ThisprojecthasreceivedfundingfromtheEuropeanCommission’sSeventhFrameworkProgramme(FP7)forresearch,technologicaldevelopmentanddemonstrationundergrantagreementno.613034.

MEASUREMENT WORKING PAPER NO. 13/2016

TheSizeandScopeoftheEuropeanThirdSector

MeasurementcoordinatorLesterM.SalamonAuthorsLesterM.SalamonWojciechSokolowski

Recommendedcitationinformation:Salamon,M.L.&Sokolowski,W(2016)TheSizeandScopeoftheEuropeanThirdSector,TSIWorkingPaperNo.12,SeventhFrameworkProgramme(grantagreement613034),EuropeanUnion.Brussels:ThirdSectorImpact.

MEASUREMENT

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TABLEOFCONTENTS1 Introduction.............................................................................................................2

2 TheContoursoftheThirdSector:TheAggregateView.............................................7

2.1 Anenormouseconomicengine...................................................................................82.1.1 Volunteerengagement....................................................................................................82.1.2 WhatdoestheEuropeanthirdsectordo?.......................................................................92.1.3 Revenuestructure..........................................................................................................102.1.4 Institutionalstructure....................................................................................................112.1.5 Longitudinalchanges......................................................................................................122.1.6 ADiverseSector:RegionalVariations............................................................................13

2.2 Regionalvariationsinthirdsectorsize......................................................................142.2.1 RelativescaleofdifferentTScomponentsamongregions............................................152.2.2 RegionalvariationsinEuropeanTSfunctionsandrevenuepatterns............................16

2.3 ExplainingCross-NationalVariationsinTSDimensions.............................................18

3 Conclusion..............................................................................................................25

Appendix1:MethodologyforestimatingthesizeoftheTSinEurope..........................26

Appendix2:EstimatesofTSFTEworkforceinEUandNorway,2014............................30

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1 IntroductionThepurposeofthispaperistoprovideanestimateofthesizeoftheThirdSectorinEuropeanUnionmembercountriesandNorway.TheconceptualframeworkfordefiningtheThirdSectorhasbeendevelopedbyateamofEuropeanexpertsworkingundertheauspicesoftheThirdSectorImpactProject1,andoutlinedinSalamonandSokolowski(2016)2.

Inanutshell,thisconceptualframeworkdefinestheThirdSectorassetoforganizationalandindividualactivitiesthatmeetthefollowingthreeunderlyingphilosophicalnotionsfrequentlyevokedinEurope(andverylikelybeyondit):

i. Privateness—i.e.formsofindividualorcollectiveactionthatareoutsidethesphereandcontrolofgovernment;

ii. Publicpurpose—i.e.,servingthebroadercommunityandnotprimarilytogeneratingprofitorotherwisecreatingsomethingofvalueprimarilytothepersonsundertakingtheactivitiesorthosepersons’familymembers;and

iii. Freechoice—i.e.,pursuedwithoutcompulsion.

Morespecifically,thisconceptualizationincludesorganizationscharacterizedbythefiveoperationalfeatures;

a) Itisanorganization,thatis,institutionalizedtosomeextent,thoughnotnecessarilylegallyregisteredorconstituted;

b) Ittotallyorsignificantlylimitsthroughsomebindingprovisiondistributinganysurplusgeneratedfromtheiractivitiestoitsdirectors,employees,investors,orothers;

c) Itisself-governing,thatis,itisinstitutionallyseparatefromgovernment,isabletocontrolitsowngeneralpoliciesandtransactionsandhasthecapacitytoownassets,incurliabilities,orengageintransactionsinitsownright;

1Formoreinformationonthisprojectseehttp://thirdsectorimpact.eu/2ForamoredetaileddiscussionofthisconceptualframeworkandtheprocessofitsassemblyseeLesterM.SalamonandS.WojciechSokolowski,BeyondNonprofits:ReconceptualizingtheThirdSector,Voluntas(2016)27:1515–1545.

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d) Itisnon-compulsory,thatis,involvingsomemeaningfuldegreeofuncoercedfreechoiceonthepartofindividualsworkingfor,orparticipatingin,itsactivities;and

e) Private,i.e.,notcontrolledbygovernment.

ThesetofinstitutionalunitsthatembodyallfiveoperationalfeaturesspecifiedaboveconstitutestheorganizationalcomponentoftheTSEsector.Thisincludesmostnonprofitinstitutions(NPIs),aswellascertaincooperatives,mutualsocieties,andsocialenterprises.

Inadditiontoorganizations,theTSEsectorembracesunpaidindividualactivitiesforsocialorpublicbenefit.Thefiveoperationalfeaturesidentifyingtheseactivitiesofthehouseholdsector,drawingonthesetofcriteriaworkedoutanddescribedintheILOManualontheMeasurementofVolunteerWorkinclude:

a) Theyproducebenefitsforothersandnotjust,orchiefly,forthepersonperformingthem.Thetesthereiswhethertheactivitycouldbereplacedbythatofapaidsubstitute;

b) Theyarenotincidentaltootheractivities.Rather,theyarecarriedonforameaningfulperiodoftime,typicallydefinedasanhourinacertainreferenceperiod;

c) Theyareunpaid,thatis,thepersonperformingthemisnotentitledtoanycompensationincashorkind;

d) Theactivityisnotaimedatbenefitingmembersofone’shouseholdorimmediatefamily;and

e) Theactivityisnon-compulsory,whichmeansitinvolvesameaningfulelementofindividualchoice.

Thisconceptualframeworkcoversalluncompensatedeffortsoutsideoforganizationsofanykindthatbenefitgeneralpublic,performedbyindividuals15yearsofageorolder,suchashelpingfriendsorneighbors,workingforthebenefitofcommunities,humanrights,ortheenvironment,exceptuncompensatedinternship,apprenticeship,andsimilartrainingactivitiestoobtainoccupationalskills.

Figure1summarizesthescopeoforganizationalandindividualactivitiescoveredbytheconceptualizationoftheThirdSectoradoptedinthisreport.

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Figure1.ConceptualFrameworkfortheTSESector

ArmedwiththisconceptualizationoftheThirdSectorweareinapositiontoestimateitsdimensionsandcontours.Butwhichdimensionscanprovidethemostrelevantdescriptionofthissector?Conventionaleconomicmeasures,suchasthemonetaryvalueofthesector’scontributiontothenationaleconomy(theso-calledGrossValueAddedorGVA)maynotbethebestmeasurebecauseaverysubstantialpartofthethirdsector’scontributiontoeconomyandsocietyisprovidedatbelowmarketpricesorfreeofchargeandreliesonunpaidvolunteerlabour.Likewise,thenumberorganizations,commonlycitedinpopularaccounts,isalsomisleadingduetovastdifferencesinthesizeoforganizations.Asectorwithafewverylargeorganizationscarriesmoreweightthanonewithmanyverysmallorganizations.Whatismore,existinglistingsoforganizationarenotoriouslyunreliablebecausetheytendnottobeupdatedandfailtopurgedefunctorganizationsinaregularway.

Previousresearch(Salamonet.al.2004)hasidentifiedthefollowingfourdimensionsdescribingtheThirdSectorthatallowustocompareittoothersegmentsofnationaleconomiesandtoitscounterpartsindifferentcountries:

1) ThesizeoftheThirdSectorworkforce,whichprovidesabettermeasureofthelevelofactivitythatthissectoraccountsforthandoestheeconomicvalueofitsoutput.Becausesuchentitiesoftenengagepart-timeworkersaswellasfull-timeones,thisvariablehastobemeasuredinfull-time-equivalentterms,i.e.aperson

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workinghalf-timeforaThirdSectororganizationwouldbecountedasone-halfofaFTEworker.3

3) ThecompositionoftheThirdSector(TS)workforce.Unlikethebusinessorgovernmentsectors,theThirdSectorreliesextensivelyonbothvolunteerandpaidemployment.Therefore,itisimportanttogenerateinformationonbothformsoflabour,andtobeabletodifferentiatebetweenthetwo.Whatismore,itisimportanttomeasurebothvolunteerworkthatischannelledthroughorganizationsandthatprovideddirectlytootherindividuals.ThesubstanceofTSactivities,whichcanbemostconvenientlymeasuredbythesharesoftheTSworkforceindifferentactivityfields.TofacilitatecomparisonbetweenTSactivitiesandthoseoftheothersectors,itisimportanttouseclassificationstructuresthathavebeendevelopedtoportraythecompositionoftheothersectors;and

4) ThecompositionofTSrevenue,whichisrepresentedbyrevenuestreamsfromthreemajorsources:governmentpayments(includinggrants,contracts,andreimbursementsforservicesrenderedtoeligibleparties);incomefrommarketsalesofgoodsandservicesandmembershipbenefitstoprivateparties;andphilanthropicdonationsbyprivateparties.Unfortunately,existinginternationalstatisticalsystems,suchastheSystemofNationalAccounts,obscurethesedifferentrevenuestreamsbytreatinggovernmentgrantsastransfersindistinguishablefromprivatephilanthropyandgovernmentcontractsandvouchersasmarketsalesindistinguishablefromothermarketsales.4Accordingly,greatcaremustbetakentoadjustthedatatoreflectclearlythesethreedistinctsources.

