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The economic value of the third sector is big, but Tech4Good could help it be bigger!

The economic value of the third sector is big, but Tech4Good could help it be bigger!

The conversation on the recovery of public services in politics and the mainstream media almost entirely focuses on this only being possible following economic and GDP growth. The problem with this position is that it is years in the making when the need for recovery is right now. Society cannot wait; our reality is that we, the citizens, need to find another way to make the necessary changes to meet the current challenges of health, care, and well-being development.

The Third Sector is Vast and Already Economically Significant

In 2019, the founder of eCulture Solutions was concerned that the third sector (not-for-profits) was poorly understood, especially regarding its contribution to social, economic, and ecological developments and servicing of individual, family, and community needs.

Subsequent research involving the review and summarisation of a wide range of third-sector reports revealed an unexpected and truly extraordinary perspective on the sector’s economics. The headlines were summarised (see the article graphic) and aligned alongside data on the UK financial sector for comparison, on the principle that the financial sector tends to be a focus of measure for how well the UK stands in the world.

The economic contribution of carers within our communities is significant enough in terms of value, contributing savings to the public purse of £132bn annually (as of 2015). This assessment confirmed an additional annual economic of £60bn from the social enterprise sector, and voluntary services added another £15bn per year in gross value add (GVA).

Altogether, this makes the annual contribution to the UK economy more than £200bn, the greatest proportion of which relates to delivering service targets at supporting people and communities with needs. This value equates to more than 25% of the government expenditure on services (£796bn) in the same pre-pandemic assessment period (2019/20).

However, this is only part of the story, as the delivery of achieves a very much greater and presently unmeasured economic contribution;

  • Reductions in demand for public sector services and social prescribing redirect people to community-provided service offers and solutions,
  • Improved social prescribing capability by increasing early intervention/prevention in supporting the needs of individuals, families, and communities, helping to avert crises before they require specialist interventions from the public sector,
  • Rapid mobilisation of resources to meet social challenges, for example, during the pandemic, in the coordination of a volunteer force to support the vulnerable, those stepping forward to help home and resettle refugees, and others developing food bank resources to meet the rising demand from people now affected by the cost-of-living crisis.

Imagine the situation for the public sector if the activities of the registered carers and volunteers stopped. If the third sector was not there doing what it does, or if the millions of people of this nation did not care for themselves and their neighbours as much as they all do!

“Charities have made a massive difference to people’s lives during the pandemic. They have saved lives; they have changed lives; they have supported the vulnerable, the poor, and the and dispossessed. Yet somehow this role is barely acknowledged either in the media, or by politicians. The gap between how critical charities think they are, and how important the wider world thinks charities are, is huge. The pandemic has highlighted this in sharp terms, but it is a gap that has existed for some time: Covid has just bought it into sharp relief.”


Turning the Tide on Rising Demand

The activities of the third sector were an integral part of society and made massive differences to people’s lives long before the arrival of the pandemic. However, today, social and economic challenges continue to grow due to the ongoing effects of austerity, increasing economic pressures arising from Brexit, the pandemic, and the growing cost-of-living crisis.

Small organisations have found the pandemic tough. For some it has been a perfect storm of increased demand, decreased income, and fewer volunteer. nfpSynergy tracking research with the public has found that volunteering and giving amongst the older (over 45) age groups was down during the pandemic, and still hasn’t fully returned to pre-pandemic levels. If this situation doesn’t change, it will spell major changes for charities.


This is all happening as the public sector seeks to establish a new social contract for engagement with the third sector. Better collaboration is needed to serve individual, family, and community health, care, and broader well-being development needs. The most notable of these public service engagements is the proposal for a new Integrated Care System (ICS), linking health, social care, and community service provision.

The ICS primarily aims to reduce the demand for public sector services. In this regard, any new integrated health and care service provision will need to be capable of understanding and responding to a wide range of determinants that can affect an individual’s well-being, such as their state of education, employment, living circumstances, social inclusion, personal health practices, personal care, and support.

Ultimate success will be determined by how well data and systems integrate to understand cause and effect better, especially when these involve a range of well-being determinants and in a way that enables the most appropriate response. Earliest interventional is key to demand reduction, the ability to anticipate events likely to create negative outcomes, and thus enable preventative interventions.

However, with these data and systems opportunities in mind, it has also to be noted that a great many third-sector organisations struggle to make investments in tech solutions. When funding is obtained, it is generally prioritised toward investment in people’s resources and doing more good stuff. Consequently, the utilisation of technology beyond social media and facilitating public engagement can be found to be quite limited.

So, in the future, the development of third-sector capabilities for data capture, measurement of social value performance, and implementation of collaboration/data sharing solutions at a community level should become imperatives and a focus for future investment and support, and this is where Tech4Good could have a vital role to play.

The Big Challenge for Tech4Good

Without question, technology has a pivotal role and contribution to developing early intervention and prevention capabilities. We are already seeing greater potential being created in the extraordinary levels of investment and innovation worldwide into wearables, the Internet of Things (IoT) and mHealth. Research has also found hundreds of thousands of health-related consumer apps, although on a cautionary note, most have been downloaded fewer than 5,000 times!

Some important questions need to be addressed, given that the data to be managed by these tech solutions and any integrated health, care and support systems are the most personalised and important data about our lives.

Do we need to be concerned that most of this investment is motivated by exploiting our data for shareholder profit? is this a bad thing? Even if you answer no to these questions, we surely must be concerned that commercial approaches tend to perpetuate the building of data silos on the basis that data is power and a source of wealth!]

If we leverage the technology in ways that can truly help us all with our personal needs, then maybe we need a new ‘tech4good’ social enterprise approach to how this happens. One is about partnership, sharing, and cooperation, established on principles of servicing social purpose before profit.

Building a non-silo digital approach capable of service individual, family, and community well-being development that is safe, secure, trustworthy, and puts the needs of the user community above all else is arguably the greatest modern-day challenge for our technologists to respond to. There is no greater motivation, too; this affects us and those we love and care for.

The Need for a New Social Enterprise Business Model

eCulture Solutions is exploring the development of a new sociocracy-based business operating model and approach to support how social and well-being tech requirements can be responded to in a way that supports communities and organisations to have their needs not just listened to but then qualified, quantified, resourced, and delivered.

This involves creating an engagement model in which lived experience guides the development of requirements to ensure the best fit for solutions to meet the community’s needs. Decisions are made based on consensus involving all and with the best information available at the time.

This is an adoption in the innovative, agile delivery approach principle but extended to include the complete delivery lifecycle, from requirements, business case/proposal development, funding bid, delivery, and subsequent lessons learned.

The key objective is to try to establish an organisational equivalent of the public sector IT department for the third sector. This department would represent the sector requirements and help provide assurance on the delivery of solutions to ensure this works effectively at the community level.

About the Author

Paul White is the founder of eCulture Solutions (www.eculturesolutions.com) and a passionate exponent of social enterprise and the opportunity to leverage digital innovation and technology to deliver sustainable, social, economic, and ecological change and better address the development of individual, family, and community well-being.


nfpSynergy – Gone Viral – blog & video summarising our research on Covid and charities | nfpSynergy

eCulture Solutions – Our Sociocracy Approach

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