tony Chapman and Dr Jonathan Wistow of Durham University said: ‘The support that big, specialised charities provide for the NHS and local authorities across West Yorkshire is invaluable. But this report also shows that many smaller VCSE charities and social enterprises contribute to local health and personal wellbeing by keeping people socially connected, mentally acute, physically active and provide a purposeful and positive focus for personal development.

The prevention of illness isn’t all about specifics. Most charities do this indirectly, by providing opportunities for local people to keep busy and engaged, whether that happens in village halls or local community centres. Collectively, the VCSE sector in West Yorkshire provided around £5 billion in social benefit in 2022’.

Rob Webster CBE, CEO Lead for West Yorkshire Health Care Partnership said: ‘This report shows the fundamental value of the VCSE. I am grateful to partners in the sector for all the hard work that they are doing to help tackle inequalities and support people during these difficult times. As we develop our medium-terms plans we will continue to work closely with the sector, at every level,  on joining up care in communities as well as looking at how we create a sustainable sector in the context of the cost-of-living crisis. This report will helpfully inform all our work’.

You can read the full report or a summary on the WY HCP website at https://www.wypartnership.co.uk/vcseyh

The full report is also available here:

The local voluntary, community and social enterprise sector (VCSE) in Cumbria is largely a ‘home grown’ resource, formed of many organisations and groups which were set up to tackle a wide range of local social, environmental and economic issues. 

As independent minded and autonomous entities, VCSE organisations decide what their objectives should be, garner the resources to get things done, develop and use working practices that suit them best and develop relationships with other organisations as and when this helps them to achieve their aims.

Collectively, the local VCSE sector achieves a great deal for its beneficiaries by strengthening people’s resolve to tackle difficult problems or supporting them to achieve their ambitions. And when working in complementary ways with other organisations and agencies, it can help improve the social fabric of neighbourhoods and communities.

So it is not surprising that the VCSE’s contribution to local wellbeing is much appreciated by local public bodies, such as the police and fire services, local authorities, the National Health Service and combined authorities.

Valuing the work of the local VCSE sector is one thing, but understanding how that value is produced and for what purpose is another. So this research report was commissioned to find out more about sector structure, purpose, energy and impact at a local level.

To understand what’s going on properly, it is necessary to look beyond the boundaries of a locality so that comparisons can be made with similar or different kinds of areas. Otherwise it cannot be known which aspects of the work of the local VCSE sector are distinctive, effective or particularly challenging.

This report compares the situation in Cumbria with similar kinds of town and country areas which are relatively distant from major urban or metropolitan areas, including: Northumberland, Shropshire, Suffolk, Dorset, Devon and Cornwall.  And to make sense of sector dynamics further – the report also compares with major urban combined authority areas.

Using comparative statistical analysis, this report builds a comprehensive picture of sector strengths in the newly established local authorities of Cumberland and Westmorland and Furness and its willingness to work alongside or in partnership with local public agencies, businesses and other VCSE organisations.

The full report can be downloaded here:

A shorter report is also available here:

The report forms part of a wider set of parallel studies on combined authorities (centred on Yorkshire and Humber) and the home counties (with a special focus on Buckinghamshire, Oxfordshire and Berkshire).

Chaired by Patrick Butler, Social Policy Editor, The Guardian.

The final event for Third Sector Trends in England and Wales 2022 will take place Tuesday 30 May, 2023: 5.00pm for 5.30pm – 7.00pm, at The Mercers’ Hall, Ironmongers Lane, London, EC2V 8HE.

Social policy in the UK is at a crossroads as Conservative government commitment to levelling up seems to be on the wane and a prospective Labour Government steadily starts to mark out its path for a shift in policy direction.

The voluntary, community and social enterprise sector sits in a good position to view the successes and failures of previous governments and to initiate and promote ideas for change. The question is, whose interests will it serve and for what purpose at a time when social inequalities are deepening and calls for social justice rising on the agenda.

Community Foundation Tyne & Wear and Northumberland is hosting an event to debate the key findings and policy implications of the Third Sector Trends study in England and Wales. 

Building on four Third Sector Trends 2022 reports released to date, Professor Tony Chapman of Durham University, will outline the role the sector has in improving localities. He will compare dynamics in richer and poorer areas, consider the role of grant funders and look at how a mixture of innovative practice and solid, steady work based on the sector’s local knowledge, skills and experience helps to keep communities going. And crucially, whether the voluntary sector will engage with and contribute towards local social and public policy debate.