SincetheconceptualframeworkadoptedinthisprojectidentifiesdifferentinstitutionalcomponentsoftheTS,wealsoincludeafifthdimension:

5) TheinstitutionalcompositionoftheTS,includingatleastfourdistinguishablecomponents:NPIs,cooperativesandmutualsocietiesthatarenotNPIs,social

3Sincevolunteersandsomepaidworkersworkpart-timeorepisodically,weconvertedallemploymentdataintofull-timeequivalent(FTE)workers.Thiswasdonebydividingthetotalhoursofpaidorvolunteerworkinagivereferenceyearbythenumberofhoursconsideredtorepresent“full-timework”whichweassumetobeonaverage1,760hours..Thisnumbervariesfromcountrytocountryanditisgenerallylowerinhigh-incomecountriesofWesternEuropethaninmediumincomecountriesofEasternEurope.4Salamon,LesterM.,S.WojciechSokolowski,andAssociates.(2004).GlobalCivilSociety:DimensionsoftheNonprofitSector,VolumeTwo.Bloomfield:KumarianPress.

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enterprisesthatarenotNPIsorcooperatives,anddirectvolunteeractionoutsideorganizations.5

IndevelopingthemeasuresofthesefivedimensionsoftheTSintheEuropeanUnionandNorway,weutilizethefollowingdatasources:

1) Acomprehensivestudyofnonprofitinstitutionsinover40countries,including20Europeancountries,carriedoutundertheauspicesoftheJohnsHopkinsUniversityComparativeNon-ProfitSectorProject(CNP)6;

2) AreportonthesocialeconomyintheEuropeanUnionpreparedbytheInternationalCentreofResearchandInformationonthePublic,SocialandCooperativeEconomy(CIRIEC)7;

3) NonprofitInstitutionSatelliteAccountsandsimilarreportsissuedbythestatisticalagenciesofBelgium,CzechRepublic,Italy,Norway,Poland,PortugalandSweden;

4) TimeUseSurveysandothersurveysinseveralEuropeancountries.8

5Volunteerworkcarriedoutthroughorganizationsisalsoincluded,butitsfull-timeequivalentamountisincludedinthecountofNPIworkers.6ForadescriptionofthisprojectanditsmethodologyseeSalamonetal.2004.7JoséLuisMonzónCamposandRafaelChavesÁvila,THESOCIALECONOMYINTHEEUROPEANUNION,Brussels:EuropeanEconomicandSocialCommittee,2012.8Miranda,V.(2011),"Cooking,CaringandVolunteering:UnpaidWorkAroundtheWorld",OECDSocial,EmploymentandMigrationWorkingPapers,No.116,OECDPublishing.doi:10.1787/5kghrjm8s142-en;ErstelltvomInstitutfürinterdisziplinäreNonprofit-ForschunganderWirtschaftsuniversitätWien(NPO-Institut),FreiwilligesEngagementinÖsterreich,Wien,2009,http://www.bmask.gv.at;GŁÓWNYURZĄDSTATYSTYCZNY,WOLONTARIATWORGANIZACJACHIINNEFORMYPRACYNIEZAROBKOWEJPOZAGOSPODARSTWEMDOMOWYM–2011(VOLUNTEERINGTHROUGHORGANIZATIONSANDOTHERTYPESOFUNPAIDWORKOUTSIDEOWNHOUSEHOLD–2011,Warszawa,2012;Pennerstorfer,A.,Schneider,U.&Badelt,C.in:Simsa,R.,Meyer,M.&Badelt,C.:(Hg.):HandbuchderNonprofit-Organisation.Stuttgart2013(5.überarbeiteteAuflage);oje,T.P.,Fridberg,T.,&Ibsen,B.(2006).DenfrivilligesektoriDanmark.OmfangogbetydningRapport06:19).København:Socialforskningsinstituttet.Retrievedfrom:http://www.sfi.dk/Admin/Public/DWSDownload.aspx?File=%2fFiles%2fFiler%2fSFI%2fPdf%2fRapporter%2f2006%2f0619_Den_frivillige_sektor.pdf;Kaminski,P.(2005).Table1.TheNPSinFrance,2002(versionINSEE).LecomptedesInstitutionsSansButLucratif(ISBL)enFrance(Année2002).Paris:l'InstitutNationaldelaStatistiqueetdesÉtudesÉconomiques(INSEE);Nagy,R.,&Sebestény,I.(2009).TableA10inMethodologicalPracticeandPracticalMethodology:FifteenYearsinNonprofitStatistics(HungarianStatisticalReviewSpecialNumber12).Budapest:HungarianCentralStatisticalOffice.Retrievedfrom:http://www.ksh.hu/statreview;ISTAT.(2014).Nonprofitinstitutionprofilebasedon2011censusresults.Rome:Istitutonazionaledistatistica.Retrievedfrom:http://www.istat.it/en/files/2014/10/Nonprofit-Institution-Profile-based-on-2011-Census-results_EN_definitivo.pdf?title=Nonprofit+institutions+profile+-+9+Oct+2014+-+Full+text.pdf;

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Itmustbenoted,however,thattheestimatesofthesizeandcontoursoftheEuropeanthirdsectorofferedherearenecessarilyhighlypreliminary.Thisissobecausethedataavailableonthekeycomponentsofthissectorremaingrosslyincompleteand,evenwhereavailable,seriouslyoutofdate.AlthoughaspecialHandbookonNonprofitInstitutionsintheSystemofNationalAccountswasissuedbytheUnitedNationsStatisticalDivisionin2003,onlysixEUcountriesplusNorwayhaveseenfittoimplementthisHandbook.Similarly,whiletheStatisticsDepartmentoftheInternationalLabourOrganizationissuedaManualontheMeasurementofVolunteerWorkin2011,onlythreecountriesinEuropehaveimplementedit,leavingusdependentontime-usesurveydatathatcoversonly17ofthe28EUcountriesandNorway.TheJohnsHopkinsComparativeNonprofitSectorProjectgeneratedsoliddataonnonprofitinstitutionsin20ofthe27EUcountries,butthesedatawerecollectedmostlyinthemid-1990sandhavebeenupdatedforonlyahandfulofthecountriessincethen,makingitnecessarytorelyoninevitablyimperfectmethodsfor“aging”thedata.Nosystematicdataexistonsocialenterprisesandthedataavailableoncooperativesmakesitdifficulttodeterminewhatsharemeetthein-scopecriteriaforinclusioninthethirdsectororwhatshareareactuallyrecordedasnonprofitinstitutions.

Fortunately,arevisedversionoftheUNNPIHandbookhasbeendevelopedandisavailableforimplementation.ThisrevisionadherescloselytothedefinitionofthethirdsectorofferedinthisreportandthereforeoffersthehopeofgeneratingmorereliabledataontheEuropeanthirdsectorthaniscurrentlyavailable.ButitremainstobeseenwhetherEuropeanstatisticalandpolicyofficialswillsupportimplementationofthisimportantnewpieceofstatisticalmachinery.

Whilepreliminary,however,thedatapresentedhereofferasolidfirstapproximationofthescaleandcontoursoftheEuropeanthirdsectorbasedonthebestdataavailableandestimatingtechniquesavailable.Foradetaileddescriptionofthesevariousestimatingproceduresused,seeAnnex1.

Topresenttheseestimates,thebalanceofthischapterfallsintothreesections.Inthesectionthatfollows,wereportourestimatesoftheaggregatedimensionsoftheTSin28EUcountriesandNorway.InthesecondsectionweexamineregionalvariationsinthescaleandcompositionoftheTStotheextentpermittedbythedata.Theselatterfindings,inturn,posethepuzzlethatthefinalsectionofthischapterwillseektounravel

2 TheContoursoftheThirdSector:TheAggregateView

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2.1 Anenormouseconomicengine

Perhapsthemajoraggregatefindingthathasemergedfromthedataexaminedhereisthat,contrarytomanypopularassumptions,theEuropeanThirdSectorisanenormouseconomicforce,outdistancingmostmajorindustriesinthescaleofitsworkforce.Takentogether,asof2014,thelatestdataforwhichdataareavailable,theEuropeanthirdsectorengagesanestimated28.3millionfull-timeequivalent(FTE)workers(paidandvolunteer)inthe28EUcountriesandNorway.TheEuropeanTSthusaccountsfornearly13percentoftheEuropeanworkforce.Thisissignificantbecauseanyindustrythataccountsfor5percentoftheemploymentofacountryisconsideredtobeamajorindustry.Whatismore,inthefieldsinwhichtheyoperate,theTSunitsturnouttoaccountforanevenlargeremploymentshare.

Putsomewhatdifferently,withover28millionfull-timeequivalentworkers,theEuropeanthirdsectoristhethirdlargest“employer”inEurope,trailingonlytradeandmanufacturing,butoutdistancingtheconstructionandtransportationindustriesby2:1,andthefinancialservicesindustryby5:1(seeFigure2).

Figure2.SizeoftheTSworkforcevs.employmentinmajorindustries,29Europeancountries,2014

2.1.1 Volunteerengagement AsecondstrikingcharacteristicoftheEuropeanthirdsectorisitsengagementofvolunteersinadditiontopaidemployees.Infact,oftheover28millionfull-time

2.5

6.1

6.6

12.5

13.1

14.4

28.3

30.7

32.0

0 10 20 30 40

Realestate

Financeandinsurance

Informationandcommunication

Accommodationandfood

Transportation

Construction

ThirdSector

Trade

Manufacturing

MillionsofFTEworkers

9

equivalentworkersinthecivilsocietysectorinEurope,55percentarevolunteers(Figure3).

