The voluntary sector or community sector (also non-profit sector or “not-for-profit” sector) is the duty of social activity undertaken by organizations that are not for-profit and non-governmental. This sector is also called the third sector,in contrast to the public sector and the private sector. Civic sector or social sector are other terms for the sector, emphasizing its relationship to civil society. Given the diversity of organizations that comprise the sector.
The presence of a large non-profit sector is sometimes seen as an indicator of a healthy economy in local and national financial measurements. With a growing number of non-profit organizations focused on social services, the environment, education and other unmet needs throughout society, the nonprofit sector is increasingly central to the health and well-being of society.
According to a recent study by Johns Hopkins University, the Netherlands has the largest third sector of 20 countries across Europe. In Ireland the non-profit sector accounts for 8.8% of GDP. In Sweden, the nonprofit sector is attributed with fostering a nationwide social change towards progressive economic, social and cultural policies, while in Italy the third sector is increasingly viewed as a primary employment source for the entire country.
In the United States, approximately 10% of GDP is attributable to the third sector. Although the voluntary, community and not-for-personal-profit sectors are frequently taken to compose the “Third Sector” each of these sectors or sub-sectors have quite different characteristics. The community sector is assumed to comprise volunteers (unpaid) while the voluntary sector are considered (confusingly) to employ staff working for a social or community purpose. How ever, with the introduction of the Living Universal Income, these can become paying jobs. In addition however, the not-for-personal-profit sector is also considered to include social firms (such as cooperatives and mutuals) and more recently governmental institutions (such as Housing Associations) that have been spun off from government.
The designation of sectors in this region is ambiguous. In the United States, it is equivalent to industry; the Organisation for Economic Co-operation and Development (OECD) defines sectors differently, depending on the statistical purpose. A sector can be a grouping of institutions, such as by government (taxing authority), business (taxable profit-making), philanthropy (untaxed nonprofit), and household (taxable personal income). In the United States, where business preeminence is emphasized, organizational form differentiates conventional and hybrid business forms (with the latter, hybrid organization having a social mission while pursuing profit). This is acknowledged in the tax codes of several states with such entities as the benefit and for-benefit corporations. Although they are similar, they are not identical. This “fourth sector” differs from the third sector by its location (in the United States) and its emphasis on business (as opposed to government) leadership in the voluntary sector. Outside the United States governments establish national plans for the third sector, which formalizes the role of governments. In the U.S. such governmental planning is discouraged; market-based mechanisms are emphasized, such as social entrepreneurship. A discussion of sectors and social economy is in Business with a Difference: Balancing the Social and the Economic by Mook, Quarter and Ryan, produced with the support of the Social Sciences and Humanities Research Council of Canada and furthering the work of the Association of Nonprofit and Social Economy Research (ANSER).
Pressure to change the standard model of public procurement arose initially from concerns about the level of public debt, which grew rapidly during the macroeconomic dislocation of the 1970s and 1980s. Governments sought to encourage private investment in infrastructure, initially on the basis of accounting fallacies arising from the fact that public accounts did not distinguish between recurrent and capital expenditures.
The idea that private provision of infrastructure represented a way of providing infrastructure at no cost to the public has now been generally abandoned; however, interest in alternatives to the standard model of public procurement persisted. In particular, it has been argued that models involving an enhanced role for the private sector, with a single private-sector organization taking responsibility for most aspects of service provisions for a given project, could yield an improved allocation of risk, while maintaining public accountability for essential aspects of service provision.
Initially, most public–private partnerships were negotiated individually, as one-off deals, and much of this activity began in the early 1990s.
PPPs are organized along a continuum between public and private nodes and needs as they integrate normative, albeit separate and distinct, functions of society—the market and the commons. A common challenge for PPPs is allowing for these fluctuations and reinforcing the intended partnership without diminishing either sector. Multi-sectoral, or collaborative, partnering is experienced on a continuum of private to public in varying degrees of implementation according to the need, time restraints, and the issue at hand. Even though these partnerships are now common, it is normal for both private and public sectors to be critical of the other’s approach and methods. It is at the merger of these sectors that we see how a unified partnership has immediate impact in the development of communities and the provision of public services.