There will then be a debate. following panel responses to the findings. Panellists include:

• Jane Ide, Chief Executive, ACEVO
• Sara Llewellin, Chief Executive, Barrow Cadbury Trust
• Stephen Miller, Director of Delivery and Impact, Power to Change
• Rob Williamson Chief Executive, Community Foundation Tyne & Wear and Northumberland

To book your place please go to ThirdSectorTrends2022.eventbrite.co.uk by 10am Friday 19 May 2023

If you have any problem booking, please contact us on 0191 222 0945 or general@communityfoundation.org.uk  

This is the fourth report from the Third Sector Trends study of England and Wales in 2022. In 2022 the study was supported by Community Foundation Tyne & Wear and Northumberland, Power to Change, Barrow Cadbury Trust and Millfield House Foundation.

Assessing the whole sector’s value in England and Wales involves more than simply ‘adding up’ the contributions of individual organisations. That is, firstly, because the value of the sector’s social productivity is greater than the sum of parts; and secondly, because value is not ‘owned’ by individual organisations – but rather, is shared.

This report shows that Third Sector organisations can rarely, if ever, achieve everything on their own. Most organisations, large or small, work together well – but rarely to the point that they lose their independence. Informal neighbourly relationships are the most common: 73 per cent of TSOs do this. But there is a lot of semi-formal complementary activity too – where organisations work together towards shared goals (51% of micro TSOs get involved in such work, rising to 82% of the biggest organisations).

There is a great deal of engagement with local social and public policy where TSOs attend formal meetings or contribute to consultations (including 61% of micro organisations rising to 84% of the biggest TSOs). A good deal of active ‘behind-the-scenes’ interaction to influence policy goes on too (rising from 36% of micro TSOs to 56% of the biggest).

National government is more likely to be pleased than perturbed that the Third Sector gets involved in local social and public policy debates. But over the last decade, while respecting the right of charities to campaign, Ministers and the Charity Commission have become concerned about ‘illegitimate’ political activities.

Evidence on the incidence of campaigning, until now, has been extremely limited. In 2022 Third Sector Trends sought to find out how widespread political engagement is by asking participants, firstly, if they ‘tend to steer clear’ of politics. Percentages of TSOs agreeing that they steer clear of local politics rises from 67% of the biggest organisations to 80% of the smallest.

A second question asked if organisations ‘campaign to further the interests of our beneficiaries’ – which is judged to be a legitimate activity according to the Charity Commission. Around a third of micro TSOs (36%) campaign – rising to 71 per cent of the biggest organisations).

In response to the publication of the latest report, Rob Williamson, Chief officer of the Community Foundation said:

“There’s talk in all sectors about the value of collaboration and this report shows the depth and importance of the sector’s internal and external relationships. These relationships maintain the third sector’s social impact because, collectively, the sector as a whole is worth more than the sum of the parts. It’s not all about formal partnership working, complementary action is vital too – where organisations stay independent but work collectively towards a common purpose.”

As the report’s author, Professor Tony Chapman of Durham University said:

“Becoming agitated about illegitimate political activities of charities, like as not, reveals as much about the government’s political insecurities as it does about the sector itself: not least because the enormous range of political opinion and activity within the Third Sector is so complex that it defies meaningful categorisation.

“The Third Sector is full of strong-willed people, who are committed to the causes that they pursue. And rarely is the sector shy of raising its objections when injustices are thought to have been committed. Surely, sustaining productive relationships between government and the third sector is much more important to Ministers when trying to achieve national, regional and local objectives than fussing about tweets.”

Laura Seebohm, Chair – Millfield House Foundation, said:

“It has never been more important for voluntary, community and social enterprise sector organisations to engage in policy and campaigning activities, on behalf of the communities they work with. It is therefore heartening to see sector organisations finding time and energy, against the odds, to advocate for wider change.”

The report is available to download here.

And a short blog is available which captures key controversies arising from the report which can be accessed here.

All reports from Third Sector Trends in England and Wales 2022 can be found at the Community Foundation’s website: Voluntary Third-Sector Trends | Community Foundation

All organisations need money – and churches are no different. But churches should perhaps be particularly mindful of where their money comes from and how that relates to Christian ethics and theology. So where do churches get their money from? And does it matter?