Figure3.CompositionofTSworkforce,29Europeancountries,2014

Putsomewhatdifferently,thethirdsectorinEuropemobilizesavolunteerworkforceofover15.5millionfull-timeequivalentworkers,moreFTEworkersthanareemployedinanymajorEuropeanindustrybuttradeandmanufacturing.Ofthese15.5millionFTEvolunteerworkers,6.5millionworkthroughnonprofitorganizationsandthebalance,roughly9.0millionvolunteerworkers,volunteerdirectlytohelpfriendsandneighbours.Clearly,thisabilitytomobilizeaveritablearmyofvolunteersisanotherpotentmeasureofthereachandpowerofthethirdsector.

2.1.2 WhatdoestheEuropeanthirdsectordo?Notonlyarecivilsocietyorganizationsimportantineconomicterms:theyarealsoimportantsocially,politically,andculturally.Indeed,thirdsectoractorsperformamultitudeofsocialfunctions.Foronething,theyareserviceproviders,deliveringsignificantsharesofsuchservicesashealthcare,education,environmentalprotection,disasterrelief,andeconomicdevelopmentpromotion.Beyondthis,however,theyfunctionaspolicyadvocates,aspromotersofasenseofcommunity,asguardiansofacrucialvalueemphasizingtheimportanceofindividualinitiativeforthecommongood,andasvehiclesforgivingexpressiontoahostofinterestsandvalues—whetherreligious,ethnic,social,cultural,racial,professional,orgender-related(Salamon2014).

TogainsomeinsightintotheactivitiesandfunctionsthattheEuropeanthirdsectorperforms,weclassifiedtheactivitiesofthethirdsectorworkforceintothreemajor

Paidemployees

,45%

Volunteers,

55%

N=28.3millionFTE

10

categories:service,expressiveandotherfunctions.9Theservicefunctionentailsactivitiesineducation,socialservices,healthcare,andhousingandcommunitydevelopment.Directvolunteeraction,whichbydefinitioninvolveshelptootherhouseholds,isconsideredaserviceactivityinthisreport.Theexpressivefunctioncomprisesactivitiesincultureandrecreation,membershiporganizations,includinglabourunions,businessandprofessionalorganizations,environmentalorganizationsandreligiouscongregations.Finally,theotherfunctionincludesactivitiesofcharitablefoundations,internationalorganizationsaswellasactivitiesnotelsewhereclassified.Giventhelimitationsoftheexistingdata,moredetailedclassificationofTSactivitybyindustryisnotpossibleatthistime.AsFigure4shows,weestimatethattheoverwhelmingmajority(75percent)ofTSworkforceactivityisdevotedtotheservicefunctionsofthesector.

Figure4.EuropeanTSworkforceactivity,byfunction,29countries,2014

2.1.3 RevenuestructureTherevenuestructureofthecivilsocietysectordiffersmarkedlyfromwhatmanyobserverstendtobelieve.Whilecharitablegivingattractsthemostpublicandmediaattention,itturnsouttoaccountforarelativelysmallshareofTSrevenue.Thus,asshowninFigure5,takenalltogether,charitablecontributions—fromindividuals,foundations,andcorporations—accountonaverageforabout11percentofoverallTSrevenueinEurope.Bycontrast,privatefeeincome,whichincludesprivatepaymentsforgoodsandservices,membershipdues,andinvestmentincome,accountsforamuchlarger57percentofincomeonaverage.Finally,governmentsupport,whichincludesgrants,contracts,andreimbursementsforservicesrenderedtoeligibleprivateparties

9SeeAnnex1forthemethodologyusedinthisestimation.Giventhelimitationsoftheexistingdata,moredetailedclassificationofTSactivitybyindustryisnotpossibleatthistime.

Service,73%

Expressive,25%

Other,2%

N=28.3millionFTEworkers

11

suchfieldsashealthcareoreducation,makeupthebalanceofabout34percentofTSrevenue.10

Figure5.EuropeanTSrevenuestructure,29countries,2014

2.1.4 InstitutionalstructureThefinaldimensionoftheEuropeanTSthatdeservesattentionisitsinstitutionalstructure.Thisincludestwocomponents:first,anorganizationalcomponentmadeupofNPIs,cooperativesandmutualsocieties,andsocialenterprises;andsecond,adirectactioncomponentmadeupofvolunteeractivitiesnotmediatedbyorganizations.

Duetodatalimitations,itisnotpossibletoestimatethesizeofthesocialenterprisesthatarenotNPIs.Basedontheavailableinformation,however,itisreasonabletoassumethatmostsocialenterprisesinEuropeareeitherNPIsorcooperatives,sotheabsenceofdataonthenon-NPIsocialenterprisecomponentshouldnotalterourpictureverysubstantially.

Similarproblemsrelatetothecooperativesthataresubjecttoafullnon-distributionofprofitconstraintandthusareconsideredtobeNPIs.BasedondataavailableinatleastoneEuropeancountry—France—weestimatethat9percentofthetotalrecorded10Theseestimatesdonotincludeanypaymentsfordirectvolunteeraction,whichifany,weassumetobeinsignificant.Wefurthermoreassumethatallincomeofcooperativesandmutualsocietiescomesfrommarketactivities,andthusisconsideredtobefeeincome.Unfortunately,thedatadonotpermitustoestimatethemonetaryvaluesoftheserevenuestreamsatthistime.FormoreinformationaboutthisestimationmethodologyseeAnnex1.

Privatefeesandsales,57%

Government,34%

Privatephilanthropy,

8%

Excludingdirectvolunteeraction

12

employmentincooperativesandmutualsreportedintheoneexistingestimateofEuropeancooperativeemploymentisactuallyworkingincooperativesthatarealsoNPIs.Wehavethereforeaddedthistoourestimateofthein-scopecooperativeandmutualemploymentoutsideofNPIsandadjustedtheemploymentinNPIsaccordingly.Figure6showsthedistributionoftheTSworkforceamongthesethreeresultingcomponents:directvolunteeringandthetworemaininginstitutionalcomponents,NPIs(excludingthosethatarecooperatives),andcooperativesandmutuals(includingthosethatarealsoNPIs).

Figure6.InstitutionalstructureoftheEuropeanTS,29countries,2014

ItisclearthatNPIsstillengagethemajority(58percent)oftheTSworkforce,andabout88percentoftheorganizationalcomponentoftheTS.OfthisNPIworkforce,however,60percentismadeupofvolunteers.Bycontrast,cooperativesandmutualsocietiesaccountforamuchsmaller10percentoftheTSworkforceevenafterincludingthecooperativesoperatingasNPIs.

ThefinalcomponentoftheTSsector—directvolunteeraction—accountsforasignificant32percentoftheTSworkforce,andifthevolunteersoperatingthroughnonprofitorganizationswereincluded,theoverallvolunteershareoftotalTSfull-timeequivalentemploymentwouldstandat55percent.

2.1.5 LongitudinalchangesOnefinalnotabledimensionofTSEactivityhasbeenitsrecentdynamism.AlthoughwehavelongitudinaldataonlyononeTSEinstitutionalcomponent,thenonprofitinstitutions(NPIs),theselimiteddatashowstheTSEsectorhasrecentlybeeninthemidstofsignificantgrowthinanumberofcountries--growingataratethatexceedsthegrowthof

NPIs,*58%

Coopsandmutuals,10%

Directaction,32%

*Excludingcooperatives

13

overallemploymentintheeconomy.Thus,paidemploymentintheNPIsectorgrewatanannualaveragerateof3.4percentinthe12EUcountriesonwhichcomparativetime-seriesdataareavailable(Figure7).Bycomparison,asshowninFigurex,totalemploymentinthese12countriesgrewatanannualrateofonly0.6percent.

Figure7.Averageannualchangeinemploymentinselectedcountries,NPIsvs.Totaleconomy

Moreover,NPIemploymentgrowthoutdistancedtotalemploymentgrowthinallbutonecountry(Denmark).AparticularlydramaticdifferencetookplaceinSpain,wheretheNPIemploymentwasgrowingattheannualrateof6.6percentbetween2008and2013,whiletotalemploymentshrunkby3.5percentperyearinthesametimeperiod.

2.1.6 ADiverseSector:RegionalVariationsImportantthoughtheseaggregatefeaturesoftheTSare,however,theycanbemisleading.Asoneoldjokeputsit:evenastatisticiancaneasilydrowninacreekthatisonaverage5inchesdeep.Behindtheaveragesoftenliesomesignificantcross-nationalandregionalvariations.AndthatiscertainlytrueoftheEuropeanthirdsector.

Tomakesenseofthesevariations,itisusefultoexaminethemattheregionallevel.Forthispurpose,wehavedividedtheEUcountriesintofourregionalgroupings,whichwetermNorthernEurope,SouthernEurope,Scandinavia,andCentralandEasternEurope.Table1belowdepictsthebreakdownofEuropeancountriesamongthesefourregionalclusters.Tobesure,significantvariationsexistwithintheseregionalgroupings,andeven

3.6%3.3%

4.1%-0.3%

1.7%6.6%

4.9%2.6%2.4%2.2%

6.6%2.6%

3.4%

1.4%1.6%

0.7%0.6%0.7%0.5%0.8%

2.3%0.2%0.6%

-3.5%1.3%

0.6%

-4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0%

Austria(2005-2010)Belgium(2004-2010)

CzechRepublicDenmark(2003-2013)France(2002-2013)

Hungary(2003-2006)Italy(2001-2011)

Norway(2004-2013)Poland(1997-2012)

Portugal(2002-2010)Spain(2008-2013)

Sweden(2000-2013)12-ctryaverage

Avg.annualchange

Totalecon.

