Scottish charity sector grows to £20.8 billion??? We wish!

The last couple of days have seen some pretty big numbers flying around about the size of the third sector and they all seem to contradict each other. In a sector notorious for its diversity and fuzzy edges, the problem is unsurprisingly one of definitions. SCVO’s most recent figures identified around 19,000 third sector charities with a turnover of £4.9 billion. But last week Third Sector published an article announcing that the Scottish charity sector is now worth a whopping £20.8 billion! This figure must be taken with a lot more than a pinch of salt. For starters, half of the huge figure is made up of the national incomes of large UK charities. The cited £12billion growth over the last 5 years is almost entirely down to the increasing numbers of these cross-border charities now being included on OSCR’s register. Sadly, there hasn’t been a sudden spike in the income of Scottish charities. The new Big Lottery funded mapping of social enterprise activity gives a slightly more modest appraisal of the sector’s size, but also raises a number of questions. The social enterprise report has identified a fairly small social enterprise sector of 3,547 organisations, with a huge £6.9billion turnover.

Suggesting that the Scottish charity sector has boomed like some dot com giant isn’t helpful and doesn’t send funders the right message.

Once again, the thorny old issue of who’s ‘in’ and who’s ‘out’ seems to be causing problems. But do these definitions really matter, or are they just an academic distraction? If we agree that the purpose of mapping our sector is to assess its health, identify growth areas and areas for investment, promote successful alternative business models, and tailor support, then I’d say having an accurate picture of who’s out there and what they’re doing is pretty crucial. Suggesting that the Scottish charity sector has boomed like some dot com giant isn’t helpful and doesn’t send funders the right message. The truth is that the average Scottish charity grew by a much less impressive 0.8% last year, which is a loss in real terms. Both reports also include ‘grey area’ charities, and it’s often these large charities that cause the biggest distortion owing to their hefty incomes. Edinburgh University alone has a turnover of over £700million, much of it from trading but are they part of the third sector or a social enterprise? Glasgow Life and other arms-length public bodies would bump the sector’s turnover up by another billion or two. Including these organisations doesn’t benefit them and risks diverting attention and support from where it’s really needed. The organisations that need targeted advice and promotion are smaller charities and start-up enterprises or new projects finding their feet. Maybe the new Civil Society Almanac published by NCVO (with SCVO input) has got it right. It has opted for an ‘everyone in’ approach with breakdowns that allow you to pick ‘n’ mix your sector according to interests and focus. This all needs to be managed very carefully to avoid any more wildly misleading headlines. Besides, we need to value not just the pounds exchanged in the market place, but the lives changed in our communities.