Professor Fred Robinson was awarded a Fellowship by the William Leech Foundation to look at churches and money in North East England. This research came about because he had initially been thinking about Christian philanthropy in the region and controversies surrounding corporate sponsorship of cultural organisations. Together with current debates about the legacies of slavery and colonialism in the North East and elsewhere, it was clearly time to reconsider the relationship between churches and their finances – and how they deal with issues of ‘tainted money’.

The report Churches and tainted money is published today. The report covers wide ground with detailed examination of congregational giving; external funding including grants from the National Lottery; historic benefactions; endowments; and where churches invest money and who they bank with. The report also explores the practices of different church denominations, each of which has its own history, challenges – and vulnerabilities to criticism.

In the research, Professor Robinson found a good deal of pragmatism. It is argued that most churches are relaxed about seeking funding from the Lottery, for example, and are not worried about using banks that are heavily invested in fossil fuels. But most are also principled in respect of their investments, putting their money into ethical funds. It’s a mixed picture that can leave churches open to criticism and even to charges of hypocrisy.

Fred says: ‘This report aims to shed light on how churches deal with money. I think that, generally, churches need to give more thought to the provenance of their money and wealth, and also be more proactive, investing in activities that address current problems not just avoiding ‘sin stocks’. But there are, at least, encouraging signs that churches are doing more to face up to historic responsibilities, including legacies of slavery’.

The report will provide some food for thought for the churches – and get church members thinking about whether their churches need to be less pragmatic and more principled in their approach to money.

Churches and tainted money can be downloaded here.

Third Sector Trends has been surveying the voluntary, community and social enterprise sector every three years since 2010. In 2022, 6,071 responses were received across England and Wales (an average of ~600 responses in each region). This is the only fully representative longitudinal survey which can produce robust and detailed comparative analysis at a regional and national level.

This is the third of five reports from Third Sector Trends in England and Wales 2022. Headline findings are provided below, but if you want to go straight to the report, here is the link:

Relationships with grant-making trusts and foundations

Relationships with grant funders have changed since 2019. The research shows that many grant makers relaxed their approach to funding during the Covid-19 pandemic (percentages refer to TSOs which ‘agree’ or ‘strongly’ agree with statements).

• In 2019 only 46 per cent of TSOs stated that they received unrestricted or ‘core funding’ compared with 60 per cent in 2022. 
• In 2019 only a quarter of TSOs reported that grant funders had approached them. This rose to 40 per cent in 2022.

There is good evidence to show that funders have taken a ‘lighter touch’ to grant-making approach during the pandemic.

• Pressure to provide evidence of impact fell from 55 per cent to 32 per cent.
• Expectations that practice should be ‘innovative’ fell from 74 per cent to 50 per cent.

Some aspects of inter-relationships with grant-making trusts and foundations did not change:

• The percentage of organisations stating that grant makers made a long-term contribution to their work remained about the same between 2019 and 2022 at 31-32 per cent.

As the report concludes:

“The benefits of these changes are plain to see. 83 per cent of organisations have reserves now compared with 76% in 2019. In 2022, 45 per cent of organisations have not drawn on reserves compared with 36% in 2019… The question is, will those grant makers which became more relaxed about how they dispensed their money remain so?

Some grant funders have always operated in a responsive way to the needs of charities and social enterprises and trust them to get things done. Others may be keener again to shape and direct the way their money has an impact on local communities and seek evidence for the changes that were achieved.”

Public service delivery contracts

Political enthusiasm for engaging the Third Sector in the delivery of contracts was at its strongest in the first decade of this century. This policy drive derived from an assumption that TSOs could be incentivised to undertake work for government at local and national level in a ‘mixed economy of welfare’.

Despite government efforts to incentivise and help prepare TSOs to engage in the delivery of contracts, such opportunities still only attract small section of organisations in the Third Sector.

• Due to their purpose and scale of their activities, fewer than 5% of micro and small organisations have been interested in public-service delivery contracts since 2013.
• Medium-sized organisations (income £250,000-£1million) have become progressively less likely to engage in bidding for or delivering contracts – falling from 52% in 2013 to 36% in 2022.
• Only the biggest TSOs (with income above £1million) have sustained involvement in such work (about 60% of bigger organisations in major urban areas and about 50% of bigger organisations nationally.

