The modern charity sector is diverse – so how much do you know? Take a look at our quick factsheet below to find out more:
The third sector
Q. What is the ‘third sector’?
A. Organisations can be categorised into three key sectors:
- The public sector or ‘first sector’ includes local and national government bodies, national healthcare providers and education facilities (like your local council, NHS board or high school).
- The private sector or ‘second sector’ includes commercial businesses and industries (like department stores and utility companies).
- The voluntary/charity sector or ‘third sector’ is made up of non-governmental and non-profit organisations, including charities, social enterprises, voluntary and community groups, credit unions, and development trusts. The sector is often also described as the charity sector, voluntary sector, not-for-profit, social enterprise sector, civil society, social economy or NGOs (non-government organisations).
Q. How many third sector organisations are there in Scotland?
A. Over 40,000, made up of registered charities, social enterprises, community interest companies, credit unions and small voluntary community groups and clubs.
Q. How many social enterprises are there in Scotland?
A. 5,200 (3,500 of which are charities). Social enterprises are businesses with primarily social objectives whose profits are typically reinvested in the business or in the community, rather than being driven by profit for shareholders and owners.
Q. How many registered/regulated third sector organisations are there in Scotland?
A. 19,965. Between 2016 and 2018, 1,599 new third sector organisations were established in Scotland – the equivalent of two per day – with an increase in environmental organisations (+15%), health (+17%), equality and rights (+13%), economic and community development (+11%) and culture, arts and sports (+12%).
Q. Who decides if a charity can be registered?
A. The Scottish Charity Regulator OSCR assesses new applications for charitable status against the charity test set by the Scottish Parliament. If the body passes the test OSCR then enter them on to the Scottish Charity Register. Once charities are registered they have to provide OSCR with their annual accounts and information about the way in which they have operated and used their resources during the year.
Q. Are all registered charities national organisations?
A. Far from it – 4 out of 5 Scottish charities are small and local, and 77% have incomes under £100,000 a year. In total, there are 15,488 local, 2,319 national and 2,158 international third sector organisations in Scotland.
Q. How many paid employees does the third sector have?
A. 106,800 (the majority working in the social care sector). This means that 3.4% of Scottish workers are employed in the third sector. Just over a quarter (28%) of Scottish charities employ paid staff, so the vast majority of organisations (72%) have no paid staff.
Q. How many volunteers are there in Scotland?
A. Around 27% of adults in Scotland volunteer. That’s approximately 1.4 million volunteers (more than the population of Estonia, to give an idea).
Q. What is a trustee?
A. Charity Trustees are the people in overall control and management of a charity. They are responsible for the charity’s governance and strategy, and for making sure that the charity is administered effectively. They must account for its activities and outcomes.
Q. How many trustees does the Scottish third sector have?
A. Over 250,000 – 183,000 charity trustees who work together to agree the priorities and direction of their respective charities, and a further 60,000-80,000 trustees support non-charitable voluntary organisations.
Q. How much income does the Scottish third sector generate?
A. In 2017, regulated Scottish third sector organisations generated £5.8 billion in income, which is higher annual turnover than the whisky industry (£3.3 billion) and catching up to the tourism sector (£7.1 billion). Over half of the overall sector income is concentrated in Glasgow and Edinburgh.
Q. Where does the money come from?
A. Two thirds of sector income is earned rather than voluntary, meaning that more charity income is earned through fees for services, trade, sales and corporate sponsorship than donated by the general public or given through grants. Here are five types of charity and their income sources:
- Donor funded charities are the most traditional type of charity and the kind that most people associate the term ‘charity’ with, and rely on donations from the public (i.e. SSPCA, Marie Curie).
- Social enterprises and trading arms receive the majority of their incomed from the sales of goods and services (i.e. community cafes, charity shops).
- Public service providers receive money from local authorities or the Scottish Government in the form of contracts to provide specialist services (i.e. social care, housing associations).
- Small local service providers receive grants from the public sector, national lottery and others (i.e. local projects for children or older people, one-off environmental projects).
- Membership bodies earn their income through membership fees (i.e. sports or hobby groups).
Q. How is the money spent?
A. The third sector now spends £5.6 billion in Scottish communities every year – up £1.5 billion since 2010. Overall, expenditure is spent on four key areas – charitable activities (88%), generating funds (7%), grants (4%) and governance (1%).
*Information correct at date of publication 24 September 2018.