NPI

14

withinparticularcountries,butourdatadonotatthisstagepermitustogobelowtheregionallevel.

Table1:RegionalgroupingofEUcountriesplusNorway

NorthernEurope

Austria IrelandBelgium LuxembourgFrance NetherlandsGermany UnitedKingdom

SouthernEurope

Cyprus MaltaGreece PortugalItaly Spain

Scandinavia

Denmark NorwayFinland Sweden

CentralandEasternEurope

Bulgaria LithuaniaCroatia PolandCzechRepublic RomaniaEstonia SlovakiaHungary SloveniaLatvia

2.2 Regionalvariationsinthirdsectorsize

AusefulstartingpointforthisdiscussionofregionalvariationsinthecontoursoftheTSiswiththesector’sbasicscale.Countriesdiffer,ofcourseinthesizeoftheirpopulation,soitisnaturalthatlargercountrieswillhavelargerTSworkforcesthansmallerones.Todrawvalidcomparisons,therefore,somewaymustbefoundtocontrolforthesizeofthecountry’spopulations.WedothisbyfocusingonthesharethattheTSworkforcerepresentsofthetotalnumberofpeopleemployedineachregion.AsFigure8shows,

15

thatsharevariesfromahighof14.9percentintheScandinaviancountriestolowof9.4%inCentralandEasternEurope.11

Figure8.EuropeanTSworkforceasapercentoftotalemployment,byregion,2014

2.2.1 RelativescaleofdifferentTScomponentsamongregionsTheseoveralldisparitiesintherelativesizeofthethirdsectoramongregionsareovershadowed,moreoverbythemuchlargerdisparitiesinthecompositionofthethirdsectorinthedifferentregionsofthiscontinent.Whatbecomesclearisthatthethirdsectorisfarfrombeingthesameexactphenomenoninthedifferentpartsofthiscontinent,apointthatpolicy-makersandstudentsofthefieldmustacknowledge.Thus,inCentralandEasternEurope,70percentofthirdsectoremploymenttakestheformofdirectvolunteering(Figure9).Bycontrast,employmentinNPIs—bothpaidandvolunteer—accountsforamuchsmaller23.7percent.ThiscontrastssharplywithNorthernEurope,where73percentoftheTSemploymentisinNPIs,muchofitinpaidpositions,whileemploymentincoopsaccountsforunder6percentanddirectvolunteeringarelativelysmall21.5percent.Thistestifiestothestill-embryonicnatureofthemoreformalthirdsectorinstitutionsintheformerlySoviet-dominatedterritoriesandtheirmuchmorerobustdevelopmentinthecontinent’sadvancedNortherntier.SouthernEuropeisdifferentagain,withanexceptionallyhigh14.5percentofTSemploymentincooperatives,asimilarlyquitehigh33percentindirectvolunteering,andacorrespondinglylow52.5percentofemploymentinNPIs.

11SeeAnnex2forthevaluesforindividualcountries.

9.4%

14.9%

13.2%

13.8%

12.9%

0% 2% 4% 6% 8% 10% 12% 14% 16%

CentralandEasternEurope

Scandinavia

SouthernEurope

NorthernEurope

29countries

TSpercentoftotalemployment

16

Figure9.InstitutionalcompositionofEUTS,byregion,2014

2.2.2 RegionalvariationsinEuropeanTSfunctionsandrevenuepatternsOtherdimensionsoftheTS—thescopeofactivitybyfieldandtherevenuestructure—alsoshowconsiderableregionaldifferences.Duetodataavailabilitylimitations,wecanonlyexaminethesevariationsonamuchsmallersetofEuropeancountriesandinstitutions—i.e.onlyfortheNPIcomponentsoftheTSandonlyforthe20countriescoveredbytheJohnsHopkinsComparativeNonprofitSectorProject.AsFigure10shows,thedistributionofserviceandexpressiveactivitiesofNPIsisverydifferentintheScandinaviancountries,where57percentofnonprofitFTEemploymentisdevotedtoexpressivefunctionsandonly40percenttoserviceones,thanitisinNorthernandSouthernEurope,wheretheseproportionsarereversed,withover60percentofTSeffortdevotedtoserviceprovisionandamuchsmaller31to35percentdevotedtoexpressivefunctions.ThisreflectsthemuchgreaterrelianceongovernmentforserviceprovisionintheScandinavianlandsandthelong-standingtraditionofnonprofitinvolvementinadvocacyandsportactivities.

21.9%

59.5%

48.4%

71.2%

58.1%

8.1%

13.2%

18.6%

7.3%

10.3%

70.0%

27.3%

33.0%

21.5%

31.6%

0% 20% 40% 60% 80% 100%

CentralandEasternEurope

Scandinavia

SouthernEurope

NorthernEurope

29countries

Percentoftotal

NPIs* Cooperatives Directvolunteering

*Excludingcooperatives

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Figure10.NPIworkforce,byfunction,20EUcountries

SimilardisparitiescharcterizetherevenuestructureofNPIsacrossEuropeasshowninFigure11.ThusfeeincomeisthedominatrevenuesourceforTSentitiesintheSandinaviancountries,accountingfor57percentofNPIrevenue,wherasgovernmentisthedominantsourceinNorthernEuropeoutsideofScandinavia,withasimilar57percentofrevenuecomingfromthisalternativesourceinthisregion.Lackingbothsubstantialgovernmentandfeeincome,NPIsinCentralandEasternEuroperelydisproportionalyonphilanthropy,whichaccountsfor19percentofNPIincome,twicethesharethatitprovidestothemuchlargerNPIsectorsinScandinavia,andNorthernEurope.

Figure11.NPIrevenuestructure,20EUcountries

53%

40%

61%

62%

55%

44%

57%

35%

31%

41%

4%

3%

4%

7%

4%

0% 20% 40% 60% 80% 100%

CentralandEasternEurope

Scandinavia

NorthernEurope

SouthernEurope

20countries

PercentofNPIworkforce

Service Expressive Other

39%

57%

53%

35%

43%

42%

35%

36%

57%

46%

19%

8%

11%

8%

11%

0% 20% 40% 60% 80% 100%

CentralandEasternEurope

Scandinavia

SouthernEurope

NorthernEurope

20countries

PercentofNPIrevenue

Fees Government Philanthropy

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Asthissectionhasshown,behindtheaggregatepictureoftheEuropeanthirdsectorliesomeenormouscross-regionalvariations.Whatismore,thesevariationsapplytoeachofthedimensionsoftheTSthatwehavebeenabletoexamine,andofteninapparentlyconfusingways.Whathascausedthesevariations?Isitpossiblethatthesevariationsholdthekeytoexplainingwhatitisthatdeterminesthesize,shape,functions,andfinancingoftheTSsectoracrossEurope?Itistothisintriguingsetofquestionsthatweturninthenextsection.

2.3 ExplainingCross-NationalVariationsinTSDimensions

Cross-nationaldimensionsindifferentmanifestationsofTSactivitieshavenot,ofcourse,totallyescapedpublicscrutiny.Publicofficials,journalists,foundationofficers,civilsocietyactivistsandvolunteershavelonghadhunchesaboutdifferentlevelsandmanifestationsofthirdsectoractivitiesamongcountriesandregions,eventhoughtheyhavelackedsolidempiricalverification.Yet,thepopularexplanationsofthesedifferencesareatbestunconvincingandoftenmisleading.

Perhapsthemostpopularexplanationlinksthesecross-countrydifferencesinthemanifestationsofTSactivitiestodifferentculturalvaluesandsentiments.Thekeyelementofthislineofargumentisthatsocialinstitutionssuchascivilsocietyorganizationsresultfromthedevelopmentofcertainvalues,attitudes,andnormsofbehaviour,manyofwhicharesupposedlyrootedinreligiousconvictionsandteachings.Societiesthatespousenormsandvaluesfavourableforcharity,self-governance,oraltruismwillhavestrongernonprofitandphilanthropicsectorsthansocietiesinwhichsuchimpulsesareweaker.

