CMPO to research the economic impact of the 'third sector'
9 December 2009
A new research initiative on the economic impact of the 'third sector' (non-governmental voluntary and community groups, social enterprises, charities, cooperatives and mutuals), based in the Centre for Market and Public Organisation (CMPO) at the University, will be launched today.
The third sector is a term used to describe all non-profit-making, non-governmental organisations, including voluntary and community groups, social enterprises, charities, cooperatives and mutuals. The sector is estimated to have a total income of £116 billion and to employ around 500,000 people in 870,000 organisations.
Funding of £800,000 over four years for the initiative will come from the Economic and Social Research Council (ESRC), Office of the Third Sector (OTS) and The Barrow Cadbury Trust and will link to the Third Sector Research Centre based at the University of Birmingham.
The money will fund a range of collaborative projects with third-sector organisations – including PhDs, partnership projects, research placements, MSc internships and an innovative voucher scheme designed to allow not-for-profit organisations to "buy in" academic expertise.
Initial projects are being developed with New Philanthropy Capital, Charities Aid Foundation and South West Forum. A range of new partnerships will be developed over the next four years.
Dr Sarah Smith, who will lead the project, said:
‘There is growing interest in the effectiveness of third-sector organisations, particularly compared to public or private-sector providers. As economists, we have an important contribution to make to the debate – a distinctive framework for analysis and a set of statistical tools for evaluation. We are very excited at working with – and learning from – third-sector organisations in applying this knowledge in practice.’
Martin Brookes, chief executive of New Philanthropy Capital added:
'Charities are increasingly focused on demonstrating their effectiveness and the new Capacity Building Cluster at Bristol will play an important role in helping charities do this. Academics at CMPO have an impressive track record of producing high quality and practically relevant research. I look forward to seeing this work develop.'
CMPO is an ESRC economics research centre with a national and international reputation for its research on public services. Its work on the effect of competition, targets and incentives in education and health has been extremely influential in academic and policy debates – the skills and expertise will now be applied to public-service delivery by third-sector organisations.
Over the summer, researchers in CMPO and the Department of Management looked at management quality in not-for-profit organisations, compared to private firms, conducting detailed interviews with managers of adoption and fostering agencies across the two sectors. The results show no difference in the overall quality of management between not-for-profits and private firms but not-for-profits performed significantly worse than their private-sector counterparts in the area of talent management (recruiting and promoting good people and losing poor performers).
Speaking about the findings, Sarah Smith said:
‘This is the first study to collect systematic information on the quality of management in not-for-profits. Not only does this allow us to compare not-for-profits directly with private-sector organisations but we can begin to understand what affects the quality of management in both the private and not-for-profit sectors.’