As the report concludes:

“Organisations that deliver contracts are the most likely to be struggling to retain staff and recruit others. If wages are poor, because contract values are too low, then staff will not be available to deliver them.  And to compound this problem, those TSOs which previously chose to subsidise contracts using trading income may struggle now to do this in challenging economic circumstances.”

Earned income from self-generated trading

Self-generated trading includes the delivery of services that clients pay for (such as childcare or community cafes), ticketing for events, rent of space or production and sale of goods.

• About 60 per cent of organisations in the Third Sector earn some of their income by delivering contracts or self-generated trading of goods or services.
• The proportion of TSOs which earn more than 80 per cent of their income from trading has fallen since 2013 from 20% to 14%.
• The overall proportion of organisations which trade has not increased. In fact it has fallen very slightly, but steadily, from 68 per cent in 2013 to 66 per cent in 2022.

As the report concludes:

“The Third Sector’s own trading activity has been affected by the pandemic.  Many organisations stopped or reduced trading activity during the worst of the lockdowns. Like private businesses, they were not allowed to open for long periods. And, initially at least, when they reopened fewer customers came.

While Covid-19 may have accelerated change, the pandemic’s effect should not be over-stated nor its impact exaggerated. The proportion of organisations earning income has not increased over the years. In fact it has fallen very slightly and fewer organisations rely very heavily on trading now than in the past. More recently established organisations are less interest in trading than their older counterparts.”

Optimism about future finances

In spite of current difficulties with rising costs of energy and wages, optimism about finances has remained remarkably high.

• 33 per cent of organisations expect that their income will rise over the next two years and 46 per cent think it will stay about the same.
• Only 21 per cent of TSOs think income will fall (and fewer that 5% feel that income will fall substantially).

But as all previous rounds of Third Sector Trends surveys have shown, organisations of all sizes tend to be somewhat ‘over optimistic’ in their projections about future finances.

• In a period of government austerity in 2010, 24% of organisations thought their income would rise, but this only turned out to be 11% of organisations in 2013.
• In 2016, 36% of organisations thought their income would rise in future, but by 2019 only 18% reported that this had happened.
• In 2019, 32% of organisations expected their income would rise. During the pandemic in 2020, optimism collapsed to just 13%. But by 2022, 18% reported that income had risen – the highest level since Third Sector Trends surveys began in 2010.
• When surveyed in 2022, 33% of organisations thought that their income would rise over the next two years. It is too hard to predict what the actual percentage will be.

As Rob Williamson, Chief Executive of the Community Foundation Tyne & Wear and Northumberland, said

“This report shows that the push since 2010 for the future income of the third sector to be based on trading, contracting, social finance and digital fundraising have amounted to very little. We still see the continued  importance of grant funding, indeed the model of social finance has evolved into a blended model relying on a mix of grant funding and social finance…

“The pandemic sped up the modernisation of grant funding through trust-based, less restrictive models increasingly focussed on core funding which is a good thing. As funders we need to continue to work and flex alongside the sector to ensure the best outcomes for our communities.”  

As the report author, Professor Tony Chapman, concludes:

“Sector over-optimism is not a bad thing because it drives enthusiasm and commitment. But when hopes are dashed, it can make people in the sector feel disappointed…

“Economic conditions are precarious. But this is neither a ‘perfect storm’ nor an ‘existential crisis’. The Third sector is more robust than many commentators think. But there will be a mix of winners and losers as social market conditions change…

“When thinking about sustainability, it should be remembered that Third Sector organisations tend to be financially prudent.  More organisations hold reserves in 2019 and that they are ‘holding on tight’ to them rather than investing in new things. And unlike private businesses, very few organisations borrow money which reduces the risk of foreclosure…

“Crucially, organisations have learned over the years how to flex their operations to manage upturns and downturns in their finances because they are so accustomed to high levels of turbulence in their finances. Inevitably, some organisations will have to make redundancies and reduce the level of services they offer…

“So government, local public sector organisations, grant-making trusts and foundations and Third Sector infrastructure agencies need to keep a close eye, as they generally do, on which kinds of organisations may be most at risk. Otherwise, calls for blanket support for all organisations may water down or misdirect the value of such investment from where need is the greatest.”

The report can be downloaded here.

A blog in the implications of the findings can be found here.