Variantsofthisargumentcanbefoundintheacademicliteratureaswell.ForexampleBanfieldattributedthebackwardnessofsouthernItalytoaprevalent,butdysfunctional,moralcodethathetermed“amoralfamilism”thatimpededcooperationamongfamiliesorclansandthusthegrowthofassociationalties.Fukuyamaproposedasimilarculturalexplanationofthesourcesofcivilsociety,emphasizingtheculturalvalueof“trust.”Societiesexhibitinghighlevelsoftrustcreateself-governingassociationsinbothbusinessandsociallife,whereaslow-trustingsocietiesrelyonfamilialtieswhilethemanagementofpublicaffairsiscarriedoutbyacentralizedauthority(thestate).“Athrivingcivilsociety,”Fukuyamathereforeexplains,“dependsonapeople’shabits,customs,andethics—attributesthatcanbeshapedonlyindirectlythroughconsciouspoliticalaction

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andmustotherwisebenourishedthroughanincreasedawarenessandrespectforculture.12

Anotherlineofargument,developedbyAmericaneconomistsandpopularizedbythespreadoftheneoliberalideologyduringthepastthirtyyears,attributesthesedifferencestothedegreeofheterogeneityofdemandforpublicgoods.Accordingtothistheory,theinabilityofthemarkettosupplythelevelofcollectivegoodsthatcitizensdemandnecessitatesthatsuchgoodsarepaidbypublicfundingratherthanthroughordinarymarkettransactions.However,whenthedemandforpublicgoodsisdiversifiedduetodifferentpreferencesofdifferentsocio-demographicgroups,itisdifficulttoobtainthelevelofpoliticalconsensusneededtosecuresufficientpublicfundingforsuchgoods.Thissetofcircumstancesleadstothegrowthofthenonprofitsectortosupplythecollectivegoodsthatneitherthemarketnorthestatecanprovide.Accordingtothistheory,thelowerthelevelofheterogeneityinapopulation,thehigherthelevelofgovernmentprovisionofpublicwelfareservices,andthereforethelowerthelevelofTSdevelopmentneededtoprovidethe“collectivegoods”thatcitizensdemand.Inotherwords,thethirdsectorshouldbelessprominentwheregovernmentspendingislowest,andviceversa.13

Neitherofthesetheoriesisveryconsistentwiththefindingsreportedhere,however.Sofarastheculturaltheories,Europe,andespeciallytheEuropeanUnioncountries,showaremarkabledegreeofculturalsimilaritybyglobalstandards.Allthesecountriessharevirtuallyidenticalculturalandreligiousroots–theGreco-RomancivilizationandChristianity.VirtuallyeveryEuropeancountry’scultureemphasizestheimportanceofsocialsolidarity,altruism,helpingothers,civicvirtues,andengagementinpublicaffairs.Clearly,afactorthatissoubiquitouscanhardlybecountedontoexplaintheenormousvariationsthatexistinthemanifestationsoftheTSinEurope.Indeed,countrieswithverysimilarreligioustraditions,suchasItaly,IrelandandPoland,allpredominantlyCatholicnations,haveverydifferentlevelsofTSactivities,especiallytheirorganizationalcomponent.PortugalandSpainsharenotonlythesamereligionbutalsothesameculturaltradition,yetdiffermarkedlyintheirTSmanifestations.

12EdwardBanfield.(1958).TheMoralBasisofaBackwardSociety.NewYork:FreePress.FrancisFukuyama.(1995).Trust:TheSocialVirtuesandtheCreationofProsperity.NewYork:TheFreePress.13BurtonWeisbrod.(1977).TheVoluntaryIndependentSector.Lexington:LexingtonBooks;HenryHansmann.(1987).“EconomicTheoriesofNonprofitOrganizations.”InWalterW.Powell(ed.),TheNonprofitSector:AResearchHandbook,pp.27-42.NewHaven:YaleUniversityPress.

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This,ofcoursedoesnotmeanthatculturalnorms,valuesandideologiesdonotplayanyroleintheTSEsectordevelopment,butthattherelationshipbetweentheideologicalinfluencesandTSEisfarmorecomplexthantheculturalsentimentstheoriesclaim.Ontheonehand,thenormsandvaluescanconstrainevenpowerfulsocialinterests.Atthesametime,whetherparticularvaluesornormsgainsupportorlegitimacycanbeinfluencedbytheirconsistencywithgroupinterests.MaxWeberrecognizedthislatterpointinhisconceptof“electiveaffinity,”thetendencyofsocialactorstoleantowardculturalnormsandvaluesthatalignwiththeirpredispositionsandgroupinterests([1904-05]1958,seealsoHowe,1978).Thus,accordingtoWeber,Protestantreligiousdoctrinesemergingin15thand16thcenturyEuropegainedgroundinimportantpartbecausetheyweremorealignedwiththeeconomicinterestsofwealthymerchantsthanthetraditionalCatholicteachingrenouncingworldlypossessions.

Thissuggeststhatratherthanbeingtreatedasgeneralinfluenceswithoutobservablecausallinkstoparticularsocialgroupingsorspecificinstitutionaloutcomes,theculturalandideologicalinfluencesmustbelinkedtopowerandactionsofspecificsocialactors.Forexample,thelong-standingCatholicdoctrineofsubsidiarity,holdingthatsocialissuesoughttobeaddressedbythesocialunitclosesttothefamily,including,ofcourse,theparish,providedaconvenienttemplateforconservativeelementstouseinresistingworkerpressuresforexpandedstate-providedsocialwelfareprotectionsin19thcenturyGermanybychannellingsuchprotectionsthroughpolitically“safe”,religiouslyaffiliated,nonprofitorganizations.Henceasitwillbeexplainedinmoredetaillaterinthischapter,thiscreatedapatternofTSEdevelopmentthatweterm“welfarepartnership.”

Withregardtotheeconomictheorieslinkingtheriseofthethirdsectortoacombinationofmarketfailureandgovernmentfailurethatconstrainsgovernmentsocialwelfarespending,theevidencepresentedhereroundlyrefutesthem.Indeed,farfrombeingmorelimited,theEuropeanthirdsectorismuchlargerandmorerobustinpreciselythoseregions—NorthernEuropeandScandinavia—wheregovernmentsocialwelfarespendingishigher.Thisrefutesboththesemarketfailure/governmentfailuretheoriesandthecommonperceptionthatWesternEuropeancountrieshavebuilt“welfarestates.”Infact,whattheyhavebuiltare“welfarepartnerships”inwhichgovernmentshaveturnedmassivelytononprofitorganizationstodeliverystate-fundedsocialwelfareservices.Thishasbeenpossiblebecause,unliketheUS,EuropeancountrieshavedevelopedwhatLijphartterms“consensusdemocracy,”whichdiffersfromthewinner-take-allimageembodiedinthegovernment-failuretheorybymakingprovisionforproportional

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representationofminorityinterests.14Thismakesitpossibletobuildconsensusesamongvariousinterestgroupsandtherebygeneratesupportforamuchbroaderarrayofpublicgoodsthanthehypothesized“medianvoter”mightwantandeliminatesthebinary“either-or”choicebetweengovernmentorthirdsectorprovisionbydesigningcooperativearrangementsthatengageboth.Thismayexplainwhytheinverserelationbetweengovernmentsocialwelfarespendingandthesizeofthecivilsocietysectorpredictedbytheeconomictheoriestheoryturnsouttobesopowerfullyrefutedbytheavailablecross-nationaldata.

HowthenarewetoaccountforthesignificantdifferencesinTSsizeandcontoursamongthedifferentEuropeanregions?OnecluetotheanswertothisquestioncanbefoundinRobertPutnam’sinfluentialstudyofthesignificantvariationsintheeffectivenessofregionalgovernmentsinNorthandSouthofItaly.AlthoughPutnamnotesthedifferencesinculturalsentimentsbetweenNorthandSouthasacrucialfactor,heultimatelytracksthesedifferencestodifferenthistoricaldevelopmentexperiencesshapedbydifferentpoliticalpowerrelationsinthesedifferentregions.15AlthoughPutnamdoesnotdevelopthisargumentfurther,hisanalysissupportsamoregeneralexplanationofthedevelopingpatternsofTSdevelopmentthatthetwoauthorsofthischapterhavetermedthe“socialorigins”theoryofthirdsectordevelopment.16

Thistheorylinksthedevelopmentofthethirdsectortodifferentconfigurationsofpowerrelationsamongkeysocialactors,suchassocio-economicclassesandtheirorganizations,aswellkeysocialinstitutions,suchasgovernment,politicalparties,andorganizedreligion,incountriesduringtheperiodofindustrializationandmodernization.Thus,forexample,incountrieswhereindustrialandcommercialmiddleclasselementswereabletodiffusetheinfluenceofconservativelandedelitesandconsolidatetheirownpoliticalandeconomicpowerduringtheperiodofindustrialization,theywereabletoimposenationalpoliciesfavourabletotheireconomicinterestsinlimitedgovernmentinvolvementineconomicandsocialaffairs,andrelianceonmarketsandprivateinitiativeinaddressingthesocialproblemsresultingfromindustrialization.Theconsequencewastheemergenceofa“Liberalpattern”ofcivilsocietydevelopment,characterizedbya

14Lijphart,Arendt.(1999).PatternsofDemocracy:GovernmentFormsandPerformanceinThirtySixCountries.NewHaven:YaleUniversityPress.15RobertPutnam.(1993).MakingDemocracyWork:CivicTraditionsinModernItaly.Princeton:PrincetonUniversityPress16LesterM.Salamon,S.WojciechSokolowski,MeganA.Haddock,andAssociates,SocialOriginsofCivilSociety:ExplainingCivilSocietyDevelopment,Baltimore,JohnsHopkinsUniversityPress,forthcoming2017

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fairlysubstantialTSinstitutions,but,mostlydependentonprivatecharityfortheirsupport.InEurope,thispatternismostvisibleintheUnitedKingdomandSwitzerland.

Incountrieswhereindustrializationandthepartialliberalizationofsocialrelationsledtothesubstantialgrowthofaworkingclassandoforganizationsrepresentingitsinterests,butnottothepointofdisplacingthedominantpositionoflandedand/orindustrialorcommercialelites,adecidedlydifferentpatternemergedcharacterizedbygreaterstate-sponsoredsocialwelfareprotections—butchannelledthroughpolitically“safe,”religiouslyaffiliated,privatevoluntaryorganizations.SuchsolutionwasfavouredbytheCatholicChurch,whichdevelopedthedoctrineofsubsidiarity,holdingthatsocialissuesoughttobeaddressedbythesocialunitclosesttothefamily,including,theparishandChurch-affiliatedsocialwelfareassociations.Thisproduceda“WelfarePartnershipPattern”ofcivilsocietysectordevelopment,mostlyfocusedonserviceactivitiesinsteadofprotestandadvocacy,heavilysubsidizedbythestate,butsafelyheldincheckbyconservativereligiousorotherinstitutions.ThispatternwasmostpronouncedintheNorth-WesternEuropecountries,especiallyinGermany,IrelandandtheNetherlands,wheretheCatholicChurchwasrelativelypowerful,butsubsequentlyadoptedbyothercountriesnowmakinguptheEU.

Yetanotherpatternemergedwherethepowerofbothurbanandruraleliteshadbeenweakened,andwhereworkingclasselementscombinedwithurbanprofessionalswereabletoexertsubstantialinfluenceonemergingsocialwelfareprovision.Theupshotherewasasocial-democraticpatternwheresocialwelfareservicesaretreatedasa“right”ofallcitizens—notagiftbestowedbycharitableinstitutions—andaredelivereddirectlybygovernmentalinstitutionssubjecttopopularcontrolbycitizens.InEurope,thispatternemergedintheScandinaviancountriesandAustria.

Anotherconstellationofsocialclassandsocialactorpowerariseswherepre-modernlandedelementsretainpowerintothemoderneraandprolongeconomicstagnationthatthreatensthecountry’ssovereignty.Tocounteractthisthreat,militaryleaders,seniorcivilservants,urbanprofessionals,ormodernizingelitesstagearevolutionarytakeoverofstateinstitutionsinordertopushthroughprogramsofrapidindustrializationandmodernization.Tokeeppopularforcesatbayandmakeitpossibletochannelwhateversurplusisproducedintomodernizationratherthanconsumption,suchmodernizingelitesoftenfinditnecessarytolimitpersonalfreedomsandparticularlyrestrictthegrowthofcivilsocietyorganizationsthatcouldchallengegovernmentaldominanceanddisrupttherapidmodernizationagendathroughdemandsforgreaterpoliticalvoiceandbetterlivingstandards.Thisresultsina“StatistPattern”ofthirdsectordevelopmentcharacterizedby

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afairlysmallscaleofcivicinstitutionsoperatinginanarrowrangeoffieldsdeemedcriticalfornationaldevelopment.OneconsequenceofthisconstraintontheTSorganizationaldevelopmentisashiftingofthevoluntaryself-helpactivitiesfromtheorganizationaltotheinformalsocialsphere.InEurope,thispatternfirstemergedinRussia,Turkey,SpainandPortugal,butaftertheWorldWarIIwasforciblyexportedtoCentralandEasternEuropecountriesonthebayonetsoftheRedArmy.

ThissocialoriginstheorythusdoesabetterjobofexplainingtheregionalvariationsintheTSdimensionsinEuropethandothealternativetheories.FirstitexplainswhythesizeoftheorganizationalcomponentoftheTSinEasternEuropeancountriesismarkedlysmallerthanthatelsewhereinEurope,whilethesizeofdirectvoluntaryactionismarkedlylarger(Fig.7).Untilthe1990s,theCentralandEasternEuropeancountriesremainedtiedtothestatistpatternunderwhichtheorganizationalcomponentoftheTSremainedfirmlyinstrictstatecontrol.Asthelegitimacyofthepoliticalregimewaned,sodidthelegitimacyofthesestatecontrolledcivicorganizations.Asaconsequence,virtuallyallspontaneouscivicactivitieswereconductedintheinformalsphereofneighbourlyself-helpactivitiesandunorganizedsocialmovements.Althoughtheeconomicandpoliticalreformsofthe1990sandthesubsequentEUaccessiondramaticallychangedtheenvironmentinwhichcivicorganizationsoperate,thenormsofsocialbehaviourthatfavourdirectvolunteeractionoverparticipationinorganizedcivicactionstilllinger.

AsimilarprocesstookplaceintheMediterraneancountries,manyofwhichfellunderthestatistregimeduringmodernization.However,unlikeinCentralandEasternEurope,thestatistregimesintheMediterraneancountriesweredemocratizedmuchearlier,in1945inItalyandintheearly1970sinSpainandPortugal.AlsothesecountriesjoinedtheEUmuchearlierthantheirEasternEuropeancounterparts.Consequently,theyenjoyedthebenefitsofasupportiveenvironmentforcivicorganizationaldevelopmentforaconsiderablylongerperiodthantheCEEcountries.

ThesocialoriginstheoryalsohelpsusunderstandtheotherwisepuzzlingdominanceofexpressiveoverserviceactivitiesinthethirdsectoroftheScandinaviancountries(Fig.8).SincethesecountriessharemanysimilaritieswithotherEuropeancountries,thisdifferencecannotbeeasilyexplainedbythesupposedpeculiaritiesoftheScandinaviancultureorScandinavianconsumerpreferences.ThesocialoriginstheoryaccountsforthisdifferencebypostulatingtwodifferentpatternsofcivilsocietydevelopmentinthesepartsofEurope.TheNorth-WesternpartsofEuropedevelopedthewelfarepartnershippatterninwhichprivate,oftenreligiouslyaffiliatedorganizations,arejuniorpartnersof

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governmentsindeliveringpublicwelfareservices,butthestrongpositionoftheworkingclassandruralelementsintheScandinaviancountriesledtoasocialdemocraticregimeinwhichpublicwelfareservicesweredeliveredpredominantlybythestate.Relievedofthisserviceburden,TSorganizationscouldfocustheireffortsonexpressiveactivities,suchassports,culture,orcivicactivism.

ThesocialoriginstheoryalsoexplainswhythegovernmentshareofnonprofitrevenueisconsiderablyhigherinNorthernEuropethanelsewhereinEurope(Fig.9).North-WesternEurope,especiallyGermanyandtheNetherlands,pioneeredthepoliciesofharnessingcivicorganizationsintotheprovisionofpubliclyfundedservices.Althoughtheoriginalimpulsesbehindthesepoliciesweretocounteracttheradicalizationoftheworkingclass,theyprovedtobeaveryeffectivemechanismofpublicservicedeliverythatcombinesthesecurityofpublicfundingwiththeresponsivenessofrelativelysmallandnon-bureaucraticcivicorganizations.Asaresult,thewelfarepartnershippatterncontinuedtodevelopevenaftertheoriginalmotivationbehinditlostitsrelevance.

Tosummarize,thesocialoriginstheoryofthirdsectordevelopmentthuscarriesusconsiderablyfardowntheroadtowardexplainingthediversesize,shape,functions,andsupportstructureoftheTSinEurope,anddoessoconsiderablybetterthanthealternativeexplanationsthathavebeendeployeduptonow.WhattheanalysishereshowsisthatwhiletheTSmaybeaconduitforaltruisticsentimentsandpersonalpreferences,thesizeofthesectorandtheshapethatittakesdependheavilyonthebroaderstructuresofpowerrelationshipsinsociety.Restoringconsiderationsofpowertothecentreofanalysisofthethirdsectorthusemergesasacentralimperativeifwearetounderstandthepaththatcivilsocietydevelopmenttakes.

ThisanalysisalsosuggestsasignificantconnectionbetweenthegrowthoftheTSandthestrengthoflabourmovementsandtheirpoliticalextensions.Thisconnectionisoftenmissedinpublicperception,as“civilsociety”and“organizedlabour”areoftenseenastwoseparatesocialinstitutionspursuingwhollydisparate,ifnotmutuallyantagonistic,goals.Butthecontributionofthelabourmovementtothedevelopmentofthecivilsocietysectorissignificantandtakestwodifferentforms.Inthefirstplace,organizedlabourhascreatedawidearrayofself-helpgroupsandclubsservingtheneedsoftheworkingclass.Andsecond,organizedlabour’sdemandshaveoftenleveragedgovernmentpoliciesthatcreatefavourableconditionsforgeneralcivilsocietysectorgrowth.

Thesocialoriginstheorycannotonlyexplainexistingdevelopments,butalsohelp

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forecastthefuture.Thiscanoffervaluableinsightsintopossibleoutcomesinrapidlychangingpartsoftheworld.Anditcanofferusefulinsightsforthedesignofpublicpoliciesfacilitativeofrobustthirdsectordevelopment.Butforthesetopics,itisnecessarytoturntosubsequentportionsofthisreport.

3 ConclusionThefollowingfiveconclusionsthusemergefromthisinitialoverviewofthesizeandcontoursoftheThirdSectorinEUmembercountries:

1.Inthefirstplace,itispossibletoformulateacoherent,systematic,andoperationalcross-nationaldefinitionofthissectorthatcanbeutilizedtoassembleempiricaldescriptionofthissector.

2.Despitelimitationsintheavailabledatasystems,itispossibletocompileacross-nationallycomparablequantitativedataonthebasicdimensionsoftheThirdSector.

3.AninitialefforttogeneratesuchdatarevealsaThirdsectorthatisfarmorewidelydispersedandfarlargerthancommonlyrecognized,rankingasoneofthelargestemployersandcontributorstoeconomiclifeofallmajorindustries,andprovidingaswellvehiclesfortheexpressionofahostofvaluesandintereststhataddenormouslytothequalityofnationallife.

4.Althoughthissectorisquitewidespreadandextensiveintheaggregate,italsoexhibitsenormousvariationsfromcountrytocountry.Thesevariationsgowellbeyondthesimpledimensionsofsizeandeconomicimpactandencompassfunctionstheseinstitutionsperform,andhowtheysupportthemselves.

5.Thesecross-nationalvariationsinthecontoursoftheThirdSectorcanbeexplainedbydifferentpatternsofhistoricaldevelopmentinEurope;threesuchpatternsareespeciallyvisible;thewelfarepartnershippatternprevailinginWesternEurope,inwhichThirdSectorinstitutionsservedasinstrumentsofdeliveringpublicwelfareservices,thesocialdemocraticpatternprevailingintheScandinaviancountries,inwhichthestateassumedthedeliveryofmostpublicwelfareserviceswhileThirdSectorperformedmainlyexpressivefunctions,andthestatistpatternprevailinginEasternEuropeancountries,wheretheThirdSectorfacedinstitutionalobstaclestodevelopmentundertheSovietsystem.

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Appendix1:MethodologyforestimatingthesizeoftheTSinEuropeFollowingtheconceptualframeworkdevelopedbytheTSIproject,thethirdsectorconsistsofthefollowinginstitutionalcomponents:nonprofitinstitutions,cooperatives,socialenterprises,andindividualhumanactivitiesoutsideorganizations.Accordingtothisconceptualframework,allnonprofitinstitutionsareinthethirdsectorscope,howeveronlysomecooperativesandsocialenterprisesthethirdsector'sdefinitionalfeatures.Thisframeworkalsodefinestheindividualactivitiesinscopeasthosethatprovideunpaidworkperformedforpublicbenefitratherthanthatofthevolunteers’householdsorfamilies.Themethodologyusedinthisprojecttoestimatethesizeofthethirdsector'sestimateseachofthesecomponentsseparatelyandthenaddsthoseestimatestogethertoarriveattheestimateofthefulltimeequivalentemploymentintheentirethirdsectorsize.

1.NonprofitInstitutions(NPIs)

TheexistingdatasourcesontheemploymentinNPIsincludetheJohnsHopkinsComparativeNonprofitSectorProject(LesterM.Salamon,S.WojciechSokolowskiandMeganHaddock,SocialOriginsofCivilSociety:AComparativeHistoricalApproach,Baltimore:JohnsHopkinsUniversityPress,forthcoming)andNPISatelliteAccountscompiledbynationalstatisticalagencies.Thesetwodatasourcescover18EUcountries(Austria,Belgium,CzechRepublic,Denmark,Finland,France,Germany,Hungary,Ireland,Italy,Netherlands,Poland,Portugal,Romania,Slovakia,Spain,Sweden,andtheUnitedKingdom)andNorway.Thedatareportedinthesesourceswere“updated”to2014bycalculatingtheratiosofNPIemploymenttototalemploymentfortheyearforwhichthedatahavebeenoriginallyreported,andthenapplyingtheseratiostothe2014employmentinrespectivecountries(asreportedbytheEurostat).ThismethodologyassumesthattheNPIshareofthetotalemploymentremainsmoreoflessconstantovertime.Inasmuchasthissharegrowsovertime,thismethodologyslightlyunderestimatestheactualsizeofNPIemployment.

Fortheremaining10EUcountriesonwhichnoNPIdataareavailable,aregressionbasedestimationmethodologywasused.ThismethodologyusesthemultivariatelinearregressionmodeltoestimatetheNPIshareoftotalemploymentin18countriesonwhichtheNPIdataarealreadyavailable,andthenapplyingtheregressionequationtocountriesonwhichnoNPIdataexist.Severalpredictorvariablesweretested,andthefollowingwereselectedbasedontheamountofexplainedvariance:perCapitaGDPinUSD,

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servicesshareofGVA,andNPISHshareofGDP.Thismodelexplains71.5%ofvariance(66%adjusted).ForcountriesonwhichNPISHdatawerenotavailable,themissingdatawerereplacedaveragesforEasternandWesternEuropeaccordingly.

TheregressionequationwasusedtopredictNPIshareoftotalemploymentin10countrieswheretheNPIdataarenotavailable.ThefollowingadjustmentstothepredictedNPIsharevaluesinthose10countriesweremadetorestrictitsvariabilitytotheactuallyobservedrange:

ForcountrieswherethepredictedvalueoftheNPIshareislowerthanthelowestobservedvalueinthe18countrydataset,thelowestobservedvalue(forRomania)wasused;

Forcountrieswherethepredictedvaluewashigherthanthehighestobservedvalueinthe18countrydataset,thehighestobservedvalue(forthewereusedforupperandlowerboundaries.

SincethisestimationmethodologyresultsinareasonablyaccuratepredictionofNPIemploymentinthe10countriesasagroup,butpredictionsforindividualcountriesmaybelessaccurateandshouldbeviewedwithcaution.These10countriesasagroupaccountforonlyabout5percentofNPIworkforce(paidandvolunteers)coveredbythisstudy.17

2.Cooperativesandmutualsocieties

ThedataoncooperativesandmutualcomefromJoséLuisMonzónCamposandRafaelChavesÁvila,TheSocialEconomyintheEuropeanUnion,ReportdrawnupfortheEuropeanEconomicandSocialCommitteebytheInternationalCentreofResearchandInformationonthePublic,SocialandCooperativeEconomy(CIRIEC),2011,exceptforPolandwheremoreaccurateestimateswereprovidedbythelocalpartner.ThereportprovidesemploymentdatainallEUmembercountriesthefollowingseparatelyidentifiedtypesoforganizations:cooperatives,mutual,andassociations.SinceNorwayisnotanEUmembercountry,thedataforthiscountryarenotincludedinthispublication.However,theTSIprojectresearchteamhasdeterminedthatallcooperativesandmutualsthatare

17DataforpredictorvariablescomefromthenationalaccountsaggregatesavailableattheUNSDwebsitehttp://data.un.org/Explorer.aspx?d=SNAAMA

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inTSIscopearealreadyincludedintheNPISatelliteAccountreleasedbyStatisticsNorway,andthosenotcoveredbytheNPISAarelikelytobeoutofscope.

TheTSIresearchteamhasalsodeterminedthatmostmutualsocietiesarealsoouttheTSscope.Asaconsequence,employmentinthistypeofinstitutionshasnotbeenincludedintheestimatesofthesizedoftheTS,exceptinFrancewhereasmallnumberofsuchsocietieswereincluded.ItwasfurthermoreassumedthatassociationsarelikelytobeNPIsandthusalreadycoveredintheestimatesofNPIemployment.Consequently,thefiguresreportedfortheseinstitutionsbyMonzónandChaveswerenotincludedtoavoiddoublecounting.

Finally,theTSIconceptualframeworkstipulatesthannotallcooperativesmeettheTSdefiningcriteria,andsomeofthemareoutofscope.Atthistime,theTSIresearchteamhasnowayofdeterminingwhatshareofemploymentincooperativesisintheTSscope.Itwasthereforeassumedthatonaverage,50percentofthatemploymentisinscope.Thisassumptionwillberevisedasmoreinformationbecomesavailable.

Insum,thetentativeestimationoftheFTEemploymentinthiscomponentoftheTSIishalfoftheemploymentincooperatives,asreportedbyMonzónandChaves.

3.Socialenterprises

Nodataonsocialenterprisesareavailableatthistime.However,theTSIprojectreviewsuggeststhatmostoftheseinstitutionalunitsarealreadyincludedintheNPIorthecooperativecomponent,sotheremainingsocialenterprisesthatareintheTSscopewouldlikelyaddverylittletothetotal.

4.Directvolunteering

ThedataondirectvolunteeringcomefromestimatesbasedonnationaltimeusesurveysandreportedbyOECD.18TUSassignstimerespondentsspendonvariousactivitiesduringthe24-hourperiodandextrapolatesthosevaluestotheentirepopulation.Thisallowsestimationofthetotaltimespendontheseactivitiesbytheentireadultpopulationofacountryduringtheperiodofoneyear,andconvertingthattimetoFTEemployment,assuming1,760hoursperaFTjob.Thatnumbermayactuallyvaryfromcountryto18Methodologicaldocumentationonnationaltime-usesurveys(TUS)usedfortheseestimatesisinMirandaV.(2011)"Cooking,CaringandVolunteering:UnpaidWorkAroundtheWorld",Miranda,V.(2011),"Cooking,CaringandVolunteering:UnpaidWorkAroundtheWorld",OECDSocial,EmploymentandMigrationWorkingPapers,No.116,OECDPublishing.doi:10.1787/5kghrjm8s142-en.

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country.Timespentcarefornon-householdmembersreportedinTUStabulationswasusedasaproxyfordirectvolunteering.Thisprobablyunderestimatesdirectvolunteeringthatdoesnotinvolvehelpingotherhouseholds,suchasunorganizedcommunityworkorprotestactions.

EighteenEuropeancountriesarecoveredbytheTUSdataintheOECDreport.Thecountriesare:Austria,Belgium,Canada,Denmark,Estonia,Finland,France,Germany,Hungary,Ireland,Italy,Netherlands,Norway,Poland,Portugal,Slovenia,Spain,Sweden,andUnitedKingdom.However,forPolandanalternativedatasource(GUS,VolunteeringThroughOrganizationsAndOtherTypesOfUnpaidWorkOutsideOwnHousehold–2011,Warsaw,2012)wasusedthatoffersamoreaccurateestimatebasedontheILOmethodologyoutlinedintheManualontheMeasurementofVolunteerWork.Thevaluereportedinthelattersourceisabout5percentlowerthanthatestimatedfromtheTUSdataforthatcountry.Fortheremaining11countriescoveredbythisreport,theaveragescalculatedseparatelyforWesternandEasternEuropewereused.

Theestimationmethodologyusedtheaveragenumberofminutesperadultspendoncaringfornon-householdmembersandvolunteeringreportedinTUSandmultipliedthatnumberby365daysandbythesizeofadultpopulation(15-65yearsofage)inarespectivecountrytoestimatethetotalnumberofhoursspendontheseactivitiesduringoneyear.ThatnumberwasthenconvertedtoFTEbydividingitby1,760hours.

5.EstimationoftheTSsize

Employmentineachoftheinstitutionalcomponentdescribedabove(1through4)wassummedforeachofthe28countriescoveredbythisreporttoarriveatthetotalsizeofworkforce(paidandvolunteers)intheTS.Thevaluespresentedhereareconservativeestimatesofthatsizeduetolimitedabilitytoestimatesocialenterprisesandtheaccuratevalueofemploymentincooperatives.

6.Estimationofserviceandexpressivesharesoftheworkforce.

ThecoredataforthisestimationwerecollectedtheJohnsHopkinsComparativeNonprofitSectorProjectfor20Europeancountries.UnweightedcountryaveragesoftheseshareswerecalculatedtoestimatetherespectivesharesoftheNPIcomponentintheEUasawhole.ThisestimatewasusedasthebasisforthefiguresfortheentireThirdSectorbyfactoringintheworkforceofthecooperativesanddirectvolunteering,whichwastreatedasperformingmainlyservicefunction.Althoughitispossiblethatsomedirectvolunteeringwasalsoperformingtheexpressivefunction,thiskindofdirect

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volunteeringwasnotcapturedbytheTUSdatathataskedonlyforhelpingotherhouseholds,whichisservicebydefinition.ThismethodprobablyunderestimatestheexpressiveshareoftheTSworkforce.

7. EstimationofTSrevenueshares.

Thecoredataforthisestimation,representingpercentagesharesofgovernmentpayments(grantscontractsandreimbursements),fees(marketsales,membershipdues,andinvestments),andprivatephilanthropyinNPIrevenueswerecollectedtheJohnsHopkinsComparativeNonprofitSectorProjectfor20Europeancountries.UnweightedcountryaveragesoftheseshareswerecalculatedtoestimatetherespectivesharesoftheNPIcomponentintheEUasawhole.IntheEuropeancontext,governmentreimbursementsforindividualservicesaccountformostofgovernmentsupporttoNPIs,thereforetheshareofgovernmentsupportreportedhereissignificantlylargerthanthatreportedinconventionaleconomicstatisticsthattreatsuchreimbursementsasmarketsalesindistinguishablefromtypesofmarketsales.

ThisestimatewasusedasthebasisforthefiguresfortheentireThirdSectorbyfactoringintheestimatedshareofcooperativerevenue,whichisassumedtocomemainlyfromfeeincome(marketsalesandinvestment).ThecooperativeshareoffeerevenuewasincludedinproportiontocooperativeshareofTSemploymentontheunderlyingassumptionthatemployeecompensationisfundedbygovernmentpayments,feesandphilanthropyinthesameproportionasthesharesofthesethreerevenuestreams.Thevalueofdirectvolunteering,estimatedatthereplacementcost,wascountedasprivatephilanthropyandfactoredinproportionallytothedirectvolunteeringshareoftheTSworkforce.

Appendix2Table.EstimatesofTSFTEworkforceinEUandNorway,2014

CountryCoops&mutuals*

Directvolunteers TotalTS

Total2014employment Otheras%oftotalemployment

Paid(FTE) ofwhichcoops Volunteers(FTE) ofwhichcoops Total(FTE) (FTE) (FTE) (FTE) Paid Volunteers Total Coops* Directvol TS

NorthernEuropeAustria 160.545 5.580 233.961 8.132 394.506 31.000 200.141 625.646 4.112.700 3,9% 5,7% 9,6% 0,8% 4,9% 15,2%Belgium 451.951 1.219 129.639 350 581.590 6.774 185.867 774.230 4.543.500 9,9% 2,9% 12,8% 0,1% 4,1% 17,0%France 1.535.368 38.632 680.000 17.110 2.215.368 214.622 139.572 2.569.562 25.802.200 6,0% 2,6% 8,6% 0,8% 0,5% 10,0%Germany 2.397.618 74.723 1.307.580 40.752 3.705.199 415.129 1.479.321 5.599.649 39.871.300 6,0% 3,3% 9,3% 1,0% 3,7% 14,0%Ireland 181.885 3.900 48.794 1.046 230.679 21.664 76.636 328.979 1.913.900 9,5% 2,5% 12,1% 1,1% 4,0% 17,2%Luxembourg 22.657 174 18.070 139 40.727 967 9.664 51.357 245.600 9,2% 7,4% 16,6% 0,4% 3,9% 20,9%Netherlands 858.045 16.565 488.632 9.433 1.346.677 92.027 281.756 1.720.459 8.236.100 10,4% 5,9% 16,4% 1,1% 3,4% 20,9%UnitedKingdom 1.671.866 21.240 1.422.360 18.070 3.094.226 118.000 1.062.630 4.274.856 30.641.800 5,5% 4,6% 10,1% 0,4% 3,5% 14,0%SouthernEuropeCyprus 23.341 456 18.615 364 41.956 2.534 15.238 59.727 362.700 6,4% 5,1% 11,6% 0,7% 4,2% 16,5%Greece 244.370 1.348 194.891 1.075 439.261 7.492 180.156 626.909 3.536.200 6,9% 5,5% 12,4% 0,2% 5,1% 17,7%Italy 938.135 101.554 597.390 64.668 1.535.525 564.191 812.383 2.912.099 22.278.900 4,2% 2,7% 6,9% 2,5% 3,6% 13,1%Malta 10.527 23 8.396 18 18.923 125 7.327 26.375 181.400 5,8% 4,6% 10,4% 0,1% 4,0% 14,5%Portugal 175.092 4.625 55.680 1.471 230.772 25.696 166.405 422.873 4.499.500 3,9% 1,2% 5,1% 0,6% 3,7% 9,4%Spain 722.223 58.176 348.830 28.099 1.071.053 323.199 914.613 2.308.864 17.344.200 4,2% 2,0% 6,2% 1,9% 5,3% 13,3%ScandinaviaDenmark 137.358 6.368 114.187 5.294 251.545 35.379 123.637 410.560 2.714.100 5,1% 4,2% 9,3% 1,3% 4,6% 15,1%Finland 73.018 8.469 85.165 9.878 158.182 47.050 145.159 350.391 2.447.200 3,0% 3,5% 6,5% 1,9% 5,9% 14,3%Norway 84.054 143.637 - 227.691 - 85.647 313.339 2.626.600 3,2% 5,5% 8,7% 0,0% 3,3% 11,9%Sweden 194.128 15.913 355.741 29.162 549.869 88.408 155.830 794.107 4.772.100 4,1% 7,5% 11,5% 1,9% 3,3% 16,6%CentralandEasternEuropeBulgaria 18.960 3.717 7.909 1.550 26.869 20.650 183.595 231.114 2.981.400 0,6% 0,3% 0,9% 0,7% 6,2% 7,8%Croatia 70.512 29.412 - 99.924 - 107.770 207.694 1.565.700 4,5% 1,9% 6,4% 0,0% 6,9% 13,3%CzechRepublic 101.901 5.236 26.413 1.357 128.314 29.089 269.964 427.367 4.974.300 2,0% 0,5% 2,6% 0,6% 5,4% 8,6%Estonia 20.652 887 8.614 370 29.266 4.925 38.931 73.122 624.800 3,3% 1,4% 4,7% 0,8% 6,2% 11,7%Hungary 89.620 7.711 16.992 1.462 106.612 42.841 255.532 404.985 4.100.800 2,2% 0,4% 2,6% 1,0% 6,2% 9,9%Latvia 34.170 40 14.253 17 48.422 220 50.334 98.977 884.600 3,9% 1,6% 5,5% 0,0% 5,7% 11,2%Lithuania 7.415 807 3.093 337 10.508 4.486 74.919 89.913 1.319.000 0,6% 0,2% 0,8% 0,3% 5,7% 6,8%Poland 212.900 22.842 172.700 18.529 385.600 126.900 1.243.900 1.756.400 16.033.200 1,3% 1,1% 2,4% 0,8% 7,8% 11,0%Romania 28.107 3.094 36.576 4.026 64.683 17.187 515.288 597.157 8.613.700 0,3% 0,4% 0,8% 0,2% 6,0% 6,9%Slovakia 19.943 2.348 7.637 899 27.580 13.045 146.491 187.116 2.363.100 0,8% 0,3% 1,2% 0,6% 6,2% 7,9%Slovenia 42.972 309 17.924 129 60.896 1.714 33.813 96.424 916.800 4,7% 2,0% 6,6% 0,2% 3,7% 10,5%TotalEU+Norway 10.529.332 405.955 6.593.090 263.734 17.122.423 2.255.308 8.962.520 28.340.251 220.507.400 4,8% 3,0% 7,8% 1,0% 4,1% 12,9%

*ExcludingcoopsandmutualsthatareNPIs

NPIs NPIsas%oftotalemployment