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| Third Sector | |
|---|---|
| Name | Third Sector |
| Type | Social sector concept |
| Founded | Varies by context |
| Headquarters | Global |
| Fields | Philanthropy; Social services; Civil society |
Third Sector
The Third Sector denotes a sphere of organized activity distinct from United States government institutions and private Ford Motor Company enterprises, encompassing nonprofit, voluntary, and charitable institutions such as Red Cross, Oxfam, and Amnesty International. It interacts with actors like World Bank, European Union, and United Nations agencies while engaging with local entities such as Greenpeace chapters, Habitat for Humanity affiliates, and Rotary International clubs. Scholars from Harvard University, University of Oxford, and London School of Economics analyze its roles alongside case studies including Bill & Melinda Gates Foundation, The Rockefeller Foundation, and Carnegie Corporation.
The concept covers nonprofit associations such as Doctors Without Borders, Salvation Army, and Goodwill Industries operating outside direct control of United Nations member states and corporate conglomerates like Walmart. It includes philanthropic foundations like Ford Foundation, voluntary groups such as Sierra Club, faith-based organizations like Catholic Relief Services, and community organizations akin to YMCA. The sector’s remit spans service delivery in contexts exemplified by Hurricane Katrina, advocacy work seen in Stonewall Riots-linked groups, and development efforts aligned with Millennium Development Goals initiatives.
Roots trace to mutual aid societies such as Friendly Societies in Guildhall, London and philanthropic movements represented by Andrew Carnegie and John D. Rockefeller. Institutionalization accelerated with 19th-century entities like Red Cross and 20th-century bodies including United Nations Relief and Rehabilitation Administration and postwar reconstruction NGOs active in Marshall Plan contexts. Late 20th-century reforms involving Margaret Thatcher and Ronald Reagan policies, plus policy frameworks from Organisation for Economic Co-operation and Development and World Bank programs, reshaped funding and partnership models. Recent transformations reflect responses to crises such as the 2004 Indian Ocean earthquake and tsunami, the 2010 Haiti earthquake, and the COVID-19 pandemic.
Common forms include charitable trusts like Bill & Melinda Gates Foundation, membership associations such as AARP, professional bodies like American Bar Association, and cooperatives akin to Mondragon Corporation. Structures vary from volunteer-run grassroots groups exemplified by Occupy Wall Street assemblies to formal NGOs with governance boards modeled on International Olympic Committee committees. Hybrid entities include social enterprises such as Grameen Bank and community interest companies influenced by legal forms in jurisdictions like Companies House filings in the United Kingdom and nonprofit registries in Internal Revenue Service systems.
Revenue streams involve philanthropic grants from institutions like MacArthur Foundation, government contracts awarded by agencies such as USAID, earned income from social enterprises like TOMS Shoes, and crowdfunding via platforms akin to GoFundMe. Investment vehicles include impact investing promoted by United Nations Principles for Responsible Investment and program-related investments used by foundations including Knight Foundation. Financial oversight interacts with reporting standards from International Financial Reporting Standards and tax-exemption regimes such as those administered by Internal Revenue Service section 501(c)(3) in the United States.
Boards of directors modeled on Gates Foundation trustees and codes of conduct influenced by Transparency International standards guide governance. Accountability mechanisms draw on audits by firms like Deloitte, regulatory scrutiny from bodies such as Charity Commission for England and Wales, and accreditation from networks such as Council on Foundations. Compliance issues intersect with laws including Foreign Agents Registration Act in the United States, nonprofit law reforms in India, and reporting directives emanating from the European Commission.
The sector contributes to labor markets through employers like Red Cross chapters and CARE International country offices, complements services provided during events such as the Ebola virus epidemic in West Africa (2014–2016), and shapes public policy debates involving actors like Amnesty International and Human Rights Watch. Empirical studies from World Bank and OECD link sector activity to social capital concepts explored by scholars at Stanford University and Yale University. Partnerships with multinational programs such as Global Fund and collaborations with corporations like Microsoft on digital inclusion initiatives illustrate cross-sector influence.
Critiques address issues of accountability raised by investigative reports in outlets like The New York Times and The Guardian, questions of elite capture associated with large foundations including Rockefeller Foundation, dependency concerns highlighted in analyses of Aid dependency, and coordination failures exposed during disasters like Haiti earthquake (2010). Tensions with sovereignty debates exemplified by disputes in Syria and regulatory conflicts in jurisdictions such as Russia and China complicate operations. Debates continue in academic forums at American Political Science Association conferences and policy debates in United Nations General Assembly sessions about reform, transparency, and democratic legitimacy.
Category:Nonprofit organizations