Charities must define how they are special, says paper

There is little empirical evidence to demonstrate why the third sector is unique or distinctive, says a new discussion paper from the Third Sector Research Centre (TSRC).

The Centre calls for debate about how we value the sector, but raises caution about attempting to value the sector as a whole, or using a purely financial language to do so.

The paper, part of a series of Third Sector Futures Dialogues, argues that we must move on from broad attempts to value ‘the sector’.

We need to think about the functions and characteristics of different organisations, from service providers to community groups, and how they are special in different ways.

Their discussion paper welcomes moves to measure impact at one level, but notes that monetary systems of measurement, such as Social Return on Investment (SROI), may be limited in what they can measure.

Measuring impact is positive, as it requires evidence rather than assumptions that organisations are effective.

And it is in the interest of organisations to demonstrate a long term return on investment.

But, noted the Third Sector Research Centre, SROIs have tended to focus on services where there is a real or assumed saving to the treasury – such as reducing reoffending, or getting people into work.

The Centre questions whether things like social justice, fairness or belonging can be reduced to a financial concept of social value. They also question whether monetary concepts allow for critical reflections of the problem.

An intervention with a ‘troubled family’ may save money in the long term, but this does not allow for analysis of structural inequalities or discrimination that may have caused that family to be ‘troubled’ in the first place.

TSRC also observed that attempts to place a value on the impact of the sector may also avoid fundamental questions about what it is worth, and to whom – to commissioners and policy makers, to the sector itself, and to users and communities.

Angus McCabe from TSRC said: "Received wisdom, and often experience, tells us that voluntary and community organisations are unique - in their values, their closeness to communities, or their commitment to social justice. But for every ‘truth’ about the sector there is an opposite and potentially equal one, and it is hard to evidence such generalised characteristics.

"So how can we demonstrate the sector’s worth? In financial terms, or in ways that value contributions to social justice and challenges to injustice? Many organisations have focused on survival in hard times. But to remain relevant, organisations need to demonstrate that they have value beyond a monetary one. They need to show that they